Strategic Control

There are two types of strategic control there is the traditional approach and the contemporary approach. The first approach I will define is the traditional approach, this is a sequential method of organizational control in which strategies are formulated and top management sets goals, strategies are implemented, and performance is measured against the predetermined goal set. The next approach is the contemporary approach, this follows the same guidelines but there are two distinct differences, informational control and behavioral control. Informational control details with the concern whether or not the organization is “Doing the right things”. Behavioral control on the other hand asks if the organization is “Doing things right” in the implementation strategy. Informational control is a method of organizational control in which a firm gathers and analyzes information from the internal and external environment in order to obtain the best fit between the organization’s goals and strategies and the strategic environment. Behavioral control is a method of organizational control in which a firm influences the actions of employees through culture, reward, and boundaries. Inside an organization there is also control systems, these are corporate culture and reward systems. Corporate culture is a system of shared values and beliefs that shape a company’s people, organizational structure and control systems to produce behavioral norms. Reward systems represent a powerful means of influencing an organization’s culture, focusing efforts on high-priority tasks, and motivating individuals and collective task performance. The next section deals with the organizational structure and how control is passed down from top management to the bottom of the ladder.