Middle management is typically responsible for translating the strategic plan into tactical plans and guiding the execution of them in their divisions of the organization. In large organizations, tactical plans are written for each specific functional area. Examples are human resources, financial management, sales and marketing, and production. Depending on the size of the company, the names of the groups may differ. Each functional area of a business creates its own tactical plan that outlines how it will meet its goals as defined by the strategic plan. Examples of tactical plans for individual areas are as follows. • A tactical plan for human resources may focus on hiring and training employees, performance evaluations, governmental regulations, benefits, and all activities that relate to human resources. • A tactical plan for financial management may be to manage the financial resources of a business including making decisions related to accounting, budgeting, and risk management. • A tactical plan for sales and marketing may describe marketing or sales goals for the company and explain how they will be achieved. The plan might also include strategies for new product development. • A tactical plan for production may focus on the activities needed to produce goods and services for the business, including how to convert raw materials and labor into a finished product in an efficient manner. Tactical plans explain how the strategic plan is going to be accomplished and specific actions that need to take place. They can overlap with operational plans, which are even more detailed than tactical plans. LO LO 3.2-3 3 . 2 - 3 Operational Plans An operational plan defines the day-to-day tasks and activities that employees must perform to meet company goals to execute the tactical plan. Like all goals, these goals are specific and measureable. An example of a goal is 200 units to be produced per day. Operational goals ask the following questions. • Where are we now? • Where do we want to be? • How do we get there? Operational plans usually cover one year or less. Supervisory management uses these plans to define how they will meet job responsibilities in the tactical plans that were conveyed to them by middle management. Depending on the organization, operational plans can be single-use or ongoing. Single-Use Plan A single-use plan is created for a specific purpose, such as sales. A sales plan is typically relevant for one year only. An example of a single-use plan is a budget. A budget is a financial plan that reflects anticipated revenue in numerical terms and shows how it will be allocated in the operation of the business. Budgets are usually created for each department in an organization and then rolled into one master company budget. Without a budget, a manager would not know how much money was available for operating his or her department. The goal is to stay within a budget during the timeframe for which it is projected. Ongoing Plans An ongoing plan is created once and updated as needed. This type of plan generally affects the daily operations to help guide a business to operate smoothly. These plans are also called standing plans. Examples of these plans include schedules, policies, and procedures. elwynn/Shutterstock.com An operational plan defines the day-to-day tasks and activities that employees must perform to meet company goals to execute the tactical plan. What do you believe would happen if a business did not create an operational plan? Chapter 3 Planning 49 Copyright Goodheart-Willcox Co., Inc.