Types of Plans
1) LONG RANGE PLANNING—Long range planning is the process of planning for long term goals. It defines the broad directions in which the organization seeks to steer its future. It usually covers a time period of five years or more. However, long range may vary according to the nature of organization .for e.g.: a retail cloth store may frame long term plans for five years . On the other hand ,a timber company may plan as much as fifty years ahead when the planting or harvesting of trees is considered.
Long range objectives specify what the organization wants to become in the long run. Stability, growth competitive advantage, customer satisfaction ,technological leadership, employee development etc., are eg of long range objectives ,. Long range planning’s defines the mission of the organization, specifies its product market position and out lines its major strategies and policies.
Long range planning is not planning for future decisions. Rather it is planning the future impact of today’s decisions.Long range plans are prepared after an analyses of the firm’s external environment and forecast of events . such plans may require changes in the environment and resources of the organization. Long range plans deals with the broad competitive and technological aspects of the organizations and the allocation of the resources over and extended period of time.
Long range planning involves a great deal of uncertainty and therefore, long term goals must be flexible. Instead of specific targets acceptable range should be laid down. All long range plans must be tied together and aliened with the stated goals and strategies of the organization. Goal and strategies must be consistent with each other. Long range plans associated with major functions of the organization should be specified. Provision must be made for periodic review and revision of long term plans.
Long range planning provides and establishes a dynamic link between the organization and its environment. It provides the basic frame work within which detailed programmes and short range plans can be developed. It enhances the competence and flexibility of the organization in meeting changes in the environment.
It helps the enterprise to enhance its strength by exploiting the opportunities and facing the threats arising out of environmental changes by means of long range planning, an organization can acquire a distinctive competitive advantage and can carve out its own “niche” in the market. Long range planning provides the criteria for decision making in future. Long range planning is the responsibility of top management.
2) MEDIUM TERM OR INTERMEDIATE PLANNING– Such planning generally covers a time horizon between two and five years. Intermediate plans are usually more detailed than long range plans. Such plans are coordinative in nature and are designed to implement long term plans through the coordinated efforts of different departments or the enterprise.
3) SHORT RANGE PLANNING– The time horizon of short term planning usually extends upto one year. Short term pans are specific and detailed they provide form and contained to long range and medium range plans they are worked out within the frame work of existing resources. Inventory plan, employee training plan, work methods are example of short range planning. A short range plan is an attempt to break down a long range plan into specific action programmes.
Short range planning is action oriented and specific. For example, an annual growth of 10% in sales turnover may be a short term plan to achieve the long term goal of doubling the sales volume in the next ten years. Short range planning provides the basis for day to day operations. Programme, budget, schedule, etc. are the main elements of short range planning. Short range planning is usually the responsibility of lower level executives.
Types of Plans Types of Plans
Powered By 360Presence
Types of Plans Types of Plans Types of Plans Types of Plans