Levels of Planning
In management theory, it is usual to consider that there are three basic levels of planning, though in practice there may be more than three levels of management and to an extent, there will be some overlapping of planning operations. The three levels of planning are discussed below:
- Top level planning: also known as overall or strategic planning, top level planning is done by the top management, i.e., board of directors or governing body. It encompasses the long-range objectives and policies or organisation and is concerned with corporate results rather than sectional objectives. Top level planning is entirely long-range and inextricably linked with long-term objectives. It might be called the ‘what’ of planning.
- Second level planning: also known as tactical planning, it is done by middle level managers or departmental heads. It is concerned with ‘how’ of planning. It deals with development of resources to the best advantage. It is concerned mainly, not exclusively, with long-range planning, but its nature is such that the time spans are usually shorter than those of strategic planning. This is because its attentions are usually devoted to the step-by-step attainment of the organisation’s main objective. It is, in fact, oriented to functions and departments rather than to the organisation as a whole.
- Third level planning: also known as operational or activity planning, it is the concern of departmental managers and supervisors. It is confined to putting into effect the tactical or departmental plans. It is usually for a short-term and may be revised quite often to be in tune with the tactical planning.
Steps/Stages of Planning
Planning is a process consisting many steps, which may differ from one plan to another. But following are the common steps:
- Setting organisational objectives: planning is total based on the objectives, which an organisation wants to achieve by way of planning. In other words first of all objectives will be fixed and then we will make plan regarding how to gets success in achievement of such predetermine objective. While making plan and setting objectives management should make analysis of internal resources available with the business and arrangement of external resources, external environments and corrective measures to face with the environment.
- List of alternatives to achieve the objective: there may be so many ways available with the business to achieve the objective. So business should prepare a list of such ways by considering the merits and demerits of each for which ever is better should be adopted. E.g. target of increasing profitability may be achieved by increasing sale, decreasing cost, introducing new product of better technology, rise in process etc. which of these alternatives is beneficial for business be adopted. Considering the merits and demerits of each alternative is also termed as development of premises of each alternative.
- Choose the best alternative: after considering the list of alternatives and merits of each management has to decide which of these alternatives will be the best in consideration with the human and nonhuman resources available with the business.
- Formulation of supporting plans: supporting plans are those plans, which provides support to the main plan. E.g. if the business wants to produce according to objective there may be many supporting plans like planning of purchase of raw material, planning of recruitment and training of the man power etc.
- Put the plans into action: after that plan formulated is ready to be put into action and so function should be started according to the plan all supporting plans should effort to help the main plan in reaching the objective and so in this all process is done in any effective manner we will get desired results of the plan.
- Follow up: once the plan is put into action it monitoring/supervision is equally important. In the main time management should see whether we are going towards achievement of objective or not. There may be some changes required before reaching the objective. E.g. a company is to sell 1200 refrigerators per year than directors should see that at least 100 units per month on average basis should be sold to achieve the target.