Checks and Balances – The Strategic Control Process
Introduction
Within the strategic control process system, top managers tend to adapt to changes in correlation with the internal and external environmental changes that affects there organization. The top managers must be able to create strategies that will lead their organization into long-term goals. Within this article, the relationship of strategic control, business-level strategies and the perceived effectiveness of the strategic control system is explored (Fiegener, 1994). The article suggests that if management is able to accommodate a strategic control system within their business strategies, they will have a more effective strategic control system process. The research of this article reveals an increase for cost-leaders, but not for differentiators (Fiegener, 1994).
Cost-Leaders/Differentiators
According to Porter, tight cost control, frequent and detailed control reports, structured responsibilities, and strict quantitative targets are characteristics of the control
systems of firms pursuing the Cost-leader generic strategy, while firms with loose control and subjective control systems are characterized as a differentiator generic strategy. Within organizations pursuing to achieve a cost advantage over their competitors in more than one area, these firms have an interest for cost-leaders rather than differentiators. These organizations strive for firms that are tight controlled, that produce a strategy of undifferentiated products at a lower cost (Fiegener, 1994). Most firms that utilize differentiators’ strategies allow the organization to pursue a broad process that is very informal. Within this study, the positive association between strategic control tightness and systems control system was greater for Control-leaders oriented firms than for Differentiators, this was proven by a sample of two different firms which was a computer software company and insurance firm, data was...