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Le Go > 13 - Strategic Control and performance management > Flashcards

13 - Strategic Control and performance management Flashcards

1
Q

Chapter 13 - 6 learning outcomes

A
  • demonstrate how and why control is required in developing strategy
  • consider the differences between qualitative and quantitative measures
  • demonstrate the difference between organisational efficiency and organisational effectiveness
  • consider how the use of metaphor can aid strategic thinking
  • challenge the need for analysis, audit, assessment and assurance
  • demonstrate how to use a balanced scorecard approach in the development and challenge of appropriate organisational control
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2
Q

Fourfold approach to control

A

Analysis
Audit
Assessment
Assurance

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3
Q

2 benefits to recording and reporting on results of the monitoring of strategy

A
  • Aids with analysis
  • Acts as audit trail of action if the org and its directors and officers are challenged
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4
Q

4 suggested dimensions for understanding of analysis

A

Effectiveness
Efficiency
Qualitative
Quantitative

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5
Q

What is meant by operational effectiveness?

A

Does the performance enable the realisation of the organisation’s strategic goals?

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6
Q

What is meant by operational efficiency?

A

Has the performance made optimal use of the stakeholder recourses in the implementation of the strategic plan?

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7
Q

What is meant by a qualitative measure of performance?

A

Consideration of performance from the collection and consideration of numerical data (subjective approach)

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8
Q

What is meant by a quantitative measure of performance?

A

Consideration of performance from the collection and consideration of numerical data (objective approach)

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9
Q

3 questions to ask when deciding how/what to evaluate and measure re. strategy

A
  • Were there certain specific objective or goals that needed to be met?
  • Was there a particular manner in which such objectives or goals needed to be met?
  • Were there other criteria that the strategy presumed would be delivered?
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10
Q

At the higher level, evaluation of performance is often separated into: (2)

A
  • Financial measures
  • Productivity measures
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11
Q

3 examples of financial measures for performance evaluation

A
  • Profitability
  • Liquidity
  • Wealth
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12
Q

3 examples of productivity measures for performance evaluation

A

People utilisation
Product quality/performance
Resource utilisation

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13
Q

What would be called an ‘output measure’? (organisational control)

A

A goal

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14
Q

It is important that goals should be aligned with each other with a clear recognition of mutual impact - example of where goals might be in conflict

A

Increasing market share and profit may be achieved through reduction in product quality and social responsibility

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15
Q

What would be considered an ‘input measure’? (organisational control)

A

How effectively stakeholder resources are being used

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16
Q

What does use of the ‘input measure’ of considering how effectively stakeholder resources are being used assume?

A

That an org derives success through maximising the efficient use of the resources that it is feeding into its transformation process

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17
Q

7 stakeholders and their standard effectiveness criteria

A

Owners - financial return
Employees - worker satisfaction & pay
Customers - quality of good/service
Creditors - creditworthiness
Community - contribution to community affairs
Suppliers - satisfactory transactions
Government - compliance with laws and regulation

18
Q

What does audit perspective of strategic control relate to?

A

Control methods

19
Q

2 dimensions of how controls can be inserted into systems (control methods)

A

Internal awareness (single-loop system)

External awareness (double-loop system)

20
Q

What is meant by internal awareness (single-loop system of internal control)?

A

The control sits as part of the problem solving and is built into the system itself

21
Q

Example of internal awareness (single-loop system of internal control)?

A

Machine automatically switching off after set production volume is met

22
Q

What is meant by external awareness (double-loop system of internal control)?

A

External sense checks are built into systems

23
Q

Example of internal awareness (single-loop system of internal control)?

A

Machine alerts operator when certain criteria are met, who can decide whether to proceed or not

24
Q

6 different leadership skills which contribute towards a balanced structure

A
  • Experienced players
  • Lateral thinkers
  • Intelligent listeners
  • Determined challengers
  • Unbiased and objective leaders
  • Effective leaders of committees/boards (chairs)
25
Q

What is an ERP system? What does it allow compared to previous systems?

A

Enterprise resource planning system

Allows ongoing control and measurement of resources consumed towards a task, allowing for early adjustment or renegotiation

26
Q

3 stages (and order) of traditional single feedback loop for strategy

A

Develop strategy
>
Implement strategy
>
Control strategy
>
back to develop

27
Q

Dess et al. - A more effective control structure is delivered how?

A

By realignment of three core aspects (develop, implement, control), so that each aspect feeds affects and is affected by the other 2

28
Q

Control structures - what does the linkage between development and control rely upon?

A

Appropriate levels of information - are we doing the right things?

29
Q

Control structures - what does the linkage between implementational and control rely upon?

A

Behaviour of people within the organisation - is the organisation doing things right?

30
Q

Simons - 4 main characteristics of effective control system

A
  • focus on and capture of constantly changing informational demands of seniors
  • recognition that control information must be important enough to demand frequent and regular attention
  • need to interpret, discuss and challenge the data and information
  • control system itself should be seen as catalyst for ongoing debate
31
Q

What is the key denominator of Simons’ view?

A

Need for people at differing levels of org to take active role in process

32
Q

What does GAP analysis assess?

A

The differences between the expected path and the actual path from A to B - how and why various influences and forces delivered the variations

33
Q

Use of GAP analysis in double-loop control system

A

Understanding of what has happened can be used to influence development of strategy

34
Q

4 core requirements for a KPI to be used for measurement, assessment and control

A
  • KPI must be Key: closely defined measures agreed by all parties
  • KPI based upon accurate and reliable data and info
  • Business management aspect covered by a KPI must be relevant to core strategic drive
  • KPI must have forward impact (simple measure of the past is not useful)
35
Q

Why should a balanced scorecard be used when measuring performance?

A

Allows for an optimal combination of quantitative and qualitative measures

36
Q

4 standard perspectives (elements) of balanced scorecard

A
  • Customer (What do customers think? Why do they buy from us?)
  • Internal business (What do we look like from inside? Efficiency? What do employees think?)
  • Innovation and learning perspective (What does today point look like? Have we been standing still for too long?)
  • Financial (How robust is financial infrastructure? What could make us fail?)
37
Q

What does analysis of control system require?

A

Clarity of understanding of what is happening now and what the vision requires?

38
Q

What does an audit of control system require?

A

Clarity of understanding of data and information that surrounds us

39
Q

What is required for assessment of control system ? (2)

A
  • Ask the right questions
  • Find different methods of challenging the people, process and culture
40
Q

What does assurance is an element of development of strategy involve?

A

Providing assurance to owners that their assets are being used to fulfil strategic objectives in order to preserve and enhance value

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