Planning is “Thinking before the action takes place” while Strategy is “A comprehensive plan.” In a business environment, both planning and strategy are of utmost importance. However, they are used in place of each other but they are neither synonyms, nor they should be used interchangeably. Both have different meanings and identity in the business world. So here we go, let’s start understanding the Difference Between Planning and Strategy.
Content: Planning Vs Strategy
|Basis for Comparison||Planning||Strategy|
|Meaning||Planning is thinking in advance, for the actions which are going to take place in the future.||Best plan opted for achieving the desired outcome.|
|What is it?||Planning is a road map for accomplishing any task.||Strategy is the path chosen for achieving the objectives.|
|Term||Depending upon the circumstances.||Long Term|
|Part of Management Functions||Yes||Sub-part of Decision Making|
Definition of Planning
Planning is an organized process of thinking in advance about a future action. It means the preparation of the plan, i.e. the sequence of steps which will help in achieving organizational objectives. Planning is among the five management functions apart from organizing, controlling, motivating & leading and decision making.
Planning is a future-oriented activity that takes place in routine decisions of a family, a friend group, a college, government and most importantly in business management. It requires good judgment skills for choosing which action is to be done earlier or later to avoid overlapping in actions.
Planning needs goal setting for which planning needs to be done after that alternative courses of action are found and finally deciding which plan will lead to your destination successfully. It doesn’t mean that everything will go according to your plan, or it may also happen that the plan may fail in the midway, so the second list of plans is also prepared which act as a complementary plan to the original plan if it fails, for achieving the goals successfully in the limited time.
The creation of complementary plans is also a part of the planning procedure. Planning needs to be flexible in nature so that any change can be done if required by the organization. With the help of planning, an organization can exercise control over the action, i.e. either everything is going as per plan or not.
Definition of Strategy
The strategy is a master game plan designed for achieving the objectives of an organization. It is a mix of competitive moves and actions made by the top level management for the accomplishment of goals successfully. They are dynamic and flexible in nature. Strategies are based on practical experiences, not on theoretical knowledge, i.e. they are realistic and action-oriented activity. It requires deep analysis of the managers on any move or action, implementation timing, the sequence of actions, outcome, reactions of competitors, etc.
In the business world, corporate strategies are made for expansion and growth of the entities which include merger, diversification, divestment, acquisition and many other. Strategies are made according to the present situations and conditions prevalent in the business environment, but it can’t be said that they are perfect because of the changing needs and demands of the people, strategies may fail.
Moreover, the market scenario will take an unexpected turn any time with the blink of an eye and nothing lasts forever. Therefore organization has to be ready for any such unpredictable changes as well as they must develop a strategy for overcoming from these situations. So, the corporate strategy of the organization is a combination of pro-active and reactive strategies.
Key Differences Between Planning and Strategy
The major differences between Planning and Strategy are as under:
- Planning is anticipation and preparation in advance, for the uncertain future events. The strategy is the best plan chosen among the various alternatives for the accomplishment of objectives.
- Planning is like a map for guidance while strategy is the path which takes you to your destination.
- Strategy leads to planning and planning leads to programs.
- Planning is future oriented, whereas Strategy is action oriented.
- Planning takes assumptions, but Strategy is based on practical experiences.
- Planning can be for short term or long term depending upon the circumstances. Unlike Strategy, which is for the long term.
- Planning is a part of the managerial process. Conversely, Strategy is a part of decision-making.
Planning is forethought of what is to be done in future, but Strategy is a blueprint of what you want to be and where you want to be. Both Planning and Strategy are made by the top-level managers as they know the mission and vision of the organization clearly, so they will make their plans and strategies to take a step forward towards their mission and vision. Planning is preventive in nature whereas Strategy is quite competitive but both aims at the optimum utilization of the scarce resources.