Functional and operational implementation
Introduction
Organisations are complex entities.
They have systems and subsystems.
These subsystems are often their
functional deppts such as marketing and operations.
Functional strategies are carried out through Functional functional and operational is done implementation. implementation through functional plans and policies in different functional areas.
Functional strategies
Functional strategy deals with a relatively restricted plan designed to achieve objectives in a specific funtional area, allocation of resources among different operations within that functional area and coordination among different functional areas.
Functional strategies are derived from business and corporate strategies and are implemented through functional and operational implementation. A key task of strategy implementation is to align or fit the activities and capabilities of an organisation with its strategies.
Vertical and horizontal fit
Strategies operate at different levels and there has to be congruence and coordination among these strategies. Such congruence is the vertical fit. Then there has to be congruence and coordination among different activities taking place at same level. This is horizontal fit.
Vertical and horizontal fit
vertical fit
Corporate level strategies Business level strategies Functional level strategies
horizontal fit
Marketing plans and policies
Financial plans and policies
Operations plans and policies
HRM plans and polcies
Information mgmt plans and policies
VERTICAL FIT
Any functional strategy becomes strategic when it is vertically fitted to the upper level business and corporate strategies .
Types of functional strategies
Strategic marketing management Strategic financial management Strategic operations management Strategic human resource management Strategic information management
Horizontal fit
The consideration of horizontal fit means that there has to be an integration of all operational activities undertaken to provide a product or service to a customer. This has to take place in the course of operational implementation.
Just like corporate and business startegies , functional strategies are not implemented directly. They have to be first defined in terms of plans and policies. So , functional implementation takes place through functional plans and policies.
Functional plans and policies
For effective implementation , strategist have to provide directions to functional managers regarding the plans and policies to be adopted.
Nature of functional plans and policies
Functional strategies operate below the business strategies . Within functional strategies there might be several sub-functional areas. They are in the nature of tactics to make strategy work.
Need of functional plans and policies
They are developed to ensure thatStrategic decisions are implemented by all parts of organisation. Basic available for controlling activities in different functional areas. Similar situations occuring in different functional areas are handled in a consistent manner
Development
The process of development of functional plans and policies whether formal or informal is similar to that for strategy formulation . Environmental factors and organisational plans and policies affect the choice of functional plans and policies.
Configuration of functional plans and policies
Financial plans and policies
Operational plans and policies
Integration of functional plans and policies Information mgmt plans and policies
Marketing plans and policies
Personnel plans and policies
Financial plans and policies
These are related to to the availability , usage and management of funds. Significant decisions to be taken are sources of funds Usage of funds Management of funds
Marketing plans and policies
These are related to the marketing mix factorsProduct Pricing Place Promotion
Integrative and systematic factors
This part of plans and policies related to marketing management deals with factors such as Marketing mix Segmentation Targeting Positioning Market standing Company image etc.
Operational plans and policies
These are related to Production system Operations planning and control Research and development
Corporate level srategies Business level strategies
Cost leadership/differentiation/focus
Nature of product /service Nature of market Manner
Operations system objective Operations system structure
Operations plans and policies production system operations planning and control
Research and development
Personnel Plans and Policies Personnel Plans and Policy relates to the Personnel system, organizational and employee characteristics, and industrial relations.
Personnel System
Plans and Policies related to the Personnel system deal with factors like manpower Planning, Selection, Development, Compensation , Communication and Appraisal. The importance of such Plans and Policies lies in the role that personal system play in providing and maintaining human resources.
Organizational and employee characteristics
It include factors , such as, the corporate image , quality of managers, staff and workers, perception about the image of the organization as an employer, availability of development opportunities for employees, working conditions, and so on.
Industrial Relations
It deal with issues such as union management relationship, collective bargaining, safety, welfare and security, employee satisfaction and morale, and so on.
Information Management Plans and Policies
Information capability factors relate to the design and management of the flow of information within and from outside into ,an organisation. If managed properly information management can augment their capability to develop strategic advantage
factors within information management system
Acquisition and retention of information Plans and policy with regard to the acquisition and retention of information deal with factors such as the sources, quantity, quality, and timeline of information; retention capacity; and security of information. Processing and synthesis of information Plans and policies formulated for the processing and synthesis of information deal with factors such as data base management, computer systems, software capability, and ability to synthesis information.
Retrieval and usage of information It deals with factors such as availability and appropriateness of information formats, and the capacity to assimilate and use information. Transmission and dissemination of information The plans and policies with regard to the transmission and dissemination of information deal with factors such as, speed, scope, width, and depth of coverage of information, and willingness to accept information.
Integrative,systematic $ supportive factors
It deals with the availabilty of IT infrastructure , its relevance and compatibility to organisational needs , upgradation of facilities , willingness to invest in state of the art systems, availability of computer professionals and top management support.
Integration of functional plans and policies
Functional tasks are derived from that the key activities that have to be performed for the implementation of the corporate and business strategies. The functional areas in any organization are therefore, based on the segregation of the key activities.
Integration of functional plans and policies
Financial plans and policies
Operational plans and policies
Integration of functional plans and policies Information mgmt plans and policies
Marketing plans and policies
Personnel plans and policies
Need for internal consistency
Five Considerations in integrating functional Plans & Policies
Relevance to development of organizational capability
Making tradeoff decisions Determination of intensity of linkages
INTEGRATION OF FUNCTIONAL PLANS AND POLICIES
Timing of implementation of functional plans & policies
Need for internal consistency
It arises due to the segregation of key organizational tasks. Internal consistency in the various functional plans and policies ensures that the different functional areas do not work at cross-purpose but operate in consonance. Absence of internal consistency may lead to a suboptimal implementation of strategy.
Relevance to development of organizational capability
The development of organizational capability, specially in terms of strategic or competitive advantages, is relevant to the integration of functional plans and policies.
Making trade-off decisions
The formulation and implementation of functional plans and policies involve tradeoff decisions. This is due to the inherent nature of the functional areas. Marketingorientation in functional plans and policies is in some ways contradictory to operation-orientation.
Determination of intensity if linkages
The intensity if linkages that exist between the different functional areas are an important consideration in determining the level of coordination that should exist between different functional areas.
Timing of implementation of plans and policies
Integration of functional plans and policies is dependent on the timing of their implementation. The different functional plans and policies have therefore, to be implemented at the appropriate time so that they dovetail with each other.
Operational implementation
Operational implementation deals with the nittygritties of strategy. This is the time for action as this is the stage at which the most tangible works gets done. Obviously, the scope of operational implementation would be very wide. It would cover practically everything that is done in an organization.
Operational imlementation plays a key role in achieving effectiveness
Strategic plan Activating startegies Managing change Achieving effectiveness Evaluation and control Functional implementation Operational implementation Operational effectiveness: Productivity Processes People Pace Monitoring
Operational effectiveness
Porter considers operational effectiveness as necessary but not sufficient to the success of strategy. He explains the term as performing similar activities better then rivals perform them. Operational effectiveness includes but is not limited to efficiency. It refers to any number of practices that allow a company to better utilize its inputs by, for example, reducing defects in products or developing better products faster.
The four Ps of operational effectiveness
Productivity Processes
Operational effectiveness
People
Pace
Productivity
Productivity is the measure of the relative amount of input needed to secure a given amount of output. The Significant modern practices observed here are of: Just in time manufacturing, Cycle time reduction, Group technology , Optimized production technology , Flexible manufacturing system , Cellular manufacturing , Total productive maintenance , Lean manufacturing
Processes
Processes are courses of action used for operational implementation . Processes are often implemented through methods. Business process reengineering Enterprise-wide resource planning Quality management processes Benchmarking, value chain and Supply chain management.
People
People are the stakeholders in the organization. The significant people are the investors, employees, suppliers, and customers. Among these employees play a direct and central role in operational implementation. Strategic recruitment Performance management Training and development Performance appraisal and retention management Separation management
Pace
Pace is the speed of operational implementation and is measured in terms of time. Efficiency is the parameter often used to express the pace of operational implementation . Efficiency is the amount of work done per unit time. Time study Time nature of managerial work Network analysis and activity charts Time based management
Applying opl impln practices
It is important to remember that any technique has a history, background, context, and requirements. A technique cannot be applied blindly. There are essential pre-requisites to applying a technique and then there are the consequences.
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