Many would debate that Google is the best search engine out there. Whether you agree or not, in 2017, Google faced criticism for its advertisements. Advertisers complained that their ads appeared on the same screen as other problematic ads. Customers complained that their search inquiries led them to fake news sites.

Google killed two birds with one stone by giving advertisers more control over ad placement and removing problematic ads or sources from the website. Google arrived at the solution by addressing a very specific problem. Organizations often address micro problems by relying on a functional strategy. What is it? Let’s find out.


  1. What Is A Functional Strategy?

  2. The Need For Functional Level Strategy

  3. How To Make Room For A Functional Strategy

What Is A Functional Strategy?


Every organization requires a strategic plan if they want to survive the competitive market and establish themselves as a reputable business. Different levels of strategies in management not only help businesses prepare for unprecedented situations but also make critical decisions for growth and profitability. Functional strategy is a type of management strategy that guides individuals at a functional or operational level.

In a nutshell, a functional business strategy is an organizational plan that informs major functional areas of an enterprise. It’s usually short-term and is used for improving the performance of a key functional area. A functional business strategy helps maximize resource productivity (or utilization of resources) and helps achieve corporate objectives in addition to the business unit or departmental objectives.

Here’s an example that’ll help you define functional strategy clearly:

Imagine you’re on an organization’s marketing team. In addition to achieving overall objectives such as increased market shares, tapping into new markets and penetrating existing markets, your team will have its own set of objectives that will be aligned with these goals. Decisions revolving around pricing, selling and advertising will need to consider an organization’s goals as well. Therefore, a functional business strategy will be customized to the business unit and in some cases, the industry. Each department plays a pivotal role in making a difference. 

The Need For Functional Level Strategy


Different types of strategic plans in management such as business-level and corporate-level strategy help in the overall improvement of business performance. However, every unit needs to respond positively and quickly to meet those objectives. This is where a functional level strategy plays a critical role. It deals with a restricted plan that guides the objectives of a specific business unit. It even helps coordinate functions of that unit to maximize resource productivity and outcomes.

Here are some benefits of a functional level strategy:


  • It provides support to the overall business or corporate strategy
  • It emphasizes the importance and roles of functional managers or leaders and how they can improve performance at an individual level
  • It provides a framework for policies and decisions, reducing the amount of time taken by managers in problem-solving
  • It provides clarity in strategic decisions made in different functional areas of an organization
  • By providing a strong foundation for what’s to be done, a functional strategy improves coordination among business units


Therefore, a functional level strategy brings together several operational plans and helps employees utilize their resources and potential effectively. 

How To Make Room For A Functional Strategy


There are several functional areas in an organization that needs a functional level strategy. These functional areas include:


1. Marketing

Functional strategies of marketing include all activities or responsibilities concerned with the identification of the product or service, making efforts to satisfy customer needs and expectations, delivery and after-sales efforts. The most important aspect of functional strategies of marketing is the marketing mix, which includes all the steps an organization should take to increase demand in the market. To implement the strategies, organizations need to draw up , implement and track the progress of the plan.

2. Finance

Financial strategies include everything related to financial management. From raising capital, creating and implementing annual budgets to the utilization of funds, financial strategies inform the use and control of financial resources. It involves all functional areas such as planning, acquiring, utilizing and monitoring financial resources.

3. Human Resource

This department focuses on employee development and ensures job satisfaction through healthy working conditions. The strategies manage multiple activities such as recruitment, employee motivation and morale, salary management, employee engagement and satisfaction and personal development. Such steps are needed because employee development and motivation are instrumental in an organization’s performance and success.

No strategy is complete without execution. If you want to lead your functional strategy to success, you need to be able to execute, that is, act upon the decisions taken. Harappa’s Executing Solutions course will teach you how to be mindful of cost, quality and timing while carrying out important business decisions. Powerful frameworks will teach you how to manage expectations, navigate roadblocks and respond to crises calmly. Choose Harappa to make a difference in your world of work. Start your free trial today!

Explore Harappa Diaries to learn more about topics such as Exit Strategy, Functional Management Structure, Business Strategy and Corporate Strategy to classify problems and solve them efficiently.

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