Chapter I - The Business Organization - Part III

3.1 Different Levels of Planning

1. There are mainly three levels of plannning. That is
a) Strategic planning which involves planning the resources for the long term interest and benefit of the organisation

b) Tactical planning which involves planning the resources at the departmental/divisional level and is considered medium term planning

c) Operational level is planning the details mainly concerned with details and is a stort term plan

2. All the plans are inter-related as one helps in the formulation of the other. Strategic plans helps to formulate tactical plans which in turn is converted into operational level plans like performance targets and budgets.

Example – Strategic planning would decide what goods would be produced for the year. Where as the tactical planning would decide how to use the resources inorder to get maximum benefit. The operation planning would include the extra staff requirements etc.

3.2 The Nature of Strategic Planning

1. Strategic planning looks into the whole organisation and integrates its activities.

2. It looks into the individual products and markets and sets the direction to the organisation.

3. It also takes into consideration the views of stakeholders and also relates the organisation to its environment.

4. It analyses and defines the resources and it looks into becoming a competitor in the market. In the whole it has a long term perspective of the organisation.

3.3 The Strategic Planning Process

This planning process involves three steps. Which are listed below:

1. Strategic Analysis: It is the analysis of internal and external threat or objectives of competitors and the market. It also includes an analysis of stakeholder’s in order to understand their expectations.

2. Strategic Choice: Based on the strategic analysis, the managers have to decide on the basis of the strategy,target market and the most suitable type of growth they want to adopt

3. Strategic Implementation: In this stage the strategies need to be translated into plans for the various types of function in the organization.