Strategic Control Systems

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Strategic control systems are the formal target-setting, measurement, and the feedback systems that allow strategic managers to evaluate whether a company is achieving superior efficiency, quality, innovation, and customer responsiveness and implementing its strategy successfully. An effective control system should three characteristics. It should be flexible enough to allow managers to respond as necessary to unexpected events; it should provide accurate information, thus giving a true picture of organizational performance; and it should supply managers with the information in a timely manner because making decisions on the basis of outdated information is a recipe for failure. Types of Strategic control systems

Personal control is the desire to shape and influence the behavior of a person in a face-to-face interaction in the pursuit of a company’s goal. The most obvious kind of personal control is direct supervision from a manager farther up in the hierarchy. The personal approach is useful because managers can question subordinates about problems or new issues they are facing to get a better understanding of the situation and to ensure that subordinates are performing their work effectively and that they are not hiding any information that could cause additional problems later. Personal control also can come from a group of peers, such as when people work in teams. Once again, personal control at the group level means that there is more possibility for learning to occur and competencies to develop, as well as greater opportunities to prevent free-riding or shirking. Output control is a system in which strategic managers estimate or forecast appropriate performance goals for each division, department, and employee, and then measure actual performance relative to these goals. Often a company’s reward system is linked to performance relative on these goals, so output control also provides an incentive structure for motivating employees at all levels in the...
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