Week-8: DQs

1. Why is strategic control important in the strategy implementation process? What are the four major types of strategic control? What are the pros and cons of each?

Strategic control refers to the process of tracking a strategy whether it is being implemented properly or not under the premises, and making necessary adjustments if required (Pearce II, J.A.,& Robinson, R.B., 2012). Strategic control tries to monitor the key activities, provide platform for interacting with people, help in allocating the various resources, and organizing the major activities, people and resources within the company. It is inevitably true that strategic control strives to answer the two basic questions which reflect the strategic importance in implementing the strategic process:

1. Are we moving in the proper direction?

It is inevitably true that the main purpose of strategic control is to steer the organization towards the right direction so that everything can be achieved as planned. Strategic control, thus, provides the right direction or road-map to the organization for future growth and profitability.

2. How are we performing?

Strategic control helps to measure the performance of the company so that corrective action can be taken to reduce the gap between the standard performance and achieved performance. Indeed, it could be helpful to minimize the risks by improving the quality and productivity of the performance within the company.

The four major types of strategic control and their respective pros and cons are highlighted on the following table:

Types of Strategic Control	Pros	Cons
1. Premise Control: Premise control is devised to examine thoroughly and relentlessly whether the strategy-based premises are still valid or not.	· Useful for planning premises and projections · High degree of focus · Consider environmental and industry factors	· Centralized data gather · Do not consider strategy-specific and Company specific factors · Expensive and time consuming
2. Strategic Surveillance: It is designed to monitor a broad range of events inside and outside the firm that are more inclined to affect the course of its strategy. It must be kept as unfocused as possible.	· Provide an ongoing, broad based vigilance in all of daily operations · Covers a wide range of areas and events for updated information.	· Lacks accuracy, accountability and is time consuming
3. Special Alert Control: This control is quite through, quick and reconsideration of the firm’s strategy because of a sudden, unexpected event.	· Support the strategies even during an unexpected event	· Impractical to change the strategies every time once it becomes invalid.
4. Implementation Control: It is designed to assess whether the overall strategy should be changed in light of the results associated with the incremental actions that implement the overall strategy (Pearce II, J.A.,& Robinson, R.B., 2012). It includes monitoring strategic thrusts and milestone reviews.	· Provide key strategic thrusts and milestones · Monitors if the strategies are being implemented as planned	· Time consuming and a lengthy process

References

Pearce II, J.A.,& Robinson, R.B. (2012). Strategic Management: Formulation, Implementation, and Control. New York: McGraw-Hill Irwin.

(n.d.) Retrieved from https://managementinnovations.wordpress.com/2008/12/10/strategy-implementation-strategic-control/

(n.d.) Retrieved from http://www.yourarticlelibrary.com/organization/importance-of-strategic-controls-in-an-organisation/44902/

2. The balanced scoreboard approach has gained popularity in recent years. What is this approach and how does it integrate strategic and operational control?

The balanced Scorecard refers to an approach that provides a set of measures which are directly linked to company’s strategy (Pearce II, J.A.,& Robinson, R.B., 2012). This approach was developed by Harvard Business School Professors, Robert Kaplan and David Norton. It allows managers to evaluate the company from four major perspectives such as:

1. Financial perspective – From this perspective, it deals with how a company should appear to its stakeholders. It basically includes measures such as operating income, return on capital employed, economic value added, and earning per share an.

2. Customer perspective – It deals with how a company should appear to its valuable customers. It includes measures such as customer satisfaction, customer retention, and market share in target segments.

3. Internal Business process perspective – It deals with which business processes a company excel at. It comprises the measures such as cost, quick delivery time and quality.

4. Learning & growth perspective – It basically talks about how a company will sustain our ability to change and improve. It includes measures such as employee satisfaction, employee retention rate, employee skill sets and so forth.

It is common these days for balanced scorecard to gain much more popularities because it provides an analytical tool for business managers to gauge the company’s performance and refine the long-term plans so as to assist the management with decision making and identify the areas for improvement. While there are four different measures, all of these are linked together logically to create the company’s value, and achieve a competitive edge in the marketplace.

It is also useful approach for integrating the strategic and operational control by facilitating the following activities:

· Clarifying strategy –This approach is likely to translate the strategic objectives, measures, targets and initiatives into actions by clarifying appropriate strategies for a company.

· Communicating strategic objectives – The Balanced Scorecard plays a pivotal role in translating the high level objectives into operational objectives and communicating them in all layers of the company.

· Planning, setting targets, and aligning strategic initiatives –This approach is quite useful in setting achievable targets for each perspective and initiatives so as to align organizational efforts with strategic planning.

· Strategic feedback and learning – This approach helps to get feedback or information about whether the strategy is being implemented as per planned.

In a nutshell, it can be said that it has been gaining as one of the powerful tools for managing control and measurement systems that enables companies to communicate their strategies, translate them into actions, and offer appropriate feedback in order to create a company’s value by leveraging core competencies, satisfying its customers, and providing a financial rewards to its shareholders.

References

Pearce II, J.A.,& Robinson, R.B. (2012). Strategic Management: Formulation, Implementation, and Control. New York: McGraw-Hill Irwin.

(n.d.) Retrieved from http://smallbusiness.chron.com/balanced-scorecard-approach-integrate-strategic-operational-control-77503.html

3. Total quality management involves a continuous improvement approach. How is continuous improvement related to innovation? What is breakthrough innovation? What are the risks and rewards associated with innovation?

Toyota’s extraordinary success the last five years is one good example of a cost-oriented continuous improvement effort

Total Quality Management (TQM), Continuous Improvement Approach and Innovation:

TQM is the philosophy that is committed to use all of the quality elements so as to satisfy the customer through continuous improvement within the company. It involves a continuous improvement approach, also called Kaizen in Japanese, which is the process of relentlessly trying to find out ways to improve and enhance a company’s products, services and processes (Pearce II, J.A.,& Robinson, R.B., 2012). In addition, this approach is more like an operating philosophy striving to find slight improvements or refinements in each and every aspect of company’s activities so as to produce lower costs, higher quality and speed or more rapid responses to customers. Toyota, for instance, has gained an extraordinary success in the field of cost-oriented continuous improvement through the use of this approach the last five years. Having said this, hence, there is a positive relation between the continuous improvement and innovation, which means that higher the improvements, higher will be the chance for innovation being made. Weston, a famous expert, explains how both continuous improvement and continuous innovation are necessary for business survival and growth.

Breakthrough innovation:

A breakthrough innovation is such kind of innovation in which a product, process, service, technology associated with them reflects a quantum leap forward in one or more of those ways (Pearce II, J.A.,& Robinson, R.B., 2012). For instance, Apple’s innovation with iPod and iTunes is a breakthrough innovation because now it became dominant after using of the microprocessor technology with Apple’s computers, deployed in a totally different industry. Due to this breakthrough innovation, Apple has become as the top music retailer worldwide within five years of its iTunes launch.

Risks and Rewards associated with innovation:

Some of the major risks associated with innovation are as follows:

1. Innovation involves creating something that doesn’t now exist so there is high risk of not being adopted by the customers.

2. Long odds for success, once it became failure may cause the image and reputation of the company for long-term.

3. Market risk, the risks or uncertainty whether markets accepts our products, process and services.

4. Technology risk, there is a huge risk in terms of R&D on its technology that could be outdated soon from the markets.

Some of the major rewards associated with innovation are increased efficiency, productivity, quality enhancement, stronger competitiveness. Apart from them, others include the following:

1. Moderately new to the marketplace

2. Based on tried and tested methodology

3. Saved money for users of innovation

4. Met customers’ needs

5. Supported existing practices

References

Pearce II, J.A.,& Robinson, R.B. (2012). Strategic Management: Formulation, Implementation, and Control. New York: McGraw-Hill Irwin.

(n.d.) Retrieved from http://asq.org/pub/qmj/past/vol8_issue4/cole.html

(n.d.) Retrieved from http://www.processexcellencenetwork.com/innovation/articles/six-sigma-and-innovation

5. What is an entrepreneur? How is the entrepreneur different from the inventor, promoter, and administrator? What is intrapreneurship? How can it be enabled in an organization?

An entrepreneur is someone who starts an enterprise with new ideas, products, market or technologies. In other words, an entrepreneur is an individual who sets up his own industry or business undertaking with a view to make a profit. In addition to this, whatever an entrepreneur does is called entrepreneurship. According to Hirich and Peters-“Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying risks and receiving the resulting rewards.”

Inventors: Those people who are exceptional for their technical talents, creativity and insights are considered as investors. While it is true that they are creators or inventors, they do not know how to become successful in the market because they do not have interests and skills that would create value for the customers.

Promotors: Those people who are clever at devising schemes or programs to sell a product or service in order to aim for at a quick profit rather than long term profit.

Administrators: Those people who are good at developing managerial skills, knowledge, abilities so that they can organize people and take pride in overseeing the efficient functioning of operations as they are.

Entrepreneurs: Those people who are good at the combination of talent such as creativity, management skills and marketing kills for selling the goods or services in the market. Entrepreneurs can achieve success from effectively managing three elements such as opportunity, entrepreneurial teams, and resources.

Intrapreneurship, and the ways it can be enabled in an organization:

Intrapreneurship is nothing but an entrepreneurship within a large company, established in order to create something new valuable to its customers. In other words, it refers to the process of attempting to identify, encourage, enable, and assist entrepreneurship within a large, established company so as to create new products, process, or services that become major new revenue streams and sources of cost savings for the company (Pearce II, J.A.,& Robinson, R.B., 2012). Unlike entrepreneurship, an intrapreneurship does not focus on the entire company but rather it focuses on particular product, service or process within the company to solve a specific problem.

Gordon Pinchot suggests 10 freedom factors that encourage and enable the intrapreneruship within the company are as follows:

1. Self-Selection: Companies should be able to give innovators the opportunity to being something new, ideas rather than making the generation of new ideas.

2. No hard-offs: Managers should allow the innovators to generate new ideas to pursue it rather than guiding them to turn it over to others.

3. The does decides: Companies should give the innovators some freedom to make decisions about their new projects or development rather than passing them through multiple levels of approvals for even a small decision.

4. Corporate “Slack”: Companies foster the resources such as time, money and other resources to facilitate innovation.

5. End the “home run” philosophy: Companies not just give importance for major breakthroughs but they should create a culture to foster even an interest in innovative ideas.

6. Tolerance of risk, failure, and mistakes: It is often misunderstood that risk, failure and mistakes are not good, but without them it is almost impossible to create innovations so that managers should be tolerated and chalked up to experience.

7. Patient money: It is necessary for companies to invest money on R&D so as to innovate from intrapranerial activities within a company.

8. Freedom from turfness: Companies should avoid the turfness and cross-fertilization should be fostered in order to produce successful entrepreneurial teams.

9. Cross-functional teams: Companies should create a cross functional team so that people can communicate and interact with each other.

10. Multiple option: It is better for companies to create as many options as possible because doing this encourages for more discussions about the innovative ideas within a company.