is a method of managing the execution of a strategic plan. It’s considered unique in the management process, as it can handle the unknown and ambiguous while tracking a strategy’s implementation and the subsequent results. In other words, strategic control is a way to find different methods of strategy implementation by adapting to changing external and internal factors to achieve strategic goals.

TWO CENTRAL ASPECT OF STRATEGIC CONTROL

(ability to respond effectively to environmental change).primarily concerned with whether or not the organization is ‘doing the right things’.

(the appropriate balance and alignment among a firms culture, rewards, and boundaries. Asks if the organization is ‘doing things right’ in the implementation of its strategy

1) strategies are formulated and top management sets goals. 2) strategies are implemented. 3) performance is measured against the predetermined goal set Adapting to and anticipating both internal and external environmental change is an integral part of strategic control

goals and objectives are set, strategies are implemented, and performance is compared to the desired standards.

Contemporary approach:

Behavioral control is an approach to implementing strategy that relies on three behavioral forces or “levers” –

refers to the shared values, unspoken understandings, and sense of purpose within organizations. It provides unwritten standards of acceptable behavior.

are another type of boundary or constraint because they provide specific, measurable frameworks for how a strategy is to be implemented.

are often used to control commercial practices such as bribes, kickbacks, and other forms of payment that may be illegal.

“An ingenious device for obtaining individual profit without individual responsibility.” is a mechanism created to allow different parties to contribute capital, expertise, and labor for the maximum benefit of each party.

two primary players —

the principals who are the owners of the firm

agents who are the people paid by the board of directors to perform a job on their behalf ().

Three key governance mechanisms

wherein the owners of the corporation become actively involved in the governance of the corporation.

is the “middlemen” or “middle women” who provide a balance between a small group of key managers in the firm and a vast group of shareholders.

any effort by shareholder to communicate a need for change in companies policy or management A practical matter, individual shareholders hold relatively little influence, they do —acting collectively — have power to bring about shareholder action suits and demand that key issues be brought up for proxy votes at annual board meetings.

(failure to exert maximum effort),

(which serves to reduce employment risk but often results in lower shareholder value).

is “a set of firms which, though legally independent, are bound together by a constellation of formal and informal ties and are accustomed to taking coordinated action.”

Traditional Forms of Organizational Structure

are usually highly centralized because the founder or a top executive makes nearly all of the decisions. Emphasize that the simple structure is the oldest and most common. It also tends to be the most informal with little specialization. This may enhance creativity since employees are often not bound by many rules, but may lead to management problems if employees do notunderstand their responsibilities. ___ organizations often offer few chances for career advancement.

As firms grow, excessive demands may be placed on the owner-manager in order to process all the information necessary to run the business. Specialists are needed in various functional areas (such as accounting, marketing, and engineering). Thus, a ______ often develops in which functions are managed by specialists. Then, the chief executive’s job shifts to coordinating and managing the departments. - are generally found in organizations in which there are single or closely related products or services, high production volume, and some vertical integration.

is organized around products, projects, or markets. Each ______ has its own functional specialists organized into departments. ______ are independent units managed by a central corporate office. ________executives manage divisional performance to achieve corporate financial objectives.

a combination of a divisional and functional structure. Most commonly, functional departments are combined with product groups on a project basis. As a result, personnel from functional departments work under a product group manager for the duration of a project. Multinational corporations combine product groups and geographical units — an alternative to the product/function matrix. In both cases, personnel become responsible to two managers.

Four types of boundaries —

involve removing internal boundaries to encourage teamwork and widespread sharing of information.

are used to make external relations more permeable and create seamless knowledge systems across organizations.

enables a firm to bridge differences in culture, function, and goals to find common ground that facilitates information sharing and cooperation.

A. The Barrier-Free Organization 1. Creating Permeable Internal Boundaries Teams are an important part of barrier free structures because they 1) substitute peer-based for hierarchical control; 2) often develop more creative solutions via brainstorming and other group problem solving techniques; and 3) absorb administrative tasks previously handled by specialists. 2. Developing Effective Relationships with External Constituencies 3. Risks, Challenges, and Potential Downsides

An example of team failure by Challenger Electrical Distribution in Jackson, Mississippi identified 5 reasons for failure:

is actually a central hub surrounded by networks of outside suppliers and specialists that perform non-vital functions. Such outsourcing allows the firm to tap into the knowledge and expertise of “best in class” suppliers but retain full strategic control. - type of organization allows a company to leverage relatively small amounts of capital and a small management team.

Potential disadvantages of the modular form include

type of organization is an evolving network of independent companies – suppliers, customers, even competitors — linked together to share skills, costs, and access to one another’s markets By pooling and sharing resources and working together in a cooperative effort, each gain in the long run. are a type of strategic alliance in which complementary skills are used to pursue common objectives.

The next fivesubsections address factors that must be considered in any transition from traditional to boundaryless organization forms.

The firms organized their breakthrough projects into one of four primary ways:

ambidextrous organizational form was most effective on both dimensions:

involves informational control and behavioral control

duties of the board of directors

individual an organization that owns part of the corporation through shares of its stock

external control mechanism

two classes of shareholders

three condition of pp

as activities that enrich the controlling shareholders at the expense of minority shareholders

who have interest that are distinct from the minority shareholders