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Functional Strategies-Meaning
Relatively restricted plan designed to achieve the following: Objectives in a specific functional area, Allocation of resources among different operations within that functional area and Coordination among different functional areas For achievement of the business and corporate level objectives.
Functional Strategies-Fit
Vertical Fit
Congruence and coordination among strategies at different level. Lower Level Functional Strategy aligned with Higher Level Business Strategy. Leads to Functional Strategies & their implementation.
Horizontal Fit
Congruence and coordination among different strategies at same level. Alignment among the various activities performed in different functional areas. Horizontal Fit leads to Operational Implementation.
NEED
Implement strategic decisions by all parts of an organization; Control activities in different functional areas of business; Reduce time spent by functional managers in decision making Handle similar situations occurring in different functional areas in a consistent manner; Coordination across the different functions takes place where necessary.
OBJECTIVE
PROFITABILITY MARKET SHARE HUMAN TALENT FINANCIAL HEALTH COST EFFICIENCY PRODUCT QUALITY INNOVATION SOCIAL RESPONSIBILITY
1. The system of finance, accounting and budgeting, cash, credit and risk management, cost control and reduction etc. 2. Important as it aims at the conservation & optimum utilisation of funds.
Marketing Strategy--Introduction of new products and services: new products include debit cards, credit cards, international cards, special deposits, demat accounts and anywhere-banking. Some of the new services include round-theclock phone-banking, Automated Teller Machines (ATMs), intercity, inter-branch banking, net-banking and bill payment services. Information Technology Strategy--Computerisation and networking of branches: Many of these branches were also networked so that their customers could be offered any-time, any-where banking services. Financial Strategy--Risk Management and Capital Adequacy: Many public sector banks were saddled with large nonperforming assets (NPAs) and suffered from low capital adequacy. Banks have since put in place stringent Risk Management Systems to address not only credit risk, but also market risk and other operational risks.