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versus specific), and frequency of use (single-use CHAPTER 5 • Foundations of Planning 169
versus standing). As Exhibit 5–7 shows, these types
of plans aren’t independent. That is, strategic plans
are usually long term, directional, and single-use.
Let’s look at each type of plan.

Breadth. Strategic plans are those that apply to an
entire organization and encompass the organization’s
overall goals. Tactical plans (sometimes referred to
as operational plans) specify the details of how the
overall goals are to be achieved. When McDonald’s
invested in the Redbox kiosk business, it was the
result of strategic planning. Deciding when, where,
and how to actually operate the business was the re-
sult of tactical plans in marketing, logistics, finance,
and so forth.
Time Frame. The number of years used to define
short-term and long-term plans has declined consid- REUTERS/ISSEI KATO/Landov Nestlé Japan is using a humanoid robot
erably due to environmental uncertainty. Long term used to mean anything over seven years. capable of reading and responding to human
Try to imagine what you’re likely to be doing in seven years. It seems pretty distant, doesn’t emotions to sell its Nescafé coffee machines.
This tactical promotional plan devised to
it? Now, you can begin to understand how difficult it is for managers to plan that far in the encourage consumers to buy products
future. Thus, long-term plans are now defined as plans with a time frame beyond three years. supports Nestlé’s strategic plan of improving
Short-term plans cover one year or less. the company’s performance and ensuring its
profitable growth.
Specificity. Intuitively, it would seem that specific plans would be preferable to directional,
or loosely guided, plans. Specific plans are plans that are clearly defined and leave no room
for interpretation. For example, a manager who wants to increase his work unit’s output by 8
percent over the next 12 months might establish specific procedures, budget allocations, and
work schedules to reach that goal. However, when uncertainty is high and managers must be
flexible in order to respond to unexpected changes, they’d likely use directional plans, flex-
ible plans that set general guidelines. For example, Sylvia Rhone, president of Motown Re-
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cords, had a simple goal—to “sign great artists.” She could create a specific plan to produce
and market 10 albums from new artists this year. Or she might formulate a directional plan to
use a network of people around the world to alert her to new and promising talent so she can
increase the number of artists she has under contract. Sylvia, and any manager who engages in
planning, must keep in mind that you have to weigh the flexibility of directional plans against
the clarity you can get from specific plans. strategic plans
Plans that apply to the entire organization and
encompass the organization’s overall goals
Flexibility ↔ Clarity tactical plans

Plans that specify the details of how the overall
goals are to be achieved
Frequency of Use. Some plans that managers develop are ongoing, while others are used
only once. A single-use plan is a one-time plan specifically designed to meet the needs of a long-term plans
unique situation. For instance, when Dell began developing a pocket-sized device for getting Plans with a time frame beyond three years
on the Internet, managers used a single-use plan to guide their decisions. In contrast, stand- short-term plans
ing plans are ongoing plans that provide guidance for activities performed repeatedly. For Plans with a time frame of one year or less
example, when you register for classes for the upcoming semester, you’re using a standardized specific plans
registration plan at your college or university. The dates change, but the process works the Plans that are clearly defined and leave no room for
same way semester after semester. interpretation
directional plans
Plans that are flexible and set general guidelines
Exhibit 5–7 Types of Plans
single-use plan
A one-time plan specifically designed to meet the
bREADTH oF usE TIME FRAME spECIFICITy FREquEnCy oF usE needs of a unique situation
Strategic Long term Directional Single-use standing plans
Tactical Short term Specific Standing Plans that are ongoing and provide guidance for
activities performed repeatedly