Managing Strategic Risk - ch.13

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Financial Accounting
Prof.Jan Klakurka

MGTD54 Week 10 March 24, 2011 Ch. 13 Managing Strategic Risk - Communicate effective boundaries and internal control systems - Communicate risks to be avoided - Remove ability to rationalize actions risky to the firm Beliefs and Boundaries - Managing tensions of short-term vs. long-term, self-interest vs. organizational successresults in innovation that enhances firm value and strategy - Inspire commitment to core set of values Core values: beliefs that define basic purpose, direction, principles Guides responsibilities to customers, employees, stockholders, communities Top mgmt view tradeoffs Inspirational leaders: 1. Articulate vision 2. Explain how to contribute to achieve vision 3. Enthusiastic support for effort 4. Encourage public recognition and reward for success - Formalize communication of core values by articulate formal beliefs systems Belief systems: explicit set of organizational definitions that senior managers communicate formally and reinforce systematically to provide basic values, purpose, and direction for the organization - High level of abstraction and generality Controlling human behaviour: Tell people what to do through command and control approach Hold ppl accountable for outcomes, leave to initiative and creativity to perform job effectively - Define boundaries by telling what not to do Inspire employees for maximum effort by:
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