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Functional and Functional and operational operational

implementationimplementation

IntroductionIntroduction

OOrganisations are complex rganisations are complex entities.entities.They have systems and They have systems and subsystems.subsystems.These subsystems are often their These subsystems are often their functional deppts such as functional deppts such as marketing and operations.marketing and operations.

Functional strategies are carried out through functional and operational implementation.

Functional implementation is done 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 fit

Strategies 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 fit vertical fit

horizontal fit

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 managementStrategic financial managementStrategic operations managementStrategic human resource

managementStrategic 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 policies

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

Nature of functional plans and policies

Functional 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 policies

They are developed to ensure that-Strategic 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

Development The 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 policies

Integration of functional plans and policies

Marketing plans and policies

Personnel plans and policies

Information mgmt plans and policies

Financial plans and policies

These are related to to the availability , usage and management of funds. Significant decisions to be taken are-

sources of fundsUsage of fundsManagement of funds

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 mixSegmentationTargetingPositioningMarket standingCompany image etc.

Operational plans and policies

These are related to –

Production systemOperations planning and controlResearch 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

Personnel Plans and Policies

Personnel Plans and Policy relates to the -

Personnel system, organizational and employee

characteristics, and industrial relations.

Personnel Personnel SystemSystem

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

Organizational and Organizational and employee employee

characteristicscharacteristics

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

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

Industrial RelationsIndustrial Relations

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 factors

It 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 Integration of functional plans and functional plans and

policiespolicies

Functional tasks are derived from that Functional tasks are derived from that the key activities that have to be the key activities that have to be performed for the implementation of the performed for the implementation of the corporate and business strategies. The corporate and business strategies. The functional areas in any organization are functional areas in any organization are therefore, based on the segregation of therefore, based on the segregation of the key activities. the key activities.

Integration of functional plans and policies

Financial plans and policies

Operational plans and policies

Integration of functional plans and policies

Marketing plans and policies

Personnel plans and policies

Information mgmt plans and policies

Need for internal consistency

Relevance to development of organizational

capabilityMaking trade-off

decisions

Determination of intensity of

linkagesTiming of

implementation of functional plans &

policies

INTEGRATION OF

FUNCTIONAL PLANS AND POLICIES

Five Considerations in integrating functional Plans & Policies

Need for internal Need for internal consistencyconsistency

It arises due to the segregation of It arises due to the segregation of key organizational tasks. Internal key organizational tasks. Internal consistency in the various consistency in the various functional plans and policies functional plans and policies ensures that the different functional ensures that the different functional areas do not work at cross-purpose areas do not work at cross-purpose but operate in consonance. but operate in consonance. Absence of internal consistency Absence of internal consistency may lead to a suboptimal may lead to a suboptimal implementation of strategy.implementation of strategy.

Relevance to Relevance to development of development of organizational organizational

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

Making trade-off Making trade-off decisionsdecisions

The formulation and implementation of The formulation and implementation of functional plans and policies involve functional plans and policies involve trade-off decisions. This is due to the trade-off decisions. This is due to the inherent nature of the functional areas. inherent nature of the functional areas. Marketing-orientation in functional Marketing-orientation in functional plans and policies is in some ways plans and policies is in some ways contradictory to operation-orientation. contradictory to operation-orientation.

Determination of Determination of intensity if intensity if linkageslinkages

The intensity if linkages that exist The intensity if linkages that exist between the different functional between the different functional areas are an important consideration areas are an important consideration in determining the level of in determining the level of coordination that should exist coordination that should exist between different functional areas. between different functional areas.

Timing of Timing of implementation implementation

of plans and of plans and policiespolicies

Integration of functional plans and Integration of functional plans and policies is dependent on the timing of policies is dependent on the timing of their implementation. The different their implementation. The different functional plans and policies have functional plans and policies have therefore, to be implemented at the therefore, to be implemented at the appropriate time so that they dovetail appropriate time so that they dovetail with each other.with each other.

Operational Operational implementatiimplementati

ononOperational implementation deals with Operational implementation deals with the nitty-the nitty-gritties of strategy. This is the time for gritties of strategy. This is the time for action action as this is the stage at which the most as this is the stage at which the most tangible tangible works gets done. Obviously, the scope of works gets done. Obviously, the scope of operational implementation would be operational implementation would be very wide. very wide. It would cover practically everything that It would cover practically everything that is is done in an organization.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:ProductivityProcessesPeoplePace

Monitoring

Operational Operational effectivenesseffectiveness

PorterPorter considers operational effectiveness as considers operational effectiveness as necessary but not sufficient to the success of necessary but not sufficient to the success of strategy. He explains the term as “performing strategy. He explains the term as “performing similar activities better then rivals perform similar activities better then rivals perform them. Operational effectiveness includes but them. Operational effectiveness includes but is is not limited to efficiency. It refers to any not limited to efficiency. It refers to any number of practices that allow a company to number of practices that allow a company to better utilize its inputs by, for example, better utilize its inputs by, for example, reducing defects in products or developing reducing defects in products or developing better products faster”.better products faster”.

Productivity

Processes

People Pace

Operational effectiveness

The four P’s of operational effectiveness

Productivity Productivity

ProductivityProductivity is the measure of the relative is the measure of the relative amount of input needed to secure a given amount of input needed to secure a given

amount amount of output. The Significant modern practices of output. The Significant modern practices

observed here are of: observed here are of: Just in time manufacturing, Cycle time Just in time manufacturing, Cycle time

reduction, reduction, Group technology , Optimized production Group technology , Optimized production

technology , Flexible manufacturing system , technology , Flexible manufacturing system , Cellular manufacturing , Total productive Cellular manufacturing , Total productive

maintenance , Lean manufacturingmaintenance , Lean manufacturing

ProcessesProcesses

ProcessesProcesses are courses of action used for are courses of action used for operational implementation . Processes are operational implementation . Processes are

often often implemented through methods.implemented through methods.Business process reengineeringBusiness process reengineering

Enterprise-wide resource planningEnterprise-wide resource planning Quality management processes Quality management processes

Benchmarking, value chain and Benchmarking, value chain and

Supply chain management.Supply chain management.

PeoplePeople

PeoplePeople are the stakeholders in the are the stakeholders in the organization. organization.

The significant people are the investors, The significant people are the investors, employees, suppliers, and customers. Among employees, suppliers, and customers. Among

these employees play a direct and central these employees play a direct and central role in role in

operational implementation.operational implementation.Strategic recruitmentStrategic recruitment

Performance managementPerformance managementTraining and developmentTraining and development

Performance appraisal and retention Performance appraisal and retention managementmanagement

Separation managementSeparation management

PacePace

PacePace is the speed of operational is the speed of operational implementation implementation

and is measured in terms of time. Efficiency and is measured in terms of time. Efficiency is is

the parameter often used to express the pace the parameter often used to express the pace of of

operational implementation . Efficiency is the operational implementation . Efficiency is the amount of work done per unit time.amount of work done per unit time.

Time studyTime studyTime nature of managerial workTime nature of managerial work

Network analysis and activity chartsNetwork analysis and activity chartsTime based managementTime based management

Applying opl Applying opl impln impln

practicespractices

It is important to remember that any It is important to remember that any technique technique

has a history, background, context, and has a history, background, context, and requirements. A technique cannot be applied requirements. A technique cannot be applied blindly. There are essential pre-requisites to blindly. There are essential pre-requisites to applying a technique and then there are the applying a technique and then there are the

consequences.consequences.

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