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Strategic Management - Strategy Formulation

Introduction of Functional Strategies

   Posted On :  26.06.2018 09:51 pm

Strategic management process involves determining appropriate courses of action for achieving objectives.

Introduction
 
Strategic management process involves determining appropriate courses of action for achieving objectives. In the process of formulation it is necessary to gear the organization in such a way that all the functional areas are synchronized viz, finance, marketing, human resources and operations. Off late logistics is also included as a key functional area. Further the functional strategies must cover all the three levels of management – top, middle and lower. It is in this context that we need to study functional strategies in detail.

Functional Strategies

 
Functional experts like R&D, operations, finance, marketing and human resources devise functional strategies. The characteristics of functional strategies are as follows.
 
            Short term

            They provide short-term operational details for achieving long-term objectives systematically.

            Limited scope
 
Functional strategy deals with a relatively restricted plan, which provides the objectives for a specific function, for the allocation of resources among different operations within that functional area and for enabling coordination between them for an optimal contribution to the achievement of the business-and corporate-level objectives.
 

Derivative

 
Functional strategies are derived from business and corporate strategies. Functional strategies specify the grand plans in different functional areas in time horizons and help operationalize the strategies. They cascade down the hierarchy and percolate from corporate strategies to divisional strategies and further down to departmental strategies. Hindustan Lever Ltd’s functional strategies at the above three levels can be depicted as follows in Figure 14-1. 


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