Functional strategies in organizational management

Functional Strategies Functional

Are the functional strategies interdependent, or can they be formulated independently of other functions?

Functional or organizational-level strategies ultimately must relate to the strategic decisions made by the firm regarding macro-level business processes and the overall organizational value chain. "Functional level strategies in marketing, finance, operations, human resources, and R&D involve the development and coordination of resources through which business unit level strategies can be executed efficiently and effectively" (Hierarchical levels of strategy, 2010, Quick MBA). They are meant to serve business unit strategies and overall corporate strategies, rather than exist independently. Functional strategies do not have a purpose in and of themselves; rather they are tools to reach a higher goal.

Because of their interdependence with wider, long-term business unit level and corporate level strategies, functional strategies should be integrated collectively rather than viewed in an independent, stand-alone fashion. Functional strategies are by definition purposeful and designed to move the firm forward in a tactical fashion. They require different units working together to achieve a common goal: simply having a strong marketing strategy is useless, if it is not connected to an R&D strategy that provides consumers with a high-quality product; an ambitious R&D project is merely a dream, if it is not also financially feasible.

Functional strategies are important as "once the higher-level strategy is developed, the functional units translate it into discrete action-plans that each department or division must accomplish for the strategy to succeed" (Hierarchical levels of strategy, 2010, Quick MBA). Even though they are interdependent, a wider corporate strategy cannot succeed if it is not served well by a functional strategy. Yet for functional strategies to be truly functional and serve the larger purposes of the organization all strategies must be complementary, otherwise different departments may compete with one another and even subvert one another's objectives. If a marketing department views its functions as more important than the technological development of the products it is promoting, its internal strategy may undermine rather than support the larger organization. A lack of perceived and real interdependence between functional strategies can result in ineffective use of resources.