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FUNCTIONAL IMPLEMENTATION

Strategic Management

Strategies operate at different levels Corporate level, Business

Level and Functional Level.


There has to coordination and congruence among these

strategies.
Coordination and congruence is needed not just among

strategies at these three levels but also among strategies taking place at the same level.

Corporate-Level Strategies

Business-Level Strategies

Functional-Level Strategies

Marketing Plans and Policies

Financial Plans and Policies

Operations Plans and Policies

H.R.M. Plans and Policies

Info. Mgmt. Plans and Policies

Vertical Fit

Horizontal Fit

Vertical fit leads to the alignment of the functional areas to the

requirement of a strategy, resulting in strategic management of these functional areas.


Horizontal fit leads to the alignment of activities taking place at

working level and is done through operational implementation.

Functional strategies are defined in terms of functional plans

and policies, which are plans or tactics to implement business strategies.


Plans are made to select a course of action. Policies are required to act as guideline to action.

Nature Of Functional Plans & Policies


Plans to implement the business strategies are made within the

guidelines set at higher levels. They are made to select a course of action. Functional plans tell the functional manager what has to be done.
Policies are required to act as guidelines to action. Functional

policies state how the plans are to be implemented.


Functional plans and policies are therefore are in the nature of

tactics to make a strategy work.


Functional plans & policies affect and are affected by the resource

allocation decisions.

Need For Functional Plans & Policies


The strategic decisions are implemented by all parts of an

organization There is a basis available for controlling activities in the different functional areas of business. The time spent by functional managers in decision making is reduced as plans lay down clearly what is to be done and policies provide the discretionary framework within which decisions need to be taken. Similar situations occurring in different functional areas are handled in a consistent manner by the functional managers. Coordination across the different functions takes place where necessary.

Development Of Functional Plans & policies


Aim:- making the strategies formulate at top level, practically

feasible at functional level.


The process of Development of Functional plans and policies may

range from formal to informal and is similar to strategy formulation.


Environmental factors relevant to each functional area have an

impact on the choice of plan & policies.


Organizational plans & policies affect the choice of functional

plans & policies.


The actual process of choice is influenced by objective as well as

subjective factors.

The Configuration Of Functional Plans & Policies


Financial plans & policies
Operational plans & policies

Marketing plans & policies

Integration of functional plans & policies

Personnel plans & policies

Information management plans & policies

1 FINANCIAL PLAN AND POLICIES

Strategies need to formulate plans and policies in these

areas so that strategies are implemented effectively.


Financial plans and policies are related to the availability,

usage and management of funds.

1.1 SOURCE OF FUNDS

The major factors regarding which plans & policies have to be made are: Capital structure Procurement of capital Working capital borrowings Reserves and surplus Relationship with lenders Banks Financial institutions

1.2 USAGE OF FUNDS Important factors regarding which plans and policies sre to be made are Investment or asset mix decisions Capital investments Fixed assets acquisition Current asset Loan and Advances Dividend decisions Relationship with shareholders

1.3 MANAGEMENT OF FUNDS It deals with decisions related to systematic aspects of financial management. Major factors are: system of finance Accounting and budgeting Management control system Cash Credit Risk management Cost control & reduction Tax planning

2 MARKETING PLAN AND POLICIES


Plans and policies of marketing consist 4 Ps of the marketing mix.

Product

Pricing

Place

Promotion

2.1 PRODUCT Product denotes the goods and services that an organisation offers to its target markets. Plans and policies related to the products and markets need to be formulated and implemented on the basis of characteristics such as Quality Features Choice of Models Brand Name Packaging

2.2 PRICING
Price denotes the money that customers pay in exchange for goods and services. It is important to the seller because it represent the returns on efforts. To a buyer, price is the value that is assigned to the satisfaction of needs and wants. Several price characteristics effects the pricing plan and policies such as Discount mode of payment Allowances Payment period Credit term

2.3 PLACE Place(or distribution) is the process by which good or services are made available to the customers. Distribution plans and policies address themselves to issues such as the channels to be used, Transportation , Logistics and inventory storage management and coverage of markets .
The success of market-orientated strategies, especially in a competitive environment, rest on the efficiency and effectiveness of distribution system.

2.4 PROMOTION
Promotion deals with marketing communication intended to convey the company and product or service image to prospective buyers. The promotional mix consists of four activities: Advertising Personal selling Sales promotion Publicity

3. OPERATIONS PLANS & POLICIES


The Operations Plan describes the production management

system.
It describes what you produce and how you produce it. But planning is easy, implementation is the hard part. Operations/production

management is one of the most important aspects of running a farm business.

Production level or yield is the single most important factor

determining the cost of production.

There is rarely one area where significant cost reductions can be

attained.
The key to more profitable businesses is managing many costs

two to five percent more efficiently than their competitors.


In the operations section of a business plan, the business manager

needs to adequately communicate that the business has a sound production management strategy.
The operations plan should document the critical operational

functions that are critical for success.

To communicate the Operations plan, Operational Planning

should discuss: The products produced The production system Quantity produced Production schedule
Operations should discuss: Resources available and needed Permits and regulations Risk management plan Environmental issues Quality control systems

Operations Plans & Policies consists of 3 major factors : 3.1 Production System 3.2 Operations Planning & Control 3.2 Research & Development

Relating Operations Plans & Policies to Strategy


Corporate-level Strategy Business-level Strategy Cost leadership / Differentiation Nature of product / service Nature of market to be served Operations system objectives Operations system structure Operations plans and policies Manner in which market is to be served

4. PERSONNEL PLAN AND POLICIES


o Personnel plan and policies relate to the personnel system ,

organizational and employee characteristics and industrial relations.

o Management of human resource has been undergoing profound

change in the post-liberalization environment in India.

4.1 PERSONNEL SYSTEM

Selection Appraisal Development

Communication
Manpower planning

4.2 INDUSTRIAL RELATIONS


o Plan and policies related to industrial relations deal with issues such as union-management relationship, collective bargaining , safety , employee satisfaction and morale , etc. o Industrial relations assume a special significance in an environment where there are several factors such a pro- labor attitude of government, plethora of legislation , rules and regulations related to unions and workers , multiplicity of unions , political interference, etc. o There has been a steady improvement in the industrial relations environment in India as evidenced by several parameters like the number of strikes , lockouts and man days lost.

INTEGRATION OF FUNCTIONAL PLANS AND POLICIES

FINANCIAL PLANS AND POLICIES INFORMATION MANAGENMENT PLANS AND POLICIES MARKETING PLANS AND POLICIES

PESONNEL PLANS AND POLICIES

INTEGRATION OF FUNCTIONAL PLANS AND POLICIES

OPERATIONS PLANS AND POLICIES

Since all activities are performed to achieve the overall objectives of an organization, so they need to be integrated with following considerations:
a) Need for internal consistency b) Relevance to the department of organizational capability c) Making trade-off decisions d) Determination of intensity of linkages e) Timing of implementation of plans and policies

THANK YOU

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