Recommended reading: Strategic Control and Operational Control Effective strategic control systems tend to have certain qualities in common. These charactristics/qualities can be stated thus: Suitable: The control system must be suitable to the needs of an organisation. It must conform to the nature and needs of the job and the area to be controlled. For example, the control system used in production department will be different from that used in sales department. Simple: The control system should be easy to understand and operate. A complicated control system will cause unnecessary mistakes, confusion and frustration among employees. When the control system is understood properly, employees can interpret the same in a right way and ensure its implementation. Selective: To be useful, the control system must focus attention on key, strategic and important factors which are critical to performance. Insignificant deviations need not be looked into.Continue reading
Strategic Management Concepts
Strategic Issues in Managing Technology
Due to increased competition and accelerated product development cycles, innovation and the management of technology is becoming crucial to corporate success. The importance of technology and innovation must be emphasized by people at the very top and reinforced by people throughout the corporation. Management has an obligation to not only encourage new product development, but also to develop a system to ensure that technology is being used most effectively with the consumer in mind. External Scanning: Corporations need to continually scan their external societal and task environments for new developments in technology that may have some application to their current or potential products, Stakeholders, especially customers, can be important participant in the new product development process. Technological Developments: Focusing one’s scanning efforts too closely on one’s own industry is dangerous. Most new developments that threaten existing business practices and technologies do not come from existing competitors or even fromContinue reading
Strategic Control Process
Strategic Control “ It is the process by which managers monitor the ongoing activities of an organization and its members to evaluate whether activities are being performed efficiently and effectively and to take corrective action to improve performance if they are not” -Sam Walton Managers exercise strategic control when they work with the part of the organisation they have influence over to ensure that it achieves the strategic aims that have been set for it. To do this effectively, the managers need some decision making freedom: either to decide what needs to be achieved or how best to go about achieving the strategic aims. Such decision making freedom is one of the characteristics that differentiate strategic control from other forms of control exercised by managers (e.g. Operational control – the management of operational processes). Strategic controls take into account the changing assumptions that determine a strategy, continually evaluate the strategyContinue reading
Strategic Control and Operational Control
Strategic Control Strategic control focuses on the dual questions of whether: (1) the strategy is being implemented as planned; and (2) the results produced by the strategy are those intended.” Strategic control is “the critical evaluation of plans, activities, and results, thereby providing information for the future action”. There are four types of strategic control: premise control, implementation control, strategic surveillance, and special alert control Premise Control: Planning premises/assumptions are established early on in the strategic planning process and act as a basis for formulating strategies. Premise control has been designed to check systematically and continuously whether or not the premises set during the planning and implementation processes are still valid. It involves the checking of environmental conditions. Premises are primarily concerned with two types of factors: Environmental factors (for example, inflation, technology, interest rates, regulation, and demographic/social changes). Industry factors (for example, competitors, suppliers, substitutes, and barriers to entry).Continue reading
Growth strategies followed by MNC’s
Growth is a way of life. Almost all organizations plan to expand. This strategy is followed when an organization aims at higher growth by broadening its one or more of its business in terms of their respective customer groups, customers functions, and alternative technologies singly or jointly — in order to improve its overall performance. There are four types of expansion (Growth) strategies Expansion through concentration Expansion through integration Expansion through diversification Expansion through cooperation 1. Expansion through concentration It involves converging resources in one or more of firms businesses in terms of their respective customer needs, customer functions, or alternative technologies either singly or jointly, in such a manner that it results in expansions. A firm that is familiar with an industry would naturally like to invest more in known business rather than unknown business. Concentration can be done through Market Penetration: It involves selling more products toContinue reading
Retrenchment Strategies Followed by Organizations
A retrenchment grand strategy is followed when an organization aims at a contraction of its activities through substantial reduction or the elimination of the scope of one or more of its businesses in terms of their respective customer groups, customer functions, or alternative technologies either singly or jointly in order to improve its overall performance. Eg: A corporate hospital decides to focus only on special treatment and realize higher revenues by reducing its commitment to general case which is less profitable. The growth of industries and markets are threatened by various external and internal developments (External developments – government policies, demand saturation, emergence of substitute products, or changing customer needs. Internal Developments — poor management, wrong strategies, poor quality of functional management and so on.) In these situations the industries and markets and consequently the companies face the danger of decline and will go for adopting retrenchment strategies. Eg: fountainContinue reading