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