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Timeframes for Planning: Strategic and Operational

Doing the daily business well is crucial, but positioning an organization for sustainable leadership in the future demands strategic thinking and prioritizing.

In this regard, it is important to note the difference between strategic planning and operational planning.

Operational planning is the determination of how to run the organization effectively and efficiently in the short, usually one-year, term, while progress is made toward achieving the objectives in a long-range strategic plan.

Operational planning sets in motion projects for the present and near future which need to be in alignment with strategies established in strategic planning.

It also is useful to note the relationships of operational planning to budgeting. Employed in nearly all organizations, a budget is best thought of as the financial interpretation, or price tag, of a plan, usually for the fiscal year ahead. Seen this way, budgets are outputs from planning, rather than inputs to it.

Projects, however, may need plans for actions to be taken over more (or less) than a year. In such cases they may have their own project budgets as well, extending over the lives of the plans.

Seen this way, budgets are instruments of planning and control. Measuring actual performance against budgeted expenditures and dealing with variances is a basic control function.

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