Planning Types: Corporate, Operational, Functional and Proactive Planning


Planning Types: Corporate, Operational, Functional and Proactive Planning!

I. Corporate Preparation:

The term corporate preparation denotes planning activities for the entire business.


The basic focus of corporate planning is to identify the long-term objectives of the organisation as a whole. And then to generate plans to attain these goals taking into mind the likely changes in the external environment (macro level). Corporate planning is typically performed on top level of management.

“Business planning consists of the setting of objectives, organising the work, people and systems to enable those objectives to be achieved, inspiring through the planning process and through the strategies, measuring efficiency therefore controlling progress of the strategy and establishing individuals through better decision making, clearer objectives, more participation and awareness of development.”– David Hussey

Hussey has given a broad meaning of business planning. It covers numerous functions of management besides specifying planning. Business preparation is the overall preparation activities in the organisation and not the overall management functions.

“Corporate Preparation is the constant process of making present danger taking decisions methodically and with the greatest knowledge of their futurity; organising systematically the efforts needed to carry out these choices, and determining expectations through arranged, methodical feedback.”– Peter Drucker


The business planning activities are carrying out at the top level. They are necessary for the success of the entire organisation. The top management is responsible for the formulation of such strategies and is prepared according to the inputs that are given to them either from the environment or the lower levels in the organisational hierarchy. The plans are generally long term and are broad based.

The corporate preparation is of two types:

i. Strategic Preparation

ii. Operational Preparation


Strategic Planning consists of the procedure of establishing techniques to reach a defined goal. It sets the long-lasting direction of the organisation in which it wants to proceed in future. According to Anthony it can be defined as the “procedure of selecting the goals of the organisation, on changes on these objectives and on the policies that are to govern the acquisition, use and personality of these resources.”

An assessment of offered resources is made at the top and after that things are prepared for a time period of upto ten years. It basically deals with the total assessment of the organisation, strengths capabilities and weak points and an objective examination of environment is produced future persuits.

Examples of tactical planning in an organisation might be; prepared growth rate in sales, diversification of organization into new lines, type of products to be offered and so on. Strategic planning likewise includes the analysis of different ecological aspects particularly with regard to how organisation connects to its environment.

The tactical preparation might be carried out in series of actions that consist of the


1. Defining Missions and Goals.

2. Elaborate Environmental Scanning.

3. Method Solution.

4. Technique Implementation


5. Assessment and Control

Strategic preparation is of prime importance for any organisation as they would define the other decisions that need to be taken.

II. Functional or Tactical Planning:

Operational preparation, is also referred to as tactical or short-term preparation, normally, covers one year approximately. Operational planning includes the conversion of strategic strategies into in-depth and particular action strategies. These plans are designed to sustain the organisation in its items Functional preparation is done at the middle or lower level of management Functional preparation can be defined as follows:

“Operational preparation is the process of deciding, the most efficient use of the resources already designated and to develop a control mechanism to ensure reliable application of the actions so that organisational goals are attained.”


A Functional plan is an annual work plan:

It tells short term organization methods; it describes how a tactical plan will be taken into operation (or what portion of a strategic plan will be taken into operation (or what portion of a strategic strategy will be resolved) during a provided operational period ().

These plans are to support tactical strategies whenever some trouble is dealt with in its application. Any modifications in internal organisation or external environment have to be met through tactical plans.

For instances, there is unexpected modification in rates of items, problem in obtaining basic materials, unexpected relocations by rivals; tactical plans will help in conference such unanticipated scenarios. The success of tactical plan depends upon the speed and versatility with which management acts to meet unexpected scenario.


Operational planning is concerned with the efficient use of resources currently allocated and with the development of a control mechanism to ensure effective execution of the action so that organization objectives are achieved.

III. Functional Preparation:

The planning that is made to make sure smooth working of the organisation taking into consideration the requirements of each and every department. The purpose of practical planning is to promote standardised management practices for business functions in the department’s decentralised business management structure.

The following 3 fundamental activities have to be performed in practical preparation:

( 1) Functional Assistance:

Supervisors need to be told and directed what they ought to be doing to effectively manage corporate functions within the business.

( 2) Setting Goal:

Specific measurable objectives require to be set that would determine the efficiency of the functional preparation. Objectives need to be meaningful, achievable and measureable.

( 3) Functional Assessments:

Functional assessment wraps up the functional planning procedure. Here the Comparison is made between the goal setting and the goal achievement. The functional assessment should have the following attributes:

(i) Substantiation:


Supervisors who are responsible for corporate functions should describe how resources and activities committed to their function offer support to the achievement of the corporate top priorities and practical targets.

(ii) Measure of Success.

Supervisors accountable for business functions must quantifiably determine the success in meeting objectives determined in their practical assistance.

(iii) Foresight:

Supervisors must be in a position to recognize establishing spaces and threats faced in their respective functional locations, along with recommendations to fill up those gaps and threats.

iv. Proactive and Reactive Preparation:

Classification of planning into proactive and reactive is based on the organisation’s response to ecological characteristics. Preparation is an open system method and is impacted by environmental factors which continue changing constantly. Nevertheless, organisations response to these modifications varies. Based on these responses, preparation might be either proactive or reactive.

Proactive Preparation:

It is based on the anticipation of the future results and state of affairs that would affect the working of the organisation. Such a preparation has to be broad based, highly flexible and creative by nature.

The organisation that favours this type of preparation typically anticipates the future and takes required actions before the taking place of the occasions. In India, companies like Dependence Industries, Hindustan Lever and so on, have actually adopted this approach and their growth rate has been much faster than others.

Reactive Preparation:


As the name suggests, this sort of planning is not in the anticipation of the future however becomes active only when the problem is challenged or has actually already happened. This is merely the restorative action that is taken. This method of planning is useful in an environment which is relatively steady over an extended period of time.

v. Formal and Casual Planning:

Formal Preparation exists in the official hierarchy of the organisation and is constantly performed in the stepwise process. It is according to the pre expressed policies and the rules of the organisation. This kind of preparation is done at a big scale and is based on the logical thinking. The planning procedure that is embraced is documented, and routine.

Informal Planning is usually performed in extremely little organisations where the official organisation structure might or might not exist. The preparation is typically user-friendly in nature and is brief termed. Considering that the environment for smaller sized organisations is not complex, they do fairly well with casual planning procedure.

vi. Automated Preparation:

Automated preparation and scheduling is a branch of artificial intelligence that concerns the realisation of methods or action series, normally for execution by smart agents, self-governing robots and unmanned cars. This kind of planning is usually discovered in the technologically innovative organisations.

Unlike classical control and classifications issues, the options are complex, unidentified and have to be found and optimized in multi-dimensional space.


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