The operational planning can be characterized as a systematic and methodical process for recognizing and solving future problems. Planning in this sense has the following characteristics:
Characteristics of Operational Planning
- Process orientation: Planning takes place within a multi-stage process that includes several phases.
- Rationality: In contrast to improvisation, planning is characterized by a systematic approach, including comprehensive information search and processing.
- Future orientation: Planning takes place before the implementation of measures, meaning that planning always takes place in a state of imperfect information.
- Goal orientation: Planning aims to shape the future with regard to the achievement of specific goals. Therefore, planning presupposes that relevant goals are fully understood and operationalized to achieve goals, and as the measures that can be used in principle and resources.
- Reduction of complexity: Within the planning process, suitable instruments and techniques are to be found to make frequently complex and poorly structured problems accessible to solution.
- Improvement of information supply: Planning is intended to make the information requirements transparent and to systematize the acquisition and processing of information.
- Setting of performance indicators: The result of planning is plans; they structure future action and provide a framework for employee behavior.
- Reduction of the risk of incorrect decisions: Planning is intended to ensure early detection of opportunities and risks and to show ways of perceiving or coping with them.
- Coordination of individual measures: By coordinating and integrating individual plans into an overall plan, the pursuit of overarching corporate goals is ensured.
- Motivational and incentive effect: By involving employees in the planning process, their identification with the company and its goals can be promoted.
Planning Process
The planning process is usually divided into the following six phases:
- Goal setting
- Problem analysis
- Search for alternatives
- Forecasting
- Evaluation
- Decision-making
It should be noted that the planning process in practice does not necessarily follow a rigid sequence. Problem analysis, search for alternatives, and evaluation are spread out over the entire duration of the planning process, albeit with different weights.
Therefore, the planning process is characterized by numerous feedforward and feedback relationships.
Also read: Operational vs. Management Decision-Making: Understanding the Differences in Information Needs
The interactions between the individual phases are therefore not fixed and can vary depending on the specific planning context.
According to the criterion of planning hierarchies, a distinction is made between
- the strategic,
- the tactical and
- operational planning
The strategic planning is designed for the long term and is carried out by the company management and provides the framework for tactical and operational planning.
The focus of strategic planning is the global analysis of a company’s potential for success and the development of strategies for the long-term future of the company.
Typical objects of strategic planning include future markets, technologies, and long-term investments.
Tactical planning involves the mid-term implementation of strategic plans on concrete problem and action complexes; the strategies are concretized in content and broken down into mid-term sub-plans.
Typical questions include mid-term investment and financial planning, the development of new sales channels, and the development of new products.
Summary
Operational planning is a short-term, action-oriented planning process that mainly involves detailed planning for the current fiscal year and is usually associated with specific plan guidelines for task performers.
A comparative overview of the essential distinguishing features of individual planning problems at different hierarchical levels is provided.
Strategic planning problems are characterized by the creation of an overall plan; the breakdown into sub-plans only occurs during tactical and operational planning.
Tactical and operational sub-plans have a higher level of detail compared to strategic plans; correspondingly, the information contained therein is more precise.
Conclusion
In conclusion, strategic planning differs from tactical and operational planning in terms of the long-term planning horizon; accordingly, the problems to be solved are more vaguely structured, while the subject of tactical and operational planning are concrete, well-defined problems.
