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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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