CHAPTER 11: STRATEGY

IMPLEMENTATION
BUSINESS AND FUNCTIONAL LEVELS

Presented by:
ABASTILLAS, BATILES, NOTORIO, OLIVA
AT THE END OF THIS CHAPTER, THE STUDENT
SHOULD BE ABLE TO:

01. discuss strategy implementation at the

business and functional levels;

02. explain the importance of programs, budgets,

and procedures; and

03. describe how to achieve consistency in

strategy implementation.

LEARNING
OBJECTIVES
 CONCEPT AND
NATURE
The different business and functional units have to
formulate their own VMGO.

The VMGO of the business and functional units must

be consistent with the overall corporate level strategy
and other business units.

The business and functional level strategies must be

efficiently implemented in order to achieve a
company's objectives.
 THE IMPLEMENTATION OF THE BUSINESS AND
FUNCTIONAL LEVEL STRATEGIES IS MADE POSSIBLE
THROUGH THE PREPARATION OF THE FOLLOWING:

PROGRAMS BUDGETS PROCEDURES

The programs, budgets, and procedures at the business level must be

anchored on the objectives of a business unit.

In a similar manner, the programs, budgets, and procedures at the functional

level must be anchored on the objectives of the functional units.

Moreover, the objectives of the functional units must be consistent with the
objectives of the business unit.
 FIGURE 11.2
Middle- and lower-level managers formulate and implement strategies

BUSINESS AND BUSINESS AND

Business and Functional level
FUNCTIONAL LEVEL managers FUNCTIONAL LEVEL

Strategy Formulation Strategy

Competitive and Implementation
various functional Programs, budgets,
level strategies and operating
procedures
 Business and
Functional
Business Level
and Functional
Objective
Objective
Level FIGURE 11. 3
What to accomplish and when
The hierarchy of programs, budgets, and procedures
What to accomplish
and when

Programs

Activities needed to
achieve the
objective

Budgets

Expected revenue
and cost of the
program

Procedures

Steps to
accomplish the
program
 PROGRAMS
A strategic program is a plan embodying the
different activities that must be accomplished
to achieve the objectives of a company through
the efficient utilization of its resources.

At the business level, the setting of a program is

spearheaded by a business level manager.

At the functional level, the setting of a program is

spearheaded by a functional level manager with
the participation of important, lead employees of
different subunits.
 STEPS ARE TO BE
OBSERVED IN THE
PREPARATION OF A
PROGRAM
01. Define the business or functional
objective.

Set the key performance indicator

02. (KPI).

Identify the people involved, dates

03. for program review, and completion
time.

04. Prepare the program

report.
DEFINE THE BUSINESS OR FUNCTIONAL
OBJECTIVE
The objective must be vertically
consistent with the corporate
level objective. .
It must also be horizontally consistent
with the objectives of other business
and functional units.

In setting an objective, one must follow the SMART

(specific, measurable, attainable, realistic, and time-
bound) principle.

In crafting the objective, the resources of a

company should be considered for it to become
realistic and attainable.
SET THE KEY PERFORMANCE INDICATOR
The key performance indicator (KPI) is a quantifiable
form of measurement used to determine how a
company effectively achieves its objectives.

An effective KPI must be based on reliable data and should

fit to the particular program, process, or activity being
measured.

When using the KPI, it must be based on the objective of

the business or functional unit concerned.

The KPI varies considerably among companies and

business and functional units because every
company has its own unique operating processes,
nature, and objectives.
01. Increased customer value (e.g.,
number of complaints)

02. Improved production processes

(e.g., average processing time)

03. Reduced manufacturing cost

(e.g., number of waste or
spoilage)

04. Increased sales revenue (e.g.,

increase of new customers)
MOST KPIS FALL
UNDER THE
FOLLOWING BROAD
CLASSIFICATIONS:
IDENTIFY THE PEOPLE INVOLVED, DATES FOR
PROGRAM REVIEW, AND COMPLETION TIME
The strategic program for a project, activity, or process
requires people who are going to execute the strategic
activities to pinpoint responsibilities and accountabilities.

The program must also include the probable dates for

conducting reviews about the progress of different
activities.

The expected completion time of every process or activity,

which matches the specified time in the objective, must
also be spelled out in the program.
 PREPARE THE PROGRAM REPORT

Every business and functional unit prepares its own program

report at the end of a project, process, or activity.

The program report should include information about the expected

business risk, the problems encountered, the hindrances and limitations
faced, and some recommendations to facilitate the completion of the
program and the achievement of the objective.

After being finalized, a program is, then, communicated to all

members of the business and functional units.
 BUDGETS
A budget is a plan expressed in quantitative,
monetary value. It includes the revenue and
expenditure budget.

The budget may serve as a control mechanism in the

implementation of a strategy.

Furthermore, it is a good tool to evaluate the

efficiency of the performance of the business and
functional units.
 PROCEDURES
The procedures, otherwise known as the standard
operating procedures (SOP), specify the detailed or
step-by-step process to be carried out to achieve
the completion of a program.

It contains the list of things to do, the executor of the

program, and the manner and time of execution.

The drafting of the standard procedure is influenced

by the strategy, objectives, and the program.
 PROCEDURES
The format of the procedures varies among business and functional
units. It can be in a simple- step, a hierarchical-step, or a flowchart
format.

Simple-step format - uses simple sentences in listing down

the procedures to be carried out to accomplish a program.

Hierarchical-step format - is employed when there are

several long procedures involved, and each major step
contains several substeps.

Flowchart format- is adopted when there are

infinite steps to be carried out since the
results may be unpredictable.
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