How would you assess the significance of this last primary component of the strategic management process?
Thoughts! (Strategy Control) How would you assess the significance of this last primary component of the strategic management process?
Strategy control is a major issue. It is concerned with tracking a strategy as it is being implemented, detecting problems or changes in its underlying premises, and making necessary adjustments, as opposed to reacting to one’s environment. This kind of control seeks to guide action in behalf of the strategies in place as they are taking place and when the end result is not entirely certain. The rapid, accelerating change of the global marketplace of the last 10 years has made continuous improvement another aspect of strategic control in many organizations. Continuous improvement provides a way for managers to provide a form of strategic control that allows their organization to respond more proactively and timely to rapid developments in most areas that influence business success.
Strategic controls can suggest that certain aspects of the strategy are wrong so that adjustments can be made. It is unlikely that an entire strategy would be wrong, but there may be major problems with implementation. Adjustments might involve changes to any of the strategic plan elements: strategy, objectives, people plans, tactics, processes, policy, procedures, structure, etc.
Breakdowns can occur in several areas, as all strategic elements are linked. Most often they result from poorly formulated objectives, goals, and tactics, which can be caused by a mismatch between people and strategy.
Continuous improvement should be and normally is a bottom-up process. Decentralization distributes decision-making to the chain of operations most closely connected to the end users of products and services. Consequently, this increases the need for controls at all levels where decisions are being made. According to research from Mendelson and Ziegler (1999), decision-making time increases exponentially the farther away the decision-maker is from the operation/project. Mendelson and Ziegler (1999) asked business unit managers “Who has the power to reallocate 10 percent of the business unit’s R&D budget, and how long does it take to finalize the decision?”
When the decision was made one level below the business unit manager, it took 1.9 weeks.
When the business manager made the decision, it took 3.1 weeks.
When the decision was made one level above the business unit manager, it took 5.7 weeks.
This is essentially not very different than tracking a hurricane, for example. You use several models, and use your own knowledge, expertise, and current information to determine what the most likely scenario is. Resources should be allocated with a focus on this best scenario, but with a contingency plan for reallocation of resources.
Although one cannot anticipate every problem that could occur, problems will surface that must be addressed in a timely fashion. Having a continuous improvement process in place, it is possible to uncover the likelihood of a particular problem occurring well in advance of its happening. Taking this a step further, from a strategic planning perspective according to Fahey and Randall (1998), in order to minimize risk, it is a smart move to formulate a number of scenarios as to what the future might look like and plan around each of those.
Environmental scanning can be viewed as a continuous process that occurs beyond implementation of the plan. Change can be catastrophic, which is why there has to be contingency plans attuned to various scenarios of the firms future.
References
Fahey, L. & Randall, R. M. (1998). Learning from the Future: Competitive Foresight Scenarios. New York: Wiley.
Mendelson, H. & Ziegler, J. (1999). Survival of the Smartest: Managing Information for Rapid Action and World-Class Performance. New York: Wiley.
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