session 11 part 2 night section spring 2009

8/8/2019 Session 11 Part 2 Night Section Spring 2009

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Session 11 Part 2Strategic Control

Chapter 13

McGraw-Hill/Irwin Copyright 2009 by the McGraw-Hill Companies, Inc. All rights reserved.


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Learning Objectives

1. Describe and illustrate four types ofstrategic control.

2. Summarize the balanced scorecardapproach and how it integrates strategicand operational control.

3. Illustrate the use of controls to guide and

monitor strategy implementation.

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Establishing Strategic Controls

Strategic control is concerned with

tracking a strategy as it is being

implemented, detecting problems or

changes in its underlying premises, andmaking necessary adjustments

Characterized as a form of steering

control

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Types of Strategic Control

Premise control

Strategic surveillance

Special alert control Implementation control

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Four Types of Strategic Control

Chapter 13 exhibit 1.CLP

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Characteristics of the Four Types ofStrategic Control

Chapter 13 exhibit 2.CLP

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Premise Control

Premise control is designed to check

systematically and continuously whether

the premises on which the strategy is basedare still valid

Environmental factors

Industry factors

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Strategic Surveillance

Strategic surveillance is designed to

monitor a broad range of events inside and

outside the firm that are likely to affect the

course of its strategy

Strategic surveillance must be kept as

unfocused as possible

Despite its looseness, strategic surveillance

provides an ongoing, broad-based

vigilance in all daily operations

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Special Alert Control

Aspecial alert control is the thorough, and

often rapid, reconsideration of the firms strategy

because of a sudden, unexpected event

A drastic event should trigger an immediate and

intense reassessment of the firms strategy and its

current strategic situation

Crisis teams Contingency plans

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Implementation Control

Strategy implementation takes place as

series of steps, programs, investments, and

moves that occur over an extended time

Implementation control is designed toassess whether the overall strategy should

be changed in light of the results

associated with the incremental actionsthat implement the overall strategy

Monitoring strategic thrusts

Milestone reviews13-10


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Balanced Scorecard Methodology

An alternative approach linking operational and

strategic control, developed by Harvard Business

School professors Robert Kaplan and David

Norton, is a system they names the balanced

scorecard

The balanced scorecard is a management system

(not only a measurement system) that enables

companies to clarify their strategies, translatethem into action, and provide meaningful

feedback

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Integrating Shareholder Value and OrganizationalActivitiesacross Organizational Levels

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Balanced Scorecard

Four perspectives:

1. The learning and growth perspective:How well are we

continuously improving and creating value?

2. The business process perspective: What are our core

competencies and areas of operational excellence?

3. The customer perspective:How satisfied are our

customers?

4. The financial perspective:

How are we doing for our shareholders?

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Dashboard

A user interface that organizes and presents

information from multiple digital sources

simultaneously in a user-designed format on

the computer screen

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session 11 part 2 night section spring 2009

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