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Functional StrategiesTrent Hemann
James YostBunde Walker
When managed strategically, able to exploit:◦ Resources◦ Capabilities◦ Core Competencies
How decision makers formulate and implement organizational strategies
Functional Strategies
Puzzle pieces represent the organization’s functional strategies
Move in desired direction Move towards goals Functional strategies are developed while
taking into account the organization’s:◦ Overall vision◦ Mission◦ Corporate and Competitive strategies
Putting Together the Puzzle
When organization is founded, overall strategic direction and goal are formulated
Capabilities and Core competencies are developed
Support business and corporate level strategies
Decision makers look at various functional un its to see what is and isn’t working
Functional Strategies
Have information about positive and negative aspects
Exploit Strengths Changes in functional strategies can be
used to counteract threats and weaknesses Analyze, Decide, Act, Evaluate
After SWOT Analysis
Goal-directed plans and actions of the organization’s functional areas
Help ensure that resources and capabilities are used efficiently and effectively
Three functional concerns◦ Product◦ People◦ Support Processes
Functional Strategies
Important strategic choice in R&D involves “who”◦ Separate R&D of product designers, engineers…◦ Cross-Functional team◦ Something in between
Product Design and Development Strategies
Important strategic choice in R&D involves “how”◦ Formal/informal process for creating ideas◦ Type and amount of research◦ Use of product prototypes, test markets….
Product Design and Development Strategies
Obvious for physical goods◦ Toyota…
Less distinct for services◦ Google…
Production-Operations Strategies
Main decisions includes how and where products will be produced.
Also includes:◦ Designing layout, locations, capacity…◦ Managing supply chain, inventory, planning…
Goal: ensure that products are available when, where, and how they are needed by customers.
Production-Operations Strategies
Managing the two “Cs”◦ Customers◦ Competitors
Other marketing strategies include:◦ 4 Ps◦ Differentiation◦ Building strong brand
Marketing Strategies
HR strategies can contribute to performance◦ Shows commitment to its employees
High-performance work practices lead to both high individual and organizational performance◦ Organizational: improve knowledge, skills, and
abilities◦ Individuals: Increase motivation, reduce loafing,
help retain quality employees
Functional Strategies-The People
HR Planning, recruiting, and staffing Orientation and straining Performance evaluation and disciplinary
actions Compensation and benefits
Functional StrategiesHR Responsibility
Free meals from 11 on-site gourmet restaurants and snack rooms all over
An on-site fitness center Five on-site doctors On-site childcare. A founders award, up to millions of dollars (literally), for new
program ideas and designs.
Receive 1.1 million resumes a year with only 2,229 jobs available
Google ranked 1st on the 10th annual '100 Best Companies to Work For' list of Fortune
Is it to really attract and motivate the employees or a business motive?
Google Work Environment
Information affects how effectively organizational members can do their work
Information is essential to making decisions and carrying out work duties
Corporate blogs are becoming more popular for getting information to outsiders
Information Systems
Harrah’s Information System was improving knowledge about customer service impact
Getting the right information is critical to managing strategically
It is common to have many different Information Systems
Information Systems
Critical in planning future strategies Strategic decisions include:
◦Choices about collecting and using financial and accounting data
◦When and how to evaluate financial performance
◦How financial forecasting will be done
◦Equity or debt, long or short term
Financial Accounting Systems
Self checkouts and impulse buys Qualitative and Quantitative for each
functional area Feedback is essential What was done vs. what was supposed to
be done What changes need to be made Google implementing tablet OS to combat
iPad
Implementing Strategies
Self checkouts and impulse buys Qualitative and Quantitative for each
functional area Feedback is essential What was done vs. what was supposed to
be done What changes need to be made
Evaluating Strategies
Google Android sales surpassed IPhone AdWord Sales No censorship in China
◦ Great Firewall
◦ Shaky access
Google Evaluating Stategies
Must consider other organizational strategies compatibility
Organizations are systems What will changes do to other departments?
How will it change their functional strategy? All resources must be pooled to obtain a
strategic competitive advantage
Coordinating Organizational Strategies
Consider other departments when implementing and evaluating other programs
When making strategic decisions, first consider functional strategies
Takeaways