Strategıc Management (ENG) — Ünite 8 Soru-Cevap

INCOMPETENT MANAGEMENT

VAGUE STRATEGIC VISION

INADEQUATE STRATEGY

NO IMPLEMENTATION PLAN

LACKING PLANNING AND CONTROL

NEGLECT OF POLITICAL INTEREST

CULTURE OF FEAR

The process of determining the effectiveness of a given strategy in achieving organizational objectives and taking corrective action wherever required to continually ensure its effectiveness.

To identify strengths, weaknesses, opportunities and threats in organizational environment.

During the three preceding stages of strategic management, managers obtain information about the external and internal environment of their organizations, formulate a strategy (i.e., strategic plan), and implement that strategy,

First, evaluation and control make it possible for top managers to control the performance of organizational subunits. Second, evaluation and control help top
managers to determine if the strategic choice. Third, evaluation and control also help top managers to assess whether the decisions they made during the course  strategy implementation are consistent with the requirements of that strategy. Fourth, evaluation and control provide feedback on the current performance of strategies being implemented. Finally, evaluation and control enable top managers to make a solid assessment of what kind of corrective actions need to be taken if implemented strategies are not likely to generate the desired or established outcomes.

Various entities participate in the process of strategic evaluation and control, including stakeholders, the board of directors and top-level managers.

There are many difficulties in the process of strategic evaluation and control. These obstacles are related to the amount of control to exert, measurement difficulties, resistance to evaluation and control, short-term orientation in measuring results, and using efficiency or effectiveness as the measurement criteria

Control can be defined as “the management function that involves monitoring activities to ensure that they are being accomplished as planned and correcting any significant deviations”.

Feedforward control involves controlling the quality of inputs (e.g., human resources, raw material, financial resources) that flow into the organization to ensure that the objectives are achieved with the minimum amount of problems possible.

Input control means monitoring qualifications of employees that flow into the organization.

The process of evaluation and control involves four steps: Setting performance standards, measuring actual performance, identifying deviations from standards set in the first step, and taking corrective action.

Performance standards could be expressed with respect to time (e.g., per hour unit of production, number of sales made in a month, net profits over the past five years, etc.), cost (e.g., cost per units, cost of distribution etc.), income (e.g., monthly sales, etc.) or market share. However, some performance standards (e.g., employee morale, creativity, organizational competencies,
etc.) cannot be expressed in quantitative or objective terms.

Various measures can be employed to measure performance. Among the measures of performance are financial measures, such as current ratio and net profit to net sales ratio, which are commonly used in financial control (i.e., in monitoring and controlling the direction, allocation, and use of organization’s resources), production measures, which evaluate the quality of inputs used in production (i.e., feedforward control), production-related activities as they are carried out (i.e., concurrent control), or the performance outcomes of production-related activities after they are carried out (e.g., quality or quantity of outputs), and marketing measures, which evaluate firm’s sales, market share or marketing expenses (e.g., expenses of sales promotions, such as marketing and advertising).

Corrective action could be taken through checking of performance, checking of
standards, and reformulating strategies, plans, and objectives.

Strategic controls are used for three main purposes: (i) to check if the premises or assumptions underlying are still valid, (ii) to continually evaluate the implementation process and (iii) to make the necessary adjustments in the process when necessary.

Implementation control helps managers to assess how well strategic plans are being implemented.

Special alert control is used in order to reassess a firm’s strategy when a sudden, unexpected event occurs, such as a sudden hike in currency exchange rate, instant change in a rival firm’s strategy, sudden acquisition of a leading rival, an unexpected product difficulty, a natural catastrophe or emergence of a pandemic.

Strategic momentum control is about maintaining or strengthening a firm’s existing momentum and modifying its direction. It can be implemented by three main approaches: responsibility control centers approach, key success factors approach and generic strategies approach.

An information system (IS) is an organizational system composed of hardware (e.g., computers), software, and telecommunications networks allowing for electronic transmission of information over distances.

Managers should reward meeting or exceeding standards in order to motivate employees. Otherwise, employees may develop a tendency to focus on easy-to-measure activities that have little or no relationship to the desired performance standards.