2 Main Types of Plans | Planning | Functions | Management

Plans are classified into two types known as Multi-use Plans and Single-use Plans.  

Other names are standing plans or repeated use plans. They are used repeatedly in situations of a similar nature. They are also used for problems of repetitive nature. They are long-term plans in nature and they are used for the entire organisation. They are the effective means of achieving control, co-ordination and objectives. They include objectives, strategies, policies, procedures and Rules.

As against multi-use plans there are single use plans. They also called as ad-hoc plans. They are developed to meet non-repetitive situations. It is a specific plan to meet a non-recurring event. Its duration is shorter and it relates to specific aspects of the organisation. It consists of budgets, schedules, project and methods.

Type # 1. Multi Use Plans:

(1) Objectives:

An objective is a goal characterized by a comparatively short time span and specific and which is a measureable achievement objectives provide orientation by depicting a future state of affairs which the organisation strives to achieve. They constitute a legitimacy which justifies the activities of the organisation and indeed its very existence.

It is the key to effective planning and planning has no meaning if it is not related to certain objectives. Objectives represent not only the end point of planning but also the end towards which other managerial activities like organising, directing and controlling are aimed at. The accomplishment of objectives is necessary for the survival for any business enterprise.

Koontz and O’Donnell define objectives as a “term commonly used to indicate the end point of a management programme.”

Louis A.Allen defines objectives as “goals established to guide the efforts of the company and each of its components.” Dalton E. McFarland has defined objectives as “the goals, aims or purposes that organisations wish to achieve over varying periods of time”. George R. Terry says that “a managerial objective is the intended goal which prescribes the definite scope and suggests direction to efforts of a manager.”

Objectives refer to specific aims of organisation. They may be set out in the form of performance targets for a particular function or position. They are to be established for the organisation and translated downwards. They set the pattern of the proposed course of action and shape the structure of other subsidiary objectives in the organisation. They specify the results expected and indicate what is to be accomplished by the various types of plans.

They are to be established in all those areas which represent the main activities of the organisation in achieving the objectives. The overall objectives are to be translated into different areas. The objectives decide the future course of action and they act as a guide to action. They must be specific, informative and clear enough to indicate what is to be done. Objectives provide the basis of planning and it is the focal point of all other managerial functions.

The features of objectives are as follows:

(i) Objectives are to be in writing.

(ii) Objectives are to be realistic and not idealistic.

(iii) Objectives must be measurable.

(iv) Objectives must have social sanction.

(v) Objectives are usually plural in nature. They are to be developed for different areas.

(vi) All objectives are inter connected and mutually supportive.

(vii) Objectives may be of long-term, medium-term and long range objectives.

(viii) Objectives may be constructed into a hierarchy i.e. for the organisation, for the divisions and for the departments.

Setting Up of Objectives:

In establishing objectives the followings points are worth considering.

They are:

(i) Organisational objectives are multiple in character. The pressing and dominant objectives should be given priority over other objectives,

(ii) There should be co-ordination and balancing between objectives.

(iii) Major objectives are to be identified and they should be translated into operating objectives. They should be in tangible and meaningful terms.

(iv) Objectives may be classified as major or minor, short-term or long- term and economic or social objectives. Major objectives relate to the main purpose of the organisation and minor ones are subordinate to and consistent with the major objectives.

Short-term objectives are for a lesser duration of time and their achievement should result in accomplishment of long-term objectives. Economic objectives are the goals relating to goals of the market place while social objectives deal with employees, shareholders and the public at large.

(v) Objectives are to be set for various levels in the organisation.

Advantages of objectives:

Accomplishment of objectives is necessary for the survival of any enterprise. The management is to specify the objectives in all areas on which the survival of the business depends.

Well defined objectives in major areas of the business will achieve the following benefits:

(A) It Unifies Plans:

The managers at various levels evolve their own plans. Objectives facilitate consistency in performance as all plans will have the same focus of action.

(B) It Stimulates Motivation:

Individual objectives fit into organisational objectives and make the job more meaningful and worth-while. This stimulates motivation of employees.

(C) Objectives Provide Direction:

They provide the end goal of an organisation and direct the efforts of all employees into certain channels. Thereby it provides direction to employees.

(D) Objectives Serve as Standards:

Objectives facilitate the measurement of performance. In the absence of these measurements the managers hardly do have any tool for evaluating their performance.

(E) It is the Basis for Decentralization:

Objectives provide for the definition of roles to be played by employees in the organisation. Well defined objectives are helpful in effective delegation of authority. The need for detailed guidance is reduced by providing the targets. Thereby it facilitates decentralisation.

(F) It Facilitates Co-Ordination:

Co-ordination means the integration of activities of employees at various levels of organisation. By defining individual goals at various levels every individual can fit his actions into a co-ordinated effort.

(2) Procedures:

Procedures indicate as how an activity is to be performed. Procedures define the course of action and spot out the chronological sequences of the actions which are to be followed by the employees within the limits chalked out by the policy to achieve the objectives. Procedures are more definite and specific guides to action only for the fulfillment of objectives.

They spell out various steps to be taken in completing an activity. Normally, time limits are also placed on each steps of a procedure accomplished within a fixed time. It will expedite the controlling efforts and also co-ordinate the operations of various procedures within the organisation.

According to Koontz and O’Donnell Procedures “are plans in that they establish a customary method of handling future activities. They are truly guides to action rather than thinking and they detail the exact manner in which a certain activity is to be accomplished. Their essence is chronological sequence of required actions.”

This definition focuses on the following:

(a) Procedures prescribe the steps for handling repetitive functions.

(b) They are guide to action.

(c) Chronological sequence is the essence of procedures.

George R. Terry has defined the procedures as, “a series of related tasks that make up the chronological sequence and the established way of performing the work to be accomplished.”

It is a list of systematic steps for handling events that occur regularly, chronological sequence of required actions is the essence of any procedure. Procedures involve planned sequence and consistency. They are operational guides to action. They routinize the way of performing certain recurring jobs.

They tend to impart systematized order in an organisation. They serve as a means by which decisions are implemented. A streamlined, simplified and sound procedure helps to expedite and accelerate work without duplication and waste of efforts, time and resources. It lubricates the management by providing the channel of information and helps the management in taking timely decision.

In formulating procedures the following points are worth considering:

(a) The number of procedures should be kept to the minimum possible.

(b) Procedures should be based on adequate facts of the situation and not on guesses or wishes.

(c) They are to be recognized and developed as a system of interrelated activities in a network.

(d) Proper balance should be kept between stability and flexibility at the time of designing a procedure.

(e) Procedures are to be reviewed periodically and changes are to be made as and when needed.

Advantages of procedures are:

(a) Procedures minimise the burden of decision making because the sequence of steps are standardised.

(b) Procedures often lead simplification of work flow and elimination of unnecessary steps.

(c) Procedures ensure uniformity and consistency of action under recurring situations.

(d) Procedures are developed after careful analysis of various operations which are necessary for bringing co-ordination in the organisation.

(e) They are an aid to communication because they communicate the steps to be followed to complete a particular piece of work.

(f) Procedures serve as a medium of control by enabling the managers to evaluate the performance of the subordinates.

Limitations of procedures are:

(a) They bring out rigidity in the performance of operations. They discourage the search for any improvement.

(b) A procedure lays down the fixed way of doing a particular job and thus a more effective way of doing may not give proper attention.

(c) They are to be reviewed and updated constantly because they become obsolete with the change in the nature of business operations.

(3) Rules:

Every organisation attempts to function in an orderly way by laying down certain rules. They are used for guiding what may or may not be done. A rule demands a specific action. It is more rigid than a policy. They generally relate to the administrative area of a procedure.

Rule is defined as a prescriptive directive to people on their conduct and action. It is in the nature of a decision made by the management what is to be done and what is not to be given in a situation. A rule is definite and rigid. No deviation expected from a rule. Rules help to regulate behaviour and facilitate communication. Generally the breach of rules carries a penalty.

(4) Methods:

A method outlines in a specific way in which a particular step in a procedure is to be performed.

A method is the manual or mechanical means by which each operation is performed. It means an established manner of performing an operation. It defines the technology of individual operations in work situation.

Type # 2. Single Use Plans:

Single use plans are made for handling non-recurring problems. They are also known as specific plans as they are tailored to suit the specific situations. Every single use plan is formulated to handle a non-repetitive, novel and unique problem.

The various single-use plans are:

(1) Programmes

(2) Projects

(3) Schedules

(4) Budgets and

(5) Standards

(1) Programmes:

Louis A. Allen:

It is “a sequence of activities designed to implement policies and accomplish objectives”. A programme involves planning for future events and establishing a sequence of required actions. It is a complex of objectives, policies, procedures, task assignments, steps to be taken, resources to be employed and other elements needed to carry out a given course of action. It is a concrete scheme of action designed to accomplish a given task. It gives a step-by-step approach to guide the action necessary to reach a pre-determined goal.

Its features are:

(a) It is a single-use plan but comprehensive in nature.

(b) It gives a step-by-step approach to guide the action plan.

(c) It specifies the steps for achieving a mission.

(d) It involves objectives, strategies and other elements of plan.

(e) It is a time table for future action.

(f) It involves an integrated and coordinated planning approach.

The steps in programming are:

(a) Identification of activities needed for achieving objectives.

(b) Divide the activities into stages and steps.

(c) Steps are arranged in sequence.

(d) The human resources required for the programme is fixed and they are assigned with necessary duties for performances.

(e) The time required for each step is set.

(f) Other resources required various steps are determined.

(g) Master schedule is prepared for monitoring.

The merit of programmes are:

(a) There is economy and uniformity in day-to-day operations.

(b) Programmes are action based and result oriented. So they serve as a practical guide and provides motivation.

(c) It facilitates prompt implementation.

(2) Projects:

A project is the smaller and separate portions of the programmes. They are limited in scope and contain distinct directives concerning assignments and time. It is defined as any scheme or part of a scheme for investing resources. The project can be analysed as an independent unit. It is actually a proposal of investment which can be separately appraised as an independent unit.

Its features are:

(a) Activity is definable in terms of specific objective.

(b) It involves a time-bound activity’.

(c) It has a distinct mission and a clear termination point.

(d) This is suitable for the following situations:

(i) Work to be done requires expertise from various departments.

(ii) Work is complicated.

(iii) High-cost is involved.

(iv) Minimisation of errors and missions.

(v) Time bound activities are needed. Projects facilitate control and co-ordination.

(3) Schedules:

Definition:

Louis A. Allen:

“Scheduling is the process of establishing a time sequence for the work to be done”. It is an integral part of programming. It specifies time limits for completion of a job. It avoids delays and ensures prompt and continuous performance.

(4) Budgets:

Budgets are plans for using money and materials. It is an important tool of planning and it is prepared to utilise scarce resources in the best possible manner. The budgets are prepared for the organisation and its departments. They are numerical statements prepared in a particular period. Budgets set standards from which actuals can be compared.

Koontz and O’Donnell defines a budget “as a plan is a statement of expected result expressed in numerical terms”.

Louis A. Allen “A budget is an estimate for use…Budgets may be stated in time, money, materials or other units required to perform work and accomplish specified results.”

Since most values are ultimately convertible into monetary units, money budgets are commonly used. The budget preparation calls for compilation of all relevant facts and figures like any other plan.

Its essential features are:

(a) It plays a dual role: A planning instrument and a control device.

(b) There is a separate budget for each department and for the organisation.

(c) Budget preparation is an annual affair. It may be prepared for a lesser duration.

(d) It sets up standards for evaluation.

The merits of a budget are:

(a) It facilitates comparison of inflow and outflow of resources.

(b) It is essential for control, but it cannot serve as a control mechanism unless it reflects plans.

(c) It is a key managerial process and is important for co-ordinating the functioning of various departments.

(d) Budgets can inject a sense of clarity, direction and purpose in the activities of the organisation by specifying verifiable and measurable goals to be achieved within a specified time.

(e) They are forward looking documents and they should be accommodating emergencies. So they give flexibility in operations.

(5) Standards:

It is a guide for performance evaluation. They can be for all areas. Standards may be quantitative or qualitative.