Functional and Operational Implimentation | Policy | Strategic Management

Functional and operational implementation

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.

Such congruence is the vertical fit.Vertical and horizontal fit Strategies operate at different levels and there has to be congruence and coordination among these strategies. . 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.

So . They have to be first defined in terms of plans and policies. . functional strategies are not implemented directly.Just like corporate and business startegies . 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.

Within functional strategies there might be several sub-functional areas.Nature of functional plans and policies Functional strategies operate below the business strategies . They are in the nature of tactics to make strategy work. .

Need of functional plans and policies They are developed to ensure thatStrategic decisions are implemented by all parts of organisation. Similar situations occuring in different functional areas are handled in a consistent manner . Basic available for controlling activities in different functional areas.

Environmental factors and organisational plans and policies affect the choice of functional plans and policies.Development The process of development of functional plans and policies – whether formal or informal – is similar to that for strategy formulation . .

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 .

usage and management of funds. Significant decisions to be taken are sources of funds Usage of funds Management of funds .Financial plans and policies These are related to to the availability .

Marketing plans and policies These are related to the marketing mix factorsProduct 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 .

and industrial relations. organizational and employee characteristics.Personnel Plans and Policies Personnel Plans and Policy relates to the Personnel system. .

. Compensation . The importance of such Plans and Policies lies in the role that personal system play in providing and maintaining human resources.Personnel System Plans and Policies related to the Personnel system deal with factors like manpower Planning. Development. Selection. Communication and Appraisal.

such as. staff and workers. and so on. . the corporate image . quality of managers. working conditions. perception about the image of the organization as an employer.Organizational and employee characteristics It include factors . availability of development opportunities for employees.

welfare and security. . collective bargaining. employee satisfaction and morale. safety. and so on.Industrial Relations It deal with issues such as union management relationship.

an organisation.Information Management Plans and Policies Information capability factors relate to the design and management of the flow of information within and from outside into . If managed properly information management can augment their capability to develop strategic advantage .

computer systems. and ability to synthesis information. and security of information. retention capacity. software capability. quantity. quality. . • Processing and synthesis of information Plans and policies formulated for the processing and synthesis of information deal with factors such as data base management. and timeline of information.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.

and the capacity to assimilate and use information. width.• Retrieval and usage of information It deals with factors such as availability and appropriateness of information formats. . and willingness to accept information. and depth of coverage of 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.

willingness to invest in state of the art systems.systematic $ supportive factors It deals with the availabilty of IT infrastructure .Integrative. . its relevance and compatibility to organisational needs . upgradation of facilities . availability of computer professionals and top management support.

based on the segregation of the key activities.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. .

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 .

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.Need for internal consistency It arises due to the segregation of key organizational tasks. Absence of internal consistency may lead to a suboptimal implementation of strategy. .

specially in terms of strategic or competitive advantages. .Relevance to development of organizational capability The development of organizational capability. is relevant to the integration of functional plans and policies.

. Marketingorientation in functional plans and policies is in some ways contradictory to operation-orientation.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.

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

Operational implementation Operational implementation deals with the nittygritties of strategy. the scope of operational implementation would be very wide. Obviously. This is the time for action as this is the stage at which the most tangible works gets done. . 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. reducing defects in products or developing better products faster”. for example. It refers to any number of practices that allow a company to better utilize its inputs by. Operational effectiveness includes but is not limited to efficiency. .

The four P’s of operational effectiveness Productivity Processes Operational effectiveness People Pace .

Group technology . Cycle time reduction. Flexible manufacturing system . Optimized production technology . The Significant modern practices observed here are of: Just in time manufacturing. Lean manufacturing . Total productive maintenance .Productivity Productivity is the measure of the relative amount of input needed to secure a given amount of output. Cellular manufacturing .

Processes Processes are courses of action used for operational implementation . value chain and Supply chain management. Processes are often implemented through methods. Business process reengineering Enterprise-wide resource planning Quality management processes Benchmarking. .

Strategic recruitment Performance management Training and development Performance appraisal and retention management Separation management .People People are the stakeholders in the organization. Among these employees play a direct and central role in operational implementation. and customers. employees. suppliers. The significant people are the investors.

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 . Time study Time nature of managerial work Network analysis and activity charts Time based management . Efficiency is the amount of work done per unit time.

context. and requirements.Applying opl impln practices It is important to remember that any technique has a history. A technique cannot be applied blindly. There are essential pre-requisites to applying a technique and then there are the consequences. background. .

Thank YOU .

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