Business Process Re-Engineering

1. FUNCTIONAL TACTICS

Functional tactics are the key, routine activities that must be undertaken in each functional area that is human resource management, marketing, finance, production/operations and research and development to provide the business 's products and services. Hence functional tactics translate thought (grand strategy) into action designed to accomplish specific short- term objectives. Every value chain activity in a company executes functional tactics that support the business's strategy and help accomplish strategic objectives.

1.1 Differences Between Business Strategies and Functional Tactics

Ш Functional tactics are different from business or corporate strategies in three fundamental ways:

i. Time horizon.

ii. Specificity.

iii. Participants who develop them.

Time Horizon

Ш Functional tactics identify activities to be undertaken "now" or in the immediate future. Business strategies focus on the firm's posture three to five years out.

Ш The shorter time horizon of functional tactics is critical to the successful implementation of a business strategy for two reasons.

i. First, it focuses the attention of functional managers on what needs to be done now to make the business strategy work.

ii. Secondly, it allows functional managers to adjust to changing current conditions.

Specificity

Functional tactics are more specific than business strategies. Business strategies provide general direction. Functional tactics identify the specific activities that are to be undertaken in each functional area and thus allow operating managers to work out how their unit is expected to pursue short-term objectives.

Specificity in functional tactics contributes to successful implementation by:

Ш Helping ensure that functional managers know what needs to be done and can focus on accomplishing results.

Ш Clarifying for top management how functional managers intend to accomplish the business strategy, which increases top management's confidence in and sense of control over the business strategy.

Ш Facilitating coordination among operating units within the firm by clarifying areas of interdependence and potential conflict.

Participants

Different people participate in strategy development at the functional and business levels. Business strategy is the responsibility of the general manager of a business unit. That manager typically delegates the development of functional tactics to subordinates charged with running the operating areas of the business. The manager of a business unit must establish long- term objectives and a strategy that corporate management feels contributes to corporate level goals. Similarly, key-operating managers must establish short- term objectives and operating strategies that contribute to business level goals. Just as business strategies and objectives are approved through negotiation between corporate managers and business managers, so too, are short-term objectives and functional tactics approved through negotiation between business managers and operating managers.

Involving operating managers in the development of functional tactics improves their understanding of what must be done to achieve long- term objectives and thus, contributes to successful implementation. It also helps ensure that functional tactics reflect the reality of the day-to-day operating situation. Most importantly it can increase the commitment of operating managers to the strategies developed.

1.2 Functional Tactics in Human Resource Management (HRM)

HRM tactics aid long term success in the development of managerial talent and competent employees; the creation of systems to manage compensation or regulatory concerns and guiding the effective utilization of human resources to achieve both the firm's short term objectives and employees' satisfaction and development.

The recruitment, selection, and orientation should establish the basic parameters for bringing new people into a firm and adapting them to "the way things are done" in the firm. The career development and training component should guide the action that personnel takes to meet the future human resources needs of the overall business strategy. Current trends in HRM's "paradigm shift" involve looking at people expense as an investment in human capital. This involves looking at the business's value chain and the "value" of human resource components along the various links in that chain. One of the results of this shift in perspective has been the downsizing phenomenon of the late 1980s and 1990s. While this has been traumatic for millions of employees in companies worldwide, its underlying basis involves an effort to examine the use of human capital to create value in ways that maximize the human contribution.

1.3 Functional Tactics in Marketing

The role of marketing function is to achieve the firm's objectives by bringing about the profitable sale of the business's products/services in target markets. Marketing tactics should guide sales and marketing managers in determining who will sell what, where, to whom, in what quantity, and how. Marketing tactics at a minimum should address four fundamental areas: products, price, place and promotion. The figure below highlights typical questions marketing tactics should address.

Functional Tactic

Typical questions that the functional tactic should answer

Product (or service) Ш Which products do we emphasize?Ш Which products/services contribute most to profitability?Ш What products/service image do we seek to project?Ш What consumer needs does the product/service seek to meet?Ш What changes should be influencing our customer orientation?

Price Ш Are we competing primarily on price?Ш Can we offer discounts or other pricing modifications?Ш Are our pricing policy standards nationally, or is their regional control? Ш What price segments are we targeting