What is Functional Strategy?

Legal Definition
Functional strategy - usually a part of overall corporate strategy prepared for various functional areas of its organizational structure (e.g., marketing strategy, financial strategy, production strategy etc.).

Some common functional strategies are:

  • Production strategy ("make or buy") - defines what the company produces itself, and that purchases from suppliers or partners, that is, how far worked out the production chain.
  • Financial Strategy- to select the main source of funding: the development of their own funds (depreciation, profit, the issue of shares, etc.) or through debt financing (bank loans, bonds, commodity suppliers' credits, etc.).
  • Organizational strategy- decision on the organization of the staff (choose the type of organizational structure, compensation system, etc.).
  • others, such as: research and development (R & D) strategy, investment strategy, etc.

In addition, each of the functional strategies can be divided into components. For example, organizational strategy can be divided into three components:

  • strategy of building organizations - to select the type of structure (divisional, functional, project, etc.);
  • strategy to work with the staff - a way of training (mainly administrative staff), training of staff (in a business or educational institutions), career planning, etc.;
  • strategy of remuneration (wages, rewards and penalties) - in particular, the approach to the compensation of senior managers (salary, bonuses, profit sharing, etc.).

Responsible for implementation of the strategy at the functional level are senior specialists (Ch. Engineer, Director of Finance). At the enterprise level - CEO, general director or director of the department, at the level of groups of companies - a collegiate body (board of directors).
-- Wikipedia
Legal Definition
Organizational plan for functional areas such as human resources, marketing, R&D, MIS. Other corporate and business strategies are supported by each org plan, customized to its sector and industry.