Strategic control Strategic control can be defined as process of monitoring as to whether to various strategies adopted by the organization are helping its internal environment to be matched with the external environment. Strategic control processes allow managers to evaluate a company's program from a critical long-term perspective. This involves a detailed and objective analysis of a company's organization and its ability to maximize its strengths and market opportunities. There are four types of strategic control as follows: 1. Premise control: is designed to check systematically and continuous whether or not the premises set during the planning and implementation process are still valid 2. Implementation control: is designed to assess whether the overall strategy result associated with incremental steps and actions that implement overall strategy. 3. Strategic surveillance: It is designed to monitor a broad range of events inside and outside the company to threaten the course of firm's strategy. 4. Special alert control: is the need to thoroughly and often rapidly reconsider the firm's basic strategy based on a sudden unexpected event. 2. Top 7 Outsourcing Advantages As you evaluate your choices and decisions in outsourcing different components of your operations, you will need to consider the advantages of outsourcing. When done for the right reasons, outsourcing will actually help your company grow and save money. There are other advantages of outsourcing that go beyond money. Here are the top seven advantages of outsourcing.

Focus On Core Activities In rapid growth periods, the back-office operations of a company will expand also. This expansion may start to consume resources (human and financial) at the expense of the core activities that have made your company successful. Outsourcing those activities will allow refocusing on those business activities that are important without sacrificing quality or service in the back-office. Example: A company lands a large contract that will significantly increase the volume of purchasing in a very short period of time; Outsource purchasing. Cost And Efficiency Savings Back-office functions that are complicated in nature, but the size of your company is preventing you from performing it at a consistent and reasonable cost, is another advantage of outsourcing. Example: A small doctor’s office that wants to accept a variety of insurance plans. One part-time person could not keep up with all the different providers and rules. Outsource to a firm specializing in medical billing.

Reduced Overhead Overhead costs of performing a particular back-office function are extremely high. Consider outsourcing those functions which can be moved easily. Example: Growth has resulted in an increased need for office space. The current location is very expensive and there is no room to expand. Outsource some simple operations in order to reduce the need for office space. For example, outbound telemarketing or data entry. Operational Control Operations whose costs are running out of control must be considered for outsourcing. Departments that may have evolved over time into uncontrolled and poorly managed areas are prime motivators for outsourcing. In addition, an outsourcing company can bring better management skills to your company than what would otherwise be available. Example: An information technology department that has too many projects, not enough people and a budget that far exceeds their contribution to the organization. A contracted outsourcing agreement will force management to prioritize their requests and bring control back to that area. Staffing Flexibility Outsourcing will allow operations that have seasonal or cyclical demands to bring in additional resources when you need them and release them when you’re done. Example: An accounting department that is short-handed during tax season and auditing periods. Outsourcing these functions can provide the additional resources for a fixed period of time at a consistent cost. Continuity & Risk Management Periods of high employee turnover will add uncertainty and inconsistency to the operations. Outsourcing will provided a level of continuity to the company while reducing the risk that a substandard level of operation would bring to the company. Example: The human resource manager is on an extended medical leave and the two administrative assistants leave for new jobs in a very short period of time. Outsourcing the human resource function would reduce the risk and allow the company to keep operating. Develop Internal Staff A large project needs to be undertaken that requires skills that your staff does not possess. Onsite outsourcing of the project will bring people with the skills you need into your company. Your people can work alongside of them to acquire the new skill set. Example: A company needs to embark on a replacement/upgrade project on a variety of custom built equipment. Your engineers do not have the skills required to design new and upgraded equipment. Outsourcing this project and requiring the outsourced engineers to work on-site will allow your engineers to acquire a new skill set.

Or --> Advantage #1: Outsourcing can save you money. --> Advantage #2: Outsourcing can help you share risk. --> Advantage #3: Outsourcing can help accommodate peak loads. --> Advantage #4: Outsourcing can help develop your internal staff.


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Market is new & unproven Buyers first-time users Companies in grow-and-build mode Technological know-how emerging Information about customers & market conditions hard to get Uncertainty about how fast demand for product will grow & how big market will get First-generation products improved rapidly

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No “rules of the game” Technological know-how is proprietary Entry barriers tend to be low Experience curve effects often permit significant cost reductions as volume builds Marketing task involves inducing initial purchase & overcoming customer concerns Difficulties in securing raw materials Firms run short of funds for R&D & start-up

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Try to win early race for industry leadership by employing a bold, creative strategy Push hard to o Perfect technology

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Improve product quality o Develop attractive performance features o Shape rules of competition Try to capture potential first-mover advantages Pursue new o Customers & user applications o Geographical areas to enter Shift advertising focus from building product awareness to o Increasing frequency of use & o Creating brand loyalty Move quickly when technological uncertainty clears & a “dominant” technology emerges Use price cuts to attract price-sensitive buyers Expect established firms looking for growth opportunities to enter market when risk lessens

Strategic success in an emerging industry calls for o Bold entrepreneurship o Willingness to pioneer & take risks o Intuitive feel for what buyers will like & how they will use product o Quick response to new developments o Opportunistic strategy-making

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Demand grows slower than economy-wide average or begins declining Competitive pressures intensify, resulting in heated battle for market share To grow & prosper, firm must take market share away from rivals Industry consolidates to smaller number of key players.

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Prune product line Emphasize process innovation Push hard for cost reduction Find ways to increase sales to present customers

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Purchase rival firms at bargain prices Expand internationally

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Pursue focus strategy by exploiting growth segments within industry Pursue differentiation strategy Work diligently to drive costs down by o Outsourcing activities o Redesigning internal business processes o Consolidating under-utilized production facilities o Closing low-volume, high-cost distribution outlets o Cutting marginal activities out of value chain


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Absence of visible market leaders Low entry barriers & absence of scale economies Market for product is local Small quantities of customized products required Market is so large & diverse it takes numerous firms to accommodate buyer needs High transportation costs prevent serving large market area Local regulatory requirements make each geographic area unique Newness of industry

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Construct & operate “formula” facilities Become a low-cost producer Increase customer value via vertical integration Specialize by product type Specialize by customer type

Focus on limited geographic area

4. DIFFERENT ORGANISATIONAL STRUCTURES: Organizations are structured in a variety of ways, dependant on their objectives and culture. The structure of an organization will determine the manner in which it operates and its performance. Structure allows the responsibilities for different functions and processes to be clearly allocated to different departments and employees. The wrong organization structure will hinder the success of the business. Organizational structures should aim to maximize the efficiency and success of the Organization. An effective organizational structure will facilitate working relationships between various sections of the organization. It will retain order and command whilst promoting flexibility and creativity. Internal factors such as size, product and skills of the workforce influence the organizational structure. As a business expands the chain of command will lengthen and the spans of control will widen. The higher the level of skill each employee has the more the business will make use of the matrix structure to maximize these skills across the organization. Different Structures The most common organization structures are: Tall Structure Organisation In its simplest form a tall organisation has many levels of management and supervision. There is a “long chain of command” running from the top of the organisation eg Chief Executive down to the bottom of the organisation eg shop floor worker. The diagram below neatly captures the concept of a tall structure.

Flat Structure Organisation In contrast to a tall organisation, a flat organisation will have relatively few layers or just one layer of management. This means that the “Chain of Command” from top to bottom is short and the “span of control is wide”. Due to the small number of management layers, flat organisations are often small organisations. Diagram: Flat Structure

Hierarchical Organisation In a hierarchical organisation employees are ranked at various levels within the organisation, each level is one above the other. At each stage in the chain, one person has a number of workers directly under them, within their span of control. A tall hierarchical organisation has many levels and a flat hierarchical organisation will only have a few. The chain of command (ie the way authority is organized) is a typical pyramid shape.

Centralised and Decentralised Organisation

In a centralised organisation head office (or a few senior managers) will retain the major responsibilities and powers. Conversely decentralised organisations will spread responsibility for specific decisions across various outlets and lower level managers, including branches or units located away from head office/head quarters.

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