State and explain different types of plans.

 TYPES OF PLAN

Different plans are prepared for different purposes at different situations. This means, there can be different types of plans depending upon situation, purpose and nature. Plans can be classified into different types on various bases as discussed below:

1. Plans on the basis of managerial hierarchy and authority As there are three different levels of management i.e. corporate level, department level and operational level, each level prepares plans for different purposes within their responsibility area. Depending upon the level of management, plan; plans can be classified into corporate plan, departmental plan and operational plan.

• Corporate level plan: Overall vision, mission, goals and strategies of the organization are prepared by top level i.e. corporate level which are called the corporate plans. They are the long term plans prepared to justify the existence and growth of organization. Such plans set the actions to attain organizational goals and objectives. Corporate plans are also called strategic plans. Corporate plans are the basis of department level plans.

•  Department level plan: Department level plans are prepared by middle level i.e. department level management for their respective activities. Such plans translate strategic i.e. corporate goals and plans into specific goals and plans according to departmental responsibilities. Department level plans are prepared by department managers to each department such as marketing plan for marketing department, financial plan for finance department, human resource plan for human resource department, production plan for production department and so on. These plans are prepared on the basis of strengths and weaknesses of that particular division or department. Main purpose of formulating the department level plan is to determine the specific details of targets for department, resource allocation, resource utilization and time target for the activities. Department plans are also called tactical plans.

• Operational level plan: Operational level plans are the plans prepared for operational units to set their goals and specific actions. Such plans are prepared by operational units to attain plans of their department. Operational plans are normally prepared daily i.e. routined activities or for short time. Such plans identify the specific procedure and process required for the operational units of an organization. Packaging unit prepares the responsibility allocation in absence of employees for five days, sales unit prepares plan for shipping goods to Pokhara and Bhairahawa from Kathmandu, operation unit sets plan of machinery maintenance within three days, etc. are some examples of operational plan. Such plans are prepared by operating level managers i.e. supervisor of each unit in coordination of employees. Operational plan should be consistent with strategic and tactical plans.

2.  Plans on the basis of frequency of use

Some of the plans are used constantly for long time while some others may have short time use and few plans have only one time use. On the basis how frequently the plans can be used, they can be classified into two categories as single use plan and standing use plan.

• Single use plans: Single use plans are prepared just for one time use. This means that single use plans are not repetitively used. Such plans are developed to solve particular problem in particular situation. They are prepared to fulfill requirements of non-programmed decisions. For instant, plan prepared to conduct any ceremonial functions like annual day, plan prepared to conduct terminal examination in college, overtime work plan in case of mechanical failure, job rotation plan in the absence of employees are some examples of single use plan. Singly use plans have no use after using it once.

• Standing use plans: Standing use plans are prepared for long time use i.e. repetitive activities like mission, strategy and goal of the organizations. Such plans are suitable for programmed decisions and routine functions. In order to make the decisions fit for the  changing situation and environmental context, there must be frequent adjustments in such plans. Standing plans are prepared for long run like growth of the organization, like innovation, consumer care, etc. to serve the existing goal of organizations.

3. Plans on the basis of flexibility

Some plans can be modified according to the situations while some others cannot easily be done so. On the basis of the extent of flexibility i.e. provision of change, amendment or modification, plans can be classified into flexible plan and specific plan.

• Flexible plans: If the plans can be modified or changed according to the needs of situation, then the plans are called flexible plans. Flexible plans provide general guidelines to perform the activities. Such plans cannot provide specific objectives and procedures. It can be changed or modified according to the changing situations. They are also known as directional plans. Such plans have no effects on long term goals and objectives of the organization.

• Specific plans: If the plans are more specific and can be used for long time without any change, or modification then the plans are called specific plans. Specific plans are clearly defined and have specific long term objectives. There is no ambiguity and no chance for miss-interpretation of such plans. Organizational vision, mission and goals are the specific plans. 

4. On the basis of Time Horizon

Plans are usually prepared for specific time period. Some plans become useless after that time. Thus, plan can be classified on the basis of the time period to which the plans are prepared into long term plans, medium term plans and short term plans as below:

• Long term plans: Long term plans are formulated for long time specially for more than five years. Mission and strategies of organization are long term plans. Long term plans are basically prepared to attain the organizational success. These plans are prepared by top level of the organization.

• Medium term plans: Medium term plans are prepared for intermediate terms specially for two to four years. Such plans are the departmental plans which are prepared by department level management of the organization. 

• Short term plans: Short term plans are prepared for less than one year. Budgets and operational plans are short term plans. Operational plans are prepared by respective work unit.

5. Contingency plan

Contingency plan is the alternative course of action prepared in case the intended plan of action is unexpectedly disrupted or found inappropriate. In few cases, the well set plan does not work or gets failed during implementation, management needs to formulate another plan either to correct that plan or replace the plan in emergency. Such plan prepared in an emergency instead of continuous of organizational activities uninterrupted is called the contingency plan. For instance, a contingency plan occurred during the late 1990s in anticipation of what was popularly known as the 'Y2K bug' in order to solve the concern problem possibly created because of change in date system i.e. internal clock changing in computer system from 1999 to 2000. For the purpose, many airlines corporations, hospitals, banks, etc. created additional backup system because of probable loss because of the reason. They also planned additional employees. Likewise, Nepal Government sets contingency plan every year for quick action in case of flood and landslide during the rainy season.

A contingency plan is implemented in four action points as shown in the following figure. 

At action point 1, management develops the basic plans of the organization. These may include strategic, tactical and operational plans as other normal plans. During this phase, in many organizations, managers usually consider various contingency events (called devil's advocate) asking 'but what if ... about the each course of action. In simple terms, contingency plan is prepared by thinking in negative ways i.e. 'if not happens what to do?'. For each course of action, varieties of contingencies are considered At action point 2, developed plans at action point 1 are implemented. During this action point as well, most important contingency events are defined and plan is prepared. Based on likelihood i.e. most probable contingency variable whose impact tend to be substantial is used in contingency planning process. At the action point 3, company specifies certain indicators or signs that suggest that a contingency event is about to take place. For instance, a car seller may consider 10 percent increase in down payments may consider a contingency variable for decrease in sales. Finally at the action point 4, plan implementation is evaluated. If the chosen action plan is successfully implemented, no need to implement the contingency plan. If there will be obstacles in implementation of chosen plan, contingency plan is implemented.