(See the notes on the definition of strategy and tactics from session 1 for more detail on the definition of the terms used on this page.)

Planning in Business

Planning is management's most vital process. Organizations need to manage change in order to:

• Offset uncertainty
• Maintain stability
• Minimize confusion by focusing on objectives
• Increase commitment
• Facilitate control
• Promote economic operation
• Co-ordinate long term and short term goals

The Planning cycle

Planning is a cyclical activity. There are several variations on the planning cycle but all start with the setting of a high level goal (the mission statement) and end with some form of evaluation which closes the loop. The most common stages are:

• Deciding on the mission statement
• Defining the objectives
• Scanning the environment to assess the current and possible future scenarios
• Setting a strategy
• Deciding on the tactics for implementation
• Measuring and evaluating the outcome

The Planning Cycle

Planning can therefore be conveniently (but not rigidly) divided in two types:

Strategic Planning

• Deciding on long term strategic goals - organizational mission statement, setting high level corporate objectives, outlining major courses of action and the allocation of major blocks of resources

Tactical Planning

• Making detailed short term decisions about how to reach the strategic goals - the what, where, how, when and who