Organisation Plan -

An organizational plan is a method for planning the future goals of an organization to be sure
everyone on the team understands what management expects. Having an organizational plan
allows the company to move towards success and profitability. An organizational plan can
improve a business's workforce, finances or products as well as grow the business overall.

An organizational plan usually involves five steps, including strategic planning, operational
planning and reviewing and revising throughout. Each step breaks down the step before,
ensuring the organization can achieve the larger goals. Often, an organizational plan starts with a
look at the overall company and larger and more long-term goals before breaking that down into
smaller, more manageable goals. Organizational plans also include a step for the company to
assess progress and create new goals. While high-level managers might start the organizational
planning process, every employee is part of the cycle.

There are five steps to creating an organizational plan which work in a cycle usually:

1. Develop strategic plan

A strategic plan is the highest level look at a company, and any goals set at this stage will be
large, overarching goals. This is the point where mostly higher-level managers review the status
of the organization currently and decide on goals for a set period, such as a year or five years.
Some organizations ask other employees to be involved in strategic planning, as including more
than management can give a different view of what a company should aspire to.

These goals should align with the organization's mission and values and should be important to
the success of the company. Because of the scale of the strategic plan goals, they will often get
divided into smaller, more manageable goals at other steps of the organizational planning
process.

Ways to develop a strategic plan include:

- Gathering company data like performance metrics

- Reviewing company mission and values
- Performing a SWOT analysis
- Setting goals based on the above information

2. Create tactical plan

The tactical plan stage of organizational planning takes the strategic plan and turns it into goals
that are more accessible and measurable. If strategic planning involved only high-level
managers, tactical planning will include other managers as well. For instance, if you have a ten-
year strategic plan with multiple goals, it's likely you'll want to break those goals into pieces
ranging from every few years to once a quarter.

It's also important that a tactical plan includes ways to measure the progress towards these goals.
Perhaps the strategic plan includes diversifying the company's workforce over the next five
years. At the tactical planning stage, you might decide that each quarter you will interview and
hire a certain percentage of diverse candidates. Having a specific percentage allows you to
measure if those goals are being met.

3. Draft operational plans

The operational plans put the goals from the strategic and tactical plans into daily operations.
Operational plans are the work you do regularly to achieve the strategic and tactical plans' goals.
You may need to create new company policies, change workflows or work with consultants to
make suggestions for ways to meet your goals. Employees of all levels may be involved in this
step of organizational planning.

If your goals are related to diversity, for instance, your strategic planning goal is diversifying
your workforce over the next five years and your tactical planning goals are to interview and hire
a set percentage of diverse candidates. The operational plans related to these goals might be how
you plan to recruit diverse new candidates to interview, ways to minimize unconscious bias in
the workplace and new directions for human resources personnel.

4. Execute the plans

Executing the plans is a key step in the organizational planning process, as this is when
organizations take all the planning from the previous steps and use it in day-to-day operations.
This is how an organization can achieve the goals that have been set, as each new process and
procedure established as an operational plan and used during the plan execution should achieve
tactical and strategic planning goals.

Thus, if the organization has created operational plans for how to recruit diverse candidates,
teach employees to minimize unconscious bias and increased training for human resources staff
in particular, at the plan execution stage all of those plans should go into effect. HR has done
specialized training and also guided training on unconscious bias for all employees, as well as
practicing new recruitment methods to find candidates that might have been missed otherwise.

5. Review and revise

The review and revise stage is important and should be done regularly to ensure the organization
is achieving necessary goals. The timing for reviewing and revision will vary depending on the
goals of the organization, but this should be planned for from the beginning of the organizational
planning process. Individual departments and teams might review their performance and provide
data to management, while management will look at overall performance and any relevant data
across the whole organization.

Types of Organizational Structures

Functional Structure

Four types of common organizational structures are implemented in the real world. The first and
most common is a functional structure. This is also referred to as a bureaucratic organizational
structure and breaks up a company based on the specialization of its workforce. Most small-to-
medium-sized businesses implement a functional structure. Dividing the firm into departments
consisting of marketing, sales, and operations is the act of using a bureaucratic organizational
structure.

Divisional or Multidivisional Structure

The second type is common among large companies with many business units. Called the
divisional or multidivisional (M-Form) structure, a company that uses this method structures its
leadership team based on the products, projects, or subsidiaries they operate. A good example of
this structure is Johnson & Johnson. With thousands of products and lines of business, the
company structures itself so each business unit operates as its own company with its own
president.

Divisions may also be designated geographically in addition to specialization. For instance, a

global corporation may have a North American Division and a European Division.

Team-Based

Similar to divisional or functional structures, team-based organizations segregate into close-knit

teams of employees that serve particular goals and functions, but where each team is a unit that
contains both leaders and workers.

Flat Structure

Flat, also known as a horizontal structure, is relatively newer, and is used among many startups.
As the name alludes, it flattens the hierarchy and chain of command and gives its employees a
lot of autonomy. Companies that use this type of structure have a high speed of implementation.

Matrix Structure

Firms can also have a matrix structure. It is also the most confusing and the least used. This
structure matrixes employee across different superiors, divisions, or departments. An employee
working for a matrixes company, for example, may have duties in both sales and  customer
service.

Circular Structure

Circular structures are hierarchical, but they are said to be circular as it places higher-level
employees and managers at the center of the organization with concentric rings expanding
outward, which contain lower-level employees and staff. This way of organizing is intended to
encourage open communication and collaboration among the different ranks.

Network Structure
The network structure organizes contractors and third-party vendors to carry out certain key
functions. It features a relatively small headquarters with geographically-dispersed satellite
offices, along with key functions outsourced to other firms and consultants.

Growth Strategies in Business –

Most small companies have plans to grow their business and increase sales and profits.
However, there are certain methods companies must use for implementing a growth strategy.
The method a company uses to expand its business is largely contingent upon its financial
situation, the competition and even government regulation. Some common growth strategies in
business include market penetration, market expansion, product expansion, diversification and
acquisition.

Market Penetration Strategy

One growth strategy in business is market penetration. A small company uses a market
penetration strategy when it decides to market existing products within the same market it has
been using. The only way to grow using existing products and markets is to increase market
share, according to small business experts. Market share is the percent of unit and dollar sales a
company holds within a certain market vs. all other competitors.

One way to increase market share is by lowering prices. For example, in markets where there is
little differentiation among products, a lower price may help a company increase its share of
the market.

Market Expansion or Development

A market expansion growth strategy, often called market development, entails selling current
products in a new market. There several reasons why a company may consider a market
expansion strategy. First, the competition may be such that there is no room for growth within
the current market. If a business does not find new markets for its products, it cannot increase
sales or profits.
A small company may also use a market expansion strategy if it finds new uses for its product.
For example, a small soap distributor that sells to retail stores may discover that factory workers
also use its product.

Product Expansion Strategy

A small company may also expand its product line or add new features to increase its sales and
profits. When small companies employ a product expansion strategy, also known as product
development, they continue selling within the existing market. A product expansion growth
strategy often works well when technology starts to change. A small company may also be
forced to add new products as older ones become outmoded.

Growth through Diversification

Growth strategies in business also include diversification, where a small company will sell new
products to new markets. This type of strategy can be very risky. A small company will need to
plan carefully when using a diversification growth strategy. Marketing research is essential
because a company will need to determine if consumers in the new market will potentially like
the new products.

Acquisition of Other Companies

Growth strategies in business can also includes an acquisition. In acquisition, a company

purchases another company to expand its operations. A small company may use this type of
strategy to expand its product line and enter new markets. An acquisition growth strategy can be
risky, but not as risky as a diversification strategy.

One reason is that the products and market are already established. A company must know
exactly what it wants to achieve when using an acquisition strategy, mainly because of the
significant investment required to implement it.

Turnaround Strategy –

The Turnaround Strategy is a retrenchment strategy followed by an organization when it feels

that the decision made earlier is wrong and needs to be undone before it damages the profitability
of the company.
Why do companies Use Turnaround Strategy?
Why businesses and companies should follow the turnaround strategy. Some of the reasons are
as follows; 

 Return on capital employed (ROCE) start declining 

 There’s a change in the structure of competition and industry 
 Performance measures start decreasing 
 Profit and revenue stream is falling 
 The company’s losses and costs are unbearable 
 Net margin and gross profit is low 
 Market share is low 

Types of Turnaround Strategies -

Some of the main types of turnaround strategies are as follows; 

Cost Efficiency Strategies

Companies implement a turnaround strategy as a recovery protocol in order to achieve cost
efficiency. The cost-efficiency requires a wide range of activities for a company to take in order
to gain a quick win. Before developing a complex strategy, the measures would improve the
company’s financial position and stabilize its cash flow. 

Companies often apply a cost-efficiency strategy as a first step in the turnaround recovery
strategy. Because it requires little capital, easy to implement, immediate effects, and companies
could easily achieve cost efficiency. 

It comprises of lower the research and development cost and marketing activities, investing
in diversification, cutting inventory, decreasing account receivable and pay increments, and
increasing account payables. 
When you cut various costs, then the company is vulnerable to many risks like low morale and
employee motivation level, high turnover rate, declining working conditions, and low job
satisfaction level. Cost efficiency could badly impact a company’s resources that are vital to its
growth and success. 

Asset Retrenchment Strategies

If a company is facing an issue of low performance, then it should follow the asset retrenchment
strategy after the cost-efficiency strategy. It’s such a strategy that allows companies to analyze
their non-performing areas and remove them to become efficient. 
The utility of asset retrenchment and turnaround strategy is when the company has a better cash
flow system. For instance, a company earns cash by disposing of obsolete assets, and it allows
the company to invest in new ventures with the same cash. 

Focus on Your Business core Activities

The turnaround strategy allows you to focus on the core activities of your business. By
concentrating on the main activities mean adopting new measures, recognizing the products that
could potentially increase the cash flow, and identify the customer market.

Companies sometimes change their management and leadership as a turnaround strategy. They
usually hire CEOs from outside the company in order to inject new and fresh blood into the
company to change the way of its thinking and operations.

CEO has the complete responsibility and authority of company’s performance on its shoulder,
when you hire someone from outside, then it sends a signal of change. The new leadership and
management mean change in the company’s strategies.