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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
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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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