organizational plan in business plan meaning

• Contact sales

Start free trial

What Is Organizational Strategy in Business? (Examples Included)

The most successful companies always have one eye on the future so they can not only survive but thrive. That doesn’t happen without an organizational strategy to plan for the organization’s long-term success.

Organizational strategy has many layers. We’ll first define the term and then go into the organizational strategy levels, as well as explain its importance in business. Then we’ll detail the key components that make up a thorough organizational strategy and throw in some free templates to get you started.

What Is Organizational Strategy?

Organizational strategy is the long-term organizational planning a company does to operate and achieve its strategic goals in the future. It involves how the company will allocate its resources to support business activities that lead to achieving those long-term goals.

Another reason to have an organizational strategy is that it provides a roadmap that can be shared across the company and illustrates how those long-term goals will be met. It’s not only communicative but helps management develop strategic plans so the company can accomplish its goals.

ProjectManager is award-winning project and portfolio management software that has powerful roadmaps that help managers track their initiatives, allocate resources and ensure that they’re on track to meet their long-term plans. Our roadmap is a Gantt chart that visually represents all of your strategic goals and related projects, including the steps necessary to accomplish them.

Use our roadmap to tie your strategy to the work that must be completed to achieve your goals. You can group and organize your various projects, manage resources and generate reports to get valuable insights on your progress and performance. Get started with ProjectManager today for free.

Organizational Strategy Levels

Organizational strategy goes deep and a company can lay the groundwork for their strategy in many different areas. This is called organizational strategy levels. It’s something that must be thought through at the beginning of strategy creation or when a company is making a strategic plan . To do this successfully means understanding the three levels of strategy to align company goals from top to bottom. Let’s explore those three levels below.

Related: Free Strategic Planning Templates for Excel and Word

1. Corporate Level Strategy

The corporate-level strategy is the highest, which means it’s also the broadest. Leadership creates this multi-tiered company plan to define, outline and achieve specific goals. Smaller companies can use corporate-level strategies to increase profits, while larger companies with multiple divisions and businesses will have more complex corporate-level strategies, such as entering new markets.

Examples of Corporate-Level Strategies

Organizational strategy is all about finding the best way to allocate resources to meet long-term goals. Here are some examples of how that’s done on the corporate level.

• Diversification: When you want to expand your business, this strategy encourages growth by adding new products or services.
• Retrenchment: This is when you consider changing your business model and is used when taking protective measures to keep the solvency of your business.
• Profit: Here a company will outline plans to increase revenue while keeping costs down.
• Stability: When the company is doing well, it seeks incremental growth by working with clients in its industry.

2. Business Level Strategy

A business-level strategy is made up of the strategic planning and implementation activities that will direct the company’s business units. This is usually used to gain a competitive advantage and create customer value in the market where the business unit operates.

Examples of Business-Level Strategies

This level of organizational strategy creates roadmaps to guide resource allocation and aligns different departments with the goal of sustainable growth, profitability and long-term success.

• Cost Leadership: This involves offering products or services at a lower cost than competitors by improving facilities, investing in tools, reducing overhead, etc.
• Differentiation: Here the company focuses on developing and marketing products that provide greater value rather than cheaper costs for the customer.
• Focused Cost Leadership: This targets a niche market and narrows the focus, allowing the company to better understand customer needs.
• Focused Differentiation: Here companies want to stand out from the competition while focusing on a smaller subset of their customer base to better anticipate customer needs.

3. Functional Level Strategy

A functional-level strategy means that the actions and goals assigned to various company departments support both business and corporate-level strategies. These strategies specify the outcomes that the company’s business departments achieve through daily operations . Therefore, functional-level strategy means that the corporate-level strategy needs participation across departments. Each department manager is responsible for leading their teams on these initiatives.

Examples of Functional-Level Strategies

• Human Resources: This department seeks out and hires highly-trained employees to solidify the workforce.
• Marketing: Works toward improving brand identification through both paid and unpaid efforts.
• Finance: Various initiatives include reducing operational expenses or implementing a new budgeting system.
• Product: Helps to develop the product or service, working to create efficiencies.

Get your free

Strategic Roadmap Template

Use this free Strategic Roadmap Template for Excel to manage your projects better.

Importance of Your Business’ Organizational Strategy

Organizational strategy has many benefits. Without having a strategy to direct your company and its strategic initiatives , the chance of reaching whatever goals you’ve set for yourself is unlikely. Rather than bet on luck to achieve your long-term goals, an organizational strategy will have a far greater impact. Here are some reasons why.

Shapes the Structure of the Organization

Organizational strategy aligns companies to a singular goal by defining what departments and roles are needed in planning the organizational strategy of a business. This creates transparency in a company’s operations that assists with better resource allocation and decision-making.

Aligns the Efforts of All Areas of the Organization

Organizational strategy also aligns everyone in the company to the common strategic goal of the company. This not only puts everyone on the same page as to understanding what their target is, but all work processes will also align to make the individual work, department and entire company more efficient. You can use a strategic roadmap to map the activities that each department will execute to better understand how different initiatives across your company work together.

Defines How Your Business Will Operate

The functional aspect of organizational strategy refers to how each part of the business will operate. It also speaks to how the company will contribute to implementing the business-level strategies and accomplishing the long-term, strategic goals of the business.

Key Components of the Organizational Strategy of a Business

When you’re developing an organizational strategy, first you have to have an idea of where you want to see the company in the long term. This will lead to the actions that the company must take to get there. That’s just two components of how a business deals with its organizational strategy. Below are all the key components of an organizational strategy for a business.

• Mission & Vision: The mission of the company and its vision for the future of the company should be brief written statements focusing on customers, employees and investors and its aspirations for the future.
• Organizational Structure: Create a system that outlines how business activities are directed to achieve the long-term goals of the company, such as rules, roles and responsibilities.
• Organizational Change: These are the actions a company takes to alter a major component of its organization. This could be anything from its culture, underlying technology or infrastructure to its internal processes.
• Organizational Culture: This refers to how an organization conducts itself as a whole in a different way from how others do. For example, how meetings are run, how new hires are trained, communication, benefits, etc.
• Strategic Plan: Here’s where the sequence of steps are outlined that will lead to achieving the company’s vision or long-term goals and objectives.
• Tactical Plan: Breaks the strategic plan into smaller objectives and goals and how they will be achieved through actions.
• Operational Plan: This will break down the day-to-day activities of the company. It will be at the project, business unit, functional or departmental level. These plans are highly detailed and action-based.

This free strategic roadmap template helps you visualize the projects and initiatives that each business department in your organization will execute to contribute to the accomplishment of strategic goals.

Related Organizational Strategy Templates

There are many steps to creating and implementing an organizational strategy. The following free strategic planning templates can help you figure out what’s the best approach and then create a plan to help you achieve your long-term goals.

Organizational Chart Template

An organizational chart can help you define the roles and responsibilities of your organization, which is part of the larger organizational strategy. Our free organizational chart for Excel is a visual flowchart illustrating the internal structure of your company.

Strategic Plan Template

Use our free strategic plan template for Word to define your vision, mission and business goals. It will help you develop a marketing plan, if necessary, and an operational plan. There’s also space to define your team and financial projections.

SWOT Analysis Template

SWOT stands for strengths, weaknesses, opportunities and threats. Our free SWOT analysis template for Excel helps you evaluate each of these four things as they relate to your business. This will inform your organizational strategy.

How ProjectManager Helps Track Your Organizational Strategy

While these free templates are a great starting point for your organizational strategy, they’re only going to take you so far. They’re not going to be helpful when implementing the strategic plan. That’s because these are static documents that must be manually updated and aren’t useful for collaboration across the organization. Project management software connects your teams and makes executing your plan more efficient. ProjectManager is award-winning project and portfolio management software that has the portfolio features you need to plan, manage and track multiple projects.

Track Resource Usage Throughout Your Organization

Our roadmap tool allows you to plan and allocate resource s across multiple projects and different departments in your company. When you onboard your teams, set their availability, including PTO, vacation time and global holidays for those teams that are working remotely. This makes assignments easier. Then check the color-coded workload chart to make sure no one is overallocated. If they are, you can balance their workload right from the chart to keep them working at capacity and productive.

Monitor Resources, Schedule and Budget in Real Time

Once you’ve made a plan, you’ll need to keep an eye on its progress and performance to ensure that it’s meeting your schedules and staying within your allocated resources. Get a high-level overview of all your projects in one place with our real-time portfolio dashboard. It collects live data automatically and displays it on easy-to-read graphs and charts. Now you can stay updated on time, costs, workload and more. Best of all, there’s no time-consuming and complicated setup as you’ll find with inferior alternatives. Whether using a project or portfolio dashboard, it’s ready when you are.

When you need more detailed information, use our customizable reporting features. You can get portfolio and status reports, as well as reports on variance, timesheets, workload and more. You can filter the reports as needed to show only the data you want to see. From there, share them with stakeholders in a variety of formats to keep them updated.

ProjectManager is online project and portfolio management software that connects teams whether they’re in the office, out in the field or anywhere in between. They can share files, comment at the task level and stay updated with email and in-app notifications. Join teams at Avis, Nestle and Siemens who use our software to deliver successful projects. Get started with ProjectManager today for free.

Deliver your projects on time and on budget

Start planning your projects.

Organizational planning: 5 steps to success

Empower your workforce development plans with talent assessments.

Companies that lack detailed organizational plans are planning to fail. You might think that “winging it” is a rarity, but this couldn’t be further from the truth – a survey from Bridges Consultancy found that only 48% of businesses achieve planning success.

So, how can you give your business the best possible chance of reaching its goals?

You need to create a solid organizational plan. 

Organizational planning enables you to enact your business strategy, clearly communicate objectives to every team member, and ensure you have a well-defined process. It also helps you account for contingencies should the worst happen.

Read on to learn how to elevate your company with an organizational plan and how skills testing can help you along the way.

Table of contents

What is organizational planning , the importance of organizational planning, what are the 4 types of organizational planning, 4 organizational plan examples, how to create an organizational plan: the 5 steps of organizational planning, organizational planning is the key to success, organization plan faqs.

Organizational planning is a map of your complex, long-term business objectives. It helps your organization define success, prepare for the future, and attain goals in shifting market conditions. An organizational plan in business planning also guides change management, organizational structure, and initiatives like company-wide restructuring .

However, nobody likes complicated plans. Good planning involves setting goals that are simple, measurable, and attainable – and involve contingency planning to mitigate risk.

In plain English, an organizational plan prevents your team from wandering aimlessly, unsure of roles, responsibilities, or expectations. 

Careful organizational planning avoids these problems. But what kind of planning is needed to steer the company in the right direction? 

To begin, a solid organizational plan improves your company’s performance and boosts your financial figures. Research backs us up by proving that businesses with strong plans are 16% more likely to succeed than their peers.

Organizational plans also clarify the roles and responsibilities of employees in your organization. 

For example, both your sales team and your support team strive to increase business revenue. With a strategic plan, everyone is clear that the sales team's role is to convert new customers, while the support team is responsible for keeping customers happy and upselling more profitable services.

Finally, a business organizational plan empowers your company to stay flexible with shifting markets and global disruption . You’re more resilient thanks to contingency plans, which enable you to follow a defined “plan B” when it comes to adopting new technology, launching innovative products and services, and filling new roles.

Okay, so what does an effective organizational plan look like? 

Let’s cover the four phases of organizational planning to give you a better idea.

1. Strategic planning

Every great business idea starts with a carefully considered strategy. 

Organizational strategic planning involves creating broad, long-term goals for your company. These goals should cover the long term, say the next five to ten years. An example of a strategic goal would be to “become the leading brand in terms of sales and brand recognition in the electronic consumer goods sector within five years.”

Strategy is usually overseen by senior management and C-level executives. A strategic plan rights the ship, setting the vision that the entire company needs to follow to achieve success over the long term.

2. Tactical planning

Next, you need to transform your high-level strategy into tactical steps that empower your organization to reach its long-term goals.

Your strategy consists of multiple tactical plans, each of which typically takes up to a year to complete. Middle managers generally establish objectives and guide their teams to accomplish them. 

Senior management uses metrics and key performance indicators (KPIs) to track progress and ensure that the executive tactical plans are inching the company closer to its final goal.

3. Operational planning

Operational planning sets up a roadmap at the departmental or team-specific level. These are the daily and monthly objectives to be checked off by finance, marketing, IT, sales, and other departments. 

Using the example strategic goal from above, an operational goal for marketing could be to “boost brand awareness by 0.5% each month.”

4. Contingency planning

Even the best plans can be derailed by unexpected market forces (e.g., a competitor launching an innovative new service) or a force majeure (e.g. a global war or pandemic.

This is why you must always prepare your organization to deal with uncertainty and the unknown with contingency planning.

Including meticulous risk management as part of your organizational plan helps you rise above your competitors when times get tough. It gives your people structure and processes to follow when the unexpected strikes.

Now that we’ve covered the definition of organizational plans and the four key types, let’s spend a few minutes examining four examples of organizational planning in action.

1. Workforce development planning

During workforce development planning, you identify and address current and future staffing needs. You typically implement talent planning strategies to enhance your employees’ skills, knowledge, and abilities to stay relevant in your industry and niche.

It begins by assessing the capabilities of your current workforce.

This translates into creating a comprehensive talent map for all employees, including your C-level team members. The goal is to understand your talent baseline, identify skills gaps, determine what kind of training workers require to acquire new skills , and whether you require external hires to meet your workforce needs.

But what’s the best way to assess the skills of your workers ? 

We highly recommend that you use a talent assessment tool, like our test library of more than 400 candidate-friendly skills and personality tests. This is a modern, efficient, and bias-free way to measure your people’s skills and pinpoint strengths and weaknesses within your workforce.

Ready to try it?

Sign up for the Test Gorilla free forever plan and start assessing your employees’ skills today.

Once you’ve established a skills baseline for your organization, it’s time to create two plans: a learning and development plan and a talent acquisition plan.

According to Emeritus, the value of a skill is cut in half about every four years, and the average skill half-life is constantly decreasing. Continuously upskilling your workforce and hiring top external talent helps you stay relevant, successful, and profitable.

Last but not least, you need to prepare skilled employees to jump into crucial vacant roles in the organization. This is a pivotal part of contingency planning because it gives you the ability to quickly fill roles that make or break your company. 

For example, if one of your executives suddenly leaves the business, you won’t need to panic and rush hiring. You can rely on your temporary (or permanent) in-house replacement thanks to your succession planning strategy .

2. Financial planning

Your organization can’t get far without a robust financial plan. Managing debt and reinvesting profits are two of the best ways to ensure your business is sustainable. 

A financial plan assesses and estimates your future revenue, profit margins, and expected expenses, including employee salaries. It also helps you research and evaluate strategic investments to strengthen your business and drive more revenue.

Financial analysts create these plans, so seek their recommendations about financial performance and how to optimize your overall decision-making processes.

3. Products and services planning

Your business wants to make its products and services more appealing to target audiences. However, to do so effectively, you need to be able to recognize gaps in the market and strategically create schemes that set your business apart from competitors . 

You should start by analyzing how your products and services are performing in your respective markets. Are they doing well, or are they struggling? 

Markets and trends also change, which means you need to be aware that you might need to adapt your products regularly to best serve your customers.

Once you determine the size of the gap, you can determine whether:

Your product is well-suited to your audience and doesn’t need updates for now

You need to modify your offering to better serve customer demands

You must innovate and launch another product or service

Developing an updated (or new) product or service requires extensive testing to achieve a solid product-market fit, so make sure to include this in your organization plan.

4. Expansion planning

A good business is always focused on growth. Hence, expansion plans identify growth opportunities and roadblocks your organization might face in its industry, helping you develop marketing strategies or other initiatives to take advantage of those opportunities and overcome the obstacles.

Expansions require hiring more people, using different approaches, and sometimes even developing new products and services. All of this requires a detailed business plan. 

You’re ready to start, so here are 5 steps to get you on the right track with organizational strategic planning:

Come up with a big picture strategic plan

Transform the strategic plan into practical steps

Plan your day-to-day operations

Execute daily operations and monitor performance

Adjust organizational planning

1. Come up with a strategic plan

A strategic plan involves business executives defining the company’s direction for a set period of time, usually 5 to 10 years, and is closely related to the organization’s mission. 

With a strategic plan, the company creates a defined qualitative goal such as “Become the industry leader in the Chicago real estate market” or “Create the most diverse workforce in our niche.” 

Data plays an integral role because reliable information guides you in making strategic decisions based on previous performance and market indicators. 

Ask yourself questions like “Have you tried to achieve a similar objective before? What were the results like?” 

Then, examine existing data and trends and conduct a SWOT analysis (strengths, weaknesses, opportunities, and threats) to determine the path to success.

2. Transform the strategic plan into practical steps

With a tactical plan, you set clear milestones, checkpoints, and metrics that identify whether the company is going in the right direction. 

In the previous section, we mentioned two examples: 

Become the industry leader

Create the most diverse workforce in your niche

Both of these business goals are strategic and qualitative. To become an industry leader, you could make a tactical goal of creating and launching three new products in the next year. A long-term objective would be to increase your market share by 25%.

A tactical plan to create a diverse workforce would be to implement skills testing for the entire team within six months to reduce unconscious bias and increase overall diversity by 20% over the next year.

3. Plan your day-to-day operations

Now that we have concrete goals set, it’s time to plan out the roadmap for everyday operations and how to achieve them in your team’s workflows.

Let’s return to our previous example of an organizational plan that aims to create a highly diverse workforce. 

Here, we create a template for the specific tasks that can achieve the goal of increasing overall diversity by 20% in one year:

Tactical goal 1 : In the next six months, implement tools and processes that empower objective and fair hiring decisions

Find platforms that meet your requirements (for example, for skills testing, try out TestGorilla )

Switch to a structured interview process

Implement and assess the impact of the changes and talent assessments

For example, you could use this talent assessment test to assess human resource professionals and find staff committed to achieving diversity objectives:

For more example questions, see our full test preview.

Tactical goal 2 : Increase the number of women in the workforce by 20%

Use gender-neutral language when writing job descriptions

Make benefits relevant to women a key part of your employer branding 

Share salary and benefits information openly and develop a skills-based compensation system

Make sure your company is able to support moms at work

Tactical goal 3 : Create a diverse management team by increasing the presence of underrepresented groups by 10%

Create a leadership program that focuses on upskilling underrepresented groups and helping them gain the essential managerial skills

Rework your onboarding process to support workers with non-traditional backgrounds

Create a bias-free employee promotion policy

Once you have set these tasks, you need to create a roadmap with concrete timelines, task owners, and measurable KPIs.

4. Execute daily operations and monitor performance

Once your overall organizational plan is set, it’s time to implement all the planning from the previous steps to enable your organization to reach its strategic goals.

No matter how strong your strategic, tactical, and operational plans are, even the best plans fail if the execution isn’t right. 

We suggest you:

Monitor relevant analytics metrics to track targets and performance and ensure that employees are executing the plan correctly and have the right tools and support

Set benchmarks based on past project performance and available industry insights

Use communication and collaboration tools to stay in touch with managers and team leaders

Keep key stakeholders informed if performance is lagging behind expectations

Implement contingency plans if you start falling behind

5. Adjust organizational planning

The business world rarely goes entirely to plan (hence the importance of organizational planning and contingency measures). 

What should you do if you’re struggling to stay on track to reach your organization’s goals?

A successful business plan is continuously monitored and adapted based on the real world. You need to review, change, and iterate each level of your organizational plan to ensure your actions remain aligned with your strategic objectives. 

For example, if you’re struggling to attract diverse managerial applicants, you could update your action plan to include a budget for attending local industry events for underrepresented groups and networking with top talent.

No one succeeds 100% of the time, but by creating an organizational plan, you set yourself up for success and create a blueprint for building an all-star team.

No matter what the future brings, you’ll be able to respond and guide every area of your business, from product planning to workforce development. 

Speaking of workforce development, TestGorilla is here for all your employee planning needs thanks to our library of 400+ assessments that help you implement better talent acquisition and retention strategies.

Sign up for a demo or try our free forever plan to discover what TestGorilla can do for your organizational plan today!

To conclude this article, we answer three of the most commonly asked questions about organizational planning.

What purpose does an organizational plan serve?

An organizational plan outlines a company’s goals and objectives and how it intends to manage change and uncertainty. Organizational planning ensures companies make decisions that align with their strategic vision. 

At the granular level, it gives managers a blueprint for determining how each team member spends their time and how their effort helps the business achieve its overarching goals. 

What are the three levels of organizational planning?

The three levels of organizational planning are strategic, tactical, and operational. Strategic planning deals with long-term goals, while tactical planning breaks these down into achievable short-term goals. Operational planning revolves around the daily and monthly objectives for each department, linking them back to the longer-term goals.

However, there’s another critical level of organizational planning: contingency planning. Scroll up to the "What are the 4 types of organizational planning?" section to find out more.

What are the elements of the organizational planning process?

Develop an organizational strategic plan

Translate the strategic plan into shorter, tactical steps

Plan daily operations, activities, and measurable for departments and individual teams

Execute the strategy and continuously monitor the plan's progress

Make necessary adjustments

Related posts

TestGorilla vs. HireVue

15 important project management skills (and how to assess them)

The 7 best video interview software for online candidate screening

Hire the best candidates with TestGorilla

Create pre-employment assessments in minutes to screen candidates, save time, and hire the best talent.

Latest posts

The best advice in pre-employment testing, in your inbox.

No spam. Unsubscribe at any time.

Hire the best. No bias. No stress.

Our screening tests identify the best candidates and make your hiring decisions faster, easier, and bias-free.

Free resources

This checklist covers key features you should look for when choosing a skills testing platform

This resource will help you develop an onboarding checklist for new hires.

How to assess your candidates' attention to detail.

Learn how to get human resources certified through HRCI or SHRM.

Learn how you can improve the level of talent at your company.

Learn how CapitalT reduced hiring bias with online skills assessments.

Learn how to make the resume process more efficient and more effective.

Improve your hiring strategy with these 7 critical recruitment metrics.

Learn how Sukhi decreased time spent reviewing resumes by 83%!

Hire more efficiently with these hacks that 99% of recruiters aren't using.

Make a business case for diversity and inclusion initiatives with this data.

How Cube works

Sync data, gain insights, and analyze business performance right in Excel, Google Sheets, or the Cube platform.

Built with world-class security and controls from day one.

Cube meets you where you work—your spreadsheets. Get started quickly with a fast implementation and short time to value.

Developer Center

Cube's API empowers teams to connect and transform their data seamlessly.

Integrations

Connect and map data from your tech stack, including your ERP, CRM, HRIS, business intelligence, and more.

Break free from clunky financial analysis tools. Say hello to a flexible, scalable FP&A solution.

See Cube in action

Centralized Data Management

Automatically structure your data so it aligns with how you do business and ensure it fits with your existing models.

Reporting & Analytics

Easily collaborate with stakeholders, build reports and dashboards with greater flexibility, and keep everyone on the same page.

Planning & Modeling

Accelerate your planning cycle time and budgeting process to be prepared for what's next.

Creating a high-impact finance function

Get secrets from 7 leading finance experts.

Download the ebook

Business Services

Real Estate

Financial Services

Manufacturing

Learn how Veryable unwound a complex spreadsheet stack

Essential reading for forward-thinking FP&A leaders.

Customer Stories

Discover how finance teams across all industries streamline their FP&A with Cube.

Featured Customers

BlueWind Medical reduced company spend by over $100k with Cube

Edge Fitness Clubs cuts reporting time by 50% & saves $300,000 annually

Join our exclusive, free Slack community for strategic finance professionals like you.

Join the community

Content Library

Discover books, articles, webinars, and more to grow your finance career and skills.

Find the Excel, Google Sheets, and Google Slide templates you need here.

Discover expert tips and best practices to up-level your FP&A and finance function.

Need your finance and FP&A fix? Sign up for our bi-weekly newsletter from former serial CFO turned CEO of Cube, Christina Ross.

Help Center

Make the most of Cube or dig into the weeds on platform best practices.

The future of strategic finance

Get the definitive guide for forward-thinking FP&A leaders

Get the guide

We're on a mission to help every company hit their numbers. Learn more about our values, culture, and the Cube team.

Grow your career at Cube. Check out open roles and be part of the team driving the future of FP&A.

Got questions or feedback for Cube? Reach out and let's chat.

In the news

Curious what we're up to? Check out the latest announcements, news, and stories here.

A newsletter for finance—by finance

Sign up for our bi-weekly newsletter from 3x serial CFO turned CEO of Cube, Christina Ross.

Subscribe now

Organizational plans: a quick primer (with examples)

Strategic planning.

Updated: September 29, 2023 |

Jake Ballinger is an experienced SEO and content manager with deep expertise in FP&A and finance topics. He speaks 9 languages and lives in NYC.

Every finance team needs a strong plan.

But organizational plans cover some broad territory. 

Strategic? Tactical? Contingency?

We're going to clear all that up (or give you a refresher) in this blog post.

But for now:

An organizational plan is where financial forecasts and budgets meet project management and goal-setting.

Let's get into the specifics. 

Jake Ballinger

FP&A Writer, Cube Software

Get out of the data entry weeds and into the strategy.

Sign up for The Finance Fix

Sign up for our bi-weekly newsletter from serial CFO and CEO of Cube, Christina Ross.

What are organizational plans?

Organizational planning is strategizing and preparing for a business's future successes.

One of the big organizational planning goals is to create strategic and tactical plans to guide the entire organization forward.

The plan can cover an organization's operations, marketing, financials, staffing, etc. Its purpose is to ensure departments collaborate to reach company goals.

Organizational planning allows businesses to anticipate market fluctuations and weather economic change without suffering losses.

A clear roadmap of where the company wants to go better helps to focus its efforts on reaching desired outcomes.

What are the benefits of organizational planning?

If your company wants to grow, you need a game plan. This is the essence of an organizational plan.

Establishing and supporting organizational planning has many benefits beyond simply delivering on your company’s ambitions.

These are some of the ways the organizational planning process creates benefits for forward-thinking companies: 

Clear goals for the organization

Organizational planning helps define and set achievable targets for the organization and its teams.

It articulates the company's overall vision , provides a roadmap for how to get there, and creates measurable goals with time frames for achieving them. This built-in clarity gives teams clear and reasonable steps to align their efforts with the organization's larger objectives. 

Organizational planning also creates feedback loops to ensure that teams are making progress toward achieving their targets on schedule. This makes it easier to identify areas needing improvement or resources.

Organizations can ensure they are efficiently working towards their desired outcomes by setting clear goals.

Visibility into gaps or opportunities

Organizational planning breaks down data siloes and creates action plans, allowing the organization to identify areas of improvement or potential growth.

With this visibility, organizations can create better strategies and more clarity into the actions that lead to success.

Better employee morale and productivity

Well-informed and properly motivated employees have higher satisfaction and better retention rates than those without a clear roadmap to success.

Organizational planning allows every team member to see their role in the successful execution of plans and helps them stay engaged in the organization’s mission.

More resilience and agility

Organizational planning helps companies make quick decisions knowing that their goals will remain achievable through challenges.

Different types of organizational planning, such as financial planning, strategy implementation, and risk management, guide teams facing uncertainty or disruption. 

• Financial planning enables organizations to adjust their budgets according to changes in the market.
• Strategic implementation provides a practical roadmap for success.
• Risk management allows businesses to anticipate and mitigate risks before they become major problems. 

By using these different types of organizational planning, companies can adapt quickly to changing conditions and be better prepared for any eventuality.

Better cost savings and optimization

When you know what to do, you’re less likely to spend time and money trying things that may not work.

An organizational plan gives your teams a roadmap for conducting business, resulting in less waste and better outcomes.

This also translates to better profit margins due to the increased spending efficiency of a well-crafted budget and plans. 

Types of organizational planning

Organizational planning covers several different approaches aimed at different facets of the business.

Some organizational planning examples include strategic planning, driver-based planning, and tactical planning.

Each of the below types of planning plays a different role in helping the company, and its team members do what they set out to accomplish.

Strategic planning is a type of organizational planning focused on setting goals, developing strategies and tactics, and providing resources to get the job done.

It involves analyzing the organization's current situation or creating a vision for the future while considering factors such as external conditions, competitive landscape, customer needs and expectations, resource availability, and other internal considerations. 

Strategic plans are usually communicated in an organizational strategy document that outlines the key objectives and initiatives required to realize these objectives.

They create the larger framework and metrics for success. Teams then execute tactical plans to fulfill the requirements of the broader strategic approach.

Driver-based planning

Driver-based planning is a process of connecting financial plans to strategic and operational activities. It helps organizations to identify, prioritize and track the most critical actions to drive success. 

Driver-based planning incorporates financial goals and operational performance into the plan, allowing for comparing financial data with projected performance. It uses business drivers—core activities that produce results for the business—to build financial models and connect them to operational activities.

Using driver-based planning, organizations remain agile, adapt their plans based on changing conditions, and stay focused on results.

Tactical planning

If strategic planning provides the broad strokes of achieving your organization’s objectives, tactical add minor details.

Tactical planning involves identifying specific tasks and activities that must be done within a given timeframe to ensure overall strategic success. 

A tactical plan is created using information gathered during the strategic planning process and feedback from stakeholders , staff, and external advisors.

These plans are typically drawn up quarterly or yearly, including everything from budgeting to marketing strategies.

Operational planning

Operational plans are like user manuals for every area of your organization, from HR and hiring to financial planning and risk management. They help govern the day-to-day activities of your different business units.

Operational planning defines your organization’s goals and objectives and outlines the steps and procedures for achieving them.

It involves identifying specific tasks to be performed by each area of your business and setting out roles, responsibilities, timelines, and budgets. It's essential for successful organizational performance as it ensures that all processes are cohesive. 

Operational plans provide the framework for managing day-to-day operations while positioning your organization to meet longer-term goals.

A well-crafted operational plan will help keep your team focused and on track to achieve success. 

Contingency Planning

Life happens when you’re making other plans, which is also true of business life. Contingency planning aims to handle precisely those moments in your company’s journey. 

Contingency planning is a type of organizational planning used to prepare organizations for uncertain and unpredictable events.

It’s an important part of any organization's success, as it provides the flexibility and resilience needed to withstand and recover in an ever-changing business environment. 

Contingency planning focuses on preparing for potential risks and responding quickly when they occur, allowing the organization to make decisions confidently in the face of unexpected market changes.

The goal is to reduce disruption, mitigate losses, and ensure the continuity of operations.

Contingency plans typically include strategies for risk management, business continuity, disaster recovery, and crisis management.

Capacity Planning

Planning for future projects requires a keen view of the resources, people, and tools needed to achieve your goals. This is the goal of capacity planning .

It involves understanding the organization's current and future resources regarding personnel, infrastructure, technology, and other capabilities. 

Capacity planning also considers a range of potential scenarios to determine the optimal resource levels needed to handle them. This helps the organization proactively manage resources and avoid potential risks or disruptions.

By increasing its capacity ahead of time, the organization is better prepared to respond quickly and effectively when faced with unexpected events.

Workforce planning

Workforce development is a part of capacity planning, focusing on personnel and organizational structure.

It involves carefully monitoring and analyzing the organization's current and future employment requirements and skill sets. This helps identify talent, skills, or experience gaps that could be addressed through strategic recruitment or training initiatives.

Workforce planning also allows organizations to anticipate potential labor shortages or surpluses and adjust hiring plans to ensure optimal workforce utilization. 

A 5-steps organizational planning process

Every organizational plan addresses different needs but follows a repeatable pattern for success. Plan your next organizational strategy using the following steps:

1. Define your goals

Outlining your goals is essential to ensure you understand the challenge and have the resources and capabilities to solve it.

Allocate time for your team to discuss the most critical objectives and prioritize them accordingly.

Once your organization's main objectives are determined, you can start breaking down the tasks needed to achieve them into smaller, more manageable steps. 

2. Analyze your current process

Understanding your current organizational practices helps you decide on actions for future improvement.

Depending on the size of your organization and the complexity of its processes, conducting a thorough examination may require additional research and data analysis.

3. Seek stakeholder input

Soliciting input creates different perspectives on your processes and plan.

Through stakeholder contributions, you include valuable perspectives and identify resources.

It also better prepares teams to support the organization and its goals.

4. Develop a plan

Decide the specific, measurable actions departments will take to reach established goals. This includes: 

• Establishing deadlines
• Determining roles for key personnel
• Assigning tasks and activities 
• Setting project management milestones 
• Selecting and tracking key performance indicators (KPIs)

5. Measure results

Measuring and tracking KPIs lets you assess your progress and course correct where needed. KPIs provide a means of gauging the success or failure of specific actions. They can be used to inform and direct future strategies.

Organizations can make more informed decisions and stay ahead of challenges by establishing measurable goals and monitoring performance. Conclusion

Conclusion: your strategic plan and organizational plans

Now you know all about organizational plans.

How to make them, how they're categorized, and why you should have them.

And we're big planners here at Cube.

If you're looking to level up your planning in Excel, you should request a demo with Cube.

Cube integrates with your source systems, Excel, and Google Sheets, so it's easy for anybody to get the information they need.

You can plan at a high level with vendor-level financials at your fingertips.

Sound intriguing? Click the image below to request a demo today.

Related Articles

The essential elements of a strategic plan: explained

The inside scoop on top-down and bottom-up planning

Strategic budgeting: are you getting it right? A guide for 2024

Online Assessment Tools

• Psychometric Tests
• Behavioral Tests
• Cognitive Tests
• Technical Tests
• Spoken English Tests
• Test Library
• Coding Tests
• Advanced Coding Simulators
• Online Coding Interviews
• Coding Test Library
• Campus Intelligence
• Student Engagement
• Screening Assessments
• Interviews & GDs
• Technical Hiring
• Sales Hiring
• Blue-Collared Hiring

Learning and Development

High-potential identification, succession planning.

• Leadership Development
• Skills Gap Analysis
• Learning Agility & Proximity
• Training Effectiveness

ONLINE EXAMINATION

• Entrance Exam
• Semester Exam

Trusted by More Than 6000 Clients Worldwide

• Client Success Stories

• Research & Reports
• Case Studies

Top 14 objectives of recruitment and selection

AI & Future of work

Examination and Proctoring

Recruitment

• Online Interviews
• Virtual ADCs
• Request a demo
• subscribe to blog

Get awesome marketing content related to Hiring & L&D in your inbox each week

Stay up-to-date with the latest marketing, sales, and service tips and news.

By using our offerings and services, you are agreeing to the Terms of Services and License Agreement and understand that your use and access will be subject to the terms and conditions and Privacy Notice

Thank you for subscribing! Let's take the HR world by storm now!

Suvarna Kartha

Recruiter, sap.

Mettl’s assessments have been the biggest filter in our recruitment process. Their platform has helped us reach out to a higher volume our applicant numbers. Mettl constantly keeps innovating on their products and tries to introduce a new aspect to everything.

Trusted by thousands of leading brands

GET A FREE DEMO

Just drop in your details here and we'll get back to you.

Learning and Development | 8 Min Read

Organizational planning: The ladder to an organization’s success

Table of contents, what is organizational planning.

Organizational planning is a set of strategies and activities to streamline a business’s day-to-day operations. It includes setting priorities and goals, mapping the utilization of resources and assets, evaluating and modifying the organization’s business path to keep up with the changing environment, and ensuring that all employees/stakeholders work toward a common objective- more extensive organizational success. Organizational planning is among the critical practices necessary to guide a company in the right direction and prevent fatal blunders that could jeopardize business in the long run.

This blog delves deep into the various nuances of the topic, elaborating on the fundamentals, offering a sneak peek into case studies that prove the importance of this business development activity, and highlighting the necessary tools and methods to help you formulate your strategies for success.

Components of an organizational plan

A typical organizational plan comprises four key components, each with its sub-components:

• Workforce planning includes leadership development, high-potential identification and succession planning.
• Financial planning covers budget decisions and strategic resource utilization across departments.
• Products and services planning ensures that the organization is at par with industry trends and upgrades catering to the target market’s needs.
• Expansion planning envisions a sustainable future for the organization across geographies and product lines/offerings.

Workforce planning

Workforce planning is all about analyzing and planning the future of your workforce. As the people-centric part of the organizational plan in business plan, workforce planning comprises three critical elements:

• Leadership development
• High-potential identification
• Succession planning

These elements are vital to the success of other organizational planning components. So, let’s take a detailed look at the way they impact business.

1. Leadership development

A leadership culture is one where everyone thinks like an owner, a ceo or a managing director. it’s one where everyone is entrepreneurial and proactive., robin s. sharma.

Leadership development is fundamental to the long-term success of organizations . An effective leadership development strategy helps organizations achieve the following objectives.

a. Achieving business goals: It helps nurture leaders who can acquire new abilities to realign strategies relevant to developing business scenarios.

b. Improving the work environment: Dedicatedly curating behavioral patterns of leaders is imperative to promote a culture of learning and development.

c. Futureproofing: Leadership development helps organizations appropriately adjust to changes in people, procedures and innovation that could influence them in a not-so-distant future.

Areas of focus in leadership development

A positive culture impacts the organization in the long term. Keeping employees updated with workplace technology, providing them greater flexibility and a clear career trajectory, recognition and appreciation all count in building a positive work culture.

Leaders should have astounding vision and instinct about where the market is going, how client inclinations will develop, every bit of product knowledge, its updates and how to impress clients with greater usability.

Organizations and the people within them, particularly the leaders, must constantly re-invent and recalibrate themselves to remain competitive in the industry. Sustaining success does depend on a company’s ability to adapt to a changing environment.

2. Succession planning

The Cambridge Dictionary defines succession planning as the “Process of finding suitable people and preparing them to replace important executives in an organization when these executives leave or retire.

Succession planning is a strategic organization planning approach to ensure that necessary talent and skills will be available when needed. It has been identified as a key initiative for addressing several critical human resources issues, including increasing turnover rates, fast-paced changes in work, and a need for a diverse workforce at all levels. With the help of succession planning , an organization recruits superior employees, develops their knowledge, skills, and abilities, and prepares them for promotions into more challenging roles within that organization.

3. High- potential identification

High–potential identification refers to assessing and recognizing employees who have the potential to learn fast, grow consistently and do justice to the new roles and responsibilities with which they are trusted. The process helps cut hiring costs, saves time and ensures lasting organizational success with a loyal workforce working more dedicatedly. Therefore, high-potential identification is crucial to the overall organizational plan in business plan.

Financial planning

Financial Planning is estimating the capital required in business initiatives and procedures and determining its competition. It involves framing monetary policies around an enterprise’s procurement, investment and administration of funds.

The objectives of this organizational planning component are to:

• Determine the total capital requirements during a specific time.
• Work out how to raise and allocate the required funds.
• Explore various investment opportunities and formulate a feasible capital expenditure plan.
• Ensure that the business has sufficient funds to run its operations smoothly.
• Reduce uncertainties which can be a hindrance to an organization’s growth.
• Ensure stability and profitability in business.
• Facilitate growth and expansion programs.

Products and services planning

The products and services section of your organizational plan in business plan outlines your product or service, its need and demand in the market, and how it will compete with other similar businesses.

Products and services planning includes:

• Key features, advantages and sales/performance of the product/service portfolio.
• Required upgrades and modifications based on competitor analysis, trends research and market changes.
• Strategies to improve marketing and boost demand and sales of the offerings.
• Reasons to launch, relaunch or discontinue specific products/services based on performance/sales data and relevant information.
• Predictions and the way forward.

Expansion planning

Expansion planning is a futuristic, growth-driven component of the organizational planning process. It helps create a roadmap for product development, market penetration and diversification.

However, you should initiate expansion planning if the business is already successful and profits in its current market. In addition to new product/service launches, this component of an organizational plan could also include strategies to conquer foreign markets.

Why is organizational planning important?

The importance of organizational planning is evident in the way it helps a company uncover approaches to enhance performance . It can, for instance, unveil insights about how to restructure the organization so it can perform to its maximum capacity. In addition, developing new products and expanding operations- a comprehensive strategic organizational plan helps a company react to various circumstances and challenges better.

Planning is choosing ahead of time, what anyone can do. At the point when a manager plans, he anticipates a strategy for the future, endeavoring to accomplish a reliable, facilitated structure of operations aimed at the desired results.

According to the author theo haimann.

The importance of organizational planning extends to how it helps prepare a company to respond to changes in the workplace better. Furthermore, it clarifies the roles, responsibilities and expectations for everyone in the company. Finally, it helps management make sure they’re meeting the determined benchmarks.

Furthermore, organizational planning:

Increases the efficiency of an organization

It focuses on the work and resources of the entire organization, creating a clear and convincing vision that the team and board wish to progress with proper coordination.

Identifies genuine client needs

It involves getting input from clients to guarantee that their requirements are understood and fulfilled. Again, it helps companies expand and enhance their services.

Reveals what not to do

A strategic plan uncovers what an organization needs to quit doing to be more effective and client-focused.

Enables optimum resource utilization

A well-articulated organizational plan shows to the general public, funders and key partners that the company is making the ideal utilization of its assets to the advantage of the clients it serves.

Enhances decision-making

A good organizational plan in business planning reveals what you want to accomplish in the given time frame, what the future holds and what your goals should be.

A robust organizational plan is essential to understanding the:

Case studies to demonstrate the need for organizational planning

Why did sun microsystems fail.

Java, one of the best programming languages for development, run in more than 3 billion devices in some form, was introduced by Sun Microsystems in 1995. But did you ever hear about the company thereafter?

Well, Sun Microsystems, the computer startup started constructing high-end servers just as the computer revolution was accelerating. Its Java programming language turned into an industry standard just as the internet arrived, helping make Sun an industry monster by the late 1990s. But the dot-com bust wiped out many of its customers and changed the way organizations meet their technology needs.

Former CEO of Sun Microsystems, Scott McNealy’s loyalty to Sun’s hardware culture scammed its software initiatives and eventually, destined the organization for fading into oblivion.

As PCs (Personal Computers) turned out to be all the more capable, fewer clients required Sun’s costly servers and the company spent most of the decade scaling back and saving. With Sun’s fairly estimated worth, only a fraction of what it had been once, Oracle bought the company later.

Software talent is constantly overwhelmed by and made to fill the needs of its hardware rulers. To do what’s depicted above at the right time would have required proactive software leadership inside Sun, someone willing to confront the hardware culture.

McNealy, the one figure who could have given the nod to such an activity, was himself instilled with the hardware culture.

In this case, there was a need for strategic organizational planning to maintain someone at the top position, be it the CEO or other empowered software leaders, aware of the competitors and the changes in the technique an organization needs to work on for success.

The unfortunate case of Motorola

Motorola, the world’s first mobile phone seller dominated the industry in 2003 when it introduced the trendy Razr- one of the largest-selling mobile phones ever. However, the brand failed to focus on futuristic planning around expansion and product upgrades. As a result, it lost its supremacy to competitors like Apple, LG and Samsung.

Strategic planning among the concerned officials of the organization, considering all aspects of transformation around the product/industry, would have made the scenario different.

Types of organizational plans

There are four major types of organizational plans that help pivot a business toward growth. Moreover, each of these plans is interconnected, and the success of one depends on the success of the others.

Strategic plans

A strategic plan defines the company’s objectives for a set period and ensures that those objectives align with the organization’s mission, vision and values. It is the foundation for dictating long-term organizational decisions.

Tactical plans

These plans are the precursor to strategic planning. Usually devised for a short duration, tactical plans involve several short-term goals that support the related strategic plan. The purpose of tactical planning is to break down the larger strategic plan into actionable chunks, carried out by mid-level managers.

Operational plans

Operational plans cover what needs to happen continually, on a day-to-day basis, to execute tactical plans. Operational plans could be single-use or ongoing. While the former could include time-bound marketing campaigns, the latter covers policies for approaching problems, rules and regulations to meet specific objectives, task assignments within a tactical strategy, etc.

Contingency plans

Contingency planning covers alternative courses of action for unusual circumstances and crises. Contingency plans suggest a range of possible scenarios and appropriate responses for issues ranging from personnel planning to advanced preparation for unexpected occurrences that could negatively impact the business. For example, organizations may have contingency plans for responding to a natural disaster, malfunctioning software, or the sudden departure of a C-level executive.

Organizational planning process

The steps in an organizational planning process correspond with the four types of organizational plans explained in the previous section. In addition, the method includes effective communication and performance monitoring of every aspect.

Step 1: Strategize

The strategy stage of organizational planning should include the following steps.

a. Begin with the goals and objectives of the company: Analyze where do you want to be in the short- and long-term. Then, assemble a team to lead the plan’s execution, tracking and progress.

b. Define the company goals and objectives to help everyone understand them and their part in realizing them.

c. Ask questions to review the company’s current position: What processes are in place now? It would allow the workforce to see what they need to do to meet targets.

d. Gather what you’ve collected and put it in a document: Use this to track progress when executing the organizational plan.

Step 2: Translate strategy into tactics and plan daily operations

Based on the strategies formulated in the first stage of your organizational planning, you can create specific tactics and procedures broken down into actionable steps. The latter would help move toward implementing the long-term strategies at constantly.

Prepare a task list with roles for everyone on your team: Then, assign the tasks and ensure the team understands what is expected of it.

Step 3: Communicate the organizational plan to your workforce

If you implement a program without everyone understanding it, you may face problems that could derail the whole idea. Hence, it is vital to call a company-wide meeting to explain your plans’ nuances and predicted success. It is also a great idea to get feedback from those in attendance and fine-tune the details of your plan before executing it.

Illustrate the organizational structure of the plan: Share it with the whole company and keep everyone updated on progress as you hit milestones.

Step 4: Execute the plan

After the communication stage, the plan should be finalized, including the tactical and operational steps. Then, once there is absolute clarity regarding the short-term and long-term goals, you should put all of it to work.

Step 5: Monitor performance and progress

At the end of each short-term goal period, managers should review if they met the targets established in step two. Then, they should submit data-backed reports to C-level executives. Depending on the reviews, you can make necessary adjustments to improve the efficacy of the plans at any stage.

Tips for creating a successful organizational plan

Once you understand the various organizational planning examples, types, processes and objectives, you must familiarize yourself with organizational planning best practices. This section enlists valuable tips to help design and implement an effective organizational plan.

• Assess the weaknesses and strengths of each department in your business. Find the co-dependencies of departments and plan to resolve deficiencies.
• Go through the legal weaknesses and strengths of your organization. Find all the possible options to legally tackle the disadvantages and turn them into advantages for your business.
• Understand current relationships in the market and plan to maintain existing relationships and build new ones.
• Develop a structural approach to work for higher productivity and employee satisfaction.
• Predict a growth pattern you want in the long run. Also, align this long-term plan with short-term growth strategies.
• Define an ideal number of employees in every department and compare it with the current availability of human resources.

Organizational planning tools

Organizational planning tools are the methods used to implement strategies that help improve the various components and phases of the organizational plan. These tools enable an objective and comprehensive approach to the process and strategy.

Assessment and development centers (ACDCs/ADCs)

ADCs are platforms for conducting advanced professional assessments. They utilize a series of innovative projects , including case study simulations, presentation exercises and various activities to assess leadership styles, motivators and work-oriented personality traits. As a result, they help leaders and potential leaders to improve their efficiency, optimize their strengths and develop their areas of improvement.

Application in organizational planning: Leadership development and hiring, workforce planning, futureproofing, succession planning and performance management.

Psychometric tests

Psychometric tests are essential for measuring cognitive abilities, personality traits, demonstrated behaviors and function knowledge/skills. They generate relevant proof of skills/competencies required for succeeding in specific professional roles and industries. Moreover, they help formulate targeted L&D (Learning & Development) and prepare and initiate the advancement of effective succession planning and administration. They are also efficient in evaluating the productivity and success of current strategies/processes.

Psychometric tests offer advantages like objective information on employee efficiency and behavioral competencies suited to the organizational system.

Application in organizational planning: Talent acquisition, organizational restructuring, IJPs (Internal Job Postings/Promotions), HR (Human Resource) allocation, etc.

Three-sixty-degree feedback

Three-sixty-degree feedback refers to holistic reviews and honest ratings about professionals and professional spaces. A robust 360-degree feedback tool helps strengthen organizational planning by highlighting the strengths, hidden strengths, blind spots and areas of development at every level of the organization.

Application in organizational planning: Leadership assessment , performance management , L&D, strategic planning for various areas of the organization: finances, products and services, expansion plans, etc.

Employee engagement evaluation

An advanced evaluation of employee satisfaction in a company is vital to organizational planning success. Therefore, using an employee engagement evaluation tool enables HR managers, administrators and decision-makers to improve the company’s work culture, environment, people policies, growth initiatives, feedback cycles and a lot more.

Application in organizational planning: Gauging the workforce’s satisfaction with current company structure and policies, career opportunities within the company, employees’ opinions and approaches toward various types of organizational plans, etc., to make improvements based on varied perspectives/experiences/ideas.

The organizational planning process is essential for maintaining order, success, discipline and sustainability in every area of an organization’s functions. It is imperative when it incorporates employees in all departments and at all levels of responsibility, potential, and skills, considering how they fit into the bigger picture.

Originally published April 18 2018, Updated July 11 2022

D'ipanjenah Ali

About this topic.

Succession planning is a systematic process through which organizations build a leadership pipeline to preserve its future. The process involves identifying and developing potential successors for a seamless transition.

Related Topics:

Related Products

Identify your next-in-line with mercer | mettl.

Future-proof your business with digital succession planning approach

HiPo Identification for Enhanced Business Outcomes

Measure the potential of your talent and make objective organizational decisions

Mercer | Mettl Learning Agility Assessments

Solutions For Measuring the Learning Agility of Your Workforce

Related posts

7 Steps To Kickstart Your Succession Planning Process

5 Powerful Succession Planning Tools You Need Right Now

What are the Types of Succession Planning?

Would you like to comment.

Please write a comment before submitting

Thanks for submitting the comment. We’ll post the comment once its verified.

404 Not found

• Search Search Please fill out this field.
• Building Your Business
• Becoming an Owner
• Business Plans

Writing the Organization and Management Section of Your Business Plan

What is the organization and management section in a business plan.

• What to Put in the Organization and Management Section

Organization

The management team, helpful tips to write this section, frequently asked questions (faqs).

vm / E+ / Getty Images

Every business plan needs an organization and management section. This document will help you convey your vision for how your business will be structured. Here's how to write a good one.

Key Takeaways

• This section of your business plan details your corporate structure.
• It should explain the hierarchy of management, including details about the owners, the board of directors, and any professional partners.
• The point of this section is to clarify who will be in charge of each aspect of your business, as well as how those individuals will help the business succeed.

The organization and management section of your business plan should summarize information about your business structure and team. It usually comes after the market analysis section in a business plan . It's especially important to include this section if you have a partnership or a multi-member limited liability company (LLC). However, if you're starting a home business or are  writing  a business plan for one that's already operating, and you're the only person involved, then you don't need to include this section.

What To Put in the Organization and Management Section

You can separate the two terms to better understand how to write this section of the business plan.

The "organization" in this section refers to how your business is structured and the people involved. "Management" refers to the responsibilities different managers have and what those individuals bring to the company.

In the opening of the section, you want to give a summary of your management team, including size, composition, and a bit about each member's experience.

For example, you might write something like "Our management team of five has more than 20 years of experience in the industry."

The organization section sets up the hierarchy of the people involved in your business. It's often set up in a chart form. If you have a partnership or multi-member LLC, this is where you indicate who is president or CEO, the CFO, director of marketing, and any other roles you have in your business. If you're a single-person home business, this becomes easy as you're the only one on the chart.

Technically, this part of the plan is about owner members, but if you plan to outsource work or hire a virtual assistant, you can include them here, as well. For example, you might have a freelance webmaster, marketing assistant, and copywriter. You might even have a virtual assistant whose job it is to work with your other freelancers. These people aren't owners but have significant duties in your business.

Some common types of business structures include sole proprietorships, partnerships, LLCs, and corporations.

Sole Proprietorship

This type of business isn't a separate entity. Instead, business assets and liabilities are entwined with your personal finances. You're the sole person in charge, and you won't be allowed to sell stock or bring in new owners. If you don't register as any other kind of business, you'll automatically be considered a sole proprietorship.

Partnership

Partnerships can be either limited (LP) or limited liability (LLP). LPs have one general partner who takes on the bulk of the liability for the company, while all other partner owners have limited liability (and limited control over the business). LLPs are like an LP without a general partner; all partners have limited liability from debts as well as the actions of other partners.

Limited Liability Company

A limited liability company (LLC) combines elements of partnership and corporate structures. Your personal liability is limited, and profits are passed through to your personal returns.

Corporation

There are many variations of corporate structure that an organization might choose. These include C corps, which allow companies to issue stock shares, pay corporate taxes (rather than passing profits through to personal returns), and offer the highest level of personal protection from business activities. There are also nonprofit corporations, which are similar to C corps, but they don't seek profits and don't pay state or federal income taxes.

This section highlights what you and the others involved in the running of your business bring to the table. This not only includes owners and managers but also your board of directors (if you have one) and support professionals. Start by indicating your business structure, and then list the team members.

Owner/Manager/Members

Provide the following information on each owner/manager/member:

• Percentage of ownership (LLC, corporation, etc.)
• Extent of involvement (active or silent partner)
• Type of ownership (stock options, general partner, etc.)
• Position in the business (CEO, CFO, etc.)
• Duties and responsibilities
• Educational background
• Experience or skills that are relevant to the business and the duties
• Past employment
• Skills will benefit the business
• Awards and recognition
• Compensation (how paid)
• How each person's skills and experience will complement you and each other

Board of Directors

A board of directors is another part of your management team. If you don't have a board of directors, you don't need this information. This section provides much of the same information as in the ownership and management team sub-section. 

• Position (if there are positions)
• Involvement with the company

Even a one-person business could benefit from a small group of other business owners providing feedback, support, and accountability as an advisory board. 

Support Professionals

Especially if you're seeking funding, let potential investors know you're on the ball with a lawyer, accountant, and other professionals that are involved in your business. This is the place to list any freelancers or contractors you're using. Like the other sections, you'll want to include:

• Background information such as education or certificates
• Services provided to your business
• Relationship information (retainer, as-needed, regular, etc.)
• Skills and experience making them ideal for the work you need
• Anything else that makes them stand out as quality professionals (awards, etc.)

Writing a business plan seems like an overwhelming activity, especially if you're starting a small, one-person business. But writing a business plan can be fairly simple.

Like other parts of the business plan, this is a section you'll want to update if you have team member changes, or if you and your team members receive any additional training, awards, or other resume changes that benefit the business.

Because it highlights the skills and experience you and your team offer, it can be a great resource to refer to when seeking publicity and marketing opportunities. You can refer to it when creating your media kit or pitching for publicity.

Why are organization and management important to a business plan?

The point of this section is to clarify who's in charge of what. This document can clarify these roles for yourself, as well as investors and employees.

What should you cover in the organization and management section of a business plan?

The organization and management section should explain the chain of command , roles, and responsibilities. It should also explain a bit about what makes each person particularly well-suited to take charge of their area of the business.

Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!

Small Business Administration. " Write Your Business Plan ."

City of Eagle, Idaho. " Step 2—Write Your Business Plan ."

Small Business Administration. " Choose a Business Structure ."

Organizational Planning: Incorporating Planning Strategies for Business Growth

Staying organized is crucial for success in today’s fast-paced and ever-evolving business world.  It not only promotes efficiency but also results in better judgment, increased output, and greater profitability. But creating a successful organizational plan can frequently seem like a challenging endeavor, leaving many unclear about where to begin. To expand the business, a corporation might define and accomplish significant goals with the help of an organizational strategy. 

Organizational plans contain several steps and might include goals for expansion, workforce development, financial planning, and planning for products and services. Through an organizational strategy, a company can address most aspects of its operations and discover ways to expand in a specific direction. In this article, we define organizational plans, discuss several sorts of planning goals, and explain how to develop an organizational plan.

• What is an Organizational Plan?

Organizational planning is identifying a company’s purpose, formulating objectives to realize the maximum potential, and developing progressively specialized duties to achieve those objectives. A strategy for the organization’s structure prepares the path for the company to flourish and turn a profit. An organizational plan can enhance employee’s assets, or goods in addition to helping it expand as a whole.

Five steps are often included in an organizational plan, including strategic planning, operational planning, reviewing, and updating as needed. Every step builds on the one before it, ensuring that the organization can accomplish the bigger objectives. A typical organizational plan looks at the overall organization and more ambitious, longer-term goals before breaking them down into more manageable, shorter-term ones.

• Types Of Organizational Planning

1. Strategic Planning:

This is a high-level, long-term planning process that entails establishing the organization’s overarching goals and selecting the most effective strategies for achieving them. Strategic planning often spans a period of three to five years and handles big-picture issues like the direction of the company, the distribution of key resources, and commercial growth.

Strategic planning typically takes into account both controllable and uncontrollable elements as well as how to modify them. The goals must be consistent with the overall mission, vision, and values of your organization.

2. Tactical Planning:

Once the strategic plans have been created, it is time to determine how to put them into action. Planning a tactical strategy can help with it. Accomplishing the strategic goals entails creating comprehensive strategies and actions. Tactical plans primarily involve middle management and are short-term in nature, lasting one to three years on average. These immediate goals demonstrate how your business intends to carry out its longer-term strategic plan.

3. Operational Planning:

This sort of planning is focused on the quick implementation of the tactical plan’s recommended strategies. Operational plans, which address how the business’s daily operations are carried out, are often annual. They involve employees and lower-level managers.

Operational plans could include task assignments that are relevant to the objectives of the tactical strategy, such as a process for recording and handling work absences, as well as work schedules, policies, rules, or regulations that establish standards for employees.

4. Contingency Planning:

Contingency planning, also referred to as “Plan B,” is imagining potential future scenarios, particularly bad ones, and developing plans to deal with and get over them. This kind of preparation is essential for risk management. Companies may create backup plans for situations like how to react to a natural disaster, broken software, or the abrupt retirement of a C-level executive.

5. Financial Planning:

Planning for the organization’s financial requirements and objectives is necessary. Budgeting, predicting income and expenses, managing cash flow, and planning investments are all included. Financial planning is essential to ensuring that the company has the resources it needs to run and expand. The majority of businesses want to expand their businesses while maintaining and improving their financial health. This may make up a sizable portion of that. Financial planning is crucial to ensure the business has the necessary funds to operate and grow.

• How To Create An Effective Organizational Plan?

An effective organizational plan is created through several phases. Each of these processes is essential for ensuring that the plan is comprehensive, realistic, and aligned with the organization’s overall goals and objectives. Here’s a step-by-step guide to help you create an effective organizational plan:

Set a Strategic Plan:

Establishing the goals of your organization is the first stage. These goals ought to be specific, measurable, achievable, relevant, and time-bound (SMART). Clear objectives give your planning direction and a standard by which you may gauge your success.

These objectives need to be crucial to the company’s performance and have to be consistent with the organization’s mission and values. The strategic plan goals are typically broken down into smaller, more manageable goals at later stages of the organizational planning process because of their size.

There are several ways to create a strategic plan:

• Collecting business data, such as performance indicators.
• Examine the values and mission of the company.
• The SWOT analysis process.
• Establishing objectives based on the data above.

Transform The Strategic Plan Into Tactical Plan:

In the tactical plan stage of organizational planning, the strategic plan is transformed into more attainable and quantifiable goals. Tactical planning will engage other managers in addition to the high-level managers who participated in strategic planning. A tactical plan needs to include methods for tracking the development of these objectives. Over the next five years, the strategic strategy can call for diversifying the company’s workforce.

• Establish quarterly targets for each department that complement the strategic plan, such as creating a quota for the sales staff to help the business reach its strategic revenue goal.
• Create processes for evaluating goal achievement to ensure that strategic and tactical objectives are being accomplished, such as running a CRM report every quarter and presenting it to the Chief Revenue Officer to verify that the testing department is meeting its quota.
• Make backup plans for things like what to do if the testing team’s CRM breaks or there is a data breach.

Drafting Operational Strategies:

The objectives from the strategic and tactical plans are implemented into daily operations by the operational plans. Operational plans describe the regular work you conduct to accomplish the objectives of the strategic and tactical plans. The processes that regulate how particular employees spend their days are known as operational plans, and they are mostly the responsibility of middle managers and the staff that they supervise.

One needs to develop new corporate policies, modify workflows, or collaborate with experts to reach the objectives. Involving employees at all levels in organizational planning is possible. Operational plans for achieving these objectives may include strategies for minimizing unconscious prejudice in the workplace, new directions for human resources staff, and methods for recruiting diverse new applicants for interviews.

Implementing The Plans:

A key phase in the organizational planning process is the implementation of the plans, as this is when organizations put all of the planning from the other processes to use in their everyday operations. As each new process and procedure is formed as an operational plan and used to carry out the plan, it should accomplish the tactical and strategic planning objectives. This is how an organization can fulfill the goals that have been set.

Therefore, if the company has developed operational plans on how to hire diverse applicants, train staff to reduce unconscious bias, and boost training for human resources workers in particular, all of those plans should be implemented at the plan execution stage.

Monitor and Revise the Plans:

To make sure the organization is meeting its objectives, it is crucial to regularly monitor the performance of the plan and make revisions wherever applicable. Depending on the organization’s aims, the period for monitoring and revision will change, but this should be anticipated from the start of the organizational planning process. While management assesses overall performance and any pertinent data from across the entire organization, individual departments and teams may evaluate their performance and offer data to management.

Monitoring and revising can enable an organization to see how to adjust plans to fulfill those goals if goals and metrics are not being met and it appears that the strategic plan goals are not being achieved by the previous phases. An organization and any employee who is committed to work will be in a position to adjust plans swiftly to accomplish goals in this manner rather than waiting to see if things turn out as planned.

• Examples Of Organizational Planning:

To better assist you to comprehend the different shapes a plan might take, examples of organizational planning are provided below. With this information, you may choose the organizational structure that is best for your business.

Workforce Development Planning

The goal of workforce development is to build a diverse, high-performing workforce composed of devoted and contented workers. High-performance organizations do not emerge by accident; rather, years of good planning and plan execution produce a competitive workforce.

Planning for workforce development could include setting objectives to achieve or beyond the Equal Employment Opportunity Commission’s (EEOC) goals for equal employment opportunities. Another example is developing sophisticated training programs to produce managers that are knowledgeable and experienced.

Product and Services Planning

Developing a product and service combination that is more enticing than your competitors’ is the aim of product planning. Operations, Finance, and Marketing are responsible for product planning. The marketing division is in charge of figuring out what the target audience wants and needs. The accounting department offers suggestions on how to control costs and determine the optimum rates, while the operations department is in charge of offering input on how to design and manufacture goods or develop services.

One method of product planning is the product pyramid profit model. According to the product pyramid model, businesses offer a variety of products in the same category, each with a distinct price point and level of quality. Serving all types of customers in the market segment can help the company increase market share for its high-profit premium products or services, even though it may make little to no money on low-end products. 

Expansion Plans

Planning for the next phases of growth in their businesses should be a constant goal for good business owners and managers. Growth strategies outline ways to overcome obstacles and seize opportunities to overtake rivals in the market. They also identify opportunities and potential barriers to success.

Small businesses have a variety of choices at their disposal to keep their businesses expanding. For instance, marketing can be a key growth engine for startups without a track record. Another illustration is the speedy national or international distribution of a small company’s products through well-established distribution channels thanks to licensing.

Financial Planning

Financial planning is a practice that both businesses and consumers engage in. Businesses create plans to control their debt and make the most of their profits. Innovative organizations never leave cash lying around; instead, they always use it to generate a profit or make investments in the future of the business. To increase the value of their financial holdings, business owners can either create their financial plans or hire qualified experts.

• Boost Your Hiring Process with Skillrobo

The success of your business depends on organizational planning, despite the fact that it can be a lengthy and challenging process. Why? The correct plan will ensure that everyone on your team understands the goals of your company and the steps necessary to reach them. 

Your workforce will benefit from a well-defined organizational strategy because everyone will be aware of their daily responsibilities and the reasons for their necessity. They will have clear goals to keep them motivated and productive.

Using Skillrobo , an innovative online talent evaluation platform, as part of your organizational planning can significantly enhance your recruitment approach. Skillrobo can help you define the specific skill sets required for each role, ensuring clarity before the hiring process begins. 

With its comprehensive suite of customizable assessments in various fields, it effectively gauges candidate aptitude, technical know-how, and specific skill proficiencies. Its robust analytics provide data-driven insights, simplifying decision-making and aiding in efficient team-building. By identifying and recruiting the most skilled candidates, Skillrobo aids in fostering a competent workforce, crucial for the successful execution of your organizational plan.

Streamline operations, optimize resources, and improve productivity with Skillrobo. Click here to Sign-Up !

Table of content

Related articles.

Employee Assessment Software – Find Out Its Purpose, Benefits, and Features

May 29, 2024

Pre-Effective Way to Digital Marketing Skills of a Content Manager

Top 15 Talent Assessment Tools that will Step Up your Hiring Strategy for 2024

Quick links.

Copyright © 2024 | Cavintek, Inc | All Rights Reserved

Business Plan Section 3: Organization and Management

This section explains how your business runs and who’s on your team. Learn how to present the information in this section of your business plan.

This section of your business plan, Organization and Management, is where you’ll explain exactly how you’re set up to make your ideas happen, plus you’ll introduce the players on your team.

As always, remember your audience. If this is a plan for your internal use, you can be a little more general than if you’ll be presenting it to a potential lender or investor. No matter what its purpose, you’ll want to break the organization and management section into two segments: one describing the way you’ve set up the company to run (its organizational structure), and the other introducing the people involved (its management).

Business Organization

Having a solid plan for how your business will run is a key component of its smooth and successful operation. Of course, you need to surround yourself with good people, but you have to set things up to enable them to work well with each other and on their own.

It’s important to define the positions in the company, which job is responsible for what, and to whom everyone will report. Over time, the structure may grow and change and you can certainly keep tweaking it as you go along, but you need to have an initial plan.

If you’re applying for funding to start a business or expand one, you may not even have employees to fit all the roles in the organization. However, you can still list them in your plan for how the company will ideally operate once you have the ability to do so.

Obviously, for small businesses, the organization will be far more streamlined and less complicated than it is for larger ones, but your business plan still needs to demonstrate an understanding of how you’ll handle the workflow. At the very least, you’ll need to touch on sales and marketing, administration, and the production and distribution of your product or the execution of your service.

For larger companies, an organizational plan with well-thought-out procedures is even more important. This is the best way to make sure you’re not wasting time duplicating efforts or dealing with internal confusion about responsibilities. A smooth-running operation runs far more efficiently and cost-effectively than one flying by the seat of its pants, and this section of your business plan will be another indication that you know what you’re doing. A large company is also likely to need additional operational categories such as human resources and possibly research and development.

One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

Here is where you can also talk about the other levels of employees in your company. Your lower-level staff will carry out the day-to-day work, so it’s important to recognize the types of people you’ll need, how many, what their qualifications should be, where you’ll find them, and what they’ll cost.

If the business will use outside consultants, freelancers, or independent contractors, mention it here as well. And talk about positions you’d want to add in the future if you’re successful enough to expand.

Business Management

Now that we understand the structure of your business, we need to meet the people who’ll be running it. Who does what, and why are they onboard? This section is important even for a single practitioner or sole proprietorship, as it will introduce you and your qualifications to the readers of your plan.

Start at the top with the legal structure and ownership of the business. If you are incorporated, say so, and detail whether you are a C or S corporation. If you haven’t yet incorporated, make sure to discuss this with your attorney and tax advisor to figure out which way to go. Whether you’re in a partnership or are a sole owner, this is where to mention it.

List the names of the owners of the business, what percent of the company each of them owns, the form of ownership (common or preferred stock, general or limited partner), and what kind of involvement they’ll have with day-to-day operations; for example, if they’re an active or silent partner.

Here’s where you’ll list the names and profiles of your management team, along with what their responsibilities are. Especially if you’re looking for funding, make sure to highlight the proven track record of these key employees. Lenders and investors will be keenly interested in their previous successes, particularly in how they relate to this current venture.

Include each person’s name and position, along with a short description of what the individual’s main duties will be. Detail his or her education, and any unique skills or experience, especially if they’re relevant to the job at hand. Mention previous employment and any industry awards or recognition related to it, along with involvement with charities or other non-profit organizations.

Think of this section as a resume-in-a-nutshell, recapping the highlights and achievements of the people you’ve chosen to surround yourself with. Actual detailed resumes for you and your management team should go in the plan’s appendix, and you can cross-reference them here. You want your readers to feel like your top staff complements you and supplements your own particular skill set. You also want readers to understand why these people are so qualified to help make your business a success.

This section will spell out the compensation for management team members, such as salary, benefits, and any profit-sharing you might be offering. If any of the team will be under contract or bound by non-compete agreements, you would mention that here, as well.

If your company will have a Board of Directors, its members also need to be listed in the business plan. Introduce each person by name and the position they’ll hold on the board. Talk about how each might be involved with the business (in addition to board meetings.

Similar to what you did for your management team, give each member’s background information, including education, experience, special skills, etc., along with any contributions they may already have had to the success of the business. Include the full resumes for your board members in the appendix.

Alternately, if you don’t have a Board of Directors, include information about an Advisory Board you’ve put together, or a panel of experts you’ve convened to help you along the way. Having either of these, by the way, is something your company might want to consider whether or not you’re putting together the organization and management section or your business plan.

NEXT ARTICLE > Business Plan Section 4: Products and Services

Apply for a loan, get started.

Loans from $5,000 - $100,000 with transparent terms and no prepayment penalty. Tell us a little about yourself, your business and receive your quote in minutes without impacting your credit score.

Thanks for applying!

Loans are originated and funded through our lending arm, Accion Opportunity Fund Community Development. By clicking “Continue to Application,” you consent to, Accion Opportunity Fund Community Development’s Terms of Use and Privacy Policy ; and to receive emails, calls and texts , potentially for marketing purposes, including autodialed or pre-recorded calls. You may opt out of receiving certain communications as provided in our Privacy Policy .

• Orginometry Blog
• Org Design Podcast
• Functionly TV
• About Org Design
• Get Started
• Another Item
• Sub-menu Item 2
• Yet Another Item
• Menu Item 3
• Menu Item 4

Org Strategy , Management

Developing a Great Organizational Planning Practice

An organizational plan is a must-have for any company that wants to achieve key objectives within a determined period of time to spur business growth.

How do you develop a good organizational plan? It starts with a clear road map and continues with a few essential steps. A carefully crafted organizational plan can have a positive impact on workforce development, company growth, expansion, product development, financial planning, and more.

Business leaders can use sound organizational planning to address almost any challenge they face. Additionally, organizational planning can set a business up to achieve targeted growth.

What Is an organizational plan?

An organizational plan is a road map that details a company's reason for existing. It includes specific plans for the future and helps ensure that everybody in the organization understands their roles and responsibilities. 

When it is crafted well, an organizational plan can keep a business on a progressive path toward growth and success. It should also outline how to improve core elements of the business, including finances, products and services, and the workforce.

Most organizational plans are created using a multistep process. These steps include both strategic and operational planning. Organizational planning must also allocate time and resources for collecting data, evaluating results, and making changes.

Frequently, organizational planning begins with a high-level assessment and documentation of the organization’s structure and goals. These are then viewed with a narrower focus to identify manageable goals and areas of improvement.

Organizational planning isn’t just useful for sustaining a company’s focus on current objectives; it is also an opportunity to create new objectives.

Who is involved in organizational planning? Organizational leadership may act as the driving force, but this process works best when all team members take part.

Organizational planning objectives

Organizational planning focuses on setting and achieving goals in four distinct areas. However, a single organizational planning effort might involve more than one of these categories.

1. Financials

Financial planning is the part of organizational planning that involves determining how the company’s financial capital should be handled. 

In organizational planning, you might make decisions that involve funds allocation, investment, and debt management. You might also decide whether to hire someone to handle company financials and lay out what their role will be in the company’s future.

2. Workforce planning

Workforce planning is the series of actions in organizational planning that focuses on your human resources. Goals that relate to this area include:

• Creating internal advancement opportunities
• Improving diversity and inclusion efforts
• Increasing the workforce head count
• Offering new training opportunities
• Creating or restructuring teams

Your ability to achieve goals and experience growth depends largely on your employees. Investing in workforce planning and making changes to improve efficiency can boost profits and increase productivity.

3. Growth and expansion

Organizational planning is an absolute must for any company that has upcoming plans for growth or expansion. These plans might include expanding into new territories, opening new locations, increasing production output, or merging with another organization.

Preparing for growth is one of the more complicated parts of org planning. However, it also has the potential for great outcomes. Expanding your business is the best way to grow your workforce, offer more products and services, and increase your revenue.

4. Products and services

In your organizational plan, you must consider the products or services that your business sells. This is a good time to lay the groundwork for dropping a product line or offering a new service. Product and service planning also involves developing a streamlined marketing strategy and setting new sales goals.

5 Key Steps to Organizational Planning

There are five steps involved in creating an organizational plan.

1. Strategic plan development

Strategic planning is viewing the organization through the broadest lens. Plans and goals that are made here will be very lofty and high-level. Think of this as big-picture planning; upper management reviews the current state of the organization to determine progress toward current goals and set long-term plans.

Although executives should take the wheel in strategic planning, it is a good idea to include lower-level employees and managers in this process. They often have a real-world point of view that the C-suite is missing.

At this stage, it’s important to keep the focus on the company’s values and mission statement. Your high-level goals should align with those. Part of your organizational planning could also involve making changes to your company’s mission and core values. Later, the goals set at this stage will be used to create attainable objectives.

Here are some activities that can help organizations with strategic planning:

• Conduct a SWOT analysis
• Gather and analyze performance metrics
• Study the company mission statement

After this, company leadership can establish goals using the information they have gathered.

2. Tactical planning

During the tactical planning stage, you will take the large-scale goals created in the first step and break them down into objectives that are easier to measure and achieve. Tactical planning will involve managers at all levels in the company, not just executives and division managers.

The goals you create here will be shorter-term than were previously set. For example, one- and five-year goals will become quarterly and annual goals.

Tactical planning must also involve identifying metrics and setting measurable standards of success. If you created a goal to increase your manufacturing workforce, now you will set a goal of hiring a specific number of new employees each quarter while also reducing churn by a specific percentage. 

3. Creating operational plans

After tactical planning, create a plan of action to achieve your stated goals. These plans will become part of daily operations; they will detail steps that will be taken to achieve organizational goals.

Operational planning may involve modifying policies, reorganizing teams, altering workflows, and redefining roles and responsibilities. This stage should include input from workers at various organizational levels. You should also consider bringing in consultants to help with ops planning.

For example, suppose that your goal is to increase the number of manufacturing employees. During the operational planning stage, you will determine the specific actions and policies needed to make that happen. You might:

• Review and improve manufacturing job descriptions
• Work with third-party recruiters to reach out to more candidates
• Start a referral rewards program for employees
• Build relationships with local trade and technical schools

Operational plans should be specific and measurable.

4. Execution

During the execution stage, your team will take the detailed plans you have created and implement them. In this stage, you need to closely monitor the work being done to achieve both your strategic and tactical goals. This step is a good test of organizational health. 

5. Organizational plan review and adjustment

After your plans have been in action for a while, it’s time to review them. Check progress using the metrics you have established. Work with team members to find any roadblocks that weren’t predicted in the planning stages. 

Again, many teams and employees will be involved at this stage because you will need their performance data to complete a reliable audit. 

When things aren’t progressing, go back to your planning. Then, determine whether something is wrong at the operational level or if you need to rethink some of your higher-level planning.

Organizational development models

You may find that the process of organizational development and planning goes more smoothly if you work from one of the many organizational development models that are available to you. These include:

• The action research model
• Lewin’s 3-stage model of change
• The general model of planned change
• The appreciative inquiry model

If you base your organizational planning on an established model, you will be able to approach your goals with even more structured thinking.

Common organizational planning mistakes

Here are some common mistakes that organizations make during organizational planning:

Failing to convince stakeholders

Stakeholders include anyone who will be impacted by your organizational plan.

Of course, leaders in key business areas are important stakeholders. However, stakeholders also include well-respected workers who can influence the actions and attitudes of others. 

It’s important to identify all of the stakeholders who will be affected by new plans and involve them in the process. This may require carefully navigating difficult conversations to get your team fully on board.

Not communicating with employees

New goals, policies, and strategies must be communicated with workers at every level. If they aren’t, team members may feel blindsided or simply not see the value in what you are trying to accomplish. Good communication also helps you get ahead of your employees’ fears of and resistance to change.

Measurable outcomes are unclear

Have you connected each goal to a specific, measurable outcome? If not, it is impossible to know whether your team has made progress.

Only internal teams are involved

For many organizations, it’s important to consider the impacts of organizational planning on external teams. These are the contractors, vendors, freelancers, and other third parties who contribute to you reaching your goals. New organizational goals and plans often change your relationships with these teams. 

For example, if you rely on a staffing agency to fill manufacturing positions, it should probably be involved in rolling out a strategic plan to hire more manufacturing techs. More importantly, the agency may have important insights and information that can help you achieve your goals.

Org planning brings important focus and leads to effective action

There’s no denying the importance of organizational planning. Without it, many businesses lack focus and never quite reach their full potential. Organizations that engage in regular planning can create relevant goals and actionable plans to accomplish them.

Whether your company is a start-up or well-established, consider following the steps outlined here to create a detailed organizational plan. This will bring a sense of clarity to your company goals and help you create an important road map for achieving them. Try Functionly to help with planning elements of your organizational plan.

Learn more about organizational design.

Org Strategy Management

Related articles

Leadership , Org Design

Navigating the Maze: Strategies for Gaining Stakeholder Buy-in During Company Reorganizations

Org Design , Org Strategy

Reshaping the Future: Tools and Tactics for Organizational Adaptability

Get started now.

Your first step towards a more effective organization.

Start trial

Subscribe to our newsletter

• Integrations
• Trial for 22 days
• Business Functions
• Workforce Transformation
• Org Chart Templates
• Org Design Training
• Org Design Cards
• Knowledge Base

© Copyright 2024 Functionly

• Privacy Policy
• Terms of Service

Thinkific Plus

How to build an organizational development plan: a comprehensive guide (+template), share this article.

Discover the power of strategic organizational development with our comprehensive plan and access a comprehensive template. Learn how to assess your company's current state, set strategic objectives, and create targeted action plans for growth.

Trying to keep up with the constant changes in the market sometimes feels like you’re a tortoise in a race full of hares. But the tortoise won the race in the end, and by taking the time for proper planning and organization, your organization can too.

Organizational development, or OD, is a process of planned change that seeks to increase the effectiveness and efficiency of an organization. An organizational development plan (ODP) is a comprehensive document that outlines how an organization will go about achieving its goals and objectives. 

It includes strategies for improving overall performance, developing employee skills, increasing customer satisfaction, and more. The ODP allows companies to identify their current strengths and weaknesses to create meaningful plans for improvement. 

By having a clearly-defined plan in place, organizations measure progress over time and make necessary adjustments as needed. An effective OD plan makes an organization more efficient, productive, competitive, and profitable. 

The benefits of implementing an organizational development plan include: 

• Improved employee morale
• Increased collaboration among staff
• Reductions in costs associated with reorganizations or restructurings
• Enhanced customer service levels
• Higher levels of productivity
• Improved communication among staff and management
• More efficient use of resources

Skip ahead:

Assessing Organizational Needs and Readiness

Defining organizational development goals and objectives, identifying key focus areas for improvement, action planning and implementation, monitoring and evaluation, sustaining organizational development, organizational development plan template, case studies and success stories, frequently asked questions.

The first step in crafting an ODP is conducting a thorough organizational analysis. This process involves examining the organization’s current state, including operational effectiveness, efficiency, customer satisfaction, employee engagement, and other relevant areas. Gaining a clear understanding of what requires improvement allows the organization to prioritize its efforts accordingly.

Consideration of External Factors

In addition to assessing internal aspects of the organization, it’s crucial to consider external factors that may impact performance – such as economic conditions or industry trends. By taking these outside influences into account when developing plans for growth and competitiveness can help ensure success.

SWOT Analysis

After completing a comprehensive analysis, organizations should use these findings to conduct a SWOT analysis – identifying strengths and weaknesses along with any opportunities or threats present. This information helps create strategies for capitalizing on strengths while minimizing or mitigating weaknesses as well as recognizing potential new revenue sources or competitive advantages.

Developing an Effective ODP

An effective ODP should include concrete steps addressing issues identified through the assessment process (organizational analysis and SWOT). It’s essential to take both internal factors (e.g., company culture, employee morale) and external forces (e.g., competition in the marketplace) into consideration during plan development so that adjustments can be made accordingly for maximum effectiveness.

The second step in crafting an ODP involves defining the organization’s goals and objectives, which will inform decisions about strategy implementation, resource allocation, and progress measurement. It is crucial to establish measurable, clear goals that align with the organization’s values and mission statement for easy progress tracking over time.

SMART Objectives

Once the overall goals are set, organizations should formulate SMART objectives – Specific, Measurable, Attainable, Relevant, and Time-bound targets. These criteria ensure that achievable targets are established while enabling organizations to evaluate their progress with tangible results. Moreover, these objectives should align with broader organizational goals to guarantee advancement towards larger ambitions.

Aligning Goals with Vision and Mission

Organizations must also ensure that their defined goals and objectives resonate with their vision and mission statements. This alignment allows organizations to optimize resource utilization in achieving overarching aspirations effectively.

Enhancing Decision-Making through Clarity

A comprehensive understanding of an organization’s desired direction facilitates improved decision-making when implementing strategies for growth or improvement. Setting clear organizational development goals aligned with a company’s vision and mission statement, along with well-defined SMART objectives, will enable organizations to navigate successfully throughout the entire process.

The third step in crafting an ODP involves pinpointing key areas for improvement based on the organization’s overall goals and objectives. Both short-term and long-term objectives should be considered when determining focus areas. Involving employees in this process can yield valuable insights into the current state of the organization and potential improvement points.

Developing Targeted Strategies 

After identifying focus areas, organizations can start formulating strategies and initiatives tailored to their specific needs, taking into account existing capabilities and resources. These strategies must be realistic and achievable to ensure success, with employee participation providing valuable input on potential solutions.

Allocating Resources Effectively

Organizations need to determine resource allocation – both financial and human – for each initiative while considering associated costs to maximize efficiency in resource use. Additionally, it is essential to provide adequate training and support for employees involved in implementing these strategies.

Establishing Key Performance Indicators (KPIs)

Lastly, setting up KPIs helps measure the success of implemented strategies over time, allowing organizations to track progress or make necessary adjustments as needed. Common KPIs include customer satisfaction, employee engagement, productivity, and profitability.

An effective ODP should consist of actionable steps to achieve desired outcomes. Break down large strategies into smaller tasks with specific timelines to keep the plan on track and ensure everyone is aware of their responsibilities. Establishing milestones also helps teams stay motivated and measure success over time.

Assigning Roles and Deadlines

Once the plan is broken down into manageable tasks, assign specific responsibilities and deadlines for each step. This approach ensures team members understand their roles in achieving desired outcomes while maintaining motivation through clear expectations.

Communication and Change Management Plans

Develop communication plans to keep all stakeholders informed about progress, allowing team members to voice opinions or suggest changes if needed. A concise communication plan promotes seamless organizational change implementation by ensuring everyone remains aligned at all times.

Risk Mitigation through Change Management

A well-defined change management plan enables teams to identify potential risks early in the process so they can be addressed proactively before becoming issues that could hinder progress.

Building Support among Stakeholders

Engage both internal (employees) and external (customers, suppliers, partners ) stakeholders throughout the planning process for widespread support of your ODP’s goals—this builds a sense of ownership that sustains motivation across all parties involved.

A crucial aspect of a successful ODP is setting measurable, specific, realistic, achievable, and timely goals that align with the organization’s values and mission statement. These metrics serve as benchmarks for measuring progress over time.

Tracking Progress and Milestones

Track progress by regularly assessing the organization’s current state against the ODP’s goals and objectives – enabling the identification of improvement areas or potential roadblocks. Monitoring also allows leadership to acknowledge successes while motivating employees toward further achievements.

Conducting Regular Reviews 

Perform regular reviews to examine organizational performance against established metrics, analyze successes and failures, and identify improvement areas or new growth opportunities – all while making necessary adjustments accordingly.

Maintaining Flexibility in ODPs 

Organizational development plans should remain adaptable based on evolving needs. If progress isn’t being made toward set objectives within the ODP framework, consider changes such as altering processes and procedures, adding staff members, or implementing new technologies.

For organizational development to have a lasting impact, it’s crucial to seamlessly integrate the plan into every aspect of company culture. Begin by clearly communicating the plan’s objectives and strategies to employees, ensuring they understand how their roles contribute to achieving these goals. 

Encourage open dialogue about why specific changes are necessary for both individual growth and overall success. By fostering a transparent environment, you’ll cultivate employee buy-in and facilitate smoother transitions throughout your organization.

Empowering Employees with Resources

Support your team by offering diverse resources tailored to their needs, like customized training programs , engaging workshops, insightful seminars, mentorship opportunities, or access to online learning platforms. 

Providing these tools ensures everyone stays aligned with your vision while knowing what they need to do for collective triumph. Empowering employees with resources helps them feel valued and nurtures personal growth that benefits the organization as a whole.

Cultivating a Learning Environment

Embrace a culture that prioritizes continuous learning and improvement at all levels within your organization. By regularly assessing processes and investing in employee skill development through targeted training initiatives or knowledge-sharing sessions, you’ll stay agile in today’s rapidly evolving business landscape. An ongoing commitment to nurturing talent will not only help attract top candidates but also retain existing talent eager for professional growth.

Acknowledging Accomplishments

It’s essential not just to celebrate major milestones but also to recognize small wins along the way; these acknowledgments fuel motivation, boost morale, and strengthen unity within an organization. In team settings where collaboration is key, recognizing personal contributions fosters camaraderie across all levels while encouraging further cooperation among coworkers.

Sharing success stories internally via newsletters or social media channels can inspire others on how their efforts play an essential role in achieving common goals – ultimately creating a positive feedback loop that benefits everyone involved.

Adapting Through Feedback Loops

Establish feedback loops to fine-tune your organizational development plans (ODP) effectively. These can involve employee surveys, one-on-one meetings, or regular team debriefs where employees openly discuss progress made and any challenges encountered. This regular input from employees helps identify areas needing improvement while adjusting ODPs accordingly.

To get started implementing your plan quickly, try this handy organizational development plan template .

This organizational development plan template provides a comprehensive structure for planning and implementing your organization’s development initiatives. You can customize the template to suit your organization’s specific needs and objectives.

The template also comes with charts for the ten organizational development plan frameworks.

These fillable templates can help you apply each of the ten organizational development frameworks to your organization. Customize them to suit your organization’s specific needs and objectives.

Organizational development plans can be implemented across many different industries. 

Marriott International, a prominent player in the hospitality industry, implemented an organizational development plan (ODP) aimed at enhancing customer satisfaction and loyalty. Leveraging data analytics to pinpoint areas needing improvement, they devised targeted strategies that led to significant growth in customer ratings and an 8% increase in overall profits.

Enhancing Patient Experience in Healthcare

In healthcare, Kaiser Permanente created an ODP encompassing process improvements and employee training initiatives to elevate patient satisfaction levels. This comprehensive strategy resulted in their patient experience scores soaring from an already impressive 84% satisfaction rate to a remarkable 94%.

Streamlining Manufacturing Processes

Toyota’s manufacturing sector adopted an ODP focused on augmenting quality, efficiency, and safety. Consequently, the company reduced production costs by 10% while simultaneously increasing customer satisfaction levels by 7%.

The Key to Successful Organizational Development Plans

These success stories illustrate how effective ODPs can benefit organizations across various industries. A well-crafted plan enables companies to monitor progress over time and make necessary adjustments as required.

For optimal results, it’s crucial for ODPs to be tailored specifically for each organization – identifying areas needing improvement while addressing potential obstacles that may hinder growth. Managers play a pivotal role here, ensuring employees comprehend the plan’s objectives and their individual roles within its execution.

Regularly measuring progress allows businesses to stay current with industry trends or internal changes within their organization and make adjustments or updates when needed accordingly.

Finally, communication is essential to keep all stakeholders informed of ongoing progress and fosters transparency while maintaining motivation toward achieving shared goals. 

Organizational development plans are a valuable tool for any type of organization. By creating an ODP, organizations can identify their current strengths and weaknesses to create meaningful plans for improvement. 

An effective OD plan should be tailored to an organization’s needs and goals, measure progress over time, communicate results regularly with all stakeholders involved, and make necessary adjustments or changes if needed. 

With careful planning and implementation, an organizational development plan increases performance, develops employee skills, increases customer satisfaction levels, reduces production costs, improves safety standards, and much more.

Download the Organizational Development Plan Framework: Propel Your Company’s Growth

Drive the growth and success of your organization with our comprehensive Organizational Development Plan Framework. This essential resource provides a structured approach to strategically enhance your company’s capabilities and maximize its potential.

Q. What is an organizational development plan? 

An organizational development plan (ODP) is a comprehensive document that outlines how an organization will achieve its goals and objectives. It includes strategies for improving overall performance, developing employee skills, increasing customer satisfaction, and more. 

Q. Why is an organizational development plan important for businesses? 

An organizational development plan improves performance and gets organizations closer to their goals. It provides a roadmap for the organization to follow to achieve success. 

The ODP outlines specific strategies to implement, such as training programs , process improvements, or changes in organizational culture. Having an effective plan will ensure that resources are allocated properly and progress is monitored over time.

Q. How do I assess the needs and readiness of my organization for development?

Assessing needs and readiness involves evaluating current performance, analyzing data on employee engagement and satisfaction, identifying areas where improvement is needed, and understanding the organization’s goals. 

It also requires looking at external factors that could affect your business such as changing customer demands or market trends. Once you have completed this assessment process, you will be better prepared to develop a comprehensive plan for achieving organizational success. 

Q. What are the key components of an effective organizational development strategy?

The key components of an effective organizational development strategy include: 

• Establishing a vision and mission statement
• Developing core values and objectives that align with the company’s vision and mission statement
• Identifying areas of improvement within the organization and developing plans to address them
• Implementing an effective communication plan
• Measuring progress against established benchmarks to determine success
• Evaluating and revising the ODP as needed based on feedback

Q. How do I implement an organizational development plan within my organization?

Implementing an ODP requires a comprehensive analysis of your current organizational structure and processes. This means assessing the strengths and weaknesses of your current system to identify areas for improvement. 

Once you have identified these areas, you can develop strategies for making improvements. These strategies should be tailored to your organization’s specific needs and goals and may include changes to policies, procedures, or even technology. 

Additionally, all stakeholders must be involved in the development process so that they understand why these changes are being made and how they will benefit them.

Q. How can I measure the effectiveness of an organizational development plan?

Organizational development plans should be evaluated regularly to determine if they are achieving their intended outcomes. Different metrics can be used depending on the type of plan, such as customer satisfaction surveys, employee engagement surveys, and performance reviews. Financial statements and other key performance indicators (KPIs) can give insight into an organization’s overall progress, too.

Q. Are there any templates available for creating an organizational development plan?

There are many templates available online that you can use to create an organizational development plan. These templates usually include sections for objectives, strategies, and action plans. They also offer guidance on what information to include in each section. This template is a fantastic resource for starting your ODP.

Q. Can you provide examples of organizations that have successfully implemented an organizational development plan?

Google has used an ODP to develop its internal structure and culture to create a more collaborative and innovative workplace. Similarly, Amazon has used OD plans to increase customer satisfaction by streamlining processes and creating better communication channels between employees and customers. Apple Inc. has also regularly utilized OD plans to update its product lines for maximum customer appeal and profitability.

Daniela Ochoa is the go-to Content Marketing Specialist here at Thinkific Plus! With years of experience in marketing and communications, she is passionate about helping businesses grow through strategic storytelling, innovative digital campaigns, and online learning at scale.On this blog, she shares her expertise in content marketing, lead generation, and more.

• How To Track Employee Training (+Excel Template)
• The Top 7 Best Corporate LMS To Deliver & Manage Your Training
• What Is Customer Lifetime Value (CLV) and Why Does It Matter?
• How to Reduce Churn (5 Strategies & Tips for Net Growth)
• Customer Success vs Customer Support: How To Use Both

Related Articles

Essential customer service strategy template for businesses.

Access a customer service strategy template that will change the way you approach your business plan and customer success.

25+ Best ChatGPT Prompts for Instructional Designers

25+ ChatGPT prompts aimed at assisting instructional designers with lesson planning, curriculum development, and instructional strategies.

Partner Training 101: How To Train Your Channel Partners

Learn how your business or organization can leverage partner training to help others promote your products and deliver your services.

Try Thinkific for yourself!

Accomplish your course creation and student success goals faster with thinkific..

Download this guide and start building your online program!

It is on its way to your inbox

• Search Search Please fill out this field.

What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

• How to Start a Business: A Comprehensive Guide and Essential Steps
• How to Do Market Research, Types, and Example
• Marketing Strategy: What It Is, How It Works, How To Create One
• Marketing in Business: Strategies and Types Explained
• What Is a Marketing Plan? Types and How to Write One
• Business Development: Definition, Strategies, Steps & Skills
• Business Plan: What It Is, What's Included, and How to Write One CURRENT ARTICLE
• Small Business Development Center (SBDC): Meaning, Types, Impact
• How to Write a Business Plan for a Loan
• Business Startup Costs: It’s in the Details
• Startup Capital Definition, Types, and Risks
• Bootstrapping Definition, Strategies, and Pros/Cons
• Crowdfunding: What It Is, How It Works, and Popular Websites
• Starting a Business with No Money: How to Begin
• A Comprehensive Guide to Establishing Business Credit
• Equity Financing: What It Is, How It Works, Pros and Cons
• Best Startup Business Loans
• Sole Proprietorship: What It Is, Pros & Cons, and Differences From an LLC
• Partnership: Definition, How It Works, Taxation, and Types
• What is an LLC? Limited Liability Company Structure and Benefits Defined
• Corporation: What It Is and How to Form One
• Starting a Small Business: Your Complete How-to Guide
• Starting an Online Business: A Step-by-Step Guide
• How to Start Your Own Bookkeeping Business: Essential Tips
• How to Start a Successful Dropshipping Business: A Comprehensive Guide

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

Organizational Management – Guiding Success Strategically

Let’s delve into the concept of organizational management, its fundamental principles, and its significance in achieving operational excellence and strategic success.

Published by Orgvue   January 18, 2024

Home > Resources > article > Organizational Management – Guiding Success Strategically

Organizational management is the cornerstone of success for businesses, nonprofit organizations, government entities and even small community groups. It serves as the compass that guides an entity towards its goals, offering a structured approach to resource allocation, decision-making and problem-solving. In a world marked by complexity, change and fierce competition, effective organizational management is not merely an advantage but a necessity. Let’s delve into the concept of organizational management, its fundamental principles, and its significance in achieving operational excellence and strategic success.

What is organizational management?

Organizational management is the practice of planning, coordinating and overseeing the resources, processes and people within an organization to achieve specific objectives. It encompasses a range of functions, including strategic planning, decision-making, leadership, and the allocation of resources, all geared towards optimizing efficiency, productivity, and overall performance. The goal of an organization is accomplished by effectively utilizing its human and material resources, making it an indispensable discipline for achieving sustainable success in any domain.

Why is organizational management important?

• Goal alignment:  Organizational management ensures that every employee, from entry-level workers to top executives, understands and works toward common business objectives. It aligns individual and team goals with the overarching company mission.
• Resource optimization: Effective management of organization helps allocate resources efficiently, whether it’s labor, finances, time, or technology. This prevents wastage and maximizes productivity.
• Enhanced productivity:  A well-structured management system provides a clear framework for work processes, resulting in increased productivity at all levels of the organization.
• Strategic planning : It involves strategic planning, helping the company adapt to changes in the business environment and remain competitive in the long term.
• Decision-making:  It offers a structured approach to decision-making, ensuring that choices align with the organization’s goals and values, whether it’s a frontline employee making a tactical decision or senior leadership making strategic choices.
• Leadership development:  Management practices identify and nurture leadership talent within the organization, helping it grow and succeed. This is important at all levels, from team leaders to executives.
• Quality control:  It implements and monitors quality control measures, ensuring consistency and excellence in products or services.
• Employee engagement:  It promotes a culture of involvement and commitment, ensuring that employees feel valued and engaged in their work, regardless of their position.
• Performance evaluation:  Through performance reviews and key performance indicators (KPIs), management of organization assesses individual and team performance. This information is then used to set expectations and improve results.
• Conflict resolution: Management plays a pivotal role in addressing conflicts and issues that may arise at all levels of the organization, preventing them from escalating and affecting productivity.
• Change management:  Adapting to change is crucial in today’s dynamic business world. Organizational business management helps employees at every level understand, accept, and embrace change, ensuring a smooth transition.
• Communication:  Effective management practices promote open, transparent communication within the organization, facilitating the flow of information between different levels and departments.
• Risk management: Management identifies, assesses, and mitigates risks, ensuring that the organization can handle unexpected challenges while minimizing their impact.
• Innovation and creativity:  Encouraging innovation and creativity is essential for keeping a business competitive. Organizational business management fosters an environment where employees, regardless of their role, can contribute fresh ideas.
• Sustainability and growth: It is essential for the sustainable growth of an organization. It helps in setting benchmarks, tracking progress, and making adjustments to ensure long-term success.
• Financial Stability: Effective management practices enable financial stability by managing budgets, controlling expenses, and optimizing revenue streams, all of which contribute to business goals.
• Customer satisfaction:  Management ensures that employees at all levels focus on meeting customer needs and delivering quality products or services, leading to high customer satisfaction.
• Ethical c ompliance:  It ensures that all employees understand and adhere to ethical standards and legal requirements in their roles, maintaining the company’s reputation and credibility.

The different management styles

Management styles play a significant role in shaping the work environment and the overall success of an organization. Two prominent management styles, autocratic and democratic, stand at opposite ends of the leadership spectrum.

Autocratic management, characterized by centralized decision-making and minimal employee involvement, is often valuable in situations requiring quick decisions and strict control, such as emergencies. However, its overuse can stifle creativity and morale.

On the other hand, democratic management empowers employees by involving them in decision-making, fostering innovation and creating a sense of ownership. While it promotes collaboration and engagement, it may sometimes lead to slower decision-making processes. The importance lies in finding the right balance and adapting these styles to the specific needs of an organization, department, or situation.

Effective organizational business management often blends elements of both styles, using autocratic approaches when urgency is paramount and shifting towards democratic methods to encourage employee participation, ultimately ensuring a dynamic and responsive organizational culture.

Leadership skills

Skills needed in the leadership team for effective organizational management:

Effective m anagement s kills:  It is at the core of organizational success. Leaders need to possess skills in setting clear objectives, creating actionable plans, and efficiently allocating resources. They should be able to oversee and guide teams, ensuring that tasks are completed on time and within budget. Effective management involves not only overseeing the daily operations but also addressing challenges and facilitating growth.

Strategic t hinking:  Strategic thinking is essential for leadership teams to navigate the complexities of today’s business environment. Leaders must have the ability to formulate a long-term vision for the organization, set strategic priorities, and align resources to achieve these goals. Strategic thinkers consider market trends, competition, and emerging opportunities, allowing the organization to adapt and thrive.

Decision- m aking and   p roblem- s olving: Leadership teams need strong decision-making and problem-solving skills. They should be capable of analyzing complex situations, weighing pros and cons, and making sound decisions that align with the organization’s objectives. Effective problem-solving skills help in resolving issues efficiently and preventing them from becoming significant obstacles.

Communication and i nterpersonal s kills:  Clear and effective communication is a cornerstone of leadership. Leaders should be able to convey their ideas, expectations, and vision to both their teams and other stakeholders. Strong interpersonal skills are equally important for building relationships, inspiring trust, and resolving conflicts. Effective communication fosters collaboration and encourages employees to be engaged and motivated.

Adaptability and c hange m anagement: The business landscape is constantly evolving. Leadership teams should be adaptable and open to change. They must have the ability to lead their organizations through transformations, whether it’s adapting to new technologies, market shifts, or industry trends. Being flexible and resilient in the face of change is vital.

Financial a cumen:  Leaders should have a strong understanding of financial principles. This includes budgeting, financial analysis and resource allocation. Financial acumen allows leaders to make informed decisions that optimize the organization’s financial performance and sustainability.

Team b uilding and d evelopment: Leadership teams must be adept at team building and development. They should recruit, train, and mentor talent to create high-performing teams. Effective leaders empower employees, allowing them to grow in their roles and contribute to the organization’s success.

Emotional i ntelligence: Emotional intelligence is crucial for leadership, as it involves understanding and managing one’s emotions and the emotions of others. Leaders with high emotional intelligence can build strong relationships, inspire trust, and effectively manage and motivate their teams.

Innovation and c reativity: Encouraging innovation and creativity is essential for staying competitive. Leadership teams should foster a culture that values new ideas and approaches. They should also be innovative thinkers, exploring novel strategies and solutions to address challenges and capitalize on opportunities.

Ethical leadership:  Ethical leadership is based on principles of integrity, honesty, and ethical decision-making. Leaders should set a moral compass for the organization, promoting values that guide behavior and maintain the organization’s reputation and credibility.

Aligning organizational management with business objectives

Common goals for all organizations:.

Every organization, regardless of size, industry, or mission, shares a common goal. These universal objectives provide a foundation for success and serve as guiding principles for organizational management. Among these shared goals are profitability, growth, customer satisfaction, employee engagement, innovation, and social responsibility. Profitability ensures the organization’s financial sustainability, while growth signifies progress and competitiveness. Customer satisfaction and employee engagement foster a positive environment, which, in turn, leads to innovation and the development of new products, services and processes. Furthermore, embracing social responsibility allows organizations to contribute positively to society, aligning their missions with broader societal goals.

Setting the right goals for your organization:

Choosing the right goals for your organization is a pivotal decision that dictates the direction and success of the business. The process begins with a deep understanding of your organization’s mission, values, and unique position within its industry. Goals should align seamlessly with the organization’s core purpose and be specific, measurable, achievable, relevant, and time-bound (SMART). They must respond to the internal and external environment through rigorous assessments, such as SWOT analysis, to consider the strengths, weaknesses, opportunities, and threats faced by the organization. Additionally, involving key stakeholders, from employees to customers, is essential to obtain valuable input and ensure that the goals are both practical and meaningful. Prioritizing goals helps focus on those that will have the most substantial impact on the organization’s success.

How to align organizational management with business goals:

Aligning organizational management with business goals is a critical step in ensuring that an organization moves in the right direction. Effective communication is the linchpin, as clear and consistent messaging about the objectives must be disseminated throughout the organization, creating a shared sense of purpose. The development of key performance indicators (KPIs) is a fundamental practice to directly measure progress toward business goals. These metrics should be tracked, reported on, and assessed regularly. Resource allocation, including budgets, talent, and technology, must be aligned with the goals to ensure that the organization commits the necessary resources for goal achievement. Leadership commitment to championing these goals and setting an example is instrumental in motivating employees. Continuous evaluation and adjustment, supported by feedback mechanisms capturing insights from employees and stakeholders, ensure that goals remain relevant and achievable. Incentive structures and recognition programs can be implemented to reward and acknowledge employees who contribute to goal achievement, fostering motivation and a sense of ownership within the organization. Through these strategies, organizations can systematically progress towards their objectives, fostering growth, profitability, and sustainability.

Organizational management and development

Building a leadership team.

An effective leadership team is the cornerstone of successful organizational management and development. Building this team involves selecting individuals who possess the right skill sets, expertise, and vision to lead the organization toward its objectives.

Leadership teams should comprise diverse talents and experiences to offer a well-rounded perspective on decision-making and strategy. Additionally, the team should be capable of collaborating seamlessly and motivating employees at all levels, creating a culture of engagement, trust, and accountability. A strong leadership team not only sets the organization on the right path but also fosters an environment where development initiatives are embraced and promoted.

Developing the leadership team to meet management objectives

Developing the leadership team is a continuous process that aligns the management style required to achieve organizational objectives. This development involves training, coaching, and mentorship to ensure that leaders possess the skills and knowledge necessary for effective decision-making, strategic planning, and resource allocation.

Leaders must be adaptable to the organization’s changing needs, whether it requires an autocratic approach in times of crisis or a more democratic style during periods of innovation and employee development. By developing the leadership team in tandem with organizational management objectives, the organization can create a dynamic, responsive leadership structure capable of guiding the organization through the challenges and opportunities of an ever-evolving business landscape.

Organizational management examples

Organizational management is a multifaceted concept that finds application in various sectors. Examples of effective organizational management include streamlining operations in a manufacturing company to reduce production costs while maintaining product quality, implementing a customer relationship management (CRM) system in a sales-driven organization to improve customer interactions, and establishing transparent communication channels within a non-profit to ensure that every stakeholder is informed and engaged. Additionally, in a healthcare setting, efficient organizational management might involve optimizing patient flow to reduce wait times and enhance the quality of care provided. These examples underscore the importance of organizational management in achieving operational excellence, fostering innovation, and achieving strategic goals across diverse industries.

What happens to a business without an organizational management plan?

Operating a business without a dedicated organizational management plan can lead to a host of detrimental consequences. Without a structured approach to resource allocation, goal-setting, and employee guidance, the business may experience chaos, inefficiency, and disarray. Key functions like decision-making, leadership, and problem-solving become erratic and haphazard, leading to missed opportunities and increased risks. Employee morale can plummet, as a lack of clear direction and communication fosters confusion and disengagement. Moreover, without a plan for adaptability and change management, the business may struggle to respond effectively to evolving market conditions and challenges, ultimately jeopardizing its sustainability and competitiveness. In essence, the absence of an organizational management plan can hinder a business’s ability to achieve its objectives, leading to operational inconsistencies, reduced profitability, and a less-than-optimal work environment.

Organizational management stands as the keystone to an organization’s success, underpinning its ability to navigate the complexities of today’s business world. It encompasses the strategic planning, effective resource allocation, and sound decision-making that guide a company toward its goals. Beyond these fundamental practices, organizational management fosters a culture of innovation, adaptability, and accountability, ensuring that businesses not only survive but thrive in an ever-evolving landscape. It is the steady hand that ensures that people, processes, and strategies align seamlessly, creating an environment where efficiency, productivity, and the pursuit of excellence become the norm. In essence, organizational management is the compass that steers an organization toward its vision, making it an indispensable discipline for long-term success and prosperity.

What is the difference between organizational management and leadership

Organizational management primarily focuses on the efficient coordination of resources, processes, and day-to-day operations along with organizational design  to achieve specific objectives. Leadership, on the other hand, emphasizes the guidance, inspiration, and vision-setting necessary to motivate and influence individuals and teams, fostering a culture of engagement and adaptability while pursuing long-term goals.

How does change management fit into organizational management?

Change management is an integral component of organizational management as it deals with planning, implementing, and guiding transitions within the organization. It ensures that organizational management processes effectively adapt to changes, whether they involve shifts in strategy, technology, or culture and provides a structured approach to mitigate resistance and maximize the chances of successful change implementation.

What is the role of Human Resources within organizational management?

Human Resources (HR) plays a crucial role within organizational management by overseeing the recruitment, training, development, and retention of talent essential for the organization’s success. HR ensures that the workforce aligns with the organization’s goals, maintains compliance with employment regulations and fosters a positive work environment that contributes to overall operational excellence.

Organizational Design

Use Orgvue to streamline your organization.

VIEW BY TOPIC

• Budgeting and Financial
• Finding and Retaining Employees
• How to close more sales
• Keys to Business Success
• Latest News
• Marketing Your Business
• Recession Proof Your Business
• Results and Case Studies
• Testimonials
• Time Management Strategies

Trending Business Growth Article

• Finding Customers
• Business Systems
• Managing Employees
• Managing Money

Get Weekly Coaching Tip

Related posts.

Chapter 7 and Chapter 13 Filing Fee in 2024

Debt-Free Living: How to Break Free From the Chains of Debt

4 Tips for Strengthening Access Controls in Your IT Infrastructure

Stop Workers Compensation Benefits from Being Cut Off Too Soon

Strategies for Preventing Forklift Accidents

Why Understanding Crypto Payments Can Elevate Your Operations

7 Tips for Safe and Stress-Free Business Travel

Get Help With Artificial Intelligence For Your Business Online

Travel Insurance For Small Businesses: Why It Is Crucial

The Impact of Remote Work on VPN Security Strategies

The impact of AI on the Insurance Market

Ready to Grow Your Business Fast?

Here’s How I Grew Five Businesses, and Eventually Sold One to a Fortune 500 Company.

Six Steps to Creating a “Must-Have” Organizational Plan

Do you have an organizational plan? Everything starts with planning. Whether you want to start a business, grow the business, or simply perform the necessary tasks to keep the business profitable. Without proper planning, all you have is an unfruitful idea.

All business plans require Organizational Planning. It is an integral part of defining your business module and your objectives. For business owners It is extremely important to have an organizational plan in place in order to navigate the daily progress efficiently. It should delineate not only your organizational structure of departments, managers, and staff but also the functions, tasks, and processes they regularly execute.

Your organizational plan should flow from your strategic plan. The strategic plan defines your long-term goals for the business, which can only be accomplished by achieving your organizational plan’s benchmarks.

These concepts may seem highly cumbersome, but let’s take a look at why you need Organizational Planning and how best to manipulate it for your business’s success.

What Is Organizational Planning?

Organizational planning is a process of defining goals for an organization, developing strategies for achieving those goals, and identifying the resources needed to carry out those strategies. It allows organizations to have direction in pursuing their mission and vision. It also assists in identifying risks, setting priorities, and using available resources effectively.

At the same time, organizational planning is an important part of the strategic management process. In this way, it helps organizations make decisions and allocate resources to ensure that they meet their goals. The organizational plan typically includes goals, objectives, strategies, action plans, budgets, and performance measures. It should also include a timeline for completing tasks and a system for monitoring and evaluating progress.

How Effective Organizational Planning?

Organizational planning can become more effective when it is done collaboratively with stakeholders from all levels of the organization. Ensuring that everyone understands the organization’s goals and strategies is important for achieving success. Additionally, different perspectives and insights can be shared to promote a productive dialogue about how everyone can contribute to achieving the desired results.

When done effectively, organizational planning can help organizations become more efficient and effective in achieving their goals. It is a necessary tool for any organization seeking to thrive and grow in the long term.

Types Of Organizational Plans

Organizational plans come in a variety of forms. The most common types are as follows:

•   Strategic Plan: A strategic plan is an overall long-term plan for the organization, usually covering multiple years. It sets forth the organization’s mission, goals, and objectives and outlines how those goals will be achieved. It is typically developed at the top level of management, with input from all departments.
•   Operational Plan: An operational plan focuses on day-to-day operations and activities necessary to achieve the strategic goals of the organization. It provides details about how resources will be allocated to support specific tasks and initiatives, as well as timelines for completion and performance metrics to measure progress.
•   Tactical Plan: A tactical plan is a highly specific and short-term guide to activities that need to be completed to reach an organization’s goals. Usually, department or team leaders create it and lay out how their resources will support the more general strategy.
•   Budget Plan: A budget plan is a financial document that details how the money will be spent in order to achieve the goals of the organization. It includes both short-term (e.g., monthly or quarterly) and long-term expectations, such as capital investments.

Organizational plans can also include plans for marketing, human resources, risk management, and other areas. An organization’s success depends on its ability to create and adhere to a regularly updated plan. This helps the company stay on track while also being able to anticipate and overcome any issues.

Importance of an Organizational Plan

A comprehensive organizational plan is crucial for the success of any small business . This plan lists all duties, functions, and objectives for a department or area and assigns a responsible person to each task. Additionally, formalizing power structures with designated supervisors creates accountability and clarifies relationships between employees.

Besides, a well-crafted plan is the best way to clearly and concisely communicate what needs to be done by each individual and how it will benefit the company.

Here Are A Few Things You Can Accomplish With A Well-Defined Organizational Plan  

Clarifies the role and function of each staff member.

A clear Organizational Plan helps ensure that every team member understands their precise roles and responsibilities. Having crystal clear roles ensures clarity and understanding about specific tasks. This helps you work more efficiently to finish projects or achieve goals sooner and more effectively.

Shows How The Staff Is Contributing To The Goals Of Your Business

By tracking your employees’ progress, you can better understand how they fit into and contribute to your organization as a whole. This is especially helpful during annual performance reviews or if you ever need to let someone go.

Displays Managerial And Team Relationships

An organizational plan is beneficial for figuring out the relationship between management and teams. Each manager can see how every team member contributes to the business, which then helps with knowing who needs more training or support. Additionally, this method is good for revealing employees that can take on a bigger workload.

Can Reveal Gaps, Issues, And Liabilities

The incredible opportunity to track the progress of each task, team, project, and target actually provides insight into any shortcomings as well. Organizational planning helps identify any inadequacies or limitations that may be hindering the growth of your business.

Clarifies The When’s, How’s, And Who’s In Your Processes.

Each member of your business has a strength, unlike others, and can handle specific types of tasks. With proper organizational planning, you can delegate the appropriate tasks at the right time to the most efficient member of the team for elevated output.

It Makes It Quick Work To Know Whom To Turn To When There Is A Problem.

Organizational planning invariably provides a detailed account of everyone’s strengths and weaknesses. Therefore, when you are faced with a difficult situation, you know exactly which member of your team can effectively solve the problem.

Everyone working with you needs to be aware of this information. Define the roles and expectations of your employees, whether entry-level or in management, by posting these responsibilities in a place where everyone will see them, like a bulletin board or internal website. Each team member will be on the same page with the company vision.

Six Steps to Create Your Organizational Plan

If you already have an organizational plan, then it is good to verify and update all the necessary information. However, if you don’t already have an organizational strategy, it is not too late to start one now.

Following are the steps for creating your own organizational plan .

• Pick Your Team – Choose an efficient team based on their skills, strengths, and determination for success.
• Draw a Chart Showing Your Organizational Structure – Share your company’s progress and the targets you have set for short-term and long-term goals.
• Drive Out Goals & Objectives – Define the company’s goals and objectives in detail to help them understand the vitality of their roles.
• List All Tasks and Functions – Predefine team member roles and focus on their tasks and functions so they know what is expected of them.
• Review Current Business Processes – Go over the business’s current situation so everyone is aware of the current state and how they can contribute to the company’s growth.
• Compile Findings into Organizational Plan – Invite their input and design an effective organizational plan.

Let us take a detailed look at these steps to create an Organizational Plan.

#1: Drive Out Goals & Objectives

All organizational plans need to include what the business wants to accomplish and how to get there. Clearly, state what you want your business to become – which drives out your goal/destination and the objectives/measurements for reaching it.

Common goals include:

• internal stability > reducing staff turnover, promoting consistency
• creativity > inspiring innovation, ingenuity, and improvements
• uniformity > consistent delivery of goods and services; branding
• security > protecting data of customers, vendors, and the business
• quality control > focusing on excellence
• accountability > identifying who’s responsible
• integrity > transparency, honesty, fairness
• rapid delivery of goods > improving turnaround
• excellent customer service > exceeding expectations
• efficiency > refinements that lead to optimum operations

#2: Pick Your Team

While you may prefer to do everything yourself, it is imperative to engage with others when creating a plan for their knowledge, ideas, and perspectives. Every member of your team has strengths, unlike others. Some may be talented with development, while others have an innate sense of design.

You must ensure that each member has a vision for the company and their personal progress that aligns with your drive.

Look at your team and select your key players – that is, those staff members:

• who understand the current systems, processes, values, and goals
• who can offer worthwhile suggestions for improvements
• who can visualize and evaluate the effects that changes may have within the business (as changes typically occur during this process)

This team can lend a helping hand in the future as you work to implement plans for business growth and development.

Note that while most small business owners develop the organizational plan on their own, there may be time, staffing, or deadline constraints that make hiring an outside consultant a better choice.

#3: Review Current Business Processes

Write out each of your processes in detail. Look at what it does and how it does it . Then, list all the functions and tasks it performs as well as who does what.

An often surprising result of this step is you will most likely realize there are differences in how the processes actually work versus how you thought they worked.

This step can be extremely time-consuming and, therefore, is why many small businesses hire a business consultant or business coach . It helps them realize a clear vision of what to expect instead of nurturing a delusion.

Thus a business consultant can actually help you formulate a more substantial and realistic organizational plan and make the necessary changes to accomplish your targets.

#4: List Tasks and Functions

Capture all the tasks and functions that your business is and should be performing. Include those things in your vision that you want the organization to do.

This process should drive out the gaps. You’ll see what is missing: perhaps where your company is lacking key pieces such as documentation, training, or analysis. It can also reveal issues and vulnerabilities (ex. insufficient safety practices or improper workarounds).

Once you have identified the factors hindering the company’s growth, you can look for viable solutions to address them. You can discuss these problems with your team and get their input.

#5: Draw Out Your Organizational Structure

Now would be a good time to draft an organizational structure chart. Map the current progress, your vision, the targets, all the shortcomings, and the viable solutions. Visual aids can help you, and your team determines exactly what needs to be done.

Include all the departments, roles, staff, and reporting structure. Define each section with clarity so each team, and the members consisting of them, are well aware of their responsibilities and their roles.

Simplicity and precision are the keys to defining an effective organizational plan. So you must pay attention to the details without complicating the plan.

#6: Compile Findings into Organizational Plan

The last step is to gather the collected information into one document. To do this, you create designated folders of the collected documents or use some best free personal document organizer .

Everything you have discussed and planned with your selective team should be compiled for posterity. This helps you track the progress of your organizational plan and make necessary updates or changes along the way.

Remember that your organizational plan is a part of your strategic plan for the company. It will be affected by external factors and subjected to change as per current business standards. Therefore you must prepare for such contingencies and leave room for errors or fallbacks.

Share the organizational plan with your entire staff. This might be an excellent opportunity to call a “town hall” or all-staff meeting.

Organizational Planning Examples

Organizational planning is a process in which organizations set out the goals, objectives and strategies that they need to achieve their business objectives. This includes identifying key operational areas, setting performance metrics and developing plans to ensure success.

Some Common Examples Of Organizational Planning Include:

•   Setting financial targets: Organizations will identify what their revenue and expenses should be and set a budget to stay on track.
•   Developing workforce plans: Organizations need to identify the roles they require in order to meet their objectives and then develop training programs or recruitment strategies to fill those roles.
•   Establishing operational procedures: Companies need to establish processes for how tasks will get done so that it will ensure that performance remains consistent and efficient.
•   Establishing organizational structures : Similarly, organizations need to determine the structure of their teams and divisions, including who is responsible for each area.
•  Crafting marketing strategies: Companies need to create a plan for how they will reach customers and promote their products or services.
•   Planning for growth and expansion: Lastly, Organizations need to have an idea of where they would like to be in the future, and develop plans for reaching those goals.

Once the organizational plan is in place, it’s important to review it periodically to ensure that strategies are updated as necessary. Companies need to assess progress against goals, identify areas of improvement and adjust plans accordingly.

The grave importance of an effective organizational plan cannot and should not be ignored.

If you are a new business owner, you can consult professional business consultants to devise a beneficial operational plan for your company. Even if you are a freelancer or a small business owner, an organizational plan goes a long way to help you establish your trade as a force to be reckoned with.

If you have an established business, but you know that there is room to grow and expand, you can start making an organizational plan now. You can use the steps that we have defined and seek professional help from business consultants to expand your company and increase your profits in multifold.

It is never too late to make an efficient and effective organizational plan to elevate and expand your business for betterment.

We hope you find this blog helpful in designing an organizational plan for your business.

© 2024 Small Business Coach All rights reserved.

• Terms of Use

Organizational Business Planning

• Small Business
• Business Planning & Strategy
• Business Plans
• ')" data-event="social share" data-info="Pinterest" aria-label="Share on Pinterest">
• ')" data-event="social share" data-info="Reddit" aria-label="Share on Reddit">
• ')" data-event="social share" data-info="Flipboard" aria-label="Share on Flipboard">

Definition of an Organization Chart

How to manage a team that is taking advantage of you, agenda for a new project.

• Relationship Between Organizational Strategy & Organization Design
• How to Improve Organizational Structure

A well-functioning business requires a solid organizational structure in place. Good organizational design takes into account all of the functions, tasks and goals an organization has to undertake, and ensures someone is responsible of each of them, according to Pingboard .

Forms of business organization group functions into positions and departments, and also create supervisory relationships and power structures for accountability. Typically, an organization expresses its designs in the form of an organizational chart so that everyone involved in the business has clarity and understanding of how things should work.

Set Your Goals

List your goals and objectives for your organizational plans. To be effective wiht an organizational plan in entrepreneurship, you need clarity on the purpose of your changes–defining what you want your business to become. Common goals include values, efficiency, excellent customer service, rapid delivery of goods, integrity, accountability, quality control, security, uniformity, creativity and internal stability.

Select Your Team

No one can design an organizational structure herself. Consider including key players in your company who understand the current systems, the effects changes might have and who have suggestions for improvements that will help everyone do their jobs better. If your planning team becomes invested and enthusiastic in the new structure, it can later become instrumental to the implementation process. Many businesses also bring in an outside consultant to facilitate or guide their organizational planning.

Where Are You Now?

Inventory your business' current processes. Look at everything it does and how it does it. List all tasks and functions it performs currently and exactly who does what in the process of accomplishing them. Usually, someone goes around and visits each team member or at least manager in the organization to observe and interview them.

Because this is so detailed and time-consuming, many companies hire a consultant to make this a full-time project. You may notice some gaps between what you think or what should be happening and what actually occurs.

Review Your Needs

Develop a list of all tasks and functions your company should perform. Don't just list the items in the gaps between what should be occurring currently and what is occurring. Include everything you want the organization to do, perhaps over the next six months, year or longer.

Involve your team to help you develop this list, and identify functions and issues that might need inclusion or that you may not see. Chart your current organizational structure if you don't have an existing organizational chart. Make sure to capture each position, department and reporting structure.

Review your findings as a team looking to see what about your current structure needs amending to take account of your desired goals, tasks and functions. Discuss whether departments or positions needs reorganizing. Look for redundancies in employee duties and functions as well as tasks no one is currently performing. Consider whether you will need additional or fewer positions, and if these positions are under the optimal reporting structure.

Create Your Plan

Create an implementation plan to put these changes into effect, which may include recruiting or layoff plans. Share your new organization chart with your teams and take the time to explain the changes and what they mean to individuals and the company as a whole.

Draft your new organizational chart reflecting decisions from your analysis. If you reshuffle duties, add positions or change any reporting mechanisms, revise jobs descriptions to match.

• Pingboard: Organizational Planning Guide: Types of Plans, Steps, and Examples

Related Articles

The role of organizational structure in an organization, steps to manage the transition from the old organizational structure to the new structure, how to successfully implement organizational structure into an organization, how to deal with everyday issues in the workplace, how to adjust a staff with budget cuts, technology and organizational structure, the implementation of a quality assurance team, what support structures must be in place to meet the needs of a flexible organization, how to develop talent in the workplace, most popular.

• 1 The Role of Organizational Structure in an Organization
• 2 Steps to Manage the Transition From the Old Organizational Structure to the New Structure
• 3 How to Successfully Implement Organizational Structure Into an Organization
• 4 How to Deal With Everyday Issues in the Workplace

🎉 Celebrate Small Business Month:

25% Off Annual Plans! SAVE NOW

0 results have been found for “”

 Return to blog home

What Is a Business Plan? Definition and Planning Essentials Explained

Posted february 21, 2022 by kody wirth.

What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance. 

A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner. 

Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed. 

What is a business plan?

A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.  

Why do you need a business plan?

The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis. 

These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. By regularly returning to your plan you can understand what parts of your strategy are working and those that are not.

That just scratches the surface for why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .  

What can you do with your plan?

So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.

Test an idea

Writing a plan isn’t just for those that are ready to start a business. It’s just as valuable for those that have an idea and want to determine if it’s actually possible or not. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful. 

The market and competitive research alone can tell you a lot about your idea. Is the marketplace too crowded? Is the solution you have in mind not really needed? Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability and you can paint a pretty clear picture of the potential of your business.

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

Document your strategy and goals

For those starting or managing a business understanding where you’re going and how you’re going to get there are vital. Writing your plan helps you do that. It ensures that you are considering all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen. 

With a plan in place, you’ll have an idea of where you want your business to go as well as how you’ve performed in the past. This alone better prepares you to take on challenges, review what you’ve done before, and make the right adjustments.

Pursue funding

Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can instead keep your plan up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.

The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but easily report on how it’s been used. 

Better manage your business

A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.

Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.

What should your business plan include?

The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see. 

Executive summary

The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover the problem you’re solving, a description of your product or service, your target market, organizational structure, a financial summary, and any necessary funding requirements.

This will be the first part of your plan but it’s easiest to write it after you’ve created your full plan.

Products & Services

When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. Lastly, be sure to outline the steps or milestones that you’ll need to hit to successfully launch your business. If you’ve already hit some initial milestones, like taking pre-orders or early funding, be sure to include it here to further prove the validity of your business. 

Market analysis

A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the overall state and potential of the industry, who your ideal customers are, the positioning of your competition, and how you intend to position your own business. This helps you better explore the long-term trends of the market, what challenges to expect, and how you will need to initially introduce and even price your products or services.

Check out our full guide for how to conduct a market analysis in just four easy steps .  

Marketing & sales

Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add it. 

Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.

Check out our full write-up to learn how to create a cohesive marketing strategy for your business. 

Organization & management

This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history. Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.

Financial projections

Possibly the most important piece of your plan, your financials section is vital for showcasing the viability of your business. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex on the surface, but it can be far easier than you think. 

Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate. 

Here are the statements you should include in your financial plan:

• Sales and revenue projections
• Profit and loss statement
• Cash flow statement
• Balance sheet

The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first and only add documentation that you think will be beneficial for anyone reading your plan.

Types of business plans explained

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. So, to get the most out of your plan, it’s best to find a format that suits your needs. Here are a few common business plan types worth considering. 

Traditional business plan

The tried-and-true traditional business plan is a formal document meant to be used for external purposes. Typically this is the type of plan you’ll need when applying for funding or pitching to investors. It can also be used when training or hiring employees, working with vendors, or any other situation where the full details of your business must be understood by another individual. 

This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information. 

Business model canvas

The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea. 

The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations. This is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan. This format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.

By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. This plan type is useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Now, the option that we here at LivePlan recommend is the Lean Plan . This is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance.

It holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27-minutes . However, it’s even easier to convert into a full plan thanks to how heavily it’s tied to your financials. The overall goal of Lean Planning isn’t to just produce documents that you use once and shelve. Instead, the Lean Planning process helps you build a healthier company that thrives in times of growth and stable through times of crisis.

It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

Try the LivePlan Method for Lean Business Planning

Now that you know the basics of business planning, it’s time to get started. Again we recommend leveraging a Lean Plan for a faster, easier, and far more useful planning process. 

To get familiar with the Lean Plan format, you can download our free Lean Plan template . However, if you want to elevate your ability to create and use your lean plan even further, you may want to explore LivePlan. 

It features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. 

Check out how LivePlan streamlines Lean Planning by downloading our Kickstart Your Business ebook .

Like this post? Share with a friend!

Posted in Business Plan Writing

Join over 1 million entrepreneurs who found success with liveplan, like this content sign up to receive more.

Subscribe for tips and guidance to help you grow a better, smarter business.

You're all set!

Exciting business insights and growth strategies will be coming your way each month.

We care about your privacy. See our privacy policy .

How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

Get on board in seconds

Join thousands of teams using Miro to do their best work yet.

• Product overview
• All features
• App integrations

CAPABILITIES

• project icon Project management
• Project views
• Custom fields
• Status updates
• goal icon Goals and reporting
• Reporting dashboards
• workflow icon Workflows and automation
• portfolio icon Resource management
• Time tracking
• my-task icon Admin and security
• Admin console
• asana-intelligence icon Asana Intelligence
• list icon Personal
• premium icon Starter
• briefcase icon Advanced
• Goal management
• Organizational planning
• Campaign management
• Creative production
• Content calendars
• Marketing strategic planning
• Resource planning
• Project intake
• Product launches
• Employee onboarding
• View all uses arrow-right icon
• Project plans
• Team goals & objectives
• Team continuity
• Meeting agenda
• View all templates arrow-right icon
• Work management resources Discover best practices, watch webinars, get insights
• What's new Learn about the latest and greatest from Asana
• Customer stories See how the world's best organizations drive work innovation with Asana
• Help Center Get lots of tips, tricks, and advice to get the most from Asana
• Asana Academy Sign up for interactive courses and webinars to learn Asana
• Developers Learn more about building apps on the Asana platform
• Community programs Connect with and learn from Asana customers around the world
• Events Find out about upcoming events near you
• Partners Learn more about our partner programs
• Support Need help? Contact the Asana support team
• Asana for nonprofits Get more information on our nonprofit discount program, and apply.

Featured Reads

• Business strategy |
• What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

How to build an organizational strategy

Get our free ebook and learn how to bridge the gap between mission, strategic goals, and work at your organization.

What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

Related resources

How to create a CRM strategy: 6 steps (with examples)

What is management by objectives (MBO)?

Write better AI prompts: A 4-sentence framework

What is content marketing? A complete guide

How to Write a Business Plan: Organization Structure

How to write a business plan: organizational structure, what is the organizational structure for a business plan.

The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person’s responsibility, and how your business will expand if needed.  There are numerous benefits to a detailed assessment of the company’s structure.  First, examining the structure of the business will help for tax purposes.  For example, limited liability and corporations are considered excellent for protecting shareholders concerning liabilities.  However, tax-wise, these firms often are double taxed.  The second benefit of a detailed assessment of a company’s structure is to understand how each owner will contribute to the company.  In other words, if there is more than one owner, what are their responsibilities, and how are these responsibilities to be carried out.

Why is the Organizational Structure important? 

There are numerous reasons why the organizational structure is essential for a business plan. In this section, the business owner will lay out how the company will be structured.  For example, this section will include job titles and responsibilities, resumes from owners and management, showing expertise in the industry, and supporting accolades for expertise.  Through discussing job responsibilities and experiences for management, readers will better understand why this type of business structure, and this management team, will be successful in the proposed business.

A second important reason for the organizational structure is that the section introduces business owners.  The owners and management team should not only be introduced in this section, but their experiences in the industry need to be highlighted and thoroughly explained.  In doing this, a sound foundation for management competence will be established.

A final reason for its importance is the job responsibility segment.  Ownership and management need to have a written document showing specific duties for each owner, if applicable, and specific job responsibilities for each position within the company.  By having this document, readers will see how the business will function and better understand the breakup of management responsibilities.

When to write the Organizational Structure?

The organizational structure should be written after the company description.   In the company description, readers will be introduced to the problem that the company is going to solve and how they propose to solve this problem.  This is usually the product or service offered.  The logical next step is to show a business structure that will allow the company to supply that product or service effectively and efficiently.  Thus the need for the organizational section follows immediately behind the company description.

How to write the Organizational Structure?

When I write my organizational structure for a business plan, for the most part, I start the first paragraph by reminding the readers of the company name.  From this, I then introduce how the company will be held in ownership.  For example, will the company be a limited liability corporation?  Sole proprietorship?  Next, I briefly introduce the management team and owners.  Further, I also briefly introduce their experience in the industry.

By following this structure, the first paragraph is an excellent summation of the section. This allows the reader to understand the breadth of the ownership structure without gaining significant details.

Organizational Structure:  Ownership

In the ownership section, I usually start writing the section by introducing the CEO/founder/majority owner.  In this portion, I usually write the segment, almost like a brief biography.  I will discuss the CEO's history in the industry and the reason why they feel that they are best suited to start and run the operation.

Once this is complete, I then follow the same structure with the other management team members and minority stakeholders.  When this is done, the reader should walk away with an excellent understanding of the qualifications of the ownership team and how their skills will complement each other.

Need Help Writing an Organizational Structure for a Business Plan?

Call or Text Paul, Doctoral Candidate, MBA.

321-948-9588

Email: [email protected]

Organizational Structure:  Responsibilities

In the job responsibility section, I usually structure this portion as a bullet-pointed list.  At the top, I put the title such as CEO, project manager, or job title.  Following this, I list the responsibilities and expectations for each position.  Not only does this help show structure and foresight for the company.  But also, this will help management divvy up duties for the business.

Organizational Structure: Resume

The resume section is for senior managers and owners.  By including resumes, supporting documentation is available for claims made related to experience.  For example, if the CEO claims to have 20 years of experience in the industry, then the resume will show where this experience came from.  This adds credibility to previous claims made.

Organizational Structure: Compensation

Compensation is sometimes necessary to include in the organizational structure component.  Investors expect management to be compensated and employees as well.  However, excessive compensation is often an issue with startups and established businesses.  By showing reasonable compensation for each position, not only will a solid understanding of the pay for each position be shown, but restraint for compensation by the management team and ownership may be highlighted as well.

Organizational Structure: Achievements

This final section is almost like a cherry on top of the cake.  By this point, the reader should be well-versed in the experience and expertise of ownership and the management team.  Adding achievements highlights their expertise in their chosen industry.

Organizational Structure Example

Organizational structure.

Legal Structure

ABC Restaurant will be a limited liability corporation.

Management Summary

John Smith, Sr., MBA., is the founder and CEO of ABC Restaurant.  He has started and managed numerous successful small restaurants over the last ten years.  Restaurants started, and managed, including a breakfast cafe, food truck, and 24-hour diner.  For each business, he was responsible for all aspects of the organization, from marketing to strategic planning.

Job Responsibilities

• Create and execute marketing strategies for business growth.
• Align business strategies with the vision statement.
• Negotiating contracts with vendors.
• Ensure legal compliance for the business.
• Continually examine the firm’s external environment for new market opportunities.

General Manager:

• Control inventory to ensure optimal levels are attained.
• Manage day-to-day operations of the restaurant.
• Servers and cooks during high volume times.
• Interview and hire new employees.
• Assist in the onboarding process for new employees.
• Set up all workstations in the kitchen
• Prepare ingredients to use in cooked and non-cooked foods.
• Check food while cooking for appropriate temperatures.
• Ensure great presentation by dressing dishes as trained.
• Keep a sanitized and clean environment in the kitchen area.
• Stock dining area tables with needed items.
• Greet customers when they enter.
• Present dinner menus and help customers with food/beverages selections.
• Take and serve orders quickly and accurately.

Author: Paul Borosky, MBA., Doctoral Candidate, Published Author

Updated: 3/4/2022

• school Campus Bookshelves
• menu_book Bookshelves
• perm_media Learning Objects
• login Login
• how_to_reg Request Instructor Account
• hub Instructor Commons

Margin Size

• Download Page (PDF)
• Download Full Book (PDF)
• Periodic Table
• Physics Constants
• Scientific Calculator
• Reference & Cite
• Tools expand_more
• Readability

selected template will load here

This action is not available.

17.5: Formal Organizational Planning in Practice

• Last updated
• Save as PDF
• Page ID 15050

\( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

\( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)

\( \newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\)

( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\)

\( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\)

\( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\)

\( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\)

\( \newcommand{\Span}{\mathrm{span}}\)

\( \newcommand{\id}{\mathrm{id}}\)

\( \newcommand{\kernel}{\mathrm{null}\,}\)

\( \newcommand{\range}{\mathrm{range}\,}\)

\( \newcommand{\RealPart}{\mathrm{Re}}\)

\( \newcommand{\ImaginaryPart}{\mathrm{Im}}\)

\( \newcommand{\Argument}{\mathrm{Arg}}\)

\( \newcommand{\norm}[1]{\| #1 \|}\)

\( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\AA}{\unicode[.8,0]{x212B}}\)

\( \newcommand{\vectorA}[1]{\vec{#1}}      % arrow\)

\( \newcommand{\vectorAt}[1]{\vec{\text{#1}}}      % arrow\)

\( \newcommand{\vectorB}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

\( \newcommand{\vectorC}[1]{\textbf{#1}} \)

\( \newcommand{\vectorD}[1]{\overrightarrow{#1}} \)

\( \newcommand{\vectorDt}[1]{\overrightarrow{\text{#1}}} \)

\( \newcommand{\vectE}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash{\mathbf {#1}}}} \)

Learning Objectives

• Understand how planning occurs in today’s organizations.

Studies indicate that, in the 1950s, approximately 8.3 percent of all major U.S. firms (1 out of every 12) employed a full-time long-range planner. By the late 1960s, 83 percent of major U.S. firms used long-range planning. Today it is estimated that nearly all U.S. corporations with sales over $100 million prepare formal long-range plans. 28 Most formal plans extend five years into the future, and about 20 percent extend at least ten years.

Encouraging Planning

In spite of the advantages to be gained by planning, many managers resist it. Some feel that there is not enough time to plan or that it is too complicated and costs too much. Others worry about the possible consequences of failing to reach the goals they set. Instead of preplanning, sometimes referred to as blueprint planning (that is, formulating outcome and action statements before moving forward), many managers simply fail to plan or at best engage in in-process planning (they read events and think about the next step just before acting). In-process planning works extremely well when individuals have a sense of what it is that they want to achieve and can improvise as they move forward in a sea of uncertainty and turbulence. This is much like skilled hockey players relying on their instincts, reading the defense, and improvising as they move up the ice and toward the opponent’s net. This process often works better than attempting to implement a detailed preplan, as often characterizes plays in football.

In situations where we want to encourage preplanning, certain techniques facilitate the process:

• Develop an organizational climate that encourages planning.
• Top managers support lower-level managers’ planning activities—for example, by providing such resources as personnel, computers, and funds—and serve as role models through their own planning activities.
• Train people in planning.
• Create a reward system that encourages and supports planning activity and carefully avoids punishment for failure to achieve newly set goals.
• Use plans once they are created.

In order for managers to invest the time and energy needed to overcome resistance to planning, they must be convinced that planning does, in fact, pay off.

Does Planning Really Pay Off?

Managers of organizations in complex and unstable environments may find it difficult to develop meaningful plans, yet it is precisely conditions of environmental complexity and instability that produce the greatest need for a good set of organizational plans. Yet the question remains, does planning really pay off?

We know from our earlier discussion that setting goals is an important part of the planning process. Today, much is known about what characterizes effective individual goals. (We discuss this issue in greater detail later in this chapter.) Although group and organizational goals have been studied less, it is probably safe to assume that most of our knowledge about individual goals also applies to group and organizational goals. The research suggests that effective organizational goals should (1) be difficult but reachable with effort, (2) be specific and clearly identify what is desired, (3) be accepted by and have the commitment of those who will help achieve them, (4) be developed by employees if such participation will improve the quality of the goals and their acceptance, and (5) be monitored for progress regularly.

While the evidence is not abundant, studies suggest that firms that engage in planning are more financially successful than those that do not. 29 For example, one study reports that the median return on investment for a five-year period is 17.1 percent for organizations engaged in strategic planning, versus 5.9 percent for those that do not. 30 Similarly, of 70 large commercial banks, those that had strategic planning systems outperformed those that did not. 31

Although planning clearly has observable benefits, it can be expensive. The financial commitment can be large for organizations with formal planning staff. Even so, research suggests that planning is warranted.

The Location of the Planning Activity

Classical management thinking advocates a separation of “planning” and “doing.” According to this school of thought, managers plan for technical core employees and formulate most of the plans for the upper levels of the organization, with little participation from lower-level managers and workers. In contrast, behavioral management theorists suggest involving organization members in drawing up plans that affect them. Implementation of a management-by-objectives program (to be discussed later in this chapter), for example, is one means by which this participative planning can be realized. Researchers at the Tavistock Institute in England promote the idea of self-managed workgroups as a means of expanding the level of employee involvement. According to their socio-technical model, workgroups assume a major role in planning (as well as in organizing, directing, and controlling) the work assigned to them. Many organizations—for example, the John Lewis Partnership, Volvo, and Motorola—have had successful experiences with employee involvement in planning and controlling activities. 32

Planning Specialists

To keep pace with organizational complexity, technological sophistication, and environmental uncertainty, many organizations use planning specialists. Professional planners develop organizational plans and help managers plan. Boeing and Ford are among the many organizations with professional planning staff. Planning specialists at United Airlines developed United’s crisis management plan.

Organizations have planning specialists and planning departments in place for a variety of reasons. These specialized roles have emerged because planning is time-consuming and complex and requires more attention than line managers can provide. In rapidly changing environments, planning becomes even more complex and often necessitates the development of contingency plans, once again demanding time for research and special planning skills. At times, effective planning requires an objectivity that managers and employees with vested interests in a particular set of organizational activities cannot provide.

A planning staff’s goals are varied. Their primary responsibility is to serve as planning advisors to top management and to assist lower-level line managers in developing plans for achieving their many and varied organizational objectives. Frequently, they coordinate the complex array of plans created for the various levels within an organization. Finally, planning staff provides encouragement, support, and skill for developing formal organizational plans.

MANAGING CHANGE

Using technology for a more efficient business.

The need to control costs has been around since trade, buying and selling, began. Each new technology creates new possibilities in production and cost reduction. Recent technology isn’t any different. Leaps in connectivity and data management are creating as many start-ups and new ways of identifying and solving problems.

Innovu uses new technology to help small and start-up businesses control the costs of their health benefits. Most small companies and start-ups are self-insured; that is, the company pays any covered employee medical bills or finances any wellness programs directly. According to Diane Hess, the executive director of the Central Penn Business Group on Health, employers account for 30 percent of the $2.9 trillion in health care spending in the United States, and workers’ compensation cost employers $91 billion in 2014. These costs included $31.4 billion for medical and $30.9 in cash payments (Hess 2016). Innovu mines employee claims to find trends and also provides data on costs due to absenteeism, disability, and workers’ compensation (Mamula 2017). As employers move to wellness programs to improve productivity and reduce medical costs, Innovu helps employers “make sure there are improvements to justify the expenses”(Hess 2016 n.p.).

In a similar vein, Marsh & McLennan Agency Michigan LLC is moving from simply providing insurance and generic “wellness programs” to helping companies focus on improving employees’ overall well-being. While traditional wellness programs focus on physical health to improve productivity, the emerging trend is to help employees with family, social, and financial issues as well. The most comprehensive program from Marsh & McLennan is its MMA Michigan’s Wellbeing University, which works to expand traditional wellness programs into nontraditional support services. The comprehensive approach of the program helps midsize employers “attract and retain talent, encourage employee satisfaction and reduce absenteeism.” The move beyond simple wellness is a move toward investing in employees. Bret Jackson, president of Economic Alliance for Michigan, said, “If you have a happy and healthy employee, productivity increases" (Greene 2017 n.p.).

Branch Messenger is a novel idea to solve employee scheduling. Employees are able to view schedules, cover shifts, and ask for time off, all from an app on their phone. It integrates with existing company systems to allow data analysis, but perhaps more importantly, it allows employees to connect. The start-up’s program has been adopted by large companies, such as Target, McDonald’s, and Walgreens, to allow employees to swap shifts simply by using an app on their cell phones. This process streamlines the process of swapping shifts by allowing employees to handle most of the leg work, “bridg[ing] the communication gap between workers and the companies that employ them.” The application is free to employees and runs on both iOS and Android devices. It can also generate digital schedules from paper schedules and create messaging channels that are workplace-specific. Moving past simple shift flexibility, the application allows businesses to tap into an “on-demand” workforce that is more elastic. It also allows enterprises to “extend the value of existing workforce management systems without the need to switch costs” (Takahasi 2017 n.p.)

Allison Harden, a shift manager for a Pizza Hut in Tampa, Florida, likes the added connectivity of the program. “The messaging feature and the ability to share pictures and posts makes it really easy to stay connected with them,” Allison says. “It’s a way that I can do it outside a social network. Not everyone has Facebook and stuff like that—so it’s good and work-friendly, safe for work” (Branch Messenger 2017 n.p.).

“Safe for work” can carry connotations of “oversharing” on social media, but during Hurricane Irma, Allison and her crew relied on Branch Messenger for storm preparation, allowing the manager to post a safety checklist and update shifts. Then during the storm itself and after, drivers were able to tell each other which gas stations actually had gas, who still had electricity, and who was safe (Branch Messenger 2017).

Branch Messenger. 2017. “A Branch Customer Story: How A Tampa Pizza Hut Stayed in Contact During Hurricane Irma.” blog.branchmessenger.com/a-br...urricane-irma/

Greene, Jay. 2017. “New course for Marsh & McLennan Agency as clients seek well-being.” Crain’s Detroit Business. http://www.crainsdetroit.com/article...eek-well-being

Hess, Diane. 2016. “Column: Using data to make business more efficient, employees more healthy.” Lancaster Online, November 8, 2016. lancasteronline.com/business/...5cc57a478.html

Mamula, Kris B. 2017. “Station Square data analytics company to use $6.5 million to grow.” Post-Gazette, August 10, 2017. www.post-gazette.com/business...s/201708100025

Takahasi, Dean. 2017. “Branch Manager helps hourly workers swap shifts on mobile.” venturebeat.com. https://venturebeat.com/2017/08/02/b...ves-on-mobile/

• What ethical problems could surface with data mining as it applies to employee health records?
• What security risks would a company need to consider when utilizing smartphone apps for work?

Figure \(\PageIndex{1}\): Procter & Gamble, the maker of Tide Pods, has faced two issues with its popular new laundry product. Early after its introduction, reports came in that 180 children had visited hospitals after ingesting the colorful pods thinking that they were candy. P&G quickly reacted by making tamper-proof packaging making it more difficult for children to access, adding a nontoxic flavor that would dissuade children from swallowing the pods, and initiating a product information campaign aimed at informing parents about the dangers—overall, a well-orchestrated contingency plan. In 2017, however, P&G began receiving reports about teenagers intentionally swallowing the product in a “pods challenge” that went viral on social media. Whenever notified, P&G decided to contact the teens directly and contact tech companies such as Facebook and YouTube to remove these posts and videos but did not publicize this, fearing that it would only cause more teens to accept the challenge or challenge others. (Credit: Mike Mozart/ flickr/ Attribution 2.0 Generic (CC BY 2.0))

concept check

• How do today’s organizations approach planning?
• Does planning pay off for today’s organizations?
• Which people in the organization should be involved in planning, and what are their roles?

• Accountancy
• Business Studies
• Organisational Behaviour
• Human Resource Management
• Entrepreneurship
• Organisation Manual: Meaning, Contents and Types
• Corporate Entrepreneurship: Meaning, Importance, Types and Models
• Agile Organizations: Meaning, Traits and Importance
• Organisational Commitment - Meaning, Types, Outcomes & Guidelines
• Organisational Politics | Concept, Features and Dimensions
• Top AI Marketing Tools for Entrepreneurs in 2024
• Organising : Meaning, Importance and Process
• Organisational Change: Meaning, Nature, Causes and Change Process
• Types of Entrepreneurs: Innovating , Imitative , Fabian and Drone Entrepreneurs
• Marketing Plan : Meaning, Types, Steps and Examples
• What is Organizational Change Management?
• Line Organisation : Meaning, Features, Suitability, Advantages and Disadvantages
• Importance of Entrepreneurship
• Business Opportunity : Meaning, Importance and Types
• Innovation : Meaning, Types, Phases and Barriers
• India moving 'The Entrepreneur Way'
• Organizational Structure, Master Data and Navigation Basics in SAP MM
• Business Continuity Plan (BCP) : Meaning, Types, Benefits and Analysis
• Social Entrepreneurship in India

Organizational Plan in Entrepreneurship: Meaning and Types

What is an organizational plan.

Organizational Planning includes establishing the business’s legal ownership, formal structure, and operational duties. It involves selecting the suitable legal structure, whether sole proprietorship, partnership, or corporation, influencing taxation, liability, and ownership aspects. Furthermore, it describes the formal structure by defining roles, responsibilities, and interactions among members. Additionally, organizational planning outlines the informal organization or culture, including attitudes, behaviors, and communication styles within the business.

Key Takeaways: The organizational plan is a mandatory component of a business blueprint, defining ownership structure and operational procedures. The organizational plan provides a strategic roadmap for sustainable growth and success, regardless of the business type or legal structure. Distinct types of organizational plans include manufacturing, wholesale, retail, and service, each tailored to specific business models. Legal structures like Sole Proprietorship, Partnership, Joint Hindu Family, and Corporation offer distinct advantages and challenges.

Table of Content

Types of Organizational Plans

1. manufacturing organizational plan, 2. wholesale organizational plan, 3. retail organizational plan, 4. service organizational plan, types of organization based on legality, 1. sole proprietorship, 2. partnership, 3. joint hindu family, 4. cooperative society, 5. corporation.

a. Production of Tangible Goods : Manufacturing organizations focus on producing tangible goods such as consumer products, industrial equipment, or raw materials. The focus lies on optimizing production processes to ensure efficiency and quality.

b. Key Components: Within the organizational structure, departments like production, engineering, procurement, and quality assurance play key roles. Each department contributes to the smooth operation of the manufacturing process, from sourcing raw materials to delivering finished products.

For instance, a clothing manufacturer may design, produce, and distribute its branded apparel. It will involve various stages, including fabric sourcing, garment production, quality control, and distribution logistics .

a. Procurement and Resale: Wholesale operations involve purchasing products in bulk from manufacturers or suppliers for resale to retailers or other businesses. The focus is on procuring goods at competitive prices and distributing them efficiently.

b. Organizational Structure: The organizational structure typically includes departments such as procurement, logistics, warehousing, and sales . Each department plays a crucial role in managing inventory, fulfilling orders, and maintaining customer relationships.

For instance, A wholesale distributor of electronic components purchases products in bulk from manufacturers and resells them to distinct electronics retailers and repair shops. It involves managing inventory levels, coordinating shipments, and maintaining relationships with suppliers and customers.

a. Direct Sales to End Consumers: Retail firms directly sells products or services to end consumers for personal or household use. The focus on providing a convenient and satisfying shopping experience for customers .

b. Organizational Components: Key components of the organizational structure include store operations, customer service, merchandising, and marketing departments. These departments work together to attract customers, manage inventory, and ensure customer satisfaction.

For instance, A clothing retail store sells directly to individual customers through its physical locations and online platform. The store focuses on offering a wide range of products, providing excellent customer service, and creating an inviting atmosphere for shoppers.

a. Provision of Intangible Services: Service-oriented businesses provide intangible services such as professional expertise, consulting, or personal services. The focus is on delivering high-quality services that meet the needs of clients.

b. Organizational Structure : Departments like client management, service delivery, quality assurance, and business development are common in the organizational structure of service businesses. Each department plays a vital role in delivering exceptional service to clients.

For instance, A management consulting firm provides strategic advisory services to corporate clients. The firm’s organizational structure includes departments for client management, service delivery, and business development. Consultants work closely with clients to understand their needs, develop tailored solutions, and ensure successful outcomes.

A sole proprietorship is a business owned and operated by a single individual who is personally responsible for all aspects of the firm. It is the simplest form of business entity, where the owner assumes full control over decision-making and management.

• Characteristics: In a sole proprietorship, the business and the owner are considered the same legal entity, implying that the owner is personally liable for all business debts and obligations. This structure shall be characterized by its simplicity in establishment, as there are minimal legal formalities involved. Additionally, the sole proprietor retains all profits generated by the business, providing a direct incentive for entrepreneurial efforts.
• Legal Structure: Legally, there is no distinction between the owner and the business in a sole proprietorship. It means that the owner bears unlimited personal liability, exposing personal assets to business risks. Consequently, creditors can pursue the owner’s assets to satisfy business debts or legal claims.
• Advantages : Sole Proprietorship offers direct control and autonomy to the owner, allowing for quick decision-making and agility in responding to market changes. Furthermore, there are minimal regulatory requirements and administrative burdens associated with this structure, making it attractive to small business owners and startups.
• Disadvantages: The primary cons of a sole proprietorship is unlimited personal liability, which exposes the owner’s assets to business risks. Moreover, sole proprietors may face challenges in accessing capital or securing financing, as lenders may perceive higher risk due to the lack of formal structure and limited liability protection. Additionally, there may be difficulties in ensuring business continuity in the event of illness, incapacity, or death of the owner.

For instance, a local bakery owned and managed by a single individual. Here, the owner is responsible for all aspects of the business, including baking, sales, marketing, and customer service. The bakery operates under the proprietor’s name, and all profits generated belong solely to the owner.

A partnership refers to a business structure owned and managed by two or more individuals who share profits, losses, and responsibilities. Partnerships are formed through mutual agreements between the partners , outlining their respective roles, contributions, and rights within the business.

• Characteristics: Partnerships are characterized by shared decision-making, where partners collaborate on strategic initiatives and operational matters. Each partner contributes capital, skills, or resources to the business, and profits are distributed among partners based on the terms of the partnership agreement . Partnerships foster collaboration and synergy among partners, leveraging diverse skill sets and expertise.
• Legal Structure: Partnerships can take various forms, including general partnerships, limited partnerships, or limited liability partnerships , each with distinct legal implications. In a general partnership, all partners have equal rights and responsibilities, while limited partnerships involve both general partners with unlimited liability and limited partners with liability limited to their investment. Limited liability partnerships offer liability protection to all partners, similar to corporations.
• Advantages : Partnerships offer shared responsibilities, allowing partners to leverage each other’s strengths and expertise. They also provide access to a broader pool of resources and capital, facilitating business growth and expansion. Additionally, partnerships benefit from flexible management structures and simplified regulatory requirements compared to corporations.
• Disadvantages: Despite the benefits, partnerships may face challenges such as shared profits and joint liability for business debts and obligations. Conflicts among partners, differences in management styles , and disagreements over business decisions can hinder productivity and strain relationships. Moreover, partnerships require careful planning and clear communication to ensure alignment of goals and expectations among partners.

For instance, a law firm with multiple partners sharing ownership and management responsibilities exemplifies a partnership structure. In this scenario, lawyers join forces to provide legal services, share overhead costs, and distribute profits based on their respective contributions and performances.

A Joint Hindu Family (JHF) is a traditional Indian business structure where family members collectively manage the business under the Hindu Succession Act. It will be governed by cultural and religious customs, focusing on family values, hierarchy, and lineage.

• Characteristics: In a Joint Hindu Family, business decisions are influenced by familial relationships, traditions, and customs. The eldest male member, known as the Karta , holds authority over business affairs, with other family members serving as coparceners . The structure reflects patriarchal norms, with family cohesion and lineage preservation as primary objectives.
• Legal Structure: Under the Hindu Succession Act, the JHF operates as a unified entity, with collective ownership and management by family members. While the Karta assumes leadership and decision-making responsibilities, other family members have rights to ancestral property and share in business profits and losses.
• Advantages : JHFs benefit from pooling family resources, shared responsibilities, and continuity within the family lineage. They construct a sense of unity and belonging among family members, promoting mutual support and cooperation. Additionally, JHFs offer stability and security, as business ownership remains within the family for generations.
• Disadvantages: Challenges in JHFs may arise due to potential conflicts among family members, differences in opinion, and disputes over inheritance or business management. Limited individual decision-making and complexities in succession planning can impede business growth and innovation. Moreover, changes in family dynamics or external factors may disrupt business operations and jeopardize long-term sustainability.

For instance, a family-owned jewelry business managed by the Joint Hindu Family structure exemplifies this traditional setup. In this scenario, family members collectively oversee business operations, preserve ancestral wealth, and uphold cultural traditions. The karta leads the family business, making strategic decisions in alignment with family values and goals.

A cooperative society is a business owned and operated by a group of individuals working together for mutual benefit. Cooperatives are formed to meet the common needs and aspirations of their members, who share ownership, control, and benefits.

• Characteristics: Cooperatives are characterized by their democratic management structure, where members have equal voting rights and participate in decision-making processes. They prioritize the collective welfare of members over individual profits, fostering a sense of community, solidarity, and shared responsibility.
• Legal Structure: Cooperatives are governed by cooperative laws, which focus on democratic control, shared benefits, and member participation. Members contribute capital to the cooperative and elect a board of directors to oversee its operations. Cooperatives operate based on principles such as voluntary membership, democratic governance, and member education.
• Advantages : Cooperatives offer several advantages, including collective bargaining power, shared resources, and focus on member welfare. By pooling resources and expertise, cooperatives can achieve economies of scale, negotiate favorable terms with suppliers, and provide services that benefit the entire community.
• Disadvantages: However, cooperatives may face challenges such as slow decision-making processes, limited access to capital, and difficulties in member cooperation. Disputes over resource allocation, leadership, and governance may arise, affecting the cooperative’s effectiveness and sustainability.

For instance, a farmer’s cooperative collectively managing agricultural production and marketing exemplifies a cooperative society. Farmers join forces to improve market access, reduce costs, and strengthen their bargaining power, thereby enhancing their economic well-being and community resilience.

A corporation is a legal entity separate from its owners, with shareholders, directors, and officers. Corporations are formed through a formal process of registration with the government, which grants them legal rights and obligations distinct from those of their shareholders .

• Characteristics: Corporations are characterized by their limited liability for shareholders, perpetual existence, and centralized management structure. Shareholders invest capital in the corporation in exchange for ownership shares, which entitle them to a portion of profits and voting rights in corporate decisions.
• Legal Structure: Corporations are governed by corporate laws, which define their structure, rights, and obligations. Shareholders elect a board of directors to oversee the corporation’s affairs and appoint officers to manage day-to-day operations. Corporations issue shares of stock, which represent ownership interests and can be bought, sold, or traded on stock exchanges.
• Advantages : Corporations offer several advantages, including limited liability for shareholders, access to capital markets, and professional management. By separating ownership and management, corporations can attract investors, raise funds for expansion, and recruit skilled professionals to lead the organization.
• Disadvantages: Despite their advantages, corporations also face challenges such as complex legal requirements, double taxation, and potential conflicts between shareholders and management. Compliance with regulatory standards, shareholder activism, and ethical considerations may also pose challenges to corporate governance .

For instance, a multinational corporation like Infosys or Tata Group operating with shareholders, a board of directors, and professional management illustrates a corporation. Shareholders invest capital in the corporation, elect directors to represent their interests, and entrust officers to manage the corporation’s operations and strategic direction.

The organizational plan is vital for any business, offering a strategic framework for ownership structure and operations. Tailored to distinct business types, from manufacturing to retail and services, it assigns roles and responsibilities to ensure efficiency and goal attainment. Whether it’s a sole proprietorship, partnership, Joint Hindu Family, or corporation, each legal structure brings its advantages and challenges, shaping the business’s dynamics. Overall, the organizational plan provides a cohesive roadmap for sustainable growth and success.

Please Login to comment...

Similar reads, improve your coding skills with practice.

What kind of Experience do you want to share?