Types and levels of planning in organizations

1. Introduction

Planning in organizations has become an important process that has aided many organizations in creating desired goal and formulating appropriate steps towards attaining them. In organizations today, planning of operations has continually become a norm. In essence, every working effort carried out by organizations today is carefully planned for. This begins from delivering, designing and creating new systems of information management to construction of new buildings.

It is imperative to note that the process of planning is indeed a complicated undertaking and largely relies on the size and level of operations of organizations. Upton, Teal and Felan (2001) posit that in order for organizations to achieve desired outcomes towards implementing organizational change or designing projects, there is dire need of develop formal procedures on the nature of strategies to follow in addition to objectives and frequency of meetings to attend.

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Furthermore, successful deliveries of the aforementioned factors will largely depend on prior planning and prioritizing of activities that a firm has. According to the analysis presented in this paper, planning plays a very crucial role of aiding organizations to recognize hidden opportunities, forecasting the future and also avoiding mistakes. This paper takes a look at the various types and levels of planning that can be executed in organizations.

2. Levels of planning

Planning is a critical component that is carried out in three distinct levels namely functional, business and corporate levels. Shelett (2002) indicates that many organizations formulate strategies in either one or both of the mentioned levels, but ensure that the plans they set for each level are aligned to ensure that the efforts to achieve them are done in maximum unity.

She adds that ineffective corporate strategies and cross-purposed functions are attributes of lack of alignment of departments in an organization. While all the three levels of planning are unique both in terms of their applications and objectives, it is worth noting that some organizational managements do fail to create their differences. Each of the three levels is discussed below.

a) Corporate level

An organization’s overall strategic direction is normally planned at the corporate level. Planning at the corporate level as Kuye and Oghojafor (2011) point out is carried out by a senior leadership within an organization.

This explains why this level of planning is usually referred to as a grand strategy bearing in mind that it constitutes that level of decision making which dictates the activities of all the other levels. A leader in this case provides a mission and a vision which is duly needed in the organization towards accomplishing the set goals and objectives.

Besides, Sharma, Boo and Sharma (2008) argue that at the corporate level, planning involves identification and a robust analysis of a myriad of strategic options and core competencies which focuses on a future operating environment. This implies that the corporate level of planning is indeed necessary and may not be ignored at all during the entire lifetime of an organization.

b) Business level

At business level, Anderson and Joglekar (2005) posit that all businesses enterprises can be categorized under specific organizations that work within specific industries. These businesses develop strategies which work at their level and that which reflect their current position and the amount of resources they have or need in respect to the competitive environment they are operating.

As a matter of fact, competition at this level can either be price competition or a unique selling point. Through this level, Gustavsson (2008) indicates that a business can demonstrate its uniqueness through product or service provision which it can also use to command higher margins.

c) Functional level

The functional level of planning focuses on support functions which are possessed by a business enterprise. According to Lichtenthaler (2008), such support functions include human resources, manufacturing, marketing and finance departments. At the functional level, strategies are defined, a consideration which Schellekens et al (2010) suggest that supports overall corporate and business strategies.

Individuals in an organization rely on goals and activities planned by their leaders to align to and make contributions towards the success of attaining set objectives.

In addition, the functional level of a business organization is indeed charged with the responsibility of ensuring that each and every single aspect of an organization is run in the moist professional manner. In any case, this level of operation is known to discharge the mandate of ensuring that the various departments of an organization are aligned with each other in terms of the set aims and objectives which must be achieved within a give period of time.

Types of planning

I. Marketing planning

Market planning is an important step in an organization since it plays a pivotal role of ensuring that marketing objectives and targets are achieved. Marketing in an organization entails all those activities that precipitate knowledge on the availability of certain products and services so that appropriate levels of production can be attained in accordance to the movements in demand and supply.

Greenley, Hooley and Saunders (2004) point out that it also entails the strategic movement of finished goods and services to various points of sale as dictated by demand.

It has been considered as a way through which companies gain attention, promote their services and products and enhance their brand. In many organizations dealing with products and services, the entry mode and the choice of market involves careful planning and strategizing between competing expansions. Top managers have been faced with tough decisions involving entry into and managing of markets. Those choices depend on managerial philosophy, firm resources and nature of the market.

At a time when the global market is increasingly becoming highly competitive due to dynamism in consumerism patterns, effective marketing forms the key to success for any business.

This has been the case due to marketing capacity to edge a competitive advantage for particular institutions and their products in the market. It is on this note that Bunnell (2005) argues that marketing planning forms the most important concept in an organization in that it facilitates the practical application of the correct techniques and mobilizes necessary resources.

The notion of marketing planning delves into a critical outline where a customer’s demands, products quality and their balance with production costs and international organizational cultures are carefully analyzed for alignment with key objectives and missions of an organization. In agreement, Greenley, Hooley and Saunders (2004) indicate that it is particularly critical for new organizations to assimilate effective mechanisms that can facilitate their ability to conquer the already saturated market while colonizing new ones.

II. Strategic planning

Strategic planning as Slotegraaf and Dickson (2004) indicate forms a key aspect in determining how well an organization can succeed in the market. It is a kind of planning that offers guidance to organizations on how to proceed accordingly with their operations, allocate resources and meet target goals.

Planning as the initial phase results to establishment of the ideals that characterize the market and therefore proactively determine how they would be addressed to get a competitive advantage. To add to that, it establishes the procedures that would be followed for a company to achieve its objectives. It is perhaps the most critical stage as it sets the platform for all the latter processes.

Bunnell (2005) argues that strategic planning is governed by certain components which require managers to understand a firm’s strategies values, mission and vision. Strategic planning process is a crucial approach that organizations use to realize their goals.

Fergusson andLangford (2006) indicate in their publication that there are many planning process approaches some of which include Situation-Target-Proposal and Draw-See-Think-Plan. In the former, situation calls for evaluation of an organizations current situation while target focuses on ideal state, objectives and goals and proposal is the path to attaining the target.

Setting out of strategies leads to another important step of implementation. The latter forms a guided and systematic process of strategic marketing where the prior established plans are implemented in a marketplace. The results of strategic implementation as Kaissi, Begun and Nelson (2008) indicate, forms the need for change in the strategy or manipulation of the initial plan.

These considerations are made to enhance stronger objectivity. From implementation, an organization is able to get the marketing results of its products. Under this consideration, the result indicates the amount of sales, customer satisfaction, and efficacies of the markers.

III. Environmental planning

Burby (2005) argues that over the last four decades, the role of environment in determining the position of a business entity has increasingly become very important. This has mainly been necessitated by revelation of the major effects that result from negative environmental effects to both the ecological systems and anthropogenic realms that constitute it.

In agreement Burby with, Daniels (2009) argues that the process of environmental planning is critical in facilitating decision making in organizations necessary to carry out developments. To attain development, environmental planning calls for setting up of strategies that ensure effective management of relations between human systems and natural systems.

The endeavors of environmental planning are geared towards seeing to it that human or organizational systems exists harmoniously, equitably, transparently, orderly and effectively. This as Burby posits has been attained via elements such as governance frameworks, infrastructure systems, management of natural resources, regional development, urban development, and social and economic development.

According to de Abreu and Cavalcanti (2011), business or organizational management and operations form the heart of a country’s social economic and political capacity to effectively articulate various human needs at different capacities. They form the main outline upon which the interdependence nature of the natural system is derived. Most importantly, they control the different resources that define the business.

Following the United Nations Conventions on Environment and Development in Rio de Janeiro in the year 1992, it became clear that natural resources management cannot be effectively managed in isolation with other systems on the globe. Environmental management system is a management model that sets standards to be assimilated by different businesses globally.

Following the great concerns for holistic interrelationship between different spheres of environment, Daniels (2009) points out that the ability of an engineering firm to succeed in the highly competitive globe is entirely dependent on its capacity to effectively conduct environmental planning and internalize the environmental management systems.

Following the global outcry from both the people and the natural systems degradation, the need for highly effective systems that guarantee maximum productivity, profitability, and resilience of natural system has greatly increased.

Environmental management systems are applied at all levels of management where the production systems assimilate a Plan-Do-Check Act cycle to ensure that high standards of production are assimilated. By incorporating environmental management systems in the consulting services, Buysse and Verbeke (2003) point out that an organization is able to guarantee its client the necessary flow, harmony, and coherence in its systems for higher profitability.

Karna, Hansen and Juslin (2003) indicate that engineering firms’ services should be taken a step deeper into understanding of the intricacies of the business management for different industries and companies.

Unlike other systems where operations are viewed instantaneously, environmental management systems emphasizes on continuous assessment, continued improvement, and long term focus of the businesses via strategic planning. It is in this respect EMS factors the effects of the business to the Environment and effectively derives the necessary mechanisms to address the same effects.

Karna, Hansen and Juslin continue to say that engineering firms’ services should curve the clients’ long term service ability as a major compliance network in the 21st century.

Such has been the case with Coca Cola Company which received its ISO 1400 standards certification in the year 2007 for its integrated environmental planning assessment.

After its realization of the negative impacts its excessive energy consumption, excessive water usage, and aquatic pollution from its effluents, major changes were inculcated leading to higher profits, better cooperation with the consumers, and higher levels of ecological integrity. As indicated in its year 2007 financial report, Coca Cola Company managed to articulate its systems via engineering applications which saw major replacements for the old and less effective ones (Daniels, 2009).

However, this system has been cited to harbor major controversies like high cost of application and time required to effectively see the results. De Abreu and Cavalcanti (2011) point out that consultancy services are mainly based on the ability to recommend the necessary systems that have the highest results within the most reasonable time a notion that forms a major undoing factor for EMS and its clients.

IV. Operations planning

Operations planning has been considered by many scholars as one of the subsets of strategic planning. Its crucial role is its how and what portion of a strategic plan needs to be employed by an organization in order to realize a goal. It no only provides a short term strategies of achieving set goals, but also justifies and offers a strong base for operating budget request for a period of one to three years.

Linea and Jonsson (2010) indicate that an operational plan like a strategic plan answers the questions of how to measure progress, how to attain it, and what to use. They add that operations plan sets out a monitoring progress process, implementation timetables, resource and staffing requirements, desired outcomes, quality standards and clear objectives.

Boulaksil and Fransoo (2010) found out that performance of modern organizations is largely based on operational planning that cut across various levels. To achieve set goal in organization, use of teams has been factored as part of the overall organization culture to facilitate inherent contribution by all.

Through teams therefore, a new operating environment is set out for consultation to harmonize ideologies of running and managing the key operations. As behavioral theories indicate, through teams and team operations, employees are able to effectively learn faster from their colleagues and employ key concepts to promote their positions at the group as well as the organization level.

Sodhi & Tang (2011) point out that teams operation create an inherent outline for the organizations running environment and therefore aligning employees with organization citizenship behavior. While aligning an organization’s teams operations, competition and rewards at the individual and team level have been credited in curving out the needed niche towards ethical operations.

V. Proactive planning

Fruchter and Mantrala (2010) lament that while proactive planning is an important imperative for planning for matters that are yet to come most organizations do not practice it. One critical advantage that an organization that plans ahead and prepares in advance is the capacity it gains in terms of arming itself or leveraging against any situation that will arise. Such situations can be form uncertainties, strikes by employees, riots, earthquakes and floods, factors that may negatively impact on a business.

In their definition of leadership, Sauma and Oren (2006) incorporate a leader’s role in creating a smoother plane for their subjects to realize preset goals with proactive planning. Situational leadership involves a strong analysis of the existing environment situation and the ability of adjusting to it.

At this point scholars appear to emphasize on making organizations highly proactive in focusing to both long and short-term situations when making the decisions. This is also articulated in Burns transformational leadership theory is built on the understanding that both the leader and followers posses key skills that must be fully exploited for organization’s visions to be achieved.

Unlike other methods where the assessment takes place at the end of a certain process, Fruchter and Mantrala (2010) explain that this method is much superior in generating a proactive ability to cite and address problems and issues. Besides, its simplified nature further makes it possible to be broken into smaller units and therefore facilitating the ability of all the people to contribute in the assessment and therefore equally being involved in addressing the problems and issues.

3. Conclusions

To recap it all, it is worth noting that the various types and levels of planning options available in organizations are indeed necessary when executing the aims and objectives of a business enterprise. The discussion in this paper was based on the thesis statement that planning in organizations has become an important process that has aided many organizations to create desired goals and formulate appropriate steps towards attaining them.

From the discussion, it is clear that planning is a crucial element in organizations for planning out and setting future courses of action and path to be followed. Besides, planning occurs in three key levels namely functional, corporate and business levels. These are witnessed in different types of planning in organizations which ensures that perfect adjustments, contributions and coordination are effected.

References

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