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Long-range plans are usually of the standing or repeat-use type. They are used over and
over again to help guide the activities of members of the organization.
Function: Another way of classifying plans is in terms of the function or use to
which they are applied. Plans may be developed for key organizational functions such
as Marketing, Manufacturing, Finance, Engineering, and R&D. The functional grouping
of plans assists management in understanding the interaction between major areas or
operations. This, in turn, helps in spotting potential conflicts and problems so that they
can be dealt with effectively.
Scope: A third way of classifying plans is with respect to their breadth or scope.
Examples include:
Objectives: An objective is a general statement of the mission of the organization
or group. This statement describes what is to be accomplished; it does not stipulate how
it will be achieved. General corporate objectives are communicated to divisions and
departments, where they are translated into specific goals and activities. This process
results in establishing a hierarchy of objectives for each kind of function at each level of
the organization.
Policies: While objectives tell what is to be done, policies focus on the constraints
within which the objectives will be accomplished. Policies, out of necessity, are broad
statements directed to guide organization members in making decisions and handling
problems. Well-developed policies ensure a continuing focus on predetermined
objectives, maintain consistency of action, and minimize randomness of decision-
making.
Policies are usually developed by high-level executives. Managers and department
heads, however, may make policy recommendations subject to the approval of
managers at higher levels. Examples of policies include such stipulations as "R&D
projects will not be subcontracted unless the company does not have the necessary
resources or expertise to perform the job," or "Promotions of engineers from within are
encouraged when the engineers have a demonstrated managerial potential."
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