Building Sustainable Competitive Advantage and a Winning Organization
  • EDGLABS Home
  • Solutions
    • Strategic Management - Strategic Decisions >
      • Functional Strategy
    • Operations Management - Operational Decisions >
      • Operations Management - Capacity Management
  • Industry Solutions
    • Restaurants - Quick Service Restaurants
    • Barbershop and Salons >
      • Barbershop Functional Strategies
      • Barbershop Operations Management
  • Resources
    • Organization Domain Modeling Methods
    • Organizations as Systems >
      • Organization System Visualization
    • Organization Management Process >
      • Strategic Management Process
      • Business Function and Tactical Management Process
      • Operations Management Process
      • Planning and Types of Plans in Business
    • Organization Performance Measurement & Management System
    • FAQ & Glossary of Terms/Concepts
  • Enterprise Design Blog
  • About
  • Contact

Attaining Sustainable Organizational Growth and Profitability

Successful Strategy Execution - BASED ON STRATEGIC CONTROL SYSTEMS

6/28/2021

0 Comments

 
Introduction
​Successful strategy implementation requires, among others, a strategic control system - a tool designed by managers to help them monitor and evaluate the progress of activities directed towards executing the organization's implemented strategy. 

Strategic Control Systems
Strategic control systems are management control systems designed by managers to help them successfully implement and execute the organization's strategies. Strategic control systems provide managers the tools to regulate and govern their activities through both proactive (feed forward) and reactive (feedback).

  • Proactive control systems - These systems help in keeping an organization on track, anticipating future events and responding to opportunities and threats.
  • Reactive control system - These systems help detect deviations after events have occurred and then take corrective actions. Managers can adopt corrective actions through adjustments in the strategy if variations are detected.

These systems further help managers achieve superior efficiency, quality, innovation and responsiveness to customers. They can also help in encouraging employees to think about innovation. Strategic control systems make employees more responsive to customers through monitoring and evaluating employees' behavior and contact with customers.

Types of Strategic Controls
Strategic controls are mainly of three types:  financial, output and behavior controls. Strategic managers can measure efficiency by comparing the total inputs with the total outputs (how many units of inputs are used to produce a unit of output). Strategic managers should ensure that financial controls and output controls are supplemented with behavior controls for efficient achievement of goals.
  • Financial Control - Managers use a financial control system to measure a company’s financial performance. For effective financial control, they establish financial goals (e.g., growth, profitability, return to shareholders) and then measure the actual achievement of those goals.
  • Output Control - In the case of the output control system, managers forecast performance goals for each unit and employee. They measure the actual performance of the units and employees. Lastly, they compare the actual performance against the goals already set for them.
    When the performance of employees or units is linked to the reward system, the output control itself provides an incentive structure for employee motivation in the organization.
  • Behavior Control - A behavior control system refers to a comprehensive system of rules and procedures. These are prescribed to direct the behavior/actions of employees at each level of the organization. Rules and procedures standardize the way of reaching the goals. Two forms of behavior control are;
  1. operating budgets and
  2. standardization of inputs, conversion activities (programming work activities so that they are done the same way time and again), and outputs.

An important task of managers is to design strategic control systems for successfully implementing a strategy.

0 Comments



Leave a Reply.

    Author

    I am a computer scientist by education and training. My interests are in modeling complex business and social systems to foster better strategic and operations management processes in delivering value to customers while meeting the expectations of stakeholders.

    Specifically, I am interested in the use of modeling techniques to improve the shared understanding of the people in the organization that would intervene to make strategies work as intended by making visible intangible concepts and assets that underlie successful organizational change.


    Archives

    June 2021
    March 2021
    April 2018
    August 2017
    May 2017
    April 2016
    January 2016

    Categories

    All
    Organization As System
    Strategic Management
    Strategy Model

    RSS Feed

Copyright Enterprise Design Labs 2005 - 2022
  • EDGLABS Home
  • Solutions
    • Strategic Management - Strategic Decisions >
      • Functional Strategy
    • Operations Management - Operational Decisions >
      • Operations Management - Capacity Management
  • Industry Solutions
    • Restaurants - Quick Service Restaurants
    • Barbershop and Salons >
      • Barbershop Functional Strategies
      • Barbershop Operations Management
  • Resources
    • Organization Domain Modeling Methods
    • Organizations as Systems >
      • Organization System Visualization
    • Organization Management Process >
      • Strategic Management Process
      • Business Function and Tactical Management Process
      • Operations Management Process
      • Planning and Types of Plans in Business
    • Organization Performance Measurement & Management System
    • FAQ & Glossary of Terms/Concepts
  • Enterprise Design Blog
  • About
  • Contact