Planning is an important activity, performed by the management, keeping in view, the vision, mission, goals and objectives of the enterprise. It implies thinking in advance, what we need to do in future and creates a rough draft, so as to fulfill the business objectives. Planning occurring at the corporate level is termed as strategic planning, while the planning process taking place at the functional level is called operational planning.
Strategic Planning is concentrated towards attaining the long-term objectives of business. On the other hand, operational planning is done to achieve short-term objectives of the company. These are used to set priorities and align the resources, in such a way that leads to the accomplishment of business goals. Take a read of the article given below, to understand the difference between strategic planning and operational planning.
Content: Strategic Planning Vs Operational Planning
|Basis for Comparison||Strategic Planning||Operational Planning|
|Meaning||The planning for achieving the vision of the organization is Strategic Planning.||Operational Planning is a process of deciding in advance of what is to be done to achieve the tactical objectives of business?|
|Time Horizon||Long term planning||Short term planning|
|Modifications||Generally, the plan lasts longer.||The plan changes every year.|
|Performed by||Top level management||Middle level management|
|Emphasis on||Planning of vision, mission and objectives.||Planning the routine activities of the company.|
Definition of Strategic Planning
Strategic Planning is a planning process undertaken by the top level management, to decide Where the organization wants to reach in future? And What should be done to pursue the organizational vision, mission, and objectives? It is an analytical process which examines the micro and macro environment of business. The process is used to define the company’s vision, ambitions, and set priorities to make a route that will lead the company towards its ultimate goal.
The planning is not made for a particular department or unit, but it covers the entire organization. The strategic planning is done to determine the factors of the internal and external environment which directly influences the organization. The plan focuses on the enduring development of the organization. The tools used in this process are:
- SWOT Analysis (Strength, Weakness, Opportunities, Threats)
- Portfolio Analysis
- PEST Analysis (Political, Economic, Social, Technological Environment)
- Porter’s 5 forces Analysis (New Entrants, Rival Sellers, Substitute Products, Buyer Bargaining Power, Supplier Bargaining Power)
- BCG Matrix (Boston Consulting Group)
These tools help the management to design a strategy considering various elements, that will lead the organization towards its vision.
Definition of Operational Planning
The process which predetermines the day to day activities of the business is known as Operational Planning. The planning is done to support the strategic planning to accomplish the organizational goals. In this process, short run objectives of the company are determined as well as a means to achieve those objectives are also discovered.
Middle-level management performs the function of the operational planning process. It includes planning of regular business activities and operations for a short period. Under this process, the organization is classified into the various department, division, unit, and center for which planning is performed individually, which is aligned with the strategic planning to reach the organization’s vision. The following are the features of Operational Planning:
- Objectives need to be clearly defined.
- Achievement of the desired result.
- The activities are to be performed as decided.
- Maintenance of quality standards.
- Measuring performance.
Key Differences Between Strategic Planning and Operational Planning
The following are the differences between strategic planning and operational planning:
- The planning to pursue the organization’s vision is known as Strategic Planning. The planning to achieve the tactical objectives of the organization is known as Operational Planning.
- Strategic Planning is long lasting as compared Operational Planning.
- Operational Planning is done to support Strategic Planning.
- Strategic Planning takes into account the internal as well as the external environment of business. Conversely, Operational Planning is concerned with the internal environment of business.
- Strategic Planning is done by top level management, whereas the Operational Planning is a function of middle-level management.
- Strategic Planning covers the whole organization, but Operational Planning is done in a particular unit or department of the organization.
As we have discussed in the beginning that planning can be done for anything, so in a business organization it can be done for various purposes right from reaching the vision to its regular business activities, but their names, ways, and planning techniques are different. Strategic Planning and Operational Planning are two types of planning process performed by the managers and executives of the organization.
Strategic Plans are made to achieve the vision, mission, goals, and objectives. On the other hand, Operational Plans are made to effectively perform the basic activities of the business in order to achieve tactical objectives.