Social:Functional Strategy

Once higher level corporate and business strategies are developed, management need to formulate and implement strategies for each function area. Functional strategy - organizational plans prepared for various functional areas of a company's organizational structure (e.g., marketing strategy, financial strategy, production strategy etc.). Functional strategies can be part of overall corporate strategy or serve as separate plans of strategy cascading/implementation within a functional area.

Some common functional strategies are:

• Production strategy ("make or buy") - defines what the company produces itself, and that purchases from suppliers or partners, that is, how far worked out the production chain.
• Financial Strategy- to select the main source of funding: the development of their own funds (depreciation, profit, the issue of shares, etc.) or through debt financing (bank loans, bonds, commodity suppliers' credits, etc.).
• Organizational strategy- decision on the organization of the staff (choose the type of organizational structure, compensation system, etc.).
• others, such as: research and development (R & D) strategy, investment strategy, etc.

In addition, each of the functional strategies can be divided into components. For example, organizational strategy can be divided into three components:

• strategy of building organizations - to select the type of structure (divisional, functional, project, etc.);
• strategy to work with the staff - a way of training (mainly administrative staff), training of staff (in a business or educational institutions), career planning, etc.;
• strategy of remuneration (wages, rewards and penalties) - in particular, the approach to the compensation of senior managers (salary, bonuses, profit sharing, etc.).

Responsible for implementation of the strategy at the functional level are senior specialists (Ch. Engineer, Director of Finance). At the enterprise level - CEO, general director or director of the department, at the level of groups of companies - a collegiate body (board of directors).