Principles of Management

Hierarchy of Planning | Principles of Management

Hierarchy of Planning: Planning is a pervasive function; therefore, it forms a hierarchy. The managers at different levels form different types of plans. Top-level management prepares higher-level plans whereas middle and first-line managers prepare lower-level plans. Therefore, lower level plans are consistent with higher-level plans.

Also Read: Managerial Hierarchy / Levels of Management and its Function

Hierarchy of Planning in Management

The following are the arrangement of plans in a hierarchy:

  • Mission
  • Goals and Objectives
  • Strategies
  • Policies
  • Procedures
  • Rules
  • Programs
  • Budgets
Hierarchy of Planning in Management
Hierarchy of Planning in Management

1. Mission

The mission is the reason for the existence of an organization. It clears what an organization wants to provide to society i.e. product or service. It tells who we are and what we do as well as what we would like to become. The mission is developed by top-level management, which defines the fundamental unique purpose that sets an organization apart from other organizations of a similar type. It also involves the company’s philosophy about how it does business and treats its employees.

2. Goals and Objectives

Goals are planned results to be achieved. These are accomplished by destinations that an organization plans to reach. Goals specify what is to be accomplished and by whom and should be shown in quantitative terms. They should be consistent with the mission of an organization.

3. Strategies

It is one of the important parts of the hierarchy of planning in management. The strategy is a comprehensive master plan stating how an organization will achieve its mission and goals. It determines the basic long-term objectives of an organization’s adoption of the course of action and allocation of resources necessary to achieve advantages and minimize the desired goals. It maximizes competitive disadvantages.

4. Policies

The policy is a comprehensive guideline for decision making that links the formulation of strategy with its implementation. It defines the area within which a decision is to be made and ensures that decisions will be consistent with objectives. Managers develop policies to make sure that employees of the organization make decisions and take actions that support the mission, goals, and strategies.

5. Procedures

Procedures are the sequential steps that describe in detail how a particular task is to be performed. They generally indicate how a policy is to be implemented and carried out. They are the guides to action and detail the exact manner in which certain activity must be accomplished.

6. Rules

Rules are detailed guides to action. They are specific and rigid and are strictly to be obeyed by all the members of an organization. It is essential to operate an organization in an orderly way. They must be followed precisely and observed strictly. The violation of rules is associated with disciplinary action.

7. Programs

Program is a statement of activities essential to accomplish a single-use plan. It is a comprehensive plan consisting of a complex set of goals, procedures, rules, resource flow, etc. It is an aggregate of several related action plans that are designed to accomplish a mission.

8. Budgets

The budget is a short-term financial plan, which is presented in terms of money. It is designed to allocate the resources of an organization. It is the basis of measuring actual performance achieved with that of standard and identifying the variance.

The above-mentioned were the eight points that fall under the hierarchy of planning in management.


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Kriti Agarwal

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  • Short-term plans generally allocate resources for a year or less. They may also be referred to as operational plans because they are concerned with daily activities and standard business operations. Like long-term plans, short-term plans must be monitored and updated, and this is the role of middle- and first-level management. Different managerial levels have responsibility for implementing different types of short-term plans. For example, a department manager may be comfortable implementing an operational plan for the entire year for her department. A marketing manager may direct a three- to four-month plan that involves the introduction of a new product line. A team leader may only be comfortable planning and implementing very specific activities over the period of a month.

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