Many companies operate without formal plans. However, formal planning can provide many benefits:
* It encourages management to think ahead systematically.
* It forces managers to clarify objectives and policies.
* It leads to better coordination of company efforts.
* It provides clearer performance standards for control.
* It is useful for a fast-changing environment since sound planning helps the company anticipate and respond quickly to environmental changes and sudden developments.
There are three different types of plans that companies might use:
* Annual plans (deal with the company's current businesses and determine how to keep them going).
* Long-range plans (also deal with company's current businesses and determine how to keep them prosperous).
* Strategic plans involve adapting the firm to take advantage of opportunities in its constantly changing environment.
* Long-range plans (also deal with company's current businesses and determine how to keep them prosperous).
* Strategic plans involve adapting the firm to take advantage of opportunities in its constantly changing environment.