Types of Plans

Organization plans are usually divided into two types, namely, standing plans and
single-use plans. Standing plans are those that remain roughly the same for long
periods of time and are used in organizational situations that occur repeatedly. The
most common kinds of standing plans are policies, procedures and rules. Singleuse
plans focus on relatively unique situations within the organization and may be
required to be used only once. These plans can be subdivided into programmes
and budgets.
Standing plans
The standing plans are as follows:
 Policies: A policy is a statement and a pre-determined guideline that provides
direction for decision-making and action taking. Policies are usually general
enough to give the manager sufficient freedom to make judgements, while
at the same time they are specific enough to establish constraining boundaries.
For example, regarding employment, a company policy may be to employ
personnel on merit alone without regard to race, sex or age and within the
bounds of this policy, a manager can make decisions. Policies must be based
upon a thorough analysis of objectives and should be consistent with the
company’s mission and philosophy.
Policies, being formal statements, serve as ready guides for answering
numerous questions and making many day-to-day routine decisions,
especially about recurring problems, thus freeing the management’s time for
more important and unique decisions. This helps improve the efficiency of
operations. If the policies are clearly understood and adhered to by all, then
there will be fewer problems and fewer complaints to start with. There may
be separate policies for separate functions but they must be coordinated.
Appropriate policy guideline enables managers to anticipate and take action
for a given set of situational variables. There are organizational policies
formulated for all types of situations and functions. There may be sales
policies, production policies, personnel policies and so on. For example,
personnel policies would specify decisions regarding selection, training,
remuneration, labour relations, promotion of personnel and so on. According
to Newman, Summer and Warren, a policy may:
 Be specific or broad in nature
 Deal with one or many aspects of a problems or a situation
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 Place wider or narrow limits within which action is to be taken
 Specify the steps to be taken when a decision is to be made
Policies are useful indicators of the conduct and the philosophy of the
company and about what the company stands for. These policies, being
formal statements, can easily be communicated to the organizational
members as well as to the outside public.
 Procedures: While policies cover a broad area of action, procedures
prescribe the exact manner in which an activity is to be completed. It is a
series of steps established to accomplish a specific project. They generally
indicate how a policy is to be implemented and carried out. They are more
precise guidelines permitting little or no individual discretion. Procedures
can be defined as a series of related tasks that make up the chronological
sequence and the established way of performing the work to be
accomplished. For example, some companies have a policy of reimbursing
employees for their educational expenses. To claim such expenses, the
employee must follow a set procedure, such as filling a form, attaching a
copy of courses taken and grades received, taking it to the personnel office
for processing and then waiting for the reimbursement check.
 Rules: While procedures specify a chronological sequence of steps to be
performed, a rule is very specific and a narrow guide to action. These are
plans that describe exactly how one particular situation is to be handled.
For example, a company may prescribe a number of safety rules, such as
‘No smoking on company premises’. ‘No eating in the classroom’ is a rule
in all schools and colleges.
A rule is meant to be strictly followed and is generally enforced by invoking
penalties. For example, if it is a rule to report on duty at 9 AM then any
person who consistently breaks this rule can be fired. A law in Delhi requires
that all car drivers not wearing safety belts while driving are subject to fine.
Single-use plans
The single-use plans are as follows:
 Programmes: A programme is a single-use plan designed to carry out a
special project, to solve a problem or achieve a group of related goals.
This project or problem is not intended to be in existence over the entire life
of the organization like the standing plans. The programme exists to achieve
some purpose identified by the organization and this achievement is expected
to benefit the organization. For example, an organization may have instituted
a management development programme to build special managerial skills
such as handling international competition or meeting the management
challenges of the next century.
Similarly, a college may have a programme to build a new laboratory or
add new class rooms. A business may have a programme to automate its
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systems. All these programmes are one-time programmes, no matter how
long it takes to complete a given programme or a project. Once the
programme’s goals are achieved, that programme is discontinued.
 Budgets: A budget is another single-use programme which is a financial
plan that covers a specified period of time. This plan identifies as to how
funds will be raised and how these funds will be utilized for procuring
resources such as labour, raw materials, information systems and other
business functions such as marketing, research and development and so on.
Every organization prepares a budget for its various activities. These budgets
are usually for a one-year period. When a specific budget period ends, the
value of that budget as a planning device is finished, even though it may
form the basis for the budget for the following period. In that respect, it is a
single-use plan.