Functional and Operational Implimentation

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Transcript of Functional and Operational Implimentation

Functional and operational implementation

IntroductionOrganisations are complex entities.They have systems and subsystems.

These subsystems are often theirfunctional 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 strategiesFunctional 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 fitStrategies 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 fitvertical 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 FITAny functional strategy becomes strategic when it is vertically fitted to the upper level business and corporate strategies .

Types of functional strategiesStrategic marketing management Strategic financial management Strategic operations management Strategic human resource management Strategic information management

Horizontal fitThe 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 policiesFor effective implementation , strategist have to provide directions to functional managers regarding the plans and policies to be adopted.

Nature of functional plans and policiesFunctional 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 policiesThey 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

DevelopmentThe 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 policiesFinancial plans and policies

Operational plans and policiesIntegration of functional plans and policies Information mgmt plans and policies

Marketing plans and policies

Personnel plans and policies

Financial plans and policiesThese 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 policiesThese are related to the marketing mix factorsProduct Pricing Place Promotion

Integrative and systematic factorsThis 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 policiesThese are related to Production system Operations planning and control Research and development

Corporate level srategies Business level strategies

Cost leadership/differentiation/focusNature of product /service Nature of market Manner

Operations system objective Operations system structureOperations 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 SystemPlans 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 characteristicsIt 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 RelationsIt 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 PoliciesInformation 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 factorsIt 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 policiesFunctional 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 policiesFinancial plans and policies

Operational plans and policiesIntegration 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 & PoliciesRelevance 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 consistencyIt 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 capabilityThe 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 decisionsThe 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 linkagesThe 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 policiesIntegration 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 implementationOperational 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 do