MGT 599 Strategic Management – Strategic Control Strategic control simply means monitoring the strategic management process, comparing its performance to specified standards, and then taking action where needed to ensure that the planned events outlined in the strategic formulation process actually occur. Business Level Strategies should address the specific ways the organization will meet this set of competitive challenges. Strategic Control is has helped a wide range of organizations, both private and public sector, to improve the effectiveness of their management. It achieves through practical processes and methodologies, often based on the business models either Cost Leadership or Differentiation. Generic Business-Level Strategy implies such notion as Cost Leadership. It means to establish a cost structure that allows the company to provide goods and services at lower unit costs than competitors.
In comparison with the other types of strategies it has some advantages: if rivals charge similar prices, the cost leader achieves superior profitability; the cost leader is able to charge a lower price than competitors. According to the advantages the following Cost Leadership Strategic Choices become evident: the cost leader does not try to be the industry innovator; the cost leader positions its products to appeal to the average customer the overriding goal of the cost leader is to increase efficiency and lower its costs relative to its rivals. Bear in mind the mentioned above it is possible to point out the cost leader advantages: protected from industry competitors by cost advantage; less affected by increased prices of inputs if there are powerful suppliers; less affected by a fall in price of outputs if there are powerful buyers; purchases in large quantities of inputs increase bargaining power over suppliers; ability to reduce price to compete with substitute products; low costs and prices are a barrier to entry. There is no business strategy without negative factors which decrease its effectiveness. The main disadvantages which can be marked as three C, preventing this strategy to be the perfect one are follows: competitors may lower their cost structures in an attempt to replicate our advantage; competitors may imitate the cost leaders methods in order to lower costs; cost reductions may affect demand. The other Generic Business-Level Strategy notion is Differentiation.It implies that thay create a product that customers perceive as different or distinct in an important way.
The Essay on Strategic Groups, Strategic Choices, Generic Strategies and Hybrid Strategies
It helps understand who are the most direct competitors of any given organisation, on what basis competitive rivalry is likely to take place within each group and how it is different from one group to another. Mobility between groups depends on the extent to which there are barriers to entry between one group and another. Just as a new market space often can be found by looking across substitute ...
As any management approach this one has its advantages and disadvantages. The advantages are: premium price; increased revenues = superior profitability. As for advantages it is possible to draw Differentiation Strategic Choices which include: quality, innovation, or responsiveness to customer needs; a differentiator strives to differentiate itself along as many dimensions as possible; a differentiator segments its market into many niches. The main feature of such kind of companies is that they try to concentrates on the organizational functions that provide the source of differentiation advantage which are: customers develop brand loyalty; powerful suppliers are not a problem because the company concentrates on the price it can charge rather than its costs; differentiators can pass price increases on to customers; powerful buyers are not a problem because the product is distinct; differentiation and brand loyalty are barriers to entry; the threat of substitute products depends on competitors ability to meet customer needs. To the differentiation disadvantages we would like to refer: difficulty in maintaining long-term distinctness in the eyes of the customer; agile competitors can quickly imitate; patents and first-mover advantage are limited in their durability; difficulty of maintaining premium price. All organisations have Strategic Control. In large organizations it is formalized; in the very small organisations it is often implemented by the boss being involved everywhere.
The Term Paper on Tactical Level Control Strategic Financial
... control at the strategic level, comparable to that provided by budgetary control at the tactical level. This would embrace: . Individual dimensions of strategy ... acknowledging that their environment is ahead of their control systems - often referring to themselves as "learning ... as strategic liabilities and poor indicators of the financial health of an enterprise. Sustainable competitive advantage, ...
Most organisations are somewhere in between these two extremes. The core element in the Control Strategy is to formulate effective strategies, to adapt strategies to changing environments, and quickly amend strategies. In this factor oversees a close connection between strategic control and business-level strategy which caused the level of effectiveness. It was proved that in case a company can find the golden middle in using the strategic controls systems and business strategy it receives more effective strategic control systems. To confirm this statement we should point out that tight strategic control used preferably by cost-leader oriented firms than for differentiators. The efficiency of this strategic model is hidden in the structural organization of the Control.
Typically the strategic control consists of three steps: monitoring performance; comparing performance to standards; taking action where needed. When an organization outgrows the ability of the boss to supervise everything management have sought to resolve the conundrum by applying (a series of) risk assessments. In these assessments the probable events are identified and appropriate actions to limit damage are determined. To prove the mentioned above will be taken two companies different by their strategic control systems. The A (cost-leader oriented) and B (differentiators) companies. Bear in mind all the peculiarities of the management process of these two firm, analyzed the corporate environment we came to conclusion that the strategic control tightness is more effective for the company A, then for the B company.
It occurs of the adherence to rules, policies and plans of a company. But the core factor is that virtually all the activities monitored by tight strategic control in A company. As for the B type company it is not effective because the strategies of the firm do not coincide with the type management control and are not able to monitor all the spheres. However, research on the subject of the relationship between strategic control tightness and strategic control system effectiveness is limited. For example in Intrapreneuring, deals with the fostering of the entrepreneurial spirit in large corporations and looks at the problems that corporate entrepreneurs or entrepreneurs face within the corporate environment. One of the problem areas is the use of formal (tight) control systems that inhibit the entrepreneur from acting. It is referred to the informal or underground economy that intrapreneurs use to circumvent the official formal control system in order to achieve results The tight control process assists in ensuring the minimization of idiosyncratic behavior and the promotion of conformity in accordance with explicit plans.
The Term Paper on Control Panel System House Alarm
Introduction There have been a number of burglaries in the area in which the Peterson family are living; thus they have become increasingly interested in Control Technology in their home. They have contacted me, and my task is to prepare a report, which advises them upon various alarm systems, also considering fire detection systems. I am going to provide the Petersons with two reports, one ...
One approach to control is close supervision, where parameters are set for the amount of discretion that can be exercised by subordinates. However, close supervision is considered to be less desirable from a motivational point of view. Another approach to control is procedural control or formalization, which refers to controlling behavior through policies and plans designed to prescribe correct or expected action. Formalization facilitates greater delegation through structuring work therefore it lessens the need for close supervision. It is also asserted that greater individual effort follows delegation since it permits a higher degree of individual freedom, discretion and control. Goal congruence is facilitated in these circumstances.
The downside to delegation is that it causes managers in different departments to develop their own departmental identities and philosophies. Their decisions become increasingly based on departmental rather than organizational goals and a parochial outlook makes co-ordination more difficult. Formalization and procedural control may promote minimally acceptable behavior rather than effective behavior. Procedural controls demand rigid and conformist behavior and are considered to be inappropriate for conditions of innovation and a rapidly changing environment. So, firm hierarchical and procedural methods of control may not be most appropriate forms. A control system that facilitates autonomy among subordinates in an environment where group acceptance and equitable rewards prevail is highly recommended in turbulent conditions as it is more effective in enhancing organizational adaptability and responsiveness.
The Term Paper on Phelps Et Al.Organizational and Strategic Leadership
... of similarities and differences) Viewpoint 1. Control of business (Difference) Taylor’s Organizational and Strategic Leadership Established by staffing positions ... optimum system does not exist in organizations. Every system must be analyzed to understand natural behavior of the system and ... causes of deviation. (Taylor, 1911: p. 152) Control is the goal and management is the most important. (Taylor, ...
However, the challenge is the development of an organizational environment or culture that supports greater autonomy. Speaking about the strategic control tightness it is necessary to investigates the area of self-control and its use in the organization to improve overall organizational control. The term self-control is often mistaken with what is essentially social control. More specifically, to distinguish self-direction, where the individual exercises discretion over his own behavior that may or may not be conducive to the achievement of organizational goals (and he/she does not necessarily adopt these goals as his/her own), from self-control, where the individual internalizes the organizations goals and values. In the absence of this internalization, one must resort to administrative and social control. Increased strategic control tightness not only increases effectiveness more for cost-leaders than for differentiators, it actually hinders strategic control system effectiveness for differentiators. The key is control systems that are designed around the concept of effectiveness rather than efficiency. Control systems clearly can represent a significant obstacle to entrepreneurship in organizations, especially when they focus on efficiency to the exception of effectiveness, encourage micromanagement of resources, and become ends instead of means in terms of their impact on employee behavior. Confirming the fact that certain characteristics of control can actually serve to facilitate entrepreneurship in companies. Bibliography Anthony, A.N.
and Govindarajan,. Management Control Systems. Chicago: Irwin. V. 1995. 45-73. Bowonder, B. and Miyake Innovations and Strategic Management: A Case Study in Hitachi Ltd.
The Research paper on Strategic Management and External Business Environment
This essay is a case study of analyzing the UK biggest chocolate company Thorntons’ existing strategy in current economic situation using different aspects from both external and internal business environments. In this report I will engage with the business frameworks that we learned in the first five weeks such as S. W. O. T analysis, Porter’s Five Forces, PESTEL analysis as well as Industry life ...
Technology Analysis and Strategic Management, 1994. – vol. 6 no. 1, 55-81. Chesbrough, H.W. and Teece, D.J.
Organizing for Innovation. Harvard Business Review, 1996. January-February, 65-73. Churchill, Neil. C., and Virginia L. Lewis “The Five Stages of Small Business Growth,” Harvard Business Review, 1983, 6 (3), 30-50. Lowe, T.
and Machin, L.J. New Perspectives in Management Control. London: The Macmillan Press Ltd. 1988.- 356..
