Functional

implementation

By: Ankita Tiwari

Functional Strategies

Deals with a relatively restricted plan designed

to achieve objectives in a specific functional
area, allocation of resources among different
operations within that functional area and
coordination among different functional areas
for optimal contribution to the achievement of
the business and corporate level objectives.
 Corporate Level strategies

Business Level Strategies

Functional-Level Strategies

Marketing
Plan & Financial
Policies Plan & Operational
Policies Plan & personal
Policies Plan & Information
Policies Management
Plan &
Policies
Functional Plans and Policies

Functional strategies defined in terms of

functional plans and policies-plans or
tactics to implement business strategies-
are made within the guidelines set at the
higher levels.
PLANS are made to select a course of
action while POLICIES are required to
act as guidelines to action.
Need for Functional Plans and
Policies
• GLUCK suggest five reasons why functional plan &
policies are needed:-
• To implement strategic decisions by all parts of an
organization;
• To control activities in different functional areas of
business;
• To reduce time spent by functional managers in
decision making
• To handle similar situations occurring in different
functional areas in a consistent manner;
• Coordination across the different functions takes
place
Development of functional plans
and policies
• The development of functional plan & policies
may range from the formal to informal.
• Larger and more complex organization's may have
several hundred policies related to every major
aspect. Many of these policies could have been
formulated through the formal process and laid down
in company manuals and documents.
• Smaller organizations with simpler businesses may
operate with a few policies most of which could be
informal and understood rather than written down.
Financial Plans and Policies
1. Sources Of Funds: Capital Mix Decisions:
Capital structure, procurement of capital and
working capital borrowings, reserves and surplus,
relationship with lenders, banks and financial
institutions.

2. Usage of Funds: Investment or asset-mix

decisions: Capital investment, fixed asset
acquisition, current assets, loan and advances ,
dividend decisions etc.

3. Management of Funds: The system of finance,

accounting and budgeting, cash, credit and risk
management, cost control and reduction etc.
 Marketing Plans and Policies
1. Product: quality, features, choice of
models , brand names, packaging etc.
2. Pricing: Discount, mode of payment,
allowances, payment period, credit terms
etc.
3. Place: Channels to be used,
transportation, logistics and inventory
storage management and coverage of
markets etc.
4. Promotion: Advertising, personal selling,
sales promotion and publicity.
Operations Plans and Policies
 Production system - capacity, location, layout,
product or service design, work systems, degree of
automation, extent of vertical integration.

 Operations Planning and control – aggregate

production planning; materials supply; inventory, cost
and quality management; and maintenance of plant
and equipment.

 Research and development- product development,

personnel and facilities, level of technology used,
technology transfer and absorption, technological
collaboration and support.
Personnel Plans and Policies
 Personnel System - manpower planning, selection,
development, compensation, communication and
appraisal.

 Organizational and employee characteristics –

corporate image, quality of managers, staff and
workers, perception about and image of the
organization as an employer, availability of
development opportunities for employees, working
conditions.

 Industrial Relations – union-management

relationship, collective bargaining, safety, welfare
and security, employee satisfaction and morale.
 Information Management
Plans and Policies
 Acquisition and retention of information- sources,
quantity, quality and timeliness of information,
retention capacity and security of information.

 Processing and synthesis of information – database

management, computer systems, software capability
and the ability to synthesize information.

 Integrative, Systemic and supportive factors –

Availability of IT infrastructure, its relevance and
compatibility to organizational needs, up gradation of
facilities, availability of computer professionals and
top management support.
Plans and Policies of Public sector
banks
• The public sector banks (the State Bank group and the
nationalized banks) had to face a tough challenge when
the new private sector banks made their entry in early
nineties.

• The new banks had the benefit of starting on a clean

slate and had started with state-of-the-art technology
which in turn helped them save on man power costs and
provide better services.

• The older banks had not kept up-to-date with technology

and were facing competition of this kind for the first time.
• Integration of functional plan
and policies
• The functional areas of any organization are based on the
segregation of the key activities. But what has been
segregated will have to be brought together, since all
activities are performed to achieve the overall objectives
of any org.

• Integration of functional plans & policies provides the

mean for such an aggregation. Strategy have to arrange
for mechanisms that will ensure that such an integrations
takes place. These mechanisms can take the form of
committees, consisting the top management and
functional heads, which can be entrusted with the
responsibility of not only integrated the functional plans
and policies but also review plan & policy implemented
and suggest modifications in light of strategy change.
Considerations In Integration
• GLUCK has referred some issues that affect
integration.

• 1. Need for internal consistency.

• 2. Relevance to development of organizational
capability.
• 3. Making trade-off decisions,
• 4. Determination of intensity of linkages.
• 5. liming of implementation of plans and policies.
1. Need for internal consistency:-
•Internal consistency in the various functional plans and
policies ensures that the different functional areas do not
work at cross-purpose but operate in harmony.

2. Relevance to development of organizational

capability:-
The development of organizational capability in any one or
more areas would critically depend on how well the
functional plans and policies have been integrated.
a market leader a low cost producer, a technologically
superior competitor, or an ideal employer.

3. Making trade-off decisions:-

4. Determination of intensity of linkages:-
Intensity of linkages determines the level of coordination that
should exist between different functional areas.
For instance, a strategy which is built upon high technology,
superior quality products requires close contact between R&D
product development, and production departments.

5. Timing of implementation of plans and policies:-

The different functional plans and policies have, therefore, to be
implemented at appropriate time so that they dovetail with each
other
.