Functional Policies and Plans

Functional implementation deals with the development of policies and plans in different areas of functions which an organization undertakes. Every business organization is built around two basic functions: production and marketing; to be in business, every organization has to produce goods or services and sell these to the customers. The resources that are used to perform and pay for these two basic functions constitute two other significant functions-finance and personneThus, an organization has to formulate policies and plans in these functions to implement its strategy successfully.

Integrated strategic planning system has significant dimension that coordinates the various plans from the top level of the organization down through the lower levels. Such plans are coordinated at different levels so that planning efforts at a lower level contribute to the higher level efforts. Thus, integration of various functions, their plans and efforts leads to effective implementation of strategy. The integration can be achieved if various functional plans are derived directly from strategic plans and that too at the level of their formulation. However, this may not always happen, particularly in the absence of proper guidelines. For, an organization is a growing concern whose operational patterns have already been established which may not contribute to the type of integration needed at various levels. Further, the functional plans are prepared by almost at any level of the organization. For example, the marketing manager develops overall marketing objectives, policies, action programmers, budget, etc. His subordinates, in turn, develop supporting marketing plans covering each area of marketing operation-distribution, sales promotion, marketing plan-which are incorporated into overall plan of the organization. Similar exercises are done in other functional areas which are incorporated into master plan for implementation. At all these levels, coordination is necessary which is not achieved automatically but through the development of policies.  Be accomplished and provide a basis for lower level managers on which to make decisions about the use of resources which have been allocated. But a policy does not tell the managers how to handle a specific activity; it is only a general guide to action. It limits the choices of managers in most cases but it does not limit them entirely.