Organizational Planning Guide: Types of Plans, Steps, and Examples

Organizational Planning Guide: Types of Plans, Steps, and Examples

Organizational planning is like charting your company’s path on a map. You need to know what direction you’re headed to stay competitive.

But what exactly is organizational planning and how do you do it effectively? This guide will cover:

The Different Components or Types of Organizational Plans?

The 5 Process Steps of Organizational Planning

Organizational planning examples.

Organizational Planning Tools

What is Organizational Planning?

Organizational planning is the process of defining a company’s reason for existing, setting goals aimed at realizing full potential, and creating increasingly discrete tasks to meet those goals.

Each phase of planning is a subset of the prior, with strategic planning being the foremost

There are four phases of a proper organizational plan: strategic, tactical, operational, and contingency. Each phase of planning is a subset of the prior, with strategic planning being the foremost.

Types of Organizational Planning

Forms of Planning

A strategic plan is the company’s big picture. It defines the company’s goals for a set period of time, whether that’s one year or ten, and ensures that those goals align with the company’s mission, vision, and values. Strategic planning usually involves top managers, although some smaller companies choose to bring all of their employees along when defining their mission, vision, and values.

The tactical strategy describes how a company will implement its strategic plan. A tactical plan is composed of several short-term goals, typically carried out within one year, that support the strategic plan. Generally, it’s the responsibility of middle managers to set and oversee tactical strategies, like planning and executing a marketing campaign.

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Operational plans encompass what needs to happen continually, on a day-to-day basis, in order to execute tactical plans. Operational plans could include work schedules, policies, rules, or regulations that set standards for employees, as well as specific task assignments that relate to goals within the tactical strategy, such as a protocol for documenting and addressing work absences.


Contingency plans wait in the wings in case of a crisis or unforeseen event. Contingency plans cover a range of possible scenarios and appropriate responses for issues varying from personnel planning to advanced preparation for outside occurrences that could negatively impact the business. Companies may have contingency plans for things like how to respond to a natural disaster, malfunctioning software, or the sudden departure of a C-level executive.

Organizational Planning Templates

The organizational planning process includes five phases that, ideally, form a cycle.

Operational Process

Strategic, tactical, operational, and contingency planning fall within these five stages.

1. Develop the strategic plan

Steps in this initial stage include:

Review your mission, vision, and values

Gather data about your company, like performance-indicating metrics from your sales department

Perform a SWOT analysis; take stock of your company’s strengths, weaknesses, opportunities, and threats

Set big picture goals that take your mission, vision, values, data, and SWOT analysis into account

2. Translate the strategic plan into tactical steps

At this point, it’s time to create tactical plans. Bring in middle managers to help do the following:

Define short-term goals—quarterly goals are common—that support the strategic plan for each department, such as setting a quota for the sales team so the company can meet its strategic revenue goal

Develop processes for reviewing goal achievement to make sure strategic and tactical goals are being met, like running a CRM report every quarter and submitting it to the Chief Revenue Officer to check that the sales department is hitting its quota

Develop contingency plans, like what to do in case the sales team’s CRM malfunctions or there’s a data breach

3. Plan daily operations

Operational plans, or the processes that determine how individual employees spend their day, are largely the responsibility of middle managers and the employees that report to them. For example, the process that a sales rep follows to find, nurture, and convert a lead into a customer is an operational plan. Work schedules, customer service workflows, or GDPR policies that protect prospective customers’ information all aid a sales department in reaching its tactical goal—in this case, a sales quota—so they fall under the umbrella of operational plans.

This stage should include setting goals and targets that individual employees should hit during a set period.

Managers may choose to set some plans, such as work schedules, themselves. On the other hand, individual tasks that make up a sales plan may require the input of the entire team. This stage should also include setting goals and targets that individual employees should hit during a set period.

4. Execute the plans

It’s time to put plans into action. Theoretically, activities carried out on a day-to-day basis (defined by the operational plan) should help reach tactical goals, which in turn supports the overall strategic plan.

5. Monitor progress and adjust plans

No plan is complete without periods of reflection and adjustment. At the end of each quarter or the short-term goal period, middle managers should review whether or not they hit the benchmarks established in step two, then submit data-backed reports to C-level executives. For example, this is when the manager of the sales department would run a report analyzing whether or not a new process for managing the sales pipeline helped the team reach its quota. A marketing team, on the other hand, might analyze whether or not their efforts to optimize advertising and landing pages succeeded in generating a certain number of leads for the sales department.

Depending on the outcome of those reviews, your org may wish to adjust parts of its strategic, tactical, or operational plans. For example, if the sales team didn’t meet their quota their manager may decide to make changes to their sales pipeline operational plan.

These templates and examples can help you start thinking about how to format your organizational plan.

Strategic Organizational Plans

This is a single page two-year strategic plan for a fictional corporation. Notice that the goals listed in the “Strategic Objectives and Organization Goals” section follow the SMART goals model: They’re specific, measurable, actionable, relevant, and time-based.

Workforce Planning

Companies need to use workforce planning to analyze, forecast, and plan for the future of their personnel. Workforce planning helps identify skill gaps, inefficiencies, opportunities for employee growth, and to prepare for future staffing needs.

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Org Chart Free Trial

This is a two-year action plan for an administration, which could also be described as a tactical plan. Organization-wide goals—aka strategic goals—that are relevant to this department are listed in the top section, while the more tactical goals for the manager of this department are listed below.

Operational Organizational Planning

Check out this strategic plan template . You’ll notice that tasks for an individual employee fall under operational planning. Note the space within each item for the manager to leave feedback for the employee.

Business Contingency Plan Template

Organizational Planning is Vital for a Successful Business

While organizational planning is a long and complex process, it’s integral to the success of your company. Luckily, the process becomes more automatic and intuitive with regular planning and review meetings.

Use Pingboard’s org chart software to help you plan and communicate your strategy. With Pingboard users can build and share multiple versions of their org chart to help with succession plans, organization redesigns, merger and acquisitions plans. Pingboard also helps with hiring plans by allowing you to communicate open roles in your live org chart so employees understand where their company is growing and what roles they can apply for. Pingboard’s employee directory helps find successors for specific roles by allowing managers to search through their workforce for the skills and experience needed to fill a position.

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What Is Organizational Planning in Project Management?


If you’re looking to start or grow a business (or just keep a business profitable), you need a business plan. But not all plans are the same. If you need to define your business and its objectives, you need to use organizational planning.

That planning provides a clear path forward. When you organize the various departments of your business, everyone knows what their function is—and the tasks and processes necessary to achieve your business goals.

What Is Organizational Planning?

Organizational planning is how business owners organize the day-to-day operations of a business. This can range from simple things, like the companies’ reason for existence, to more complex considerations, like setting goals to realize a specific objective. You use the organizational plan as a framework for creating tasks that, when executed, will allow the company to achieve its goal.

Organizational planning is often used to improve a company’s overall business, but a company can direct it towards its workforce, finances or products. There are, therefore, various types of organizational planning goals; from workforce development and financial planning to products, services and expansion planning.

That’s a lot of data to organize. ProjectManager has interactive Gantt charts that help you organize all that information, create a functional plan and manage it successfully. Try ProjectManager today for free!

ProjectManager's Gantt chart

Why Organizational Planning Is Important

It goes without saying that the better you organize your company, the better your company performs. Organizational planning is important because it lets companies develop effective planning and achieve their stated goals.

Having an organizational plan is also helpful because a prepared company responds better to changes in the workplace. Furthermore, organization planning clarifies the roles, responsibilities and expectations of everyone in the company. This helps management make sure they’re meeting the determined benchmarks.

Because organizational planning creates a structure where relationships between teams and managers are clearly defined, it can also reveal where there are any shortcomings, issues or liabilities. The company can then resolve these hamstringing limitations.

Typical Organizational Planning Processes

These phases of organizational planning are defined in these four processes:

How to Make an Organizational Plan

The four phases of the organizational planning process create a framework, but there are different steps when making an organizational plan:

How to Communicate Your Organizational Plan to the Team

Once you’ve created an organizational plan, you need to communicate it to the team. This is a crucial step. If you implement a plan without having everyone understand it, you may have problems that might derail the whole plan.

One way to get everyone on the same page is to call a company-wide meeting. Have a tight agenda that details the organizational plan, and get feedback from those in attendance. You can also create a one-sheet, and distribute it prior to or during the meeting.

If your company has project management software, you can bring the whole company in on the organizational plan, assign tasks and communicate through the tool if they have any questions. Then, when you implement the organizational plan, you can track progress and ensure everyone stays in communication.

How ProjectManager Helps with Organizational Planning

ProjectManager is a cloud-based tool with multiple project views that allow managers and their teams to choose the tool that they want to work with. No matter which they use, data is shared across the platform so everyone is working from the most current data.

Lay Out Entire Plans on Gantt Charts

Begin planning by organizing tasks and adding deadlines. Gantt charts are the traditional tool to get all your work on a timeline, but not all Gantt charts are the same. ProjectManager’s Gantt chart project view lets you to filter for the critical path without any complicated calculations. You see what is essential, and what you can skip, if time and money become an issue.

ProjectManager Gantt chart

Set Baselines to Track Progress

Once the schedule is completed, you can set a baseline. This captures your planned effort around tasks, resources cost and more. That means, once you start to execute your plan, you can compare the actual effort to your planned effort to make sure you’re keeping on track.

Baseline section of Gantt chart

Get Real-Time Data from Dashboards and Reports

To keep an eye on progress and performance, use ProjectManager’s live dashboard. It collects data, automatically calculates it and displays it in easy-to-read graphs and charts. Unlike other software, you don’t need to configure the dashboard; it’s up and running from the start.

ProjectManager’s dashboard view, which shows six key metrics on a project

ProjectManager is award-winning software that has everything you need to plan, execute and track your organizational plan. With timesheets, automated notifications and kanban boards, managers get transparency and teams have the autonomy to manage their tasks. See how ProjectManager can help you with organizational planning and take a free trial today.

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Strategic Planning

The art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives

What is Strategic Planning?

Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.

Strategic Planning

The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.

CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.

Strategic Planning Process

The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company’s management will, hopefully, settle on a strategy that is most likely to produce positive results (usually defined as improving the company’s bottom line) and that can be executed in a cost-efficient manner with a high likelihood of success, while avoiding undue financial risk.

The development and execution of strategic planning are typically viewed as consisting of being performed in three critical steps:

1. Strategy Formulation

In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ). As a result of the analysis, managers decide on which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.

Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.

2. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.

Effective strategy implementation involves developing a solid structure, or framework, for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.

3. Strategy Evaluation

Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.

All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.

Benefits of Strategic Planning

The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations.

Among the primary benefits derived from strategic planning are the following:

1. Helps formulate better strategies using a logical, systematic approach

This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.

2. Enhanced communication between employers and employees

Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.

Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.

3. Empowers individuals working in the organization

The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.

An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.

Additional Resources

Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:

organizational planning business definition

What Is Business Planning?

Why business planning isn't just for startups.

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

organizational planning business definition

Morsa Images / Getty Images

Business planning takes place when the key stakeholders in a business sit down and flesh out all the goals , strategies, and actions that they envision taking to ensure the business’s survival, prosperity, and growth.

Here are some strategies for business planning and the ways it can benefit your business.

Business planning can play out in many different ways. Anytime upper management comes together to plan for the success of a business, it is a form of business planning. Business planning commonly involves collecting ideas in a formal business plan that outlines a summary of the business's current state, as well as the state of the broader market, along with detailed steps the business will take to improve performance in the coming period.

Business plans aren't just about money. The business plan outlines the general planning needed to start and run a successful business, and that includes profits, but it also goes beyond that. A plan should account for everything from scoping out the competition and figuring out how your new business will fit into the industry to assessing employee morale and planning for how to retain talent.

How Does Business Planning Work?

Every new business needs a business plan —a blueprint of how you will develop your new business, backed by research, that demonstrates how the business idea is viable. If your new business idea requires investment capital, you will have a better chance of obtaining debt or equity financing from financial institutions, angel investors , or venture capitalists if you have a solid business plan to back up your ideas.

Businesses should prepare a business plan, even if they don't need to attract investors or secure loans.

Post-Startup Business Planning

The business plan isn’t a set-it-and-forget-it planning exercise. It should be a living document that is updated throughout the life cycle of your business.

Once the business has officially started, business planning will shift to setting and meeting goals and targets. Business planning is most effective when it’s done on a consistent schedule that revisits existing goals and projects throughout the year, perhaps even monthly. In addition to reviewing short-term goals throughout the year, it's also important to establish a clear vision and lay the path for your long-term success.

Daily business planning is an incredibly effective way for individuals to focus on achieving both their own goals and the goals of the organization.

Sales Forecasting

The sales forecast is a key section of the business plan that needs to be constantly tracked and updated. The sales forecast is an estimate of the sales of goods and services your business is likely to achieve over the forecasted period, along with the estimated profit from those sales. The forecast should take into account trends in your industry, the general economy, and the projected needs of your primary customers.

Cash Flow Analysis

Another crucial component of business planning is cash flow analysis. Avoiding extended cash flow shortages is vital for businesses, and many business failures can be blamed on cash flow problems.

Your business may have a large, lucrative order on the books, but if it can't be invoiced until the job is completed, then you may run into cash flow problems. That scenario can get even worse if you have to hire staff, purchase inventory, and make other expenditures in the meantime to complete the project.

Performing regular cash flow projections is an important part of business planning. If managed properly, cash flow shortages can be covered by additional financing or equity investment.

Business Contingency Planning

In addition to business planning for profit and growth, your business should have a contingency plan. Contingency business planning (also known as business continuity planning or disaster planning) is the type of business planning that deals with crises and worst-case scenarios. A business contingency plan helps businesses deal with sudden emergencies, unexpected events, and new information that could disrupt your business.

The goals of a contingency plan are to:

Business Succession Planning

If your business is a family enterprise or you have specific plans for who you want to take over in the event of your retirement or illness, then you should have a plan in place to hand over control of the business . The issues of management, ownership, and taxes can cause a great deal of discord within families unless a succession plan is in place that clearly outlines the process.

Key Takeaways

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Definition of Organization Planning

by Anam Ahmed

Published on 7 Jun 2018

The way a company is run directly affects the successes and failures it will have. When the management team identifies solid long-term objectives for the organization, plus innovative ways to achieve them, then the organization as a whole has the motivation and drive to work towards that outcome.

Imagine working for an organization where the senior management team failed to acknowledge any growth plans or long-term goals. What would happen to that company? It may sustain itself for a few months, but the lack of planning or strategic intervention could lead to its demise. Similarly, not having any direction from senior management may cause the employees to lose trust in the company. Organization planning, which includes strategies for all levels of the company, is imperative to the success of the business.

Organization Planning Definition

Organization planning begins when the senior management team identifies the company’s short-and-long-term objectives. Once those goals have been defined and refined so that they are clear and attainable, it’s essential to formulate specific strategies and plans to achieve those objectives. Organization planning ensures that there is a vision for the business so that the employees know and understand how their day-to-day jobs contribute to the company as a whole.

The goals a company sets need to be realistic enough to be implemented within the organization’s resources. It’s good to reach for the stars, but at the same time, the goals need to be attainable as well. Not being able to hit targets that are way out of reach can be demoralizing for the company. A good goal should also be quantitatively measurable. This way, the company can track its progress throughout the fiscal year, checking to see how far they have come and how much further they have left to go. It’s also important to outline a time frame to achieve the goal, such as within a fiscal year or a quarter. This way the company can set project deadlines to keep everyone on track.

In addition to defining objectives and developing plans to achieve them, organization planning covers staffing and resource allocation. The right people have to be in place to perform their roles, and the necessary resources, including finances, need to be available for the organization so that they can successfully implement the plans in place.

As every organization is unique, no one structure or method of staffing will work for every company. However, certain factors should always be considered in planning an effective organizational structure. Companies need to research and evaluate the strengths and weaknesses of various organizational structure options, such as functional, divisional or matrix structures, and consider which one will set them up to best achieve their organizational objectives. The company will also need to predict their growth patterns, and how they fit in with their overall plans. In addition, the organization will need to see which structure will produce the most significant operational efficiency and worker satisfaction.

Organization planning can apply to any size of a company, whether it’s a small entrepreneurial business or a multi-national conglomerate. In any situation, it’s crucial for the management team to determine the goals of the company and lay out plans to achieve them, in addition to the resources it will take to meet those goals.

Types of Organization Planning

There are many ways to categorize types of organization plans, though many of them fall into four main categories: financial, strategic, contingency and succession. Each type of organization plan looks at the business as a whole, but through the lens of a particular area. This way, it’s easy to see how the business will fare in many different scenarios.

Financial planning in an organization aims to generate a greater income or increase the market share of the business. Also, financial planning can solve predictable financial issues the company may face in the future. The way a financial plan is structured depends on the level of the company and the goals it wants to achieve. An important factor of a financial plan is that it needs to be rooted in reality. Like effective goal-planning, the financial plan needs to take into account the true financial picture of the company, now and in the future. The plan also needs to be forward-looking, so that it can pick up on any potential issues the company may need to overcome.

Take a small business such as a digital marketing agency, for example. With a staff of five, the company is stalled at a plateau and doesn’t have enough human resources to grow the business. Increasing their sales is one of their organizational objectives. However, if they hire another employee, then they don’t have the finances to pay for them. Having a clear financial plan in place for this organization will not only help them figure out how to bring on an additional resource but also how to pay for them. Besides, having that new employee can then help them grow their sales and meet their organizational objective.

Another type of organization plan is strategic planning, which involves translating the company’s vision into goals and objectives, with steps to achieve them. Strategic planning doesn’t only look inwards at the company itself but also focuses on the market and the industry, as well as the competitors. This kind of planning involves analyzing the company’s future opportunities and possible incoming threats. It also requires knowing the organization’s strengths and weaknesses fully. Strategic planning also requires having an understanding of who the competitors are in the market, and precisely what their strengths and weaknesses are in comparison to the organization. Having a realistic view of the overall marketplace and economy is also imperative.

In the case of the digital marketing agency, for example, part of their strategic vision may be to offer a new service such as copywriting of lead generation materials. If the business has mostly been focusing on web design and online advertising up until that point, they will need to conduct thorough research into the copywriting field to understand how it fares in the industry. If their competitors offer copywriting as a service, then it may be prudent for them to offer it as well. They may also need a way to differentiate their copywriting services from their competitors.

Many organizations also create contingency plans for outcomes that are outside of the realm of normal. This kind of organization planning helps to mitigate potential risks to the company and can even potentially help them avoid events that may have catastrophic effects. A robust contingency plan is well-researched and presents realistic scenarios that can take place that may have negative repercussions on the company, and it provides a step-by-step solution that the company can implement in that scenario. Contingency planning can save an organization from downfall and can help it grow in times of transition.

A possible catastrophic scenario for the digital marketing agency may be that their biggest client, which provides over 50 percent of their revenue, decides to sign with one of their competitors. In this case, the company would lose a large part of their income. If they can’t figure out a way to replace it, they may have to declare bankruptcy. A contingency plan, in their case, would provide possible solutions for this problem, which may include ways of bringing that client back with the company, increasing their revenue through other channels or even taking out a loan for short-term relief. By having a plan already in place if their biggest client leaves, the digital marketing agency can then get right to work trying to solve their problem, instead of wasting time trying to figure out a plan while they are in crisis mode.

Succession planning is another effective way of organization planning. This involves developing a strategy to put into place when a key player in the organization leaves. If someone in a decision-making management role leaves the organization for whatever reason, planned or unplanned, the company as a whole can be set off track. They may not be able to meet their organizational objectives if they don’t have the right leadership in place. Succession planning involves more than just naming a successor. It means training and grooming that person to fill the leadership position before the need arises. This way, there is no lag time for the successor to get up to speed, and the organization can continue with business as usual.

If the lead web developer of the digital marketing agency left suddenly, for example, the company might not be able to complete their existing projects or any new projects until they had a replacement in place. For a small business, this could mean they may have to close their doors. With a succession plan, they may have been training a junior developer to take on the role. If that person was already groomed for the chief decision-making position, then the agency could continue with servicing their clients without any hiccups.

Why You Need to Use Organization Planning

Proper organization planning enables the company to reach its full potential. By using a systematic approach, companies can establish where they want to go, and then implement the steps they can use to get there. If an organization is interested in growth and doesn’t quite know how to get there, then organization planning can help to establish the steps they need to take, both to define their goals and to reach them.

Organization planning helps companies to be strategic in the way they make key decisions. When there are larger company objectives in place, then it’s easier to come to certain decisions when using a strategic method. Similarly, organization planning can help companies to build on their strengths. If there are specific areas where the organization excels, it would be prudent to play on those more to grow the business. On the other end of the spectrum, an organization’s weaknesses can be improved using organization planning. Elements of financial and contingency planning can play a significant role in overcoming a business’s weaknesses.

Setting the company up for success is one of the main reasons why they should use organization planning. Through developing plans and processes, the company can work to improve procedures that are put in place continuously. Improving the way the company operates helps to give them a competitive advantage as well, which can also increase their business.

How to Improve Organization Planning

No one method of organization planning works for a company. Many times, a company has to apply different ways of organization planning to find what works well for them. Improving organization planning is a continuous job, because as the company grows and changes, the way the company plans needs to change to meet new requirements.

Honesty and openness are important aspects of organization planning. It’s vital to have a clear and objective view of how the organization is doing. This way, it becomes easier to identify potential issues or threats the organization is facing, or specific weaknesses that are apparent within the company. Removing internal roadblocks employees are facing helps them to then focus on the task at hand. Once internal roadblocks, such as some procedures or policies, are removed, employees can work towards improving the weaknesses of the organization.

When looking to improve organization planning, it’s imperative to have a set of metrics to gauge the performance of the plan. Metrics can provide great value and act as a guide to making decisions about key elements of the business. Management can use the data to pinpoint areas where the organization needs to focus its efforts and then develop strategies to fine-tune the operations, leading the company to better its overall performance.


Business Jargons

A Business Encyclopedia

Definition : Planning is the fundamental management function, which involves deciding beforehand , what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an  organisation’s objectives and develops various courses of action , by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.

Planning is nothing but thinking before the action takes place . It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.

Characteristics of Planning

characteristics of planning

Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the   present condition to identify the ways of attaining the desired position in future . It is both, the need of the organisation and the responsibility of managers.

Importance of Planning

Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.

Steps involved in Planning

Steps of Planning

By planning process, an organisation not only gets the insights of the future, but it also helps the organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should be clearly stated and easy to understand  because if the plan is too much complicated it will create chaos among the members of the organisation. Further, the plan should fulfil all the requirements of the organisation .

Related terms:

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April 18, 2019 at 12:48 pm

Really a simple but effective narration on planning which even commom men can follow.

Riya yadav says

November 23, 2019 at 1:00 pm

Can you please add scopes of planning too.

April 21, 2019 at 8:45 am

Language is simple and clear

June 30, 2019 at 9:26 pm

very clear language all are understandable . Nice post sir it help me for my semester exam .

George Emetuche says

July 4, 2019 at 9:55 pm

Great job on Planning! It is simple, yet detailed!

teyeku says

August 15, 2019 at 5:40 pm

It is nice continuous by this ways

Tossyn temi says

October 13, 2019 at 3:12 am

Really helpful. God bless you Ma’am.

Surbhi S says

October 14, 2019 at 9:51 am

Thank you so much all the readers, for constantly appreciating the article, it means a lot to us, Keep reading. 🙂

February 4, 2021 at 2:23 pm

Great piece Thank you

Rahul Bansal says

October 19, 2019 at 2:37 pm

Amatulla says

November 13, 2019 at 12:10 pm

very informative, and to the point

November 20, 2019 at 11:37 pm

Nice work Ma’am, very educative and well narrated… It will really help me in my exam tomorrow

Abdujebar Mohammed says

November 25, 2019 at 1:05 am

Very nice. Thank you so much very helpful article

Kingsman Acquah Aidoo says

December 8, 2019 at 3:57 am

It was great to read

realesson says

December 26, 2019 at 11:15 pm

Very nicely done. Your show schedule gave me the info on some shows I was wondering about.

Otayama says

January 2, 2020 at 2:05 pm

Thank you Excellent…good

Abundant Grace says

January 21, 2020 at 2:57 pm

This is insightful. Thank you.

Ankit Kumar Singh says

February 26, 2020 at 9:41 pm

Very Informative. It cleared all my doubts. 😊😊😊😊😊

Tangiri says

February 29, 2020 at 4:07 pm

wonderful one. Thanks Sir

March 2, 2020 at 3:07 pm

Good job done, very informative.

Sneha jaiswal says

March 4, 2020 at 8:34 am


July 22, 2020 at 8:08 pm

mansoor wahab says

August 31, 2020 at 4:37 pm

very well excellent

Akinbi Oluwaseun Esther says

September 21, 2020 at 9:10 am

This is very straightforward ! Thanks you

Baxhir omar says

November 4, 2020 at 4:38 am

Splendid Great

November 26, 2020 at 9:24 am

Great Article, how do I cite it, what date was it published and who is the author? Can you please assist me with this information. Thank you.

November 26, 2020 at 9:41 am

The article was written by Surbhi S. on December 3, 2016

chikiss says

November 27, 2020 at 11:32 am

I am very grateful ,thanks

Ayo Oladipo says

December 10, 2020 at 2:12 pm

Very interesting and educative

Sandie says

December 14, 2020 at 2:46 am

Matthew says

December 20, 2020 at 6:54 pm

Good points

December 22, 2020 at 8:46 pm

It is a very important article. But, plz give me the reference for this article.

David Onyatta says

February 27, 2021 at 8:46 pm

I’m very grateful. Thanks.

Abhishek Kumar saxena says

March 17, 2021 at 7:58 pm

Ortese Msughter says

March 25, 2021 at 3:11 am

You have done a wonderful by providing this information.

K. S. Afzal Ahmed says

April 7, 2021 at 6:35 pm

I found it which I was looking for. Very informative, briefed and illustrative.

Thanks to the Author. Keep doing also on other projects. Good by.

Reridis Paulinus says

May 3, 2021 at 12:34 pm

Interesting and informative Thank you very much. God bless 👏

buba juwara says

June 1, 2021 at 8:11 am

very simple to understand keep the good work i am deeply touch

Elijah Awune says

September 9, 2021 at 5:48 pm

Nice research done

Very helpful. Thank you

September 16, 2021 at 2:31 am

please advise who wrote the article and when it was published. this may help on my research. hope somebody can help me

September 17, 2021 at 11:20 am

It was created on Dec 3, 2016 by Surbhi S.

October 20, 2021 at 11:26 pm

Full of information

Hani Ibrahim says

October 24, 2021 at 12:27 am

Perfect, it is very useful thanks guys 🥰

Comr simon israel says

November 11, 2021 at 2:25 pm

November 11, 2021 at 2:28 pm

So perfect on planning

Mumaraki Nanyama says

November 21, 2021 at 10:55 am

Well researched.

Jyoti badiger says

November 23, 2021 at 2:17 pm

Super, very helpful thank you so much🥰

December 25, 2021 at 12:26 am

Helpful information

February 3, 2022 at 2:05 pm

Clear information.

Faiz Rahman Ghafari says

March 1, 2022 at 7:30 pm

Simple and good explanation. Thank you.

Lizzianah says

March 19, 2022 at 7:36 pm

Clear and straight to the point…easy to understand Thanks a lot, I believe it will be of great help in my exam

March 19, 2022 at 7:40 pm

Simple and clear,easy to understand Thanks so much,I believe it’ll be of great help in my end of semester exam Be blessed for your help

Asaku Emma says

April 21, 2022 at 9:05 pm

Thanks so so much for the work

Micheal says

April 25, 2022 at 5:47 pm

it is very easy to understand…

Janaka Fonseka says

May 29, 2022 at 8:40 pm

very helpful. thanks for sharing this valued information

Daniel happiness says

June 8, 2022 at 5:15 pm

Thank you sir is really helpful

martha Situmbeko says

June 10, 2022 at 10:09 pm

Thank you so much for the information

Cecilia says

August 15, 2022 at 9:11 pm

Thanks a bunch, easy to understand and very informative.

edward says

September 13, 2022 at 4:01 pm

Wow! it helped me formulate class materials, good.

Carolyn says

September 24, 2022 at 10:48 pm

Good information.

Rachel Pronsloo says

January 26, 2023 at 6:23 pm

I would like to use some of the information in this article. Can I get the writer’s name, etc., to include as a reference source?

February 10, 2023 at 11:00 am

The author’s name is Surbhi S.

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What Is Organization Development?

Organization development (OD) is an effort that focuses on improving an organization’s capability through the alignment of strategy, structure, people, rewards, metrics, and management processes. It is a science-backed, interdisciplinary field rooted in psychology, culture, innovation, social sciences, adult education, human resource management, change management , organization behavior, and research analysis and design, among others.

Organization development involves an ongoing, systematic, long-range process of driving organizational effectiveness, solving problems, and improving organizational performance. It is also one of the capabilities identified in the Talent Development Capability Model .

What Can the Association for Talent Development Do to Help?

Learning and Development

What Is the Difference Between OD and Human Resources (HR)?

Many OD interventions relate to human resource management and talent management . While HR initiatives focus on people practices, organization development zooms out to consider multiple inputs and tools that cut across the breadth and depth of the organization. OD is more holistic and strategic whereas HR is operational.

Like talent development, sometimes OD functions are under the HR umbrella.

5 phases of organizational strategy

OD Strategy: Five Phases

TD professionals should integrate OD skills with the growing number of L&D, performance improvement , and talent management solutions focused upon increasing organizational effectiveness. The process used by OD practitioners to design and implement organizational development strategies is structured in five phases:

What Are Some Organization Development Initiatives?

Organization Development Initiatives images

Organization development initiatives are typically categorized as:

Most initiatives have elements of each category. TD professionals should ensure that any OD solution is aligned to specific strategic objectives.

Skills for an OD practitioner

OD practitioners concern themselves with strategic planning and thinking, so these skills are musts for them. The Talent Development Body of Knowledge lists being an change expert, efficient designer, business advisor, credible strategist, and informed consultant as the major capabilities of an OD professionals. Some of the skills included are data collection and analysis, project management , management skills, emotional intelligence , business acumen , communication , collaboration, and facilitation.

OD practitioners create an alignment of strategy, structure, people, rewards, metrics, and management processes to improve efficiency and productivity in the workplace. These practitioners identify and solve problems that have to do with organizational systems that impact engagement, productivity, and performance, and they may also lead initiatives that benefit individual growth, such as career development, management and leadership development, and performance improvement

OD professionals are adept at designing and implementing employee engagement strategies; facilitating communication between employees and work groups; and articulating and codifying talent and leadership principles, values, and competencies that guide the organization’s culture.

The Association for Talent Development (ATD) offers various resources for those interested in learning more or developing their OD practice. Becoming a successful OD practitioner includes furthering your knowledge in areas such as collaboration and leadership, performance improvement, business partnering and consulting, change management, talent management, project management, and beyond. ATD offers a wide variety of content, education, and publications in these areas. For access to even more resources, including practical tools and templates, research, and insights, you’re invited to become an ATD member. Learn more . For more information, explore these resources:

Free E-Book: Remote Work Audit

By using this remote-work audit, you can help your organization reinvent and reinstate a company-wide culture rooted in your values and mission to keep your employees connected and on track for success.

organizational planning business definition

Browse our OD and talent management best-selling books, TD at Work, magazine articles, research reports and more.

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Education Courses

Browse our courses in organization development and talent management to help grow your skillset and career.


Bookmark the ATD talent strategy and management topic page and sign up for our newsletter.

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1.5 Planning, Organizing, Leading, and Controlling

Learning objectives.

A manager’s primary challenge is to solve problems creatively. While drawing from a variety of academic disciplines, and to help managers respond to the challenge of creative problem solving, principles of management have long been categorized into the four major functions of planning, organizing, leading, and controlling (the P-O-L-C framework). The four functions, summarized in the P-O-L-C figure, are actually highly integrated when carried out in the day-to-day realities of running an organization. Therefore, you should not get caught up in trying to analyze and understand a complete, clear rationale for categorizing skills and practices that compose the whole of the P-O-L-C framework.

It is important to note that this framework is not without criticism. Specifically, these criticisms stem from the observation that the P-O-L-C functions might be ideal but that they do not accurately depict the day-to-day actions of actual managers (Mintzberg, 1973; Lamond, 2004). The typical day in the life of a manager at any level can be fragmented and hectic, with the constant threat of having priorities dictated by the law of the trivial many and important few (i.e., the 80/20 rule). However, the general conclusion seems to be that the P-O-L-C functions of management still provide a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals (Lamond, 2004).

Figure 1.7 The P-O-L-C Framework


Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.

Planning is a process consisting of several steps. The process begins with environmental scanning which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.

Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.

There are many different types of plans and planning.

Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization’s mission, which is its fundamental reason for existence. An organization’s top management most often conducts strategic planning.

Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning.

Operational planning generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans.

Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the chain of command within an organization. Decisions made about the structure of an organization are generally referred to as organizational design decisions.

Organizing also involves the design of individual jobs within the organization. Decisions must be made about the duties and responsibilities of individual jobs, as well as the manner in which the duties should be carried out. Decisions made about the nature of jobs within the organization are generally called “job design” decisions.

Organizing at the level of the organization involves deciding how best to departmentalize, or cluster, jobs into departments to coordinate effort effectively. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations use multiple methods of departmentalization.

Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources. Traditionally, job design was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. However, experience has shown that it is possible for jobs to become too narrow and specialized. For example, how would you like to screw lids on jars one day after another, as you might have done many decades ago if you worked in company that made and sold jellies and jams? When this happens, negative outcomes result, including decreased job satisfaction and organizational commitment, increased absenteeism, and turnover.

Recently, many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs are now designed based on such principles as empowerment, job enrichment and teamwork . For example, HUI Manufacturing, a custom sheet metal fabricator, has done away with traditional “departments” to focus on listening and responding to customer needs. From company-wide meetings to team huddles, HUI employees know and understand their customers and how HUI might service them best (Huimfg, 2008).

Leading involves the social and informal sources of influence that you use to inspire action taken by others. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort to attain organizational objectives.

The behavioral sciences have made many contributions to understanding this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates. For example, this research tells us that to become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions.

Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. Studies of communication provide direction as to how managers can effectively and persuasively communicate. Studies of leadership and leadership style provide information regarding questions, such as, “What makes a manager a good leader?” and “In what situations are certain leadership styles most appropriate and effective?”


Quality control ensures that the organization delivers on its promises.

International Maize and Wheat Improvement Center – Maize seed quality control at small seed company Bidasem – CC BY-NC-SA 2.0.


Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. Performance standards are often stated in monetary terms such as revenue, costs, or profits but may also be stated in other terms, such as units produced, number of defective products, or levels of quality or customer service.

The measurement of performance can be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree.

The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. This function does not imply that managers should attempt to control or to manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the manager’s role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives.

Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. Two traditional control techniques are budget and performance audits. An audit involves an examination and verification of records and supporting documents. A budget audit provides information about where the organization is with respect to what was planned or budgeted for, whereas a performance audit might try to determine whether the figures reported are a reflection of actual performance. Although controlling is often thought of in terms of financial criteria, managers must also control production and operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization.

The management functions of planning, organizing, leading, and controlling are widely considered to be the best means of describing the manager’s job, as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions.

Key Takeaway

The principles of management can be distilled down to four critical functions. These functions are planning, organizing, leading, and controlling. This P-O-L-C framework provides useful guidance into what the ideal job of a manager should look like., (accessed October 15, 2008).

Lamond, D, “A Matter of Style: Reconciling Henri and Henry,” Management Decision 42, no. 2 (2004): 330–56.

Mintzberg, H. The Nature of Managerial Work (New York: Harper & Row, 1973); D. Lamond, “A Matter of Style: Reconciling Henri and Henry,” Management Decision 42 , no. 2 (2004): 330–56.

Principles of Management by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.


Building Organizational Resilience

organizational planning business definition

To cope—and thrive—in uncertain times, develop scripted routines, simple rules, and the ability to improvise.

Successful organizations all have well-established routines for getting things done. The task may be as lofty as acquiring a competitor or as prosaic as filling out a time sheet, but if you look closely, you’ll find a reliable process to guide you through it. These routines are often taken for granted in stable periods. However, they tend to break down when a company faces high levels of uncertainty or needs to move quickly in a crisis. Organizations scramble to make adjustments on the fly—with varying degrees of success. Before the next crisis hits, it’s wise to spend time thinking systematically about the granular nuts-and-bolts processes you use—and to experiment with alternatives.

Researchers have identified three broad approaches to getting work done, and what they’ve learned can help managers respond more effectively to highly changeable environments. The first approach is the one we’ve just described: organizational routines, which are efficient when work is predictable. The second approach is simple rules, or heuristics —rules of thumb that help you speed up processes and decision-making and prioritize the use of resources in less-predictable contexts (for example, “We invest only in projects with a projected ROI of 10% or more”). And the third is improvisation —spontaneous, creative efforts to address an opportunity or a problem (for example, when a team figures out how to do manual production because a factory’s automated line has suddenly broken down).

Surprisingly, nobody has ever studied how those different approaches can be used as a tool kit. Yet any organization—or team—will do better if it can move easily among them. People can improvise in the face of a crazy-seeming, unexpected situation, learn from the improvisation, and eventually develop a simple rule based on what they’ve discovered, for example. Or they can revise an organizational routine after experimenting with new approaches to a particular task. Fluency in all three modes can improve performance and enhance resilience under any circumstances. And if an organization faces extreme uncertainty, that fluency becomes essential. In fact, we believe that the ease with which teams refashion how specific tasks get done—whatever the level of turbulence—is the defining capability of a resilient organization.

We recently had a chance to think more deeply about that hypothesis while writing an article for Organization Science   about a Mount Everest climb that one of us (Juan) had been lucky enough to take part in. In it we explored how the three approaches had been used on the expedition, how they interacted, and which worked best under what circumstances. To be sure, the expedition involved far more pressure and unpredictability than most HBR readers normally have to deal with. But what we learned can help organizations cope better with whatever challenges they face. And if 2020 has taught us anything, it’s that everyone needs to prepare for higher levels of volatility, uncertainty, complexity, and ambiguity.

The Resilience Tool Kit on Mount Everest

The Kangshung Face is the most remote, least explored side of Mount Everest. It’s a difficult route to the summit that as of 2020 only three teams had completed successfully. On Juan’s expedition a team of six climbers, who had trained together for almost two years, spent 41 days on the mountain. (It was a smaller team, with fewer sherpas and a briefer stay on the mountain, than was typical.) Three climbers reached the summit—one more than the team had thought could manage it—with no serious accidents and with minimal use of oxygen. The challenges that arose along the way offer insights into how a skilled team moves between modes of working as the context changes.

About the Research

This article is based on an ethnographic study of a Mount Everest ascent via one of the mountain’s most-technical and least-known routes, the Kangshung Face. We had direct access to the details of the expedition because one of the authors was on it and took extensive notes throughout. We also had access to the diaries of three other expedition members, 12 hours of video footage, 1,250 photographs, and transcriptions of interviews with expedition members. In addition, we reviewed 52 letters written by the members before, during, and after the ascent, together with the planning documents for the trip and the rationale for the team selection.

As the climbers, sherpas, and porters settled into base camp, at 17,700 feet, they relied on well-known routines that were suited to relatively benign conditions. These detailed processes increase the efficiency of a climbing team and help keep it safe. They script out how the team sets up camp, prepares backpacks and tools, coordinates shifts and roles for the ascent, and maintains the ropes. Rodrigo Jordán, the expedition leader, led planning sessions every evening and had the final word on the most important decisions.

As the next phase of climbing began, the environment changed in often dramatic ways, and some of the organizational routines broke down. The first big challenge on the route is an uncommonly treacherous 4,000-foot wall of rocks and ice. (It’s the reason so few expeditions attempt this side of Everest.) For 12 days the climbers “opened the route” by choosing a path and attaching ropes up the face, going incrementally higher but returning to base camp every night until they were able to establish Camp One, just past the wall. Once the ropes were in place, the following day’s climb became faster and safer. The route is technically difficult, and the climbers were always “counting the minutes before the next avalanche,” in the words of one participant. Normally the expedition leader coordinates this kind of ascent, but a few days in, the climbers realized that Jordán, who was at base camp, didn’t have enough information to make timely decisions and that this was putting them at risk.

The team discussed this breakdown in the organizational routine over dinner several days running and eventually developed a simple rule: The first climber on the rope calls the shots. That heuristic sped up decision-making by empowering the climber who was leading the ascent at any particular time. It made the group into an essentially flat organization while routes were being opened up. Jordán continued to make all other decisions and to coordinate activities during the evening planning sessions.

Another organizational routine had begun to break down at the start of the climb, when the team was forced to leave 300 pounds of supplies behind because of a disagreement with Chinese authorities. The problem intensified when the team’s sherpas were hit by an avalanche. Though they suffered only minor injuries, they were understandably concerned for their safety and negotiated carrying lighter loads. In response to having far fewer supplies than planned, the team developed two simple rules. The first was Carry only the supplies that the climbers who are going to the next stage need. (Normally, climbers bring buffer supplies to the upper camps, of which there were three on this expedition.) The second was Always return to sleep at the lower camp. This made sense for a number of reasons, the primary one being that less oxygen would be needed at lower camps.

organizational planning business definition

The next stage of the trek, up a long glacier, took 17 days. It went slowly because the climbers were walking through deep powder and reacting to a higher altitude (21,000 to 23,000 feet). This stretch was technically easier than the wall but had hard-to-anticipate crevasses and a higher risk of avalanches. Though the plan was for only two climbers to summit the mountain, during this phase a third member (Juan) turned out to be in better physical shape than expected. He had a brief radio conversation with Jordán, and they decided together that he would join the others in attempting to summit. This improvisation carried risks: Juan didn’t have a sleeping bag, so the original two summiters would have to share theirs with him, and because of the diminished supplies, they’d also have to share their oxygen, leaving them somewhat short. But Jordán concluded that the team had a better chance of reaching the top with three climbers than with two. This decision, like most decisions about improvisation, had to be made quickly; there wasn’t time to build consensus. (In contrast, groups usually adopt a heuristic only after extensive discussion.) That meant it posed another risk: alienating other members of the team.

In the final, “death zone” stage of the climb, which took five days, the climbers were in a first-ever situation that demanded rapid responses. There were few rehearsed routines or simple rules to fall back on. None of them had ever been at such a high altitude before, and they didn’t know how their bodies would react. In situations like this, climbers often improvise. The three climbers began the final ascent carrying ropes because the Hillary Step, a steep, rocky section just before the summit, required them to climb tied together. However, the ropes became too much of a burden for their tired bodies and slowed down one climber. They decided on the spot to simply drop the ropes and continue separately. When the context is uncertain and unforgiving, as it was here, there’s no way to know whether you’re making the right call. By dropping the ropes, the climbers increased their risk of a bad fall—but also the likelihood that they’d finish the climb. Fortunately, the move paid off when all three reached the summit safely.

What We Learned

When we analyzed our findings from Juan’s extensive notes and from videos, diaries, letters, and interviews with the other climbers, we came away with the following observations:

Heuristics and improvisations are triggered by different types of challenges.

We saw two major reasons for the adoption of new tools. One was speed: a sharp increase in the rate at which the team had to make decisions. That was the case on the wall, when the team transferred decision-making rights from the expedition leader to the on-site leader. Here, and in other cases where things were happening too quickly, heuristics seemed to offer the best response. They helped the climbers adjust to the faster pace, but they didn’t change the underlying principles that guided the expedition. (There was still a designated decision-maker during the route openings, for example, and a rule governing how many supplies to carry in specific circumstances.)

The second trigger was complex, unfamiliar contexts, such as when the climbers experienced the death zone without knowing how their bodies would react. In those cases the team was more likely to improvise, because some challenges required out-of-the-box, ad hoc solutions that sharply departed from what the team had imagined would take place. Sometimes they were in response to an opportunity (a third climber seemed fit enough to summit). At other times they were in response to a problem (the ropes were too heavy, so they were abandoned).

When to Try Each Approach

Much of the time, organizational routines can guide how work gets done. But if resources are scarce, things are moving fast, or the terrain is unpredictable, simple rules and improvisation should be in the mix.

The tools are interdependent and dynamic.

The lines between routines, simple rules, and improvisation aren’t always clear, and one approach can morph into another. For example, under normal circumstances, specific members of a climbing team are assigned to check and maintain the ropes daily. However, the extreme conditions of the Kangshung Face prompted an improvisation: One climber, when descending after a 12-hour climb, stopped for almost an hour to repair the ropes in a section of sharp rocks when he became very concerned about safety. From the base camp the other climbers could see that he had stopped but didn’t know why. That night they discussed his improvisation and concluded that the extra safety was worth more than the cost in time spent. They replaced their rope maintenance routines with a simple rule: If you see a damaged rope, you have to fix it right away.

In other instances a newly introduced heuristic might prompt an improvisation. As noted earlier, the team developed heuristics around how much to carry and where to sleep, in response to resource constraints. Those rules increased efficiency and maximized speed, but they were also risky. That became apparent late in the climb, when one of a pair of support climbers, who should have gone back to Camp Two for the night, began exhibiting symptoms of hypothermia. The team had to improvise: Both support climbers spent the night in Camp Three, without sleeping bags and oxygen, because the team hadn’t brought any extra supplies. (In accordance with a rule established earlier, those were reserved for the climbers who would continue to the summit.) This improvisation worked out, fortunately: The summit team was able to continue its ascent, and the compromised support climber went down to Camp Two safely the next day.

Using the Tool Kit

The Covid-19 crisis and the economic havoc it has wrought are harbingers of the extraordinary challenges we’re all going to face in coming years. (For a look at health care professionals’ adoption of the three approaches during the pandemic, see the sidebar “How Hospitals Used Routines, Simple Rules, and Improvisation to Deal with Covid-19.”) Climate change, massive migration flows, and technological advances will all dramatically reshape the social and economic landscape in ways we can’t fully anticipate. They will disrupt industries, economies, and nations.

How Hospitals Used Routines, Simple Rules, and Improvisation to Deal with Covid-19

During the spring of 2020, when patients suffering from Covid-19 threatened to overwhelm hospitals, health care professionals responded not just with courage but with ingenuity. Stories of their resourcefulness filled the news and social media.

As we look at these reactions to a novel situation, however, we see something else: examples of how people utilized new routines, heuristics, and improvisation to work more quickly and effectively.

New routines.

Normal hospital practices were disrupted, but some of them could be rescripted. Emergency rooms have a process for managing patients’ arrival and treatment, for example, but patients were flooding in too rapidly as the pandemic spread. Hospitals replaced a multistep indoor admission process with screening patients’ temperatures outside the ER building so that people with high fevers would be prioritized.

Doctors and nurses who weren’t treating Covid-19 patients swiftly settled into new routines in response to the need for social distancing: They conferred with patients over the phone or by computer rather than in person.


As the crisis intensified, routines needed more than minor adjustments. Doctors and nurses began to rely on heuristics to speed up activities and processes. If it was impossible to treat everyone needing care, they would make a quick triage decision: Admit the patient (if a bed was available); send him or her to another hospital (if one wasn’t); or send the patient home (if that person’s symptoms were not life-threatening).

At a later stage, caregivers had to make painful choices about which patients would get time on limited ventilators. Hospitals developed heuristics for making those decisions; generally they were based on which patients had the greatest likelihood of surviving (such as younger people).


Over time the resource gap grew larger. Health care workers didn’t have enough N95 masks and protective gowns, nor did they have enough beds in their intensive care units. These problems prompted several improvisations. Some nurses and doctors began to reuse masks (aware of the increased risks to themselves). Hospitals repurposed entire floors to expand ICU areas or to treat the more-stable Covid-19 patients, often making the change in just a few days. New York City built a makeshift tent hospital in Central Park and transformed the Javits Convention Center into a field hospital in anticipation of a surge in patients.

The most extreme situations involved the shortage of ventilators. Doctors and nurses, trained to do everything medically possible to save lives, had to adjust to a reality in which that simply wasn’t possible. They turned to risky improvisations, like sharing ventilators between two patients.

By the summer, health care workers had developed a better understanding of how to treat Covid-19. The pandemic still presented massive challenges (like the development of a vaccine), but the early-stage experimentation with protocols meant that hands-on care for patients had significantly improved.

But organizations aren’t helpless. They can prepare themselves to cope with novel and uncertain situations, be they existential crises, like a pandemic, or more-familiar situations, like an industry shake-up. By actively training the organization to alter the combination of routines, heuristics, and improvisation on the fly to match the changing requirements of different possible scenarios, leaders can build resilience throughout their organizations. Organizations that regularly deal with fast-evolving situations—think SWAT teams and military commandos—know that it pays to practice and prepare for the unexpected while you have the luxury of time and resources, instead of trying to learn how to adapt in the middle of a storm.

Most organizations are already good at working with routines. Indeed, managers have been trained to focus on efficiency, so they’re naturally inclined to codify best practices into organizational routines. Therefore management should focus on helping people add heuristics and improvisations to their tool kits. What we observed in the Everest expedition can serve as a helpful template. Here are some suggestions for getting started:

Analyze which tools you use to get different chunks of work done.

The point isn’t to do fine-grained process mapping—it’s to think at a high level about how you handle work. Such an analysis isn’t necessarily straightforward, though, because most work gets broken down into parts that may call for different tools. If you do A/B testing on new product features, for example, you almost certainly have a rigorous organizational routine in place—whereas decisions about what to test may be more open-ended and improvisational. Do your best to build a picture of which approaches are used where, and whether your organization favors a particular one. Then think about whether it’s the best choice for most of those tasks. You’ll manage a crisis better if you’ve analyzed and discussed your processes—and done at least some reinvention—before you’re in the thick of things.

Organizations that deal with fast-evolving situations—think SWAT teams—know that it pays to practice and prepare for the unexpected.

Question the assumptions behind your routines.

Every routine and process is built on a significant number of assumptions. Spend some time figuring out what they are, at least for your key routines, and then think about how you’d operate if they didn’t hold. These questions will help:

Practice doing more with less.

We can’t think of any actual crisis that didn’t involve resource scarcity of some kind. The Everest climb certainly did. So it makes sense to get used to working lean. Managers can challenge a unit by asking it to achieve an ambitious goal with significantly fewer resources than normal, for example. Or a team can brainstorm about how it would respond if a key resource suddenly became scarce.

Deepen your knowledge of how your work fits into the whole.

Organizations tend to ask people to specialize, sticking to narrow tasks or activities. It’s efficient, and it fits well with scripted organizational routines. In uncertain times, though, deeper knowledge of how other areas function (perhaps gained through cross-training) makes a group more resilient. Team members develop a better idea of how their work depends on others’ work, and vice versa. As a result, when a routine is changed, the larger group’s work is less likely to be disrupted.

Invest in building expertise.

New heuristics and improvisations may appear spontaneous, but in reality they work best when they rest on a foundation of knowledge and training. The mountain climbers in our study trained much harder than those on other expeditions we have data on, and they did it in the belief that they’d be better prepared to adjust when they needed to.

Identify your priorities.

If a crisis is unfolding, red lights and alarms go off everywhere, and managerial attention becomes a very scarce resource. In such situations leaders need to hyperfocus on the metrics that are central to moving the organization through the turmoil. By doing so, they can help everyone tackle the most-pressing problems and concentrate on the activities that are essential to avoiding a collapse; everything else will simply have to wait. This often requires tough trade-offs. The metrics won’t be the same in every situation, however, so it’s useful to imagine a variety of scenarios and think through what they might specifically require.

Learn to give up control.

In a crisis, solutions are not obvious and seldom come from a top-down approach. All organizational brains are needed to solve problems on the spot. If those brains don’t feel empowered to act immediately, a problem can quickly get worse. This goes beyond the traditional advice about empowerment, which says that people should be given limited freedom to make decisions in their area. Organizations that survive dangerous times have developed the ability to swiftly delegate authority and decision-making to people with expertise on the front lines.

Here’s the beauty of analyzing your routines and practicing new ways to solve problems in anticipation of a crisis: Your organization will become more adept at heuristics and improvisation, which will make it more resilient and resourceful—and better able to cope when uncertainty does reach alarming levels.

It helps you ask the right questions and learn faster.

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Organizational planning: The ladder to an organization’s success

Learning and Development Learning and Development --> | 8 Min Read

Organizational planning: The ladder to an organization’s success

Table of contents, 10 min read, what is organizational planning.

Organizational planning is a set of strategies and activities to streamline a business’s day-to-day operations. It includes setting priorities and goals, mapping the utilization of resources and assets, evaluating and modifying the organization’s business path to keep up with the changing environment, and ensuring that all employees/stakeholders work toward a common objective- more extensive organizational success. Organizational planning is among the critical practices necessary to guide a company in the right direction and prevent fatal blunders that could jeopardize business in the long run.

This blog delves deep into the various nuances of the topic, elaborating on the fundamentals, offering a sneak peek into case studies that prove the importance of this business development activity, and highlighting the necessary tools and methods to help you formulate your strategies for success.


Components of an organizational plan

organizational planning business definition

A typical organizational plan comprises four key components, each with its sub-components:

Workforce planning

Workforce planning is all about analyzing and planning the future of your workforce. As the people-centric part of the organizational plan in business plan, workforce planning comprises three critical elements:

These elements are vital to the success of other organizational planning components. So, let’s take a detailed look at the way they impact business.

organizational planning business definition

1. Leadership development

A leadership culture is one where everyone thinks like an owner, a ceo or a managing director. it’s one where everyone is entrepreneurial and proactive., robin s. sharma.

Leadership development is fundamental to the long-term success of organizations . An effective leadership development strategy helps organizations achieve the following objectives.

a. Achieving business goals: It helps nurture leaders who can acquire new abilities to realign strategies relevant to developing business scenarios.

b. Improving the work environment: Dedicatedly curating behavioral patterns of leaders is imperative to promote a culture of learning and development.

c. Futureproofing: Leadership development helps organizations appropriately adjust to changes in people, procedures and innovation that could influence them in a not-so-distant future.

Areas of focus in leadership development

A positive culture impacts the organization in the long term. Keeping employees updated with workplace technology, providing them greater flexibility and a clear career trajectory, recognition and appreciation all count in building a positive work culture.

Leaders should have astounding vision and instinct about where the market is going, how client inclinations will develop, every bit of product knowledge, its updates and how to impress clients with greater usability.

Organizations and the people within them, particularly the leaders, must constantly re-invent and recalibrate themselves to remain competitive in the industry. Sustaining success does depend on a company’s ability to adapt to a changing environment.

organizational planning business definition

2. Succession planning

The Cambridge Dictionary defines succession planning as the “Process of finding suitable people and preparing them to replace important executives in an organization when these executives leave or retire.

Succession planning is a strategic organization planning approach to ensure that necessary talent and skills will be available when needed. It has been identified as a key initiative for addressing several critical human resources issues, including increasing turnover rates, fast-paced changes in work, and a need for a diverse workforce at all levels. With the help of succession planning , an organization recruits superior employees, develops their knowledge, skills, and abilities, and prepares them for promotions into more challenging roles within that organization.

organizational planning business definition

3. High- potential identification

High–potential identification refers to assessing and recognizing employees who have the potential to learn fast, grow consistently and do justice to the new roles and responsibilities with which they are trusted. The process helps cut hiring costs, saves time and ensures lasting organizational success with a loyal workforce working more dedicatedly. Therefore, high-potential identification is crucial to the overall organizational plan in business plan.

Financial planning

Financial Planning is estimating the capital required in business initiatives and procedures and determining its competition. It involves framing monetary policies around an enterprise’s procurement, investment and administration of funds.

The objectives of this organizational planning component are to:

Products and services planning

The products and services section of your organizational plan in business plan outlines your product or service, its need and demand in the market, and how it will compete with other similar businesses.

Products and services planning includes:

Expansion planning

Expansion planning is a futuristic, growth-driven component of the organizational planning process. It helps create a roadmap for product development, market penetration and diversification.

However, you should initiate expansion planning if the business is already successful and profits in its current market. In addition to new product/service launches, this component of an organizational plan could also include strategies to conquer foreign markets.

Why is organizational planning important?

The importance of organizational planning is evident in the way it helps a company uncover approaches to enhance performance . It can, for instance, unveil insights about how to restructure the organization so it can perform to its maximum capacity. In addition, developing new products and expanding operations- a comprehensive strategic organizational plan helps a company react to various circumstances and challenges better.

Planning is choosing ahead of time, what anyone can do. At the point when a manager plans, he anticipates a strategy for the future, endeavoring to accomplish a reliable, facilitated structure of operations aimed at the desired results.

According to the author theo haimann.

The importance of organizational planning extends to how it helps prepare a company to respond to changes in the workplace better. Furthermore, it clarifies the roles, responsibilities and expectations for everyone in the company. Finally, it helps management make sure they’re meeting the determined benchmarks.

Furthermore, organizational planning:

Increases the efficiency of an organization

It focuses on the work and resources of the entire organization, creating a clear and convincing vision that the team and board wish to progress with proper coordination.

Identifies genuine client needs

It involves getting input from clients to guarantee that their requirements are understood and fulfilled. Again, it helps companies expand and enhance their services.

Reveals what not to do

A strategic plan uncovers what an organization needs to quit doing to be more effective and client-focused.

Enables optimum resource utilization

A well-articulated organizational plan shows to the general public, funders and key partners that the company is making the ideal utilization of its assets to the advantage of the clients it serves.

Enhances decision-making

A good organizational plan in business planning reveals what you want to accomplish in the given time frame, what the future holds and what your goals should be.

A robust organizational plan is essential to understanding the:

Infographic 3

Case studies to demonstrate the need for organizational planning

Why did sun microsystems fail.

Java, one of the best programming languages for development, run in more than 3 billion devices in some form, was introduced by Sun Microsystems in 1995. But did you ever hear about the company thereafter?

Well, Sun Microsystems, the computer startup started constructing high-end servers just as the computer revolution was accelerating. Its Java programming language turned into an industry standard just as the internet arrived, helping make Sun an industry monster by the late 1990s. But the dot-com bust wiped out many of its customers and changed the way organizations meet their technology needs.

Former CEO of Sun Microsystems, Scott McNealy’s loyalty to Sun’s hardware culture scammed its software initiatives and eventually, destined the organization for fading into oblivion.

As PCs (Personal Computers) turned out to be all the more capable, fewer clients required Sun’s costly servers and the company spent most of the decade scaling back and saving. With Sun’s fairly estimated worth, only a fraction of what it had been once, Oracle bought the company later.

Software talent is constantly overwhelmed by and made to fill the needs of its hardware rulers. To do what’s depicted above at the right time would have required proactive software leadership inside Sun, someone willing to confront the hardware culture.

McNealy, the one figure who could have given the nod to such an activity, was himself instilled with the hardware culture.

In this case, there was a need for strategic organizational planning to maintain someone at the top position, be it the CEO or other empowered software leaders, aware of the competitors and the changes in the technique an organization needs to work on for success.

The unfortunate case of Motorola

Motorola, the world’s first mobile phone seller dominated the industry in 2003 when it introduced the trendy Razr- one of the largest-selling mobile phones ever. However, the brand failed to focus on futuristic planning around expansion and product upgrades. As a result, it lost its supremacy to competitors like Apple, LG and Samsung.

Strategic planning among the concerned officials of the organization, considering all aspects of transformation around the product/industry, would have made the scenario different.

Types of organizational plans

There are four major types of organizational plans that help pivot a business toward growth. Moreover, each of these plans is interconnected, and the success of one depends on the success of the others.

organizational planning business definition

Strategic plans

A strategic plan defines the company’s objectives for a set period and ensures that those objectives align with the organization’s mission, vision and values. It is the foundation for dictating long-term organizational decisions.

organizational planning business definition

Tactical plans

These plans are the precursor to strategic planning. Usually devised for a short duration, tactical plans involve several short-term goals that support the related strategic plan. The purpose of tactical planning is to break down the larger strategic plan into actionable chunks, carried out by mid-level managers.

organizational planning business definition

Operational plans

Operational plans cover what needs to happen continually, on a day-to-day basis, to execute tactical plans. Operational plans could be single-use or ongoing. While the former could include time-bound marketing campaigns, the latter covers policies for approaching problems, rules and regulations to meet specific objectives, task assignments within a tactical strategy, etc.

organizational planning business definition

Contingency plans

Contingency planning covers alternative courses of action for unusual circumstances and crises. Contingency plans suggest a range of possible scenarios and appropriate responses for issues ranging from personnel planning to advanced preparation for unexpected occurrences that could negatively impact the business. For example, organizations may have contingency plans for responding to a natural disaster, malfunctioning software, or the sudden departure of a C-level executive.

Organizational planning process

The steps in an organizational planning process correspond with the four types of organizational plans explained in the previous section. In addition, the method includes effective communication and performance monitoring of every aspect.

Infographic 1

Step 1: Strategize

The strategy stage of organizational planning should include the following steps.

a. Begin with the goals and objectives of the company: Analyze where do you want to be in the short- and long-term. Then, assemble a team to lead the plan’s execution, tracking and progress.

b. Define the company goals and objectives to help everyone understand them and their part in realizing them.

c. Ask questions to review the company’s current position: What processes are in place now? It would allow the workforce to see what they need to do to meet targets.

d. Gather what you’ve collected and put it in a document: Use this to track progress when executing the organizational plan.

Step 2: Translate strategy into tactics and plan daily operations

Based on the strategies formulated in the first stage of your organizational planning, you can create specific tactics and procedures broken down into actionable steps. The latter would help move toward implementing the long-term strategies at constantly.

Prepare a task list with roles for everyone on your team: Then, assign the tasks and ensure the team understands what is expected of it.

Step 3: Communicate the organizational plan to your workforce

If you implement a program without everyone understanding it, you may face problems that could derail the whole idea. Hence, it is vital to call a company-wide meeting to explain your plans’ nuances and predicted success. It is also a great idea to get feedback from those in attendance and fine-tune the details of your plan before executing it.

Illustrate the organizational structure of the plan: Share it with the whole company and keep everyone updated on progress as you hit milestones.

Step 4: Execute the plan

After the communication stage, the plan should be finalized, including the tactical and operational steps. Then, once there is absolute clarity regarding the short-term and long-term goals, you should put all of it to work.

Step 5: Monitor performance and progress

At the end of each short-term goal period, managers should review if they met the targets established in step two. Then, they should submit data-backed reports to C-level executives. Depending on the reviews, you can make necessary adjustments to improve the efficacy of the plans at any stage.

Tips for creating a successful organizational plan

Once you understand the various organizational planning examples, types, processes and objectives, you must familiarize yourself with organizational planning best practices. This section enlists valuable tips to help design and implement an effective organizational plan.

Organizational planning tools

Organizational planning tools are the methods used to implement strategies that help improve the various components and phases of the organizational plan. These tools enable an objective and comprehensive approach to the process and strategy.

Infographic 2

Assessment and development centers (ACDCs/ADCs)

ADCs are platforms for conducting advanced professional assessments. They utilize a series of innovative projects , including case study simulations, presentation exercises and various activities to assess leadership styles, motivators and work-oriented personality traits. As a result, they help leaders and potential leaders to improve their efficiency, optimize their strengths and develop their areas of improvement.

Application in organizational planning: Leadership development and hiring, workforce planning, futureproofing, succession planning and performance management.

Psychometric tests

Psychometric tests are essential for measuring cognitive abilities, personality traits, demonstrated behaviors and function knowledge/skills. They generate relevant proof of skills/competencies required for succeeding in specific professional roles and industries. Moreover, they help formulate targeted L&D (Learning & Development) and prepare and initiate the advancement of effective succession planning and administration. They are also efficient in evaluating the productivity and success of current strategies/processes.

Psychometric tests offer advantages like objective information on employee efficiency and behavioral competencies suited to the organizational system.

Application in organizational planning: Talent acquisition, organizational restructuring, IJPs (Internal Job Postings/Promotions), HR (Human Resource) allocation, etc.

Three-sixty-degree feedback

Three-sixty-degree feedback refers to holistic reviews and honest ratings about professionals and professional spaces. A robust 360-degree feedback tool helps strengthen organizational planning by highlighting the strengths, hidden strengths, blind spots and areas of development at every level of the organization.

Application in organizational planning: Leadership assessment , performance management , L&D, strategic planning for various areas of the organization: finances, products and services, expansion plans, etc.

Employee engagement evaluation

An advanced evaluation of employee satisfaction in a company is vital to organizational planning success. Therefore, using an employee engagement evaluation tool enables HR managers, administrators and decision-makers to improve the company’s work culture, environment, people policies, growth initiatives, feedback cycles and a lot more.

Application in organizational planning: Gauging the workforce’s satisfaction with current company structure and policies, career opportunities within the company, employees’ opinions and approaches toward various types of organizational plans, etc., to make improvements based on varied perspectives/experiences/ideas.

The organizational planning process is essential for maintaining order, success, discipline and sustainability in every area of an organization’s functions. It is imperative when it incorporates employees in all departments and at all levels of responsibility, potential, and skills, considering how they fit into the bigger picture.

Originally published April 18 2018, Updated July 11 2022

D'ipanjenah Ali

D'ipanjenah Ali

An alumna of National Institute of Fashion Technology (NIFT), Mumbai and a Fine Arts graduate from Jamia Millia Islamia, New Delhi, D’ipanjenah is a writer and marketing professional, associated with Mercer Mettl since 2020.D’ipanjenah firmly believes in building powerful narratives that add value to a brand and its clients. At Mercer Mettl, she strives to achieve the same through dedicated content management and product marketing initiatives that are rooted in an ideal balance of conventional insights and modern trends.Having worked in advertising, fashion, and entertainment in the past, D’ipanjenah has helped brands create innovative campaigns across digital channels, start valuable conversations, and position themselves better through novel ideas and influence. Her passion for creating and curating rich content has allowed her to explore an array of creative positions throughout her career, and enabled her to offer extensive experience in social media, research, blogging, and storytelling.When not reading or writing, D’ipanjenah loves experimenting in her studio. She is also an avid painter, zero-waste advocate, and mother to a snobbish calico.

D’ipanjenah is a writer and marketing professional associated with Mercer Mettl since 2020. Her working style thrives on a balanced approach towards standard insights and novel trends. She utilizes creative content and digital strategies to help brands start important conversations. When not reading/writing, she enjoys art and parents a calico.

About This Topic


Succession planning is a systematic process through which organizations build a leadership pipeline to preserve its future. The process involves identifying and developing potential successors for a seamless transition.

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Organization & Business Planning

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How to assemble a project management plan, strengths of strategic planning.

One of the top concerns of business managers is the need for effective planning, and organization is a key element of proper planning. A disorganized company is prone to setbacks and challenges to its overall business plan. A prudent business owner or manager seeks insight into the relationship between organization and business planning as well as how it directly relates to her own company.


Organization is necessary from the very beginning of the business planning process. How you organize your initial written business plan has a significant affect on how useful it will be to you on a day-to-day basis. If a business plan is poorly written and organized, it's difficult to follow and implement. A well-organized business plan also affects how seriously potential investors, partners, and lenders will take your business when you approach them for help. According to business consultant Nathan Kelly of Baron Consulting, the five essential elements of a well-organized business plan are marketing, human resources, operations, financing, and an exit strategy.

Project Management

Project planning requires an organized business leader. When setting up project teams, you must organize your workers into functional groups that will efficiently complete the task at hand. You must also organize a written project plan with a list of to-dos, responsibilities and deadlines that team members can follow. Finally, keeping track of deadlines and issues that occur during the project requires advanced organizational skills.

Organizing Finances

Another important element of the business planning process that requires organization is the company's budget and finances. The company owner must keep close tabs on the business's budget, both in general and as related to specific projects. He must organize and monitor expenses to ensure that he makes informed financial decisions.

Expert Insight

Communication consultant Andy Johnston suggests that business owners use a three-point process to organize a strategic plan. Start by asking the questions, "Where are we now?," "Where do we want to be?" and "How do we get from point A to point B?" and writing down detailed answers each question. Use your responses to organize and form your plan.

A number of software programs help businesses organize for success. One basic type of program that can help is a calendar organizer (such as Microsoft Outlook, Lotus Notes, or Google Calendar). Additionally, project management software allows a business owner to create, manage and organize a project, as well as communicate with members of the team, within one common system.

Louise Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.

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strategic planning

What is strategic planning?

Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision.

Strategic planning typically represents mid- to long-term goals with a life span of three to five years, though it can go longer. This is different than business planning, which typically focuses on short-term, tactical goals, such as how a budget is divided up. The time covered by a business plan can range from several months to several years.

The product of strategic planning is a strategic plan. It is often reflected in a plan document or other media. These plans can be easily shared, understood and followed by various people including employees, customers, business partners and investors.

Organizations conduct strategic planning periodically to consider the effect of changing business, industry, legal and regulatory conditions . A strategic plan may be updated and revised at that time to reflect any strategic changes.

list of what CIOs should have in a strategic plan

Why is strategic planning important?

Businesses need direction and organizational goals to work toward. Strategic planning offers that type of guidance. Essentially, a strategic plan is a roadmap to get to business goals. Without such guidance, there is no way to tell whether a business is on track to reach its goals.

The following four aspects of strategy development are worth attention:

What are the steps in the strategic planning process?

There are myriad different ways to approach strategic planning depending on the type of business and the granularity required. Most strategic planning cycles can be summarized in these five steps:

Identify. A strategic planning cycle starts with the determination of a business's current strategic position. This is where stakeholders use the existing strategic plan -- including the mission statement and long-term strategic goals -- to perform assessments of the business and its environment. These assessments can include a needs assessment or a SWOT (strengths, weaknesses, opportunities and threats) analysis to understand the state of the business and the path ahead.

Prioritize. Next, strategic planners set objectives and initiatives that line up with the company mission and goals and will move the business toward achieving its goals. There may be many potential goals, so planning prioritizes the most important, relevant and urgent ones. Goals may include a consideration of resource requirements -- such as budgets and equipment -- and they often involve a timeline and business metrics or KPIs for measuring progress.

Develop. This is the main thrust of strategic planning in which stakeholders collaborate to formulate the steps or tactics necessary to attain a stated strategic objective. This may involve creating numerous short-term tactical business plans that fit into the overarching strategy. Stakeholders involved in plan development use various tools such as a strategy map to help visualize and tweak the plan. Developing the plan may involve cost and opportunity tradeoffs that reflect business priorities. Developers may reject some initiatives if they don't support the long-term strategy.

Implement. Once the strategic plan is developed, it's time to put it in motion. This requires clear communication across the organization to set responsibilities, make investments, adjust policies and processes, and establish measurement and reporting. Implementation typically includes strategic management with regular strategic reviews to ensure that plans stay on track.

Update. A strategic plan is periodically reviewed and revised to adjust priorities and reevaluate goals as business conditions change and new opportunities emerge. Quick reviews of metrics can happen quarterly, and adjustments to the strategic plan can occur annually. Stakeholders may use balanced scorecards and other tools to assess performance against goals.

diagram of a balanced scorecard

Who does the strategic planning in a business?

A committee typically leads the strategic planning process. Planning experts recommend the committee include representatives from all areas within the enterprise and work in an open and transparent way where information is documented from start to finish.

The committee researches and gathers the information needed to understand the organization's current status and factors that will affect it in the future. The committee should solicit input and feedback to validate or challenge its assessment of the information.

The committee can opt to use one of many methodologies or strategic frameworks that have been developed to guide leaders through this process. These methodologies take the committee through a series of steps that include an analysis or assessment, strategy formulation, and the articulation and communication of the actions needed to move the organization toward its strategic vision.

The committee creates benchmarks that will enable the organization to determine how well it is performing against its goals as it implements the strategic plan. The planning process should also identify which executives are accountable for ensuring that benchmarking activities take place at planned times and that specific objectives are met.

How often should strategic planning be done?

There are no uniform requirements to dictate the frequency of a strategic planning cycle. However, there are common approaches.

Timetables are always subject to change. Timing should be flexible and tailored to the needs of a company. For example, a startup in a dynamic industry might revisit its strategic plan monthly. A mature business in a well-established industry might opt to revisit the plan less frequently.

Types of strategic plans

Strategic planning activities typically focus on three areas: business, corporate or functional. They break out as follows:

In most cases, a strategic plan will involve elements of all three focus areas. But the plan may lean toward one focus area depending on the needs and type of business

What is strategic management?

Organizations that are best at aligning their actions with their strategic plans engage in strategic management. A strategic management process establishes ongoing practices to ensure that an organization's processes and resources support the strategic plan's mission and vision statement .

In simple terms, strategic management is the implementation of the strategy . As such, strategic management is sometimes referred to as strategy execution. Strategy execution involves identifying benchmarks, allocating financial and human resources and providing leadership to realize established goals.

Strategic management may involve a prescriptive or descriptive approach . A prescriptive approach focuses on how strategies should be created. It often uses an analytical approach -- such as SWOT or balanced scorecards -- to account for risks and opportunities. A descriptive approach focuses on how strategies should be implemented and typically relies on general guidelines or principles.

Given the similarities between strategic planning and strategic management, the two terms are sometimes used interchangeably.

What is a strategy map?

A strategy map is a planning tool or template used to help stakeholders visualize the complete strategy of a business as one interrelated graphic. These visualizations offer a powerful way for understanding and reviewing the cause-and-effect relationships among the elements of a business strategy.

While a map can be drawn in a number of ways, all strategy maps focus on four major business areas or categories: financial, customer, internal business processes (IBPs), and learning and growth. Goals sort into those four areas, and relationships or dependencies among those goals can be established.

For example, a strategy map might include a financial goal of reducing costs and an IBP goal to improve operational efficiency . These two goals are related and can help stakeholders understand that tasks such as improving operational workflows can reduce company costs and meet two elements of the strategic plan.

A strategy map can help translate overarching goals into an action plan and goals that can be aligned and implemented.

Strategy mapping can also help to identify strategic challenges that might not be obvious. For example, one learning and growth goal may be to increase employee expertise but that may expose unexpected challenges in employee retention and compensation, which affects cost reduction goals.

tasks in a balanced scorecard

Benefits of strategic planning

Effective strategic planning has many benefits. It forces organizations to be aware of the future state of opportunities and challenges. It also forces them to anticipate risks and understand what resources will be needed to seize opportunities and overcome strategic issues.

Strategic planning also gives individuals a sense of direction and marshals them around a common mission. It creates standards and accountability. Strategic planning can enhance operational plans and efficiency. It also helps organizations limit time spent on crisis management , where they're reacting to unexpected changes that they failed to anticipate and prepare for.

Information technology is a key part of developing an effective strategic plan. Look at these six free IT strategic planning templates that can help make IT a driving force in a business.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, elements of a business plan, special considerations.

Business Plan: What It Is, What's Included, and How To Write One

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

organizational planning business definition

Investopedia / Ryan Oakley

A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.

A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.

Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.

Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.

Key Takeaways

Want Funding? You Need a Business Plan

A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.

Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.

A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.

While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.

A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.

Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.

When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.

Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.

The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.

As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.

Unique Business Plans Help

The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.

Types of Business Plans

Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.

Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.

Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.

Financial Projections

A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.

Other Considerations for a Business Plan

A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.

If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.

Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.

Think of the business plan as a living document that evolves with your business.

A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.

Why Do Business Plans Fail?

Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out of control budgets. Markets and the economy can also change. Without flexibility built in to your business plan, you may be unable to pivot to a new course as needed.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.

Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.

Small Business Administration. " Write Your Business Plan ."

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What is a Business Plan? Definition, Tips, and Templates

AJ Beltis

Updated: September 02, 2021

Published: September 01, 2021

In an era where more than 50% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Marketer typing up a business plan on their laptop

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

Download Now: Free Business Plan Template

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

Business Plan Template [ Download Now ]

Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break-even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if – and when – they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies – from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

3. Legitimizing a business idea.

Everyone's got a great idea for a company – until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics – and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan – providing a section-by-section guide on creating your plan?

What does a business plan need to include?

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice. Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all fair game here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The “team” section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans. For even more examples, check out these 11 sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is used for brand new business ideas. This plan is used to lay the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans typically reference existing industry data and explain unique business strategies and go-to-market plans.

2. Business Acquisition Plan

Believe it or not, investors use business plans to acquire existing businesses, too — not just new businesses.

A business plan for an existing company will explain how an acquisition will change its operating model, what will stay the same under new ownership, and why things will change or stay the same. Additionally, the business plan should speak to what the current state of the business is and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased and what the new owner will do to turn the business around, referencing previous business metrics, sales projections after the acquisition, and a justification for those projections.

3. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

Companies planning for a business reposition do so – proactively or retroactively – due to a shift in market trends and customer needs. For example, Pizza Hut announced a plan to drastically overhaul its brand, as it sees the need to shift from dine-in to delivery – a decision resulting from observing years of industry and company trends and acknowledging the need to reposition itself for the future of its sector.

4. Expansion Business Plan

Expanding a successful business venture into another location typically requires a business plan, as the project may focus on a new target market and demand more capital.

Fortunately, an expansion business plan isn’t like a startup business plan in that it starts from scratch. Instead, this type of plan references sales, revenue, and successes from existing locations. However, as great as a reference as these points can be, it's important to not be too reliant on them since it's still a new business that could succeed or fail for a myriad of reasons.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan – and the business it outlines – will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Business Plan Template

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  1. Organizational Plan

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