Management explains the Categories and levels of Planning

Meaning of Planning; It is the process of thinking about the activities required to achieve the desired goal. It is the first and foremost activity to achieve the desired results. What are the categories and levels of Planning? Categories and Levels of Planning; A class or division of people or things regarded as having particular shared characteristics. And, a level is a point on a scale, and a position on a scale of amount, quantity, extent, or quality.

Here are explain; What are the categories and levels of Planning? Know and Understand each of them!

The following Categories and Levels are below;

What are the categories of planning?

Meaning of categories; Categories defines as different-different departmental divided into different levels in the base of their profession. A class or division of people or things regarded as having particular shared characteristics. Any of several fundamental and distinct classes to which entities or concepts belong Taxpayers fall into one of several categories.

Planning can classify on different bases which are discussed below:

Strategic and Functional Planning.

In strategic or corporate planning, the top management determines the general objectives of the enterprise and the steps necessary to accomplish them in the light of resources currently available and likely to be available in the future. Functional planning, on the other hand, is planning that covers functional areas like production, marketing, finance, and purchasing.

Long-range and short-range planning.

Long-range planning sets the long-term goals of the enterprise and then proceeds to formulate specific plans for attaining these goals. It involves an attempt to anticipate, analyze, and make decisions about basic problems and issues which have significance reaching well beyond the present operating horizon of the enterprise.

Short-range planning, on the other hand, is concerned with the determination of short-term activities to accomplish long-term objectives. Short-range planning relates to a relatively short period and has to be consistent with the long-range plans. Operational plans are generally related to short periods.

Adhoc and Standing Planning.

Adhoc planning committees may constitute for certain specific matters, as, for project planning. But standing plans are designing to use over and over again. They include organizational structure, standard procedures, standard methods, etc.

Administrative and Operational Planning.

Administrative planning is finishing by the middle-level management which provides the foundation for operative plans. Operative planning, on the other hand, is finishing by the lower-level managers to put the administrative plans into action.

Physical Planning.

It is concerned with the physical location and arrangement of buildings and equipment.

Formal and Informal Planning.

Various types of planning discussed above are formal. They are carrying on systematically by the management. These specify in black and white the specific goals and the steps to achieve them.

They also facilitate the installation of internal control systems. Informal planning, on the other hand, is mere thinking by some individuals which may become the basis of formal planning in the future.

What are the levels of planning?

Meaning of level; A horizontal plane or line concerning the distance above or below a given point. Second means, a level is a point on a scale, and a position on a scale of amount, quantity, extent, or quality.

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 as under:

Top Level of 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 of the organization and is a concern with corporate results rather than sectional objectives.

Top-level planning is entirely long-range and is inextricably linked with long-term objectives. It might call the “what” of planning.

Second Level of Planning.

Also known as tactical planning, it is done by middle-level managers or department heads. It’s concerned with “how” of planning. They deal with the deployment of resources to the best advantage.

It is concerned mainly, but not exclusively, with long-range planning, but its nature is such that the periods are usually shorter than those of strategic planning.

This is because its attentions are usually devoting to the step by step attainment of the organization’s main objectives. It is, in fact, Oriente to functions and departments rather than to the organization as a whole.

Third Level of Planning.

Also known as operational or activity planning, it is the concern of department managers and supervisors. It is confining to putting into effect the tactical or departmental plans. It is usually for short-term and may revise quite often to be in tune with the tactical planning.

Advanced levels of strategic planning:

Upstair we have discussed – the categories and levels of Planning. And, now studying and take a look at the topic; levels of strategic planning are also useful.

There are three levels of strategic planning: Corporate, business, and functional. The strategy may plan at each level, but the plans for every level of an organization should align to ensure maximum unity of effort. Without alignment, departments and functions will be working at cross-purposes, and the overall corporate strategy will be less effective.

Here is how strategist views each of the three levels of strategic planning:

Corporate level:

Planning at this level should provide overall strategic direction for an organization, sometimes refers to as the “grand strategy.” This is a concise statement of the general direction which senior leadership intends to undertake to accomplish their stated mission or vision.

The corporate-level strategy is usually deciding by the CEO and the Board of Directors although other senior leaders will often contribute to the strategy formulation. Strategic options at the corporate level will likely require a commitment of a significant portion of the firm’s resources over an extending period, and the results will have a significant impact on the future health of the organization.

Strategic planning at this level will usually include a robust analysis and identification of several strategic options based on the assumed future operating environment. In a multi-business firm, careful consideration will give to the overall core competencies of the firm and where the boundaries lie between corporate and business level responsibilities.

Business level:

Each business within an organization will develop a strategy to support the overall business within its specific industry. The business-level strategy reflects the current position of the firm within its industry and identifies how the available resources can apply to improve the position of the firm about its competitors.

There are a variety of ways that businesses will compete, but more often than not it is based on the USP (unique selling proposition) of the firm which distinguishes the company and its products from other competitors. If there are no differences between one firm’s products or services from other competitors, then the product or service becomes a commodity.

Competition among firms that offer commodities is usually root in price competition, and low-cost providers usually take over. On the other hand, businesses that distinguish themselves can compete on their unique selling proposition.

If they can successfully demonstrate why they are different and how that difference can provide a better level of service or quality product, then the business can command a higher margin for the premium service or product. This is the “value” adds by the firm, and the business strategy should focus on how the firm adds value.

Functional level:

The functional level describes the support functions of a business: Finance, Marketing, Manufacturing, and Human Resources are a few examples of the functional level. Strategies at this level should define to support the overall business and corporate-level strategies.

If the functional level leaders can describe their activities and goals about the business or corporate levels. Then everyone in the organization will align and as such contribute to the overall goals and objectives for the organization.

So for example, functional leaders for IT or HR must ask. If the strategies for their functions match and support the overall strategic direction of the businesses. They support or of the overall firm itself.

The best strategic planners understand how important. It is for a firm to have alignment among the corporate, business, and functional levels of strategy. The overall corporate-level strategies will not be effective. If the supporting business and functional level strategies are inconsistent with the overall strategic intent of the senior leaders. Thus, it is not only important to pick the right strategy for the corporate level. But also equally important to make sure that the business and functional level strategies support the overall grand strategy for the organization.