Strategic control
generally focuses on five aspects of organizations—structure, leader-
ship, technology, human resources, and information and operational control systems. For
example, an organization should periodically examine its structure to determine whether it
is facilitating the attainment of the strategic goals being sought. Suppose a firm using a func-
tional (
U-form
) design has an established goal of achieving a 20 percent sales growth rate per
year. However, performance indicators show that it is currently growing at a rate of only
10 percent per year. Detailed analysis might reveal that the current structure is inhibiting
growth in some way (for example, by slowing decision making and inhibiting innovation)
and that a divisional (
M-form
) design is more likely to bring about the desired growth
(by speeding decision making and promoting innovation).
In this way, strategic control focuses on the extent to which implemented strategy
achieves the organization’s strategic goals. If, as outlined earlier, one or more avenues
of implementation are inhibiting the attainment of goals, that avenue should be changed.
Consequently, the firm might find it necessary to alter its structure, replace key leaders,
adopt new technology, modify its human resources, or change its information and oper-
ational control systems.
For several years, Pfizer, the world’s largest pharmaceutical company, has invested bil-
lions of dollars in research and development. Recently, though, the firm acknowledged that
it was not getting an adequate return on its investment and announced that it was laying
off 800 senior researchers. The firm also signaled a strategic reorientation by suggesting it
would look for other drug companies to buy in order to acquire new patents and drug
formulas.
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Kohl’s department stores essentially redefined how to compete effectively in
the midtier retailing market and was on trajectory to leave competitors such as Sears and
Dillard’s in its dust. But then the firm inexplicably stopped doing many of the very things
that had led to its success—such as keeping abreast of current styles, maintaining low
inventories, and keeping its stores neat and clean—and began to stumble. Now, managers
are struggling to rejuvenate Kohl’s strategic focus and get it back on track.
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Because of both their relatively large size and the increased complexity associated with
international business, global organizations must take an especially pronounced strategic
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