Organizations are founded on ideas and dreams but built on plans and strategies.

Your business and corporate strategies help you identify your purpose, what your business is and your market competition. Once you’ve figured this out, you move on to the next step, which is developing a functional strategy.

A functional strategy is concerned with different functional areas in an organization. These include technology, marketing, finance etc.

Organizations are as successful as their functional level strategy. Whether it’s production or advertising, each function of your organization should work in tandem with the rest.

Read on to find out more about the types of functional strategies in an organization.

Functional Strategy For Your Business

When you’re setting up a new business, you first focus on the overall idea behind it. You have to decide whether you’re selling a product or a service. Then comes the competition and how you set yourself apart from the crowd. Once this has been decided, it’s time to hash out a functional level strategy for each of the functional areas in your organization.

There are six functional areas in an organization:

  • Strategy

  • Marketing

  • Finance

  • Human Resources

  • Technology and Equipment

  • Operations

It’s the management’s responsibility to identify tasks within each of these functional areas. Let’s look at a few examples of functional strategies:

  1. Marketing Strategy

A marketing strategy for a service-oriented organization would be to create a lasting, long-term link between the organization and the customers. Their functional strategy will include social media marketing, lead generations and SWOT (Strength, Weakness, Opportunity & Threats) Analysis to study the competition.

  1. Finance Strategy

When you have your corporate strategies down pat, you have to raise the required finances. For a startup, it can be seed funding, investor money or bank financing. Other financial strategies include capital budgeting and dividend strategies for equity shareholders.

  1. Operations Strategy

This functional level strategy defines the resources that you need for your business. For a web design studio, you would need skilled graphic designers, software like Dreamweaver or Sketch and the right equipment.

Organizations have to account for different types of functional strategies depending on what they’re trying to achieve. For instance, some new ideas come into existence with the help of crowdfunding.

Functional Strategies In Strategic Management

A functional level strategy is a short-term plan for a specific aspect of a business. It may be an advertising campaign for a new product or service or outsourcing services to an external third-party. For the purpose of strategic management, a functional strategy has defined tasks, timeline, budget, resources and goals.

Whether it’s hiring for a new leg of the business or financing a project, functional strategies in strategic management helps businesses stay afloat with a sustained competitive advantage.

Today’s dynamic world forces organizations to fall back on multiple layers of functional areas. It’s a more complex—but helpful—way to do business. Technological advancements or even market crashes need to be accounted for when you’re planning your corporate strategies. This is where functional strategies come into the picture. They act as airbags in a crisis situation.

Implementation of a functional strategy lies in the hands of management. Experts and specialists like chief officers and directors are responsible for delegating duties, monitoring progress and following-up with their staff. This way everyone’s on the same page about their objectives and goals.

Human Resources And Functional Strategies

N.R. Narayana Murthy, the co-founder of Infosys said, “The future of any corporation is as good as the value system of the leaders and followers in the organization.”

It’s no secret that people make the organization what it is. The organization’s values, culture and expectations define how well its people identify with them. A functional strategy for human resources is critical for growth and development. Employee engagement, learning and development and team-building are effective ways to increase productivity and improve performance. Human resources managers have to implement changes wherever necessary to keep their employees motivated to perform. Initiatives like opinion surveys, counseling and ensuring workplace safety are equally, if not more, important.

Organizational Success With Functional Strategies

Organizations work on the GRIN (Goals-Roles-Interdependence-Norms) framework. This helps them assess what needs to be done and how. It’s important to arm yourself with the right skills for a nuanced approach to management. Harappa’s Managing Teamwork course will teach you the essentials of collaborative goal-setting. Align your personal goals with organizational goals to achieve all-around excellence.


Explore topics such as What is Strategic Management & What is the Strategic Management Process from Harappa Diaries and attain larger organizational objectives.

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