Differences Between Business Strategies and Functional Tactics
1. FUNCTIONAL TACTICS
Functional tactics are the key, routine activities that must be undertaken in each functional area that is human resource management, marketing, finance, production/operations and research and development to provide the business ‘s products and services. Hence functional tactics translate thought (grand strategy) into action designed to accomplish specific short- term objectives. Every value chain activity in a company executes functional tactics that support the business’s strategy and help accomplish strategic objectives.
1.1 Differences Between Business Strategies and Functional Tactics
- Functional tactics are different from business or corporate strategies in three fundamental ways:
i. Time horizon.
ii. Specificity.
iii. Participants who develop them.
Time Horizon
- Functional tactics identify activities to be undertaken “now” or in the
immediate future. Business strategies focus on the firm’s posture three to five
years out.
- The shorter time horizon of functional tactics is critical to the successful
implementation of a business strategy for two reasons.
i. First, it focuses the attention of functional managers on what needs to be done
now to make the business strategy work.
ii. Secondly, it allows functional managers to adjust to changing current conditions.
Specificity
Functional tactics are more specific than business strategies. Business strategies provide general direction. Functional tactics identify the specific activities that are to be undertaken in each functional area and thus allow operating managers to work out how their unit is expected to pursue short-term objectives.
Specificity in functional tactics contributes to successful implementation by:
- Helping ensure that functional managers know what needs to be done and can focus
on accomplishing results.
- Clarifying for top management how functional managers intend to accomplish the
business strategy, which increases top management’s confidence in and sense of
control over the business strategy.
- Facilitating coordination among operating units within the firm by clarifying
areas of interdependence and potential conflict.
Participants
Different people participate in strat...
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Beecham Kenya 2000
- 3. Flat organizations – Microsoft and dotcom companies
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- 4. Increased responsiveness to customers
NB. BPR requires maintenance of Key Performance Indicators on Quality, Lead time,
Cost and Service.
CONSEQUENCES
- As BPR efforts progress, one of the first phenomena is excess capacity. As
processes are re-engineered, even more capacity is discovered. The most frequent
response is downsizing.
- BPR suggests that old practices must be “obliterated” and new processes designed
from scratch to fully leverage new technologies and business realities. In
practice, few managers have the luxury of re-designing their processes or
organizations from “clean sheet of paper” - people, equipment and business
knowledge cannot be so easily scrapped. Furthermore, organizational change
almost inevitability becomes a learning process in which unanticipated obstacles
and opportunities emerge.
Reference:
- Pearce & Robinson – Strategic Management
- Readings on bus 6020
- Henry J. Johansson – Business Processing Engineering
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