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Unformatted text preview: 1 Week 12 1 Management Control Required Reading • In the supplementary reading materials • Reading 11.1 by Dess, G., T. Lumpkin and M.L.Taylor. (2005) At the end of the seminar students should be able to : Understand and explain the two perspectives on information control Distinguish between the three “levers” 1 Learning Objectives 2 3 of behavioural control Understand and explain corporate governance as a form of control 3 External environment Internal environment Strategy analysis & formulation Performance management & control Are we creating Shareholder Value? Environment/Society Seminar 9 Your firm! Customers Seminar 6 Suppliers Seminar 7 Employees Seminar 8 Strategic risk management & Control Seminar10&11 Seminar10&11 Behavioural control Information control STRATEGIC CONTROL CORPORATE GOVERNANCE Internal control mechanisms External control mechanisms Behavioural control Information control STRATEGIC CONTROL Traditional vs. Contemporary 2 Strategic Control (Traditional Approach) Formulate strategies Implement strategies Control strategies Lengthy time lags Formulate strategies Control strategies Strategic Control (Contemporary Approach) Implement strategies Hold’em Car Manufacturer Emphasise safety and comfort with a focus on Emphasise safety and comfort with a focus on 4WDs 4WDs Formulate strategy Ensure alignment of business units: Ensure alignment of business units: e.g. R&D on 4WDs, train sales force to e.g. R&D on 4WDs, train sales force to Implement understand new products, incentives for understand new products, incentives for dealers to sell new ranges etc. dealers to sell new ranges etc. strategy E.g. sales quota on new 4WD; R&D budget; E.g. sales quota on new 4WD; R&D budget; cost budgets and new vehicle roll cost budgets and new vehicle roll-out out schedules schedules Control strategy But what if the environment changes during the year? • External environment: • significant changes in oil prices; • increased awareness of environmental issues due to media coverage of natural disasters to media coverage of natural disasters? • changes in regulations? • Internal environment: • unexpected strikes? • new vehicle roll-out schedule not met? Formulate strategies Implement Strategic control Strategic Control (Contemporary Approach) strategies • For example: • Customer trends changed new strategy? new implementation plan? • Business intelligence indicates that competitors will introduce their new product first need to adjust implementation plan? “first-to-market” no longer a good strategy? Has potential strategic importance. Requires face-to-face meetings of superiors, subordinates and peers....
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- Spring '11