Strategic Management: Formulation and Implementation

Functional Strategies In Finance / Accounting

Financial management is primarily concerned with two functions. The first function, acquiring funds to meet the organization's current and future needs. The second function is recording, monitoring, and controlling the financial results of an organization's operations.

Financial strategies concern objectives, profitability, liquidity and cash management, leverage and capital management, asset management, investment ratios, and financial planning and control. Figure 2-6 highlights some key questions financial strategies must answer for successful implementation.

Financial strategies have received a great deal of attention recently because of the apparent inconsistency among some of the decision areas.

Research And Development Strategies

The need to develop or improve products and production processes is met by the research and development (R&D) function. Figure 2-7 outlines several questions that need to be considered in developing an R&D strategy.

The most important research and development strategy issue concerns the relationship of R&D to corporate strategy. The more important innovation is to the strategy of the organization, the more implementation will require consideration of strategic issue in R&D.

Moreover, if R&D is part of an aggressive new product development strategy, a series of decisions logically follow from such a link, including funding levels, project selection decisions, and the structure for R&D. If R&D is used primarily for process improvement, the decisions are more conservative.