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Levers of Control for Implementing Strategy - Ch. 14

7 Pages
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Department
Financial Accounting
Course Code
MGAD40H3
Professor
Prof.Jan Klakurka

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MGTD54 Week 11 March 31, 2011
Ch.14 Levers of Control for Implementing Strategy
Levers of control: performance measurement and control system tools available to mngrs
to work on achieving profit goals and strategies
Levers of Control
- control of business strategy achieved by integrating four levers of beliefs systems,
boundary systems, diagnostic control systems, interactive control systems
- dynamic tension b/w opportunistic innovation and predictable goal achievement
Using Levers of Control to Guide Strategy
- strategy is plan, pattern of actions, product-market position, unique perspective
Intended strategies: plans managers attempt to implement in specific product market based
on analysis of competitive dynamics and current capabilities
- plans managers want to achieve
Emergent strategies: emerge spontaneously as employee respond to unpredictable threats
and opportunities through experimentation and trial and error
Realized strategies: outcome of both streams combined, what actually happened
Diagnostic control systems-Transform intended strategies into
realized strategies
-Relates to strategy as a plan
- Measure outcomes against preset
profit plans and performance goals
- Monitor for unanticipated roadblocks
or insufficient resources
-Watch for inappropriate goal setting
Interactive control systems-Tools to influence experimentation
and opportunity-seeking, resulting in
emerging strategies
-Consistency and guide create search
processes
-Relates to strategy as patterns of
action
www.notesolution.com
-Cohesive pattern that respond to
strategic uncertainties
Beliefs systems-Inspire intended and emergent
strategies
- Management vision motivate
organizational participants to
accomplish overall mission of firm
-Relate to strategy as perspective
-Innate desires to belong and
contribute
-Inspiration for indiv opportunity-
seeking
Boundary systems-Realized strategies fall within
acceptable domain of activity
-Controls strategy as position
-Activities in defined product mkts at
acceptable levels of risk
-Costs on participants who wander
outside boundaries
Dynamic Interplay of Forces
Belief systems + interactive control systems
=>motivate organizational participants to search creatively and expand opportunity space
- intrinsic motivation by creating positive informational environment encouraging info
sharing nad learning
Boundary systems + diagnostic control systems
=>constrain search behaviour and allocate scarce attention
- extrinsic motivation by explicit goals, formula-based rewards, clear limits to opportunity
seeking
- each system used to leverage scarce mgmt attention and maximize ROM
Diagnostic control systems -> conserve mgmt attention
Interactive systems -> amplify mgmt attention
Beliefs & boundary systems -> core value understood by everyone
- achieve high learning and high degrees of control
- reconcile tensions b/w innovation and efficiency
www.notesolution.com

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Description
MGTD54 Week 11 March 31, 2011 Ch.14 Levers of Control for Implementing Strategy Levers of control: performance measurement and control system tools available to mngrs to work on achieving profit goals and strategies Levers of Control - control of business strategy achieved by integrating four levers of beliefs systems, boundary systems, diagnostic control systems, interactive control systems - dynamic tension bw opportunistic innovation and predictable goal achievement Using Levers of Control to Guide Strategy - strategy is plan, pattern of actions, product-market position, unique perspective Intended strategies: plans managers attempt to implement in specific product market based on analysis of competitive dynamics and current capabilities - plans managers want to achieve Emergent strategies: emerge spontaneously as employee respond to unpredictable threats and opportunities through experimentation and trial and error Realized strategies: outcome of both streams combined, what actually happened Diagnostic control systems - Transform intended strategies into realized strategies - Relates to strategy as a plan - Measure outcomes against preset profit plans and performance goals - Monitor for unanticipated roadblocks or insufficient resources - Watch for inappropriate goal setting Interactive control systems - Tools to influence experimentation and opportunity-seeking, resulting in emerging strategies - Consistency and guide create search processes - Relates to strategy as patterns of action www.notesolution.com
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