Functional objectives and strategies

Unit 3

What you will learn

• Understand how functional objectives are derived from corporate objectives

• Analyse a range of corporate objectives that larger businesses might pursue

• Explain the relationship between functional objectives and strategies

• Evaluate the contribution of functional objectives in achieving corporate objectives

Corporate objectives

Maximise returns or profits

Survival Growth

Functional objectives

• Use the corporate objectives to set targets

• If the corporate objectives are to be achieved all functional areas must co-ordinate so they do not contradict

• The success of any department depends on the cooperation of all other areas-as companies grow this can be hard

Functional areas

• Finance department

• Marketing department

• Human Resources department

• Operations department

These are not definitive –each company will have its own structure and therefore the departments which best meet its needs

Corporate objectivese.g. survival

Marketing objectives

e.g. increase sales

Operations objectives

e.g. innovation

Finance objectives

e.g. cash-flow management

Human resource objectives

e.g. make full use of the workforce

The relationship between corporate and functional objectives

Functional strategies

• Once the functional objectives have been agreed, detailed plans of how they can be achieved must be developed

SmartMeasurableAgreedRealisticTime-based

Corporate objectivese.g. survival

Marketing objectives

e.g. increase sales

Operations objectives

e.g. innovation

Finance objectives

e.g. cash-flow management

Human resource objectives

e.g. make full use of the workforce

Marketing objectivese.g. new markets

Operation strategies

e.g. research and

development

Finance objectivese.g. cost

minimisation

HR strategiese.g. training

initiatives and new workforce

The relationship between functional objectives and strategies