Why boundaries become less important as a firm develops a strong culture and reward system?

Why are effective strategic control systems so important in today’s economy? Name of the Student: Course: Institution: Lecturer:

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Strategic Control is a measure of business progress on a balanced scoreboard achieved by setting programs that keep track of the business and points out what needs to be rectified for a profitable progress to be achieved. The two major aspects of Strategic Control are Informational control and Behavioural Control. Information control is the ability of a firm to respond successfully to environmental change and Behavioural Control is the correct control balance and correct order among a business’s culture, boundaries and incentives. The above aspects can be practised in two different control systems and produce different outputs in the long run. Contemporary control systems are more reliable than Traditional control system in the light of unstable economy. Traditional control systems are based on a single feedback loop. Once the strategies are sort and goals set, they are implemented and performance is only reviewed against the predetermined goals and change only effected at the end of the cycle. However, in Contemporary control systems, informational control is part of daily practise in setting, implementing and making changes. A double loop develops whereby the business ideas, assets, goals and strategies are constantly monitored, reviewed and verified. Continuous monitoring present advantages to the business by saving time because changes in the competitive unsettled economy are detected in time and the organisation can respond effectively. In addition, the three elements of Behavioural control; culture, rewards and boundaries play a big role in the business progress. Offering incentives and rewards not only develops a better workforce but saves the business from external controls and therefore decision making is made easy. Organizations that practise strategic management normally outdo those that do not. The achievement of a suitable tie between a firm’s setting and its strategy contribute significantly to its output and progress. A firm cannot risk relying on intuitive strategies when it expands or the economy changes. As the world’s economy becomes unpredictable and complex strategic management is used by today’s business to perform in the complex economy. References

Dess, G. G., Lumpkin, G. T., & Eisner, A. B. (2006). Strategic management: Text and cases. Boston: McGraw-Hill/Irwin.

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