TYPES OF PLANS
TYPES OF PLANS
Because planning has been applied to all types of activities, there are numerous types of plans. Some plans deal with broad areas, some with narrow ones; some concern space considerations, whereas others emphasize performance, cost, quality, or another major attribute.
Plans can be conveniently classified into the following:
1. Growth plans. These plans chart the direction in which the organization is going, its goals, and the rate of expansion sought. The rational way to ensure desirable growth is by the commitment of competent management members to growth and by planning for that growth. In turn, this requires knowing where the organization is, where it is going, and where it should go; what major problems now stand or will stand in the way of achieving its goals; the time phasing for implementing the growth plans; and what specific activities are required to fulfill them.
Specific courses of action, tailored to the individual`s needs and the organization`s requirements, are necessary for adequate leadership and the development of management members to take place.
2. Profit plans. Commonly, this type of plan is focused on profit per product or group of products. Headed by a profit planner, the entire plan points toward a minimum effort and expenditure in order to realize maximum profits. The normal time span for profit plans is one to three years.
3. User plans. How to market a selected product/service, or to serve a selected market better, is answered by a user plan. Commonly called product planning or market planning, this type of plan is popular. Most people understand the subject being planned for, and user plans are widely used to illustrate planning techniques. The period covered by user plans is generally one year.
4. Personnel-management plans. Plans formulated to attract, develop, and retain management members are growing in importance. It is being recognized that managerial personnel cannot be left to chance; planning is essential.
The classification of plans according to the period of time they cover is common. This leads to designating plans as long range - those dealing with three or more years - and short range - those involving one year or less. Plans covering from two to five years are termed long or short depending on the organization; some use the term intermediate plans, but this is not widely used.
Most managers like to use a time period sufficient to justify the dollar expenditure required by the plan. That is, they want the plan to include the time needed to recover their total dollar commitments. This is frequently expressed in terms of recovery costs. Acceptance of the commitment concept means that planning periods will vary considerably, depending on such things as the organization, the subject area planned for, and the beliefs of the top manager.
Further identifications of plans are orientational and operational plans. Usually, they are a particular type of either a long-or short-range plan. An orientational plan seeks to reveal the organization`s current goals, activities, strengths, personnel, and relationship with customers. With these types of data as a background, a projection is made of what the future expectancies might be. In turn, this leads to an evaluation of whether this is where the managers want the organization to be. In contrast, an operational plan deals with current activities. It answers: Who is going to do what? The activation of physical resources - facilities, materials, and personnel - is dealt with. The planning is tangible, definite, and specific.