Slide strategic management 6e by harrison chapter 8 strategic control and restructuring

Chapter 8Strategic Control and Restructuring Chapter 8 Strategic Control and Restructuring... Learning ObjectivesTo understand:  feedback, concurrent, feedforward and comprehensive str

Chapter 8

Strategic Control

and Restructuring

Chapter 8 Strategic Control

and Restructuring

Learning Objectives

To understand:

 feedback, concurrent, feedforward and

comprehensive strategic control systems

 the implications of national cultures for the design

of control systems

 characteristics of the most common restructuring tactics

 the concept of business cycle orientation and how it

is useful in helping firms deal with economic cycles

To understand:

 feedback, concurrent, feedforward and

comprehensive strategic control systems

 the implications of national cultures for the design

of control systems

 characteristics of the most common restructuring tactics

 the concept of business cycle orientation and how it

is useful in helping firms deal with economic cycles

Direction

Strategy Formulation (corporate and business level)

Strategy Implementation

and Control

Strategic Restructuring

External and Internal

Analysis

Strategic Management Process

Strategic Control System

A system to support managers in

- assessing whether the organization’s

strategy is accomplishing goals as intended

- identifying areas needing attention

A system to support managers in

- assessing whether the organization’s

strategy is accomplishing goals as intended

- identifying areas needing attention

Types of Control

Types of Control

• Feedback - Provides managers with performance

information so that they can make adjustments if

necessary

• Concurrent - Provides real-time information used

to control organizational processes

• Feedforward – Monitoring systems that help

managers anticipate changes in their external and

internal environments

• Feedback - Provides managers with performance

information so that they can make adjustments if

necessary

• Concurrent - Provides real-time information used

to control organizational processes

• Feedforward – Monitoring systems that help

managers anticipate changes in their external and

internal environments

Stakeholders and

Environment

Missions

and

Goals

Strategies Implementation ( including targets &

concurrent

concurrent controls) controls

Performance

Comparison

of Performance with Targets

Assessment

of Cause and Effect

FEEDFORWARD CONTROL

FEEDBACK CONTROL

FEEDBACK CONTROL

time

Feedback that guides impressions & expectations Feedback that guides impressions & expectations

Feedback used to alter plans and strategies

Feedback used to alter plans and strategies

Feedback Controls

Functions of feedback controls in organizations:

•Creating specific objectives or targets ensures that

managers understand the plans and strategies that guide firm decisions

•Motivate managers to pursue organizational interests

•Help managers decide when and how to intervene to

make corrections

Functions of feedback controls in organizations:

•Creating specific objectives or targets ensures that

managers understand the plans and strategies that guide firm decisions

•Motivate managers to pursue organizational interests

•Help managers decide when and how to intervene to

make corrections

Elements in a Feedback

Control System

Elements in a Feedback

Control System

Establish Broad Goals

Based on Mission, Vision,

and Purpose

Identify Key Result Areas for Each of the Broad Goals

Establish Targets for Each Result Area and a Time Frame for Accomplishment

Make a Specific Manager

Responsible for Each Target

Develop an Action Plan for

Accomplishing Each Target

Follow Up

With

Each Manager

Characteristics of Effective

Objectives or Targets

Characteristics of Effective

Objectives or Targets

• High enough to be motivating

• Realistic

• Specific

• Measurable

• Understood by all affected managers & employees

• Set through participative processes

• Use feedback on performance

• Cover specific time frame

• High enough to be motivating

• Realistic

• Specific

• Measurable

• Understood by all affected managers & employees

• Set through participative processes

• Use feedback on performance

• Cover specific time frame

Concurrent Controls

Process Controls

• Statistical Process Control

• Real-time Inventory Control

Behavioral Controls

• Bureaucratic Controls

• Rules and Procedures

• Policies – general guides to action

• Clan Control

• Socialization processes that dictate appropriate behavior

• Orientation sessions

• Training

• Formal communications such as newsletters, mission, visions, values

Process Controls

• Statistical Process Control

• Real-time Inventory Control

Behavioral Controls

• Bureaucratic Controls

• Rules and Procedures

• Policies – general guides to action

• Clan Control

• Socialization processes that dictate appropriate behavior

• Orientation sessions

• Training

• Formal communications such as newsletters, mission, visions, values

Feedforward Control Systems

Rapid changes in the social, economic,

technological and political environments make

good feedforward controls necessary and important

• Monitoring Systems – The firm analyzes information

from stakeholders, the industry and the broad

environment to predict potential changes

• Premise Control – evaluates whether information used to

establish strategies and goals is still valid

Rapid changes in the social, economic,

technological and political environments make

good feedforward controls necessary and important

• Monitoring Systems – The firm analyzes information

from stakeholders, the industry and the broad

environment to predict potential changes

• Premise Control – evaluates whether information used to

establish strategies and goals is still valid

Comprehensive Strategic

Control Systems

Comprehensive Strategic

Control Systems

Rapidly advancing technologies make continuous

improvements through control systems a possibility

• Information generated should be an important and

recurring item to be addressed by top management

• Control process should be given frequent attention

at all levels

• Data from system should be discussed in

face-to-face meetings

• Continually challenge the underlying data,

assumptions and strategies

Rapidly advancing technologies make continuous

improvements through control systems a possibility

• Information generated should be an important and

recurring item to be addressed by top management

• Control process should be given frequent attention

at all levels

• Data from system should be discussed in

face-to-face meetings

• Continually challenge the underlying data,

assumptions and strategies

National Cultures

For control systems to be effective they should reflect the

culture of the nation in which they are established:

accept uneven power distribution

of society is on individual or group

strong distinctions between gender roles

society are tolerant of uncertainty and ambiguity

focused on the long term vs the short term

For control systems to be effective they should reflect the

culture of the nation in which they are established:

accept uneven power distribution

of society is on individual or group

strong distinctions between gender roles

society are tolerant of uncertainty and ambiguity

focused on the long term vs the short term

National Cultures and Control Systems

Influence of national cultures on characteristics of control systems:

Power distance low – focus on adherence to plan

Collectivism – team-based rewards

Feminine – value on relationships and quality of life

Uncertainty tolerance – less rule based

Short-term oriented – focus on profits

Influence of national cultures on characteristics of control systems:

Power distance low – focus on adherence to plan

Collectivism – team-based rewards

Feminine – value on relationships and quality of life

Uncertainty tolerance – less rule based

Short-term oriented – focus on profits

Common Restructuring

Approaches

Common Restructuring

Approaches

downsizing (workforce reductions)

protection from foreclosure and an opportunity to renegotiate contracts

managers, employees, unions, or private investors

downsizing (workforce reductions)

protection from foreclosure and an opportunity to renegotiate

contracts

managers, employees, unions, or private investors

Business Cycle Orientation

Capabilities that allow a firm to respond more quickly than rivals to business cycles:

• Business cycle literacy

• Forecasting resources

• Facilitative organizational structure

• Business-cycle sensitive management principles

• Supportive organizational culture

Capabilities that allow a firm to respond more quickly than rivals to business cycles:

• Business cycle literacy

• Forecasting resources

• Facilitative organizational structure

• Business-cycle sensitive management principles

• Supportive organizational culture

• Increasing global complexity and

interconnectedness, fueled by technological

advancements

• Specialized, mobile and diverse labor pools,

including those found outside home countries

• Education levels, income levels and access to

capital will continue to grow worldwide

• New powerful competitors in global marketplace

• Increased concern about governance, sustainability

Trends:

• Increasing global complexity and

interconnectedness, fueled by technological

advancements

• Specialized, mobile and diverse labor pools,

including those found outside home countries

• Education levels, income levels and access to

capital will continue to grow worldwide

• New powerful competitors in global marketplace

• Increased concern about governance, sustainability

The Future

Challenge of the Future

Challenges for managers:

time when change is so rapid

diseases and wars

Challenges for managers:

time when change is so rapid

diseases and wars