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Chapter 7 Strategic Control and Restructuring

Chapter 7 Strategic Control and Restructuring. The Strategic Management Process. Internal and External Analysis. Strategy Formulation (corporate and business level). Strategic Direction. Strategy Implementation and Control. Strategic Restructuring. Strategic Control System.

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Chapter 7 Strategic Control and Restructuring

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  1. Chapter 7 Strategic Control and Restructuring

  2. The Strategic Management Process Internal and External Analysis Strategy Formulation (corporate and business level) Strategic Direction Strategy Implementation and Control Strategic Restructuring

  3. Strategic Control System A system to support managers in - assessing whether the organization’s strategy is accomplishing goals as intended - identifying areas needing attention

  4. Types of Control • Feedback - Provides managers with performance information so that they can make adjustments if necessary • Concurrent - Provides real-time information used to control organizational processes • Feedforward - Helps managers anticipate changes in the external and internal environments

  5. Elements in a Feedback Control System • Establishment of broad goals • Identification of key result areas • Establishment of specific targets and time frames • Assignment of responsibility • Development of an action plan

  6. Feedback Controls Budgets Ratio Analysis Goal Setting and Evaluation Surveys Audits

  7. Concurrent Controls Process Controls • Statistical Process Control • Real-time Inventory Control Behavioral Controls • Bureaucratic Controls • Rules and Procedures • Policies--general guides to action • Clan Control • Socialization processes that dictate appropriate behavior • Human Resources Systems such as screening, selection, training and rewards processes may also influence human outputs

  8. Feedforward Control Systems Environmental discontinuities (major, unexpected changes) make good feedforward controls necessary and important • Premise Control--evaluates whether information used to establish strategies and goals is still valid • Strategic Surveillance--helps organizations determine what is going on in their external environment. Business intelligence is the outcome from strategic surveillance.

  9. Stakeholders and Environment FEEDFORWARD CONTROL Missions and Goals time Implementation (targets, tolerances, concurrent controls) Performance Strategies Comparison of Performance with Targets Assessment of Cause and Effect FEEDBACK CONTROL

  10. The Strategic Management Process Internal and External Analysis Strategy Formulation (corporate and business level) Strategic Direction Strategy Implementation and Control Strategic Restructuring

  11. Restructuring Approaches • Refocusing Assets : Down-scoping • Retrenchment: Down-sizing • Chapter XI Reorganization • Leveraged Buyout (LBO) • Changes to Organizational Design

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