While there clearly is overlap between the various forms of planning, and they are often confused for one another, there are important distinctions to be drawn. Strategic or long-term planning typically involves a few key (broad-based, critical) issues which are studied or predicted over an extended period of time. For example, an organization might prepare a strategic marketing or sales plan for the next five years. By contrast, tactical or short-term planning focuses on problems associated with a specific setting, customer group or individual stakeholder.
While strategic planning tends to look at a larger, multi-dimensional context (economic, political, geographic, demographic)—and hence can focus on the future—tactical planning is deeply embedded in a specific context. Tactical plans in one sales region, with regard to one product line, or with reference to one specific customer group, may be quite different from tactical plans associated with any other region, product line or customer group in the organization. For example, a tactical plan could focus on sales training for a specific customer group. It may even be tailored around the need to respond in a unique way to a specific customer.
In recent years, a third term has been introduced, contingency planning. This form of planning typically combines long term and short term planning processes. Through the use of contingency planning, organizational leaders prepare several different organizational responses to possible (alternative) situations in the future. Alternatives of a pessimistic nature tend to point to the nature and extent of organizational “buffers.” For example, a contingency planning process can be engaged in the creation of several marketing plans for potential shifts in customer demographics or customer needs. Alternatives of an optimistic nature tend to point to the nature and extent of temporary and affiliate arrangements that can be constructed with regard to specific required resources (human, machines, facilities, etc.). Given these distinctions between strategic, tactical and contingency planning, I will turn briefly to four different version of strategic planning (the third and fourth versions actually combining strategic and contingency planning).
Version One: Program budgeting
During the first fifty years of the 20th Century, many organizational leaders engaged in a systematic analysis of the relationship between program priorities and fiscal realities. For example: “given that we have only $40,000 available for new program development, should we focus on new program A or new program B? How much money will it take to begin Program A and how much will it take to begin Program B?” This version of strategic planning made sense prior to 1950, not only because management prior to this time was rather chaotic and nonsystematic, but also because the setting in which most organizations operated was relatively stable and because most organizations operated on a “bottom line” mentality, with finances and budgets being of highest priority.Download Article Download Article 1K Club