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Strategic Planning and Operational Planning: What is the difference?

Ashish M. Shaji

| Updated: Mar 09, 2021 | Category: CFO Service

Strategic Planning and Operational Planning: What is the difference?

Planning is done keeping in mind the vision, mission, goals, and objectives of the enterprise. It also means thinking in advance and to know what we need to do in the future in order to fulfill business objectives. Planning occurring at a corporate level is called Strategic Planning, and planning process that takes place at the functional level is called operational planning. Though this is just a small picture, in this article, we shall brief you about not only its meaning but also look at what makes Strategic Planning and Operational Planning different from each other.

Definition of Strategic Planning

It is a planning process that’s undertaken by the top-level management with a view to decide where the organization wants to reach. It involves an analytical process that examines the micro and macro environment of business. The process is used to define the vision, ambitions of the company and set priorities to make a way that will help the company to achieve its goal.

This sort of planning is not just made for a department or unit, but it covers the entire organization. Strategic planning helps in determining the factors of the internal and external environment that influences the organization directly.

Definition of Operational Planning

Operational planning involves a process that determines the daily activities of the business. The planning is done in order to assist strategic planning to meet the organizational goals. In this, short run objectives of the company are determined, and the means to meet those objectives is also discovered in the process.

Mid-level management performs the operational planning functions. It includes planning regular business activities and operations for a shorter duration. Under this, the organization is divided into various departments, units, and division for which planning is done individually and is aligned with strategic planning to meet the vision of the organization.

Strategic and Operational Planning: Key Differences

The main points of difference between Strategic Planning and Operational Planning are discussed in the table made below.

On the basis of-Strategic PlanningOperational Planning
  Meaning  It involves strategies to be used at an organizational level to meet the visions, mission, and organization’s objectives.  It involves determining a plan that requires to be carried out at functional level of the organization.  
  Objective  To establish plans as per the mission and vision of the organization.  To determine the routine operations of a business unit or department.  
  Time frame  Carried out for long term  Short term  
  Performed by      Higher level management  Mid-level management    
  Scope    It has a wider scope  It has a narrow scope  
  Changes  Is usually unchanged for long term  Changed from time to time

In the next segment, we have discussed these differences in detail.

Difference between Strategic and Operational Planning in detail

  • Meaning-

Strategic planning is the establishment of the direction for an organization, determining its objectives and formulating the strategies that it is required to follow in order to achieve its vision. Strategic planning involves a general guideline for the management to follow to accomplish the objectives of the organization.

On the other hand, operational planning is done to present a guide to people about the routine tasks that they require to do. It involves short term activities that are to be achieved by employees. It, in turn, helps to meet the larger objective of the organization.

  • Objective-

Strategic planning focuses on long term objectives, missions, and vision of the organization and the manner in which different departments should work with each other in order to achieve them. Operational planning is focused on planning on the operations of a business unit.

  • Time frame-

As stated above, strategic planning is long lasting than operational planning. Strategic planning is done keeping in mind long term, but the objectives of operational planning is to plan for everyday business activities of the organization.

  • Performed by –

Top notch management is involved in strategic planning but in case of operational planning, it is the responsibility of mid-level management.

  • Scope-

Strategic planning has a greater scope as it pertains to the overall organization. On the flip side, operational planning is done for a specific business having a narrow scope.

  • Changes-

Once the strategic plans are developed, they are kept the same for longer duration however, operational plans are frequently changed.

How to start Strategic Planning?

Given the value it provides to your organization, you can consider involving both Strategic Planning and Operational Planning.

Starting with the strategic planning, the following steps can help:

How to start Strategic Planning?
  • Involve stakeholders

The creation of strategic plan is usually an activity for your senior leadership. Therefore have them to kick off the plan and get inputs from the rest of the organization to help in identifying right strategic priorities.

  • SWOT Analysis

SWOT stands for Strengths, Weakness, Opportunity and Threats. Conducting SWOT analysis[1] can help you know what should go inside the strategic plan.

  • Develop goals

By knowing the mission and vision of your organization, develop goals that are specific, measurable, achievable, and realistic.

  • Determine KPIs

Develop ways to measure your progress as an organization towards goals in your strategic plan.

  • Document the plan

Pen down your plan and decide how many times will you visit it.

  • Share it with your organization

Ensure sharing the plan with departments in order to help them develop operational plans.

Once this process is fulfilled, individual teams can create operational plans based on strategy that’s laid out. Every team or department should be having operational tactics to stay on target. 

Conclusion

Strategic planning and operational planning are two planning processes that has different objectives, but despite that, it is worth noting that the two processes are linked to each other, and it should be developed in a way that they complement each other. Operational planning has to be aligned with the strategic plan of the organization. This will help your organization to perform better in the long run.

Read our article: What is the Process for Strategic Planning Services?

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Ashish M. Shaji

Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on criminal and corporate law. He is a creative thinker and has a great interest in exploring legal subjects.

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