A critical activity that is carried out by the management of an organization is planning. Through planning, an organization is able to determine the steps it has to follow to attain success. There are essentially two kinds of planning that are carried out by organizations to achieve their objectives, i.e. strategic planning and operational planning. Strategic planning refers to the planning that is carried out at the organizational level, whereas operational planning takes place at the functional level of the organization. The aim of both these types of planning is to establish priorities and organize resources in such a way that the objectives, goals, mission and vision of the organization are accomplished, and performance of the organization is improved.
This article discusses strategic planning and operational planning in greater detail, while also elaborating on the differences between the two.
Definitions and explanations
Strategic planning is the planning process carried out at the highest management level of an organization with the aim of determining where the organization wishes to be in the future. The focus of strategic planning is to determine the activities that the organization should carry out to ensure that its mission, vision and objectives are attained.
Strategic planning is a systematic and analytical process that is formally documented. The purpose of this process is to determine the critical decisions that should be made by an organization so as to achieve success in the subsequent years.
Strategic plans are developed for the whole organization, and not for a specific unit or department of the organization. In strategic planning, an analysis of the internal and external environmental factors that have a direct impact on organizational activities is carried out. The focus of strategic planning is on ensuring the survival and development of an organization in the long-run.
There are many tools that are used by organizations to carry out strategic planning, a few of which are: SWOT analysis, PEST analysis and Porter’s 5 Forces. Using these tools, an organization will be able to take into account different factors to develop a strategy that enables it to achieve its vision.
Operational planning is the process used to determine the routine activities of the business at the tactical level. The purpose of operational planning is to design a plan that supports strategic planning to attain organizational goals and objectives.
It is the middle-level management that pursues the development of operational plans. When developing an operational plan, the immediate short-term activities that the business needs to carry out to attain its strategic objectives are ascertained in a systematic manner. Operational planning divides the business into different departments, business units, divisions and centers, where planning occurs individually for every unit. Planning at this level is consistent with strategic planning so that the overall objectives of the organization can be attained.
Difference between strategic planning and operational planning
The major points of difference between strategic planning and operational planning are discussed below:
Strategic planning refers to the establishment of a direction for an organization, determining its objectives and goals and formulating the strategies that it should follow to achieve its vision. Strategic planning presents a general guideline for the management to follow so as to accomplish the objectives of the organization. On the other hand, operational planning is carried out to present a specific guide to people regarding the routine tasks they need to carry out. It establishes the short-term activities that need to be achieved by the employees, which will eventually lead to the fulfillment of the larger objectives of the organization.
The focus of strategic planning is on the long-term objectives, mission and vision of the organization, and the way different departments should work alongside each other to attain them. Operational planning is focused on planning for the operations of a given business unit or department
3. Time frame
Strategic planning is carried out for the long-term, whereas the objective of operational planning is to plan for the everyday business activities of the organization.
4. Carried out by
The top-most level of management is involved in strategic planning, whereas it is the responsibility of middle-level management to perform operational planning.
Strategic planning pertains to the overall organization, hence, it is has a greater scope. In contrast, operational planning is carried out for a specific business or functional unit, having a narrow scope.
After developing strategic plans, they are usually kept the same for long periods of time; however, operational plans are changed frequently (usually every year).
Strategic planning vs operational planning – tabular comparison
A tabular comparison between strategic planning and operational planning is presented below.
|Strategies that should be used at the organizational level to fulfill the vision, mission and objectives of the organization||Determining the specific plan that needs to be carried out at the functional level of the organization|
|Establishing plans in accordance with the mission and vision of the organization||Determining the routine operations of the a business unit or department|
|Carried out by|
|Higher level management||Middle level management|
|Wider scope||Narrow scope|
|Usually unchanged for longer periods of time||Changed from time to time (every year)|
Conclusion – strategic planning vs operational planning
Strategic planning and operational planning are the two kinds of planning processes that take place within organizations. The objective of these two processes is quite different from one another, with the former focusing on achieving the mission, vision and objectives of the organization while the latter focuses on fulfilling the routine functions of the business so as to achieve its tactical objectives.
Despite the clear differences between the two, it is important to note that the two processes are linked to one another, and should be developed in a way that they complement one another. This is critical so as to make sure that strategies are managed in an effective manner. The critical aspects of strategic planning should serve as a guide to the way the employees of an organization carry out the operations of the business. In other words, operational planning should be aligned with the strategic plans of the organization.