STRATEGIC MANAGEMENT IN TIMES OF CHANGE

1. STRATEGIC MANAGEMENT IN TIMES OF CHANGE Strategic control

2. Purpose To facilitate an understanding of the need for, and process of, control of organisational performance.

3. Focus performance appraisal on stakeholder requirements. • Performance appraisal relies on answering “who does the organisation belong to, and for whose benefit is it run?”. • Recall the theories of the firm (economist, stockholder, stakeholder and consensus). • Corporate social responsibility has become an important political issue.

4. Explain the levels and aims of control. • The levels of control are: • strategic control • management control • operational control • The aims of control are to ensure that: • strategies are delivering the desired performance • the firm’s performance conforms to vision and mission • the firm is operating efficiently and effectively to maintain competitive advantage and bolster distinctive competencies.

5. Understand the review process. • The following represents the stages in the review process: • become familiar with plans and programs • review preparation • establish an agenda for strategic review • conduct strategic review meetings • disseminate feedback

6. Validate the salience of strategy. • Internal validity of strategy. • External validity of strategy. • Self appraisal of board performance.

7. Identify important performance measures. • Determine what needs controlling • efficiency targets • human resource targets • internal functioning targets • environmental targets • Market control. • Output control. • Bureaucratic control. • Clan control.

8. Understand the balanced scorecard. • The balanced score card links long-term strategic objectives with short-term actions. • Whether an organisation reaches long-term goals requires more than financial information. • It requires the control and monitoring of four interrelated processes: • translating the vision • communicating and linking • business planning • feedback and learning.

9. UNDERSTAND THE BALANCED SCORECARD (continued)

10. Appreciate the difference between joint venture control and control of the integrated firm. • Joint ventures are more risky, vulnerable, more complex, and add an extra dimension to performance appraisal. • What performance measures are used will depend on: • how well the evaluator knows about the transformation process • how thoroughly and accurately the evaluator can assess results. • The above is predicated on the rationale of the joint venture.