Lecture notes
Strategy Monitoring and Control
- Module
- Business and Management
- Institution
- The University Of Kent (UKC)
Detailed explanation of strategic monitoring and control.
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Strategy Monitoring and ControlStrategy Review, Evaluation, and Control
Why strategies need to be reviewed, evaluated, and controlled?
The best formulated (i.e. created / devised) and best implemented strategies become obsolete as a
firm’s external and internal environments change.
What is Strategic Control?
Strategic Control consists of determining the extent to which:
• the organization’s strategy is being implemented as planned; and
• the strategy is successful in attaining its goals and objectives.
The Importance of Strategic Control
• Feedback and Insights
• Identification of gaps between the intended and realized strategies
• Check on the validity of strategic choice
• Congruence (comparison / similarity) between decisions and intended strategy
• Successful culmination (i.e. conclusion / end / finale) of the strategic management process
• Creating inputs for new strategic planning
Strategic Drift
Strategic drift is the tendency for strategies to develop incrementally (i.e. gradually) on the basis of
historical and cultural influences but fail to keep pace with a changing environment.
In most successful businesses there are usually long periods of relative continuity during which
established strategy remains largely unchanged or changes very incrementally (as shown in phase 1).
For example, for many years UK retailer HMV had quite successfully developed its business by
adapting to changing technology and tastes in the entertainment market. They had moved from
vinyl to CDs introduced DVDs and computer games when they arrived on the market; increasing the
space allocation to them as demand increased.
, Whilst an organisation’s strategy may continue to change incrementally, the problem is that there
do not need to be sudden or dramatic environmental changes for the strategy to become less
aligned with the environment. This is reflected in phase 2, where environmental change is
accelerating, but is not sudden. For HMV it was not as if changes in buyer behaviour (i.e. shift
towards accessing music via the internet or brought through supermarkets) or the growth in
supermarket sales of CDs and DVDs happened overnight. These changes took place over years. The
problem that causes strategic drift is that, as with many organisations, HMV’s strategy was not
keeping pace with these changes.
Reasons Strategies’ fail to keep pace with Environmental Changes
• Steady as you go: managers may be wary of changing what they are likely to see as a
winning strategy, on the basis of what might only be a fad in the market, or a temporary
downturn in demand, especially if that strategy is built on capabilities that have been the
basis of competitive advantage. It may be easy to see major changes with hindsight, but it
may not be so easy to see their significance as they are happening.
• Building on the familiar: managers may see changes in the environment as uncertain or
don’t fully understand the changes. In these circumstances they may try to minimise the
extent to which they are faced with such uncertainty by looking for answers that are
familiar, which they understand, and which have served them well in the past. This will lead
to a bias towards continued incremental strategic change.
• Core rigidities: the capabilities that have been bases of advantage can become difficult to
change; in effect core rigidities. There are two reasons:
o Over time, the ways of doing things that have delivered past success may become
taken for granted.
o Ways of doing things develop over time and become more and more embedded in
organisational routines that reinforce and rely on each other and are difficult to
unravel (i.e. untangle).
• Relationships become shackles: success has probably been built on the basis of excellent
relationships with customers, suppliers, and employees. Maintaining these may very likely
be seen as fundamental to the long-term health of the organisation. Yet these relationships
may make it difficult to make fundamental changes to strategy that could entail (i.e. involve
/ require):
o Changing routes to market or the customer base.
o Developing products requiring different suppliers.
o Changing the skill base of the organisation with the risk of disrupting relationships
with the workforce.
• Lagged performance effects: the effects of strategic drift may not be easy to see in terms of
the performance of the organisation. For example, financial performance may continue to
hold up in the early stages of strategic drift. Customers may be loyal and the organisation.
Or, by becoming more efficient, cutting costs or simply trying harder, the organisation may
continue to hold up its performance. So, there may not be internal signals of the need for
change or pressures from mangers, or external observers, to make changes.
Note: core rigidities are caused by overreliance on the capabilities that have been bases of
competitive advantage(s) for too long. While a successful firm's management relaxes its
improvement efforts, others keep on getting better and make its competitive advantage obsolete.
Reasons why Strategic Control is more Difficult today:
• A dramatic increase in the environment’s complexity
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