Organizational hierarchy: management levels

Fayol delimits the existence of three administrative levels in the hierarchy of

organizations: supervisory level administration, intermediate level administration
and, finally, top management. Each level of the pyramid requires the use of
management skills in a different proportion.

Components of strategic planning

Strategic level-Senior management

Management philosophy and the importance of organizing the company.
Management Philosophy is a principle of every nascent organization. Management
philosophy is what defines companies before others. It is the face of the
organization in letters.

It is closely linked to the design of the organizational structure and is applied in

specific areas, which are normally those that monitor and define aspects that
cannot be defined at other levels.

Some characteristics of this planning are:

 It constitutes the source of origin for subsequent concrete plans.

  It is executed by the highest hierarchical management levels.
 It is proposed for all areas of the organization.
 Handles primarily external information.
 Its main measure is effectiveness.
 Projected in the long term, its effects and consequences are foreseen for
several years.
 It covers the company as a whole, covering all areas of activity and the
resources used.
 It outlines objectives at the organizational level, it concerns the major plan,
to which all other plans are subordinated.

Mission
The mission is a description of the reason for being of the organization, it
establishes its institutional “task”, the goods and services it delivers, the main
functions that distinguish it and make it different from other institutions and justify
its existence.

The Mission can be an exercise of identification or definition, as well as review

and sometimes updating. The exercise of working with the Mission is limited to the
scope of managerial decisions, at the highest levels of organizational responsibility,
given that it frames the products and results by which the organization must
respond to its users and citizens.

In this way, before beginning any exercise around the institutional mission, it is
key that its highest authorities are involved, leading the process and validating the
commitments that arise. If it is not possible to have this leadership, experience
indicates that it is better not to continue, given that time resources are valuable and
the mission requires validation, likewise starting with an exercise around the
Mission generates expectations.
 Vision

The vision corresponds to the desired future of the organization. It refers to how
the entity wants to be recognized, it represents the values on which its public
actions will be based.

It can be broader than the Institutional Mission, and must contain aspects that
allow citizen users to identify what they can expect from the Entity in terms of
values, creation of opportunities, projection, among others. You should avoid
repeating the functions and products that characterize the definition of the mission.
Likewise, those aspects related to short-term modernization projects should not be
highlighted.

The vision publicly commits institutional aspirations, giving a cohesive effect to

the organization. It allows us to distinguish and visualize the public nature and how
government intervention is justified from the point of view of what it delivers to
society. It complements the communication effect of the mission and frames the
institutional work in the values that society expects from the public entity.

Strategic objectives

Strategic objectives constitute the next step to define, once the Mission has
been established. They are the achievements that the public entity, ministry or
body hopes to achieve within a specific period (more than one year), to fulfill its
mission efficiently and effectively.

When an entity intends to establish its strategic objectives, it must necessarily

start from an institutional diagnosis, which allows it to identify the gaps from the
organizational point of view that make it difficult to obtain the expected
improvement in management and the results that it wants to achieve. In this sense,
not only to address the mission but also to build objectives and strategies, an
analysis of the internal and external aspects of the entity is generally used.

Strategic objectives constitute the basis for establishing indicators that will
measure the progress of government actions towards results. It allows us to verify
the intention of a change or transformation in the quality, efficiency, economy, or
result in the products with which it is related and must be expressed in concrete
terms of expected results and not be established in terms of permanent functions
of the Program.

Strategies and Action Plans

Strategies are the guidelines that help choose appropriate actions to achieve
the organization's goals. They allow the definition of goals, programs and action
plans and the basis for priorities in the allocation of resources. The action plans or
the set of tasks that the organization will establish to achieve the results must
facilitate the closing of the gaps that exist between the current situation and the
desired situation.

Help turn our dreams into reality. An action plan is a way to ensure that our
organization's vision comes to fruition. Describes how the group will use strategies
to achieve its objectives.
 Functional or tactical plans

Functional level-Middle management

These determine more specific plans that refer to each of the company's
departments and are subordinated to the strategic plans. They are established and
coordinated by mid-level managers in order to put the company's resources into
practice. These plans, due to their establishment and execution, are medium-term
and cover a specific area of activity.

It is based on the guidelines suggested by strategic planning and refers to the

issues concerning each of the main areas of activity of the companies and the
most effective use of the resources that have been applied to achieve the specific
objectives. The difference between the two consists of the more strategic time
element is planning.

Therefore, planning will be strategic if it refers to the entire company, it will be

tactical if it refers to a large part of the planning of a product or advertising. Senior
management is responsible for strategic plans, since they have a better global
corporate vision. Mid-level managers have a better understanding of day-to-day
operations, and are generally responsible for tactical planning.

Some of the main characteristics of tactical planning are:

 It occurs within the guidelines produced by strategic planning.

 It is led and executed by mid-level executives.
 It refers to a specific area of activity of which the company consists
 External and internal information is managed
 It is oriented towards the coordination of resources.
 Its main parameters are effectiveness and efficiency

Steps to develop tactical planning

Six general steps are identified to develop a tactical plan.

1- Define the business.

2- Analyze the market.

3- Request projects, participate in the target market and develop a marketing

strategy.

4- Develop organization and management models.

5- Evaluate the financial and mission implications of the business.

6- Put everything together in the final tactical plan.

Operational planning

Operational level-Lower management

This planning is carried out to carry out the different tasks that are part of the
work routine. It is the prior assignment of the specific tasks to be carried out in
each of the operating units. Assuming that top management has prepared a
strategic plan and middle management has prepared a tactical plan, lower
management should have a clear idea of what they are trying to achieve. You just
have to draw up a detailed operational plan to make it a reality.

It includes an outline of the tasks and operations subject to a control process, its
scope is immediate. It is the planning that is carried out on a day-to-day basis, the
agenda of daily tasks, lists of pending tasks, scheduled results. It is a level of
planning that is relatively easy to apply and effective in the advancement and
execution of daily tasks.

The purpose is to deploy plans in order to develop financial projections and

maximize the company's participation in the market. An operating plan uses an
organization's financial ratios to analyze its profitability.

Strategies:
The operations strategy specifies how the company plans to use its production
capabilities to support its corporate strategy. Similarly, the marketing strategy
addresses the way the firm plans to sell and distribute its goods and services, and
the financial strategy identifies the best way to use the company's financial
resources.
 A company considered world- class knows that its ability to compete in the
market depends on developing an operations strategy that adequately aligns with
its mission of serving customers. The operations strategy involves decisions
related to the design of a process and the infrastructure necessary to support said
process.

The main objectives of developing a manufacturing strategy are to translate the

required priorities typically obtained from marketing into specific performance
requirements for operations, and to design the necessary plans to ensure that
operational and business capabilities are sufficient to meet them.

Competitiveness represents a very important role in companies, since they

must have a special characteristic in order to be differentiated from their
competition ; For this reason, these companies must strive to have sustainable
competitive advantages that set a standard with respect to the competition and not
be absorbed or disappear from the market due to their lack of competitiveness.

Operations strategy consists of the formulation of broad policies and the design
of plans to use the company's resources in ways that best support the firm's long-
term (corporate) competitive strategy.

However, it is not sufficient for the proper functioning of the organization. It has
two planning sublevels: one daily and one weekly that allows you to adjust daily
tasks to a broader context.

Some characteristics of operational planning are:

 It is carried out within the guidelines established by strategic and tactical

planning.
 It is executed by personnel of lower hierarchical rank.
 Accurately follows defined procedures.
 Projected in the short term, in reduced periods.
 Its measure is efficiency.
 Covers tasks or activities in isolation.
 Set specific objectives and goals.