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Strategic Management - Concept Of Corporate Strategy

Functional Strategies - Strategic Business Unit and Functional Level Strategies

   Posted On :  25.06.2018 11:53 pm
Functional Strategies - Strategic Business Unit and  Functional Level Strategies

Functional strategies which are short-term game plans for the key functional areas are the means to accomplish the annual plans.

Functional Strategies
 
Functional strategies which are short-term game plans for the key functional areas are the means to accomplish the annual plans. Functional strategies by clearly specifying the various measures to be taken in different functional areas in different time horizons help operationalize the grand strategy. In other words, functional strategies provide the short-term operational details for accomplishing the long term objectives systematically. Pearce II and Robinson Jr. (1988) maintained
 
“Functional strategies help in implementation of grand strategy by organizing and activating specific subunits of the company (marketing, finance, production, etc) to pursue the business strategy in daily activities. In a sense, functional strategies translate thought (grand strategy in to action designed to accomplish specific annual objectives. for every major subunit of a company, functional strategies identify and coordinate actions that support the grand strategy and improve the likelihood of accomplishing annual objectives.”
 
Operationalizing the corporate strategy requires the development of functional strategies in key areas like marketing, production, R &D, finance and human resources. Figure.4.5 Illustrates annual objectives and functional strategies
 


The annual objective is to increase sales by ` 86 crores. Strategies for this include, for example, increasing the sale of division A by `38 crores, division B by ` 30 croes, division C by `18 crores, developing a new product, intensifying promotion by increasing the size of the filed sales force, increasing the number of dealers etc.

The functional strategy for marketing must cover all the factors of the marketing mix. Mutually consistent strategies for each of the factors must be developed to help achieve the annual marketing objective.
 
R & D strategy may involve improving product or packing, developing new product etc.
 
Similarly every key functional area must develop strategies to achieve the annual objectives. The functional strategies are discussed in detail in unit III of this study material for all the functional areas viz., R & D operations, finance, human resources, logistics, information systems and marketing

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