09 BUS 444 Chap 9

09 BUS 444 Chap 9 - Strategic Control and Corporate...

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Strategic Control and Corporate Governance Chapter Nine
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Learning Objectives After reading this chapter, you should have a good understanding of: LO1 The value of effective strategic control systems in strategy implementation. LO2 The key difference between “traditional” and “contemporary” control systems. LO3 The imperative for “contemporary” control systems in today’s complex and rapidly changing competitive and general environments. 9-2
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Learning Objectives (cont.) LO4 The benefits of having the proper balance among the three levers of behavioral control: culture, rewards and incentives, and boundaries. LO5 The three key participants in corporate governance: shareholders, management (led by the CEO), and the board of directors. LO6 The role of corporate governance mechanisms in ensuring that the interests of managers are aligned with those of shareholders from both the United States and international perspectives. 9-3
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Strategic Control Strategic control the process of monitoring and correcting a firm’s strategy and performance Informational, behavioral 9-4
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Ensuring Informational Control Traditional control system 1. strategies are formulated and top management sets goals 2. strategies are implemented 3. performance is measured against the predetermined goal set 9-5
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Traditional Approach to Strategic Control
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Traditional Approach to Strategic Control Most appropriate when Environment is stable and relatively simple Goals and objectives can be measured with certainty Little need for complex measures of performance 9-7
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Contemporary Approach to Strategic Control Contemporary control system Continually monitoring the environments (internal and external) Identifying trends and events that signal the need to revise strategies, goals and objectives 9-8
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Contemporary Approach to Strategic Control
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Contemporary Approach to Strategic Control Informational control Concerned with whether or not the organization is “doing the right things” Behavioral control Concerned with whether or not the organization is “doing things right” in the implementation of its strategy 9-10
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Question Top managers at USA Today meet every Friday to review daily operational reports and year- to-date data. This is an example of A. Behavioral control B . Informational control C. Strategy formulation D. Strategy implementation 9-11
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09 BUS 444 Chap 9 - Strategic Control and Corporate...

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