About Strategic Management

Strategic or institutional management is the conduct of drafting, implementing and

evaluating cross-functional decision making that will enable an organization to achieve
its long-term objectives. It is the process of specifying the organization's mission, vision
and objectives, developing policies and plans, often in terms of projects and programs,
which are designed to achieve these objectives, and then allocating resources to
implement the policies and plans, projects and programs. A balanced scorecard is often
used to evaluate the overall performance of the business and its progress towards
objectives.

Strategic management is a level of managerial activity under setting goals and over
Tactics. Strategic management provides overall direction to the enterprise and is closely
related to the field of Organization Studies. In the field of business administration it is
useful to talk about "strategic alignment" between the organization and its environment or
"strategic consistency". According to Arieu (2007), "there is strategic consistency when
the actions of an organization are consistent with the expectations of management, and
these in turn are with the market and the context." Strategic management includes not
only the management team but can also include the Board of Directors and other
stakeholders of the organization. It depends on the organizational structure.

“Strategic management is an ongoing process that evaluates and controls the business and
the industries in which the company is involved; assesses its competitors and sets goals
and strategies to meet all existing and potential competitors; and then reassesses each
strategy annually or quarterly [i.e. regularly] to determine how it has been implemented
and whether it has succeeded or needs replacement by a new strategy to meet changed
circumstances, new technology, new competitors, a new economic environment., or a
new social, financial, or political environment.”

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About Functional Management

Functional management is the most common type of organizational management. The

organization is grouped by areas of specialty within different functional areas (e.g.,
finance, marketing, and engineering). Some refer to a functional area as a "silo."
Communication generally occurs within a single department. If information or project
work is needed from another department, a request is transmitted up to the department
head, who communicates the request to the other department head. Otherwise,
communication stays within the department. Team members complete project work in
addition to normal department work.

The main advantage of this type of organization is that each employee has only one boss,
thus simplifying the chain of command

STRATEGIC Versus FUNCTIONAL (Operational Management)

Category Strategic Management Functional Management

Duration of period Decisions taken to achieve long- To achieve short-term goals,
term goals are considered decisions taken are
strategic decisions considered, functional
decisions.
Management levels Such kind of decisions are taken Such kind of decisions is
at top level of management i. e. taken at lower or middle
directors, managers etc level of management i. e.
officers of lower or middle
level.
Type of work Work of strategic decision is Functional decision is
intellectual process administrative process

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Result – On account of strategic decision, On account of functional
production and profitability of decision, departmental
unit is increasing. planning becoming
successful and coordination
of activities is maintained
Study of environment It is necessary to make study of For functional decisions, it
internal as well external is necessary to make study
environmental factors affecting of internal factors.
business, while taking strategic
decisions.
Requirements For strategic decisions it is For functional decisions, it
necessary to obtain advice of is necessary to have
experts of production, technical, administrative experts,
marketing and financial level resources and facilities
Financial problems On account of strategic decisions, In functional decisions,
financial requirement raises at short-term financial
large scale and in which capital requirement raises and in
expenses would be more which current nature of
expenses would be more.
Basis of information For strategic decisions, For functional decisions,
information gathered from the past as well current
current sources and forecasting is information is used.
used
Organizational For strategic decisions, flexible For functional decisions,
requirement – organization is required. steady and functional
organization is required

Leadership – Such type of Leadership is Such type of Leadership is

required, which can bring required, which can
necessary changes in future maintain current situation.

STRATEGIC MANAGERS and FUNCTIONAL MANAGERS

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QUALITIES STRATEGIC MANAGER FUNCTIONAL MANAGER
Competencies At this level, managers must exhibit At this level, look for the
succinct and compelling communication, ability to be innovative and
the ability to inspire and lead organization- think “out-of-the-box” when
wide change, entrepreneurship, a passion for introducing and managing
results, and tenacious drive for high change. Additionally,
performance at all levels. functional managers will need
to develop strong internal
partnerships across
departments or work groups,
and build strategic
relationships with external
clients to ensure loyalty and
satisfaction.
Knowledge Strategic managers need to make well An functional manager
thought-out, long-range plans and thus must candidate should demonstrate
intimately understand their customers’ in-depth knowledge of the
needs and the competitive landscape. They company’s business model,
must also have the ability to understand and financials, and competitive
drive key talent management functions, landscape. Further, they
such as compensation, training, and should have an understanding
performance management and of the other business units’
measurement. processes, products and
procedures in all markets—
domestic and international.

Experience Managers at the strategic level need to have Functional managers should
experience in creating a corporate culture, have some experience in the
cost control, and global or expatriate following areas: leading a

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 managership assignments. This is even business unit with profit/loss
more crucial at this level since these senior- accountabilities, leading cross-
level managers drive the culture and functional teams, preparation
direction of the organization. of business plans, and
managing a significant
function
Personal Finally, your candidate should exhibit high Finally, your candidate should
Attributes levels of ambition, inquisitiveness, exhibit personal attributes like
imagination and innovation, and a high receptivity to feedback,
learning orientation flexibility/adaptability, a
strong desire for continued
growth and development, and
acceptable risk-taking.

Conclusion
“Functional plans focus on issues of control and efficiency”
“Strategic plans focus on issues of change, adaptation and innovation”

BIBLIOGRAPHY
S.no Name of the Book/Magazine/Article Author Publisher/Source
1 Azhar Tata Mgraw Hill
Strategic Management And Business Kazmi (2008)
Policy

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 2 Fred David Prentice hall of
Strategic Management: Concepts and india
Cases, 12th Edition

3 Gollakot Phi Learning

Business Policy And Strategic a (2009)
Management: Concepts And Kamala
Applications

Web sites Referred:

Websites referred
http://www.greatleadershipbydan.com/2008/10/strategic-vs-operational-leaders.html

http://www.biodieselmagazine.com/article.jsp?article_id=1966

INDEX

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S.NO Contents Page No

1 About Strategic Management 1

2 About Functional Management 2
3 Strategic Management versus Functional 2-4
Management
4 Managers Qualities & Attributes in Strategic & 4-5
Functional Management
5 BIBLIOGRAPHY 6

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 MINI PROJECT

ACADEMIC YEAR : 2009-2010

SEMISTER : 3rd SEMESTER

MID : 1st MID
SUBJECT : STRATEGIC MANAGEMENT
TOPIC : Compare and Contrast Strategic
Management & Functional Management

SUBMITED
BY
BALAMURALI BHASKARAN
09331E0004

SCHOOL OF MANAGEMENT STUDIES

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 MVGR COLLEGE OF ENGINEERING
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