Distinguish between behavior and output controls. Provide examples of each.
Behavior controls specify how something should be done; they either stem from policies, set processes,
rules, SOPs, or can be ordered by a superior. Through the text, we learned that behavior controls are
now really implemented by the ISO 9000 and 14000 Standards which are basic principles and standards
set forth and internationally accepted as a form of documentation for a company’s quality operations
and their impact on the environment. Behavior controls are typically set in place when a company is
unable to clearly measure performance results of its staff; so the cause-and-effect portion of behavior
controls enables them to clearly define and see performance results.
Output controls, unlike behavior controls, are needed when the cause-and-effect portion of one’s job
doesn’t give clear results. Output controls are specifically formulated to understand what needs to be
accomplished by focusing on the desired end result. Typically, you will see an output control in the form
of sales quotas, specific cost objectives, customer satisfaction surveys, and performance targets.
Depending on the strategy in place for the company, they may focus more on output controls in order to
gain a clear understanding of the performance measures put in place.
Discuss the three general orientations comprising directional strategy.
The three general orientations that comprise the directional strategy are:
Growth strategies – the most widely sought-after strategy of corporations because the typical objective
is to achieve growth in all facets of business. Growth strategies focus on concentration and
diversification. Concentration in the growth strategy works well for businesses that have a good product
line that shows great growth potential; focusing concentration on what’s already there and how to make
it better and more desirable. Diversification becomes the focus when sales or growth has begun to
plateau; they then want to search for ways to expand out into other industries to promote more growth.
Stability – when the corporation functions within a predictable environment, stability is sometimes the
strategy focus rather than growth. Although this strategy can oftentimes seem like a lazy or lackadaisical
approach to business, companies that thrive in a niche market can rely on this strategy to continue to be
successful. One thing that differentiates the stability strategy from the others within the directional
strategy groups is that using this strategy for the long-term can prove to be dangerous. Thus, there are
three focuses within the stability strategy: pause/proceed with caution, no-change, and profit strategies.
Depending on the market environment at any specific time, one of these focuses will be implemented
through the stability strategy.
Retrenchment – this is a strategy used by companies that are performing poorly. You can think of
retrenchment as digging out of a hole; companies are looking for ways to cut ties with weaknesses or
any aspect of the business that’s causing loss. In the retrenchment strategy, there are three different
ways to accomplish this: turnaround, captive, sell-out, and liquidation. Depending on the severity of the
situation, a turnaround strategy should probably be used first to transform what’s currently happening
into something more efficient. A captive strategy ensures that business still runs but the firm is basically
becoming captive to a larger firm, whether it be a customer or a competitor. They merge themselves
with the “angel” company which guarantees sales but also cuts losses for operational costs and so forth.
Behavior controls specify how something should be done; they either stem from policies, set processes,
rules, SOPs, or can be ordered by a superior. Through the text, we learned that behavior controls are
now really implemented by the ISO 9000 and 14000 Standards which are basic principles and standards
set forth and internationally accepted as a form of documentation for a company’s quality operations
and their impact on the environment. Behavior controls are typically set in place when a company is
unable to clearly measure performance results of its staff; so the cause-and-effect portion of behavior
controls enables them to clearly define and see performance results.
Output controls, unlike behavior controls, are needed when the cause-and-effect portion of one’s job
doesn’t give clear results. Output controls are specifically formulated to understand what needs to be
accomplished by focusing on the desired end result. Typically, you will see an output control in the form
of sales quotas, specific cost objectives, customer satisfaction surveys, and performance targets.
Depending on the strategy in place for the company, they may focus more on output controls in order to
gain a clear understanding of the performance measures put in place.
Discuss the three general orientations comprising directional strategy.
The three general orientations that comprise the directional strategy are:
Growth strategies – the most widely sought-after strategy of corporations because the typical objective
is to achieve growth in all facets of business. Growth strategies focus on concentration and
diversification. Concentration in the growth strategy works well for businesses that have a good product
line that shows great growth potential; focusing concentration on what’s already there and how to make
it better and more desirable. Diversification becomes the focus when sales or growth has begun to
plateau; they then want to search for ways to expand out into other industries to promote more growth.
Stability – when the corporation functions within a predictable environment, stability is sometimes the
strategy focus rather than growth. Although this strategy can oftentimes seem like a lazy or lackadaisical
approach to business, companies that thrive in a niche market can rely on this strategy to continue to be
successful. One thing that differentiates the stability strategy from the others within the directional
strategy groups is that using this strategy for the long-term can prove to be dangerous. Thus, there are
three focuses within the stability strategy: pause/proceed with caution, no-change, and profit strategies.
Depending on the market environment at any specific time, one of these focuses will be implemented
through the stability strategy.
Retrenchment – this is a strategy used by companies that are performing poorly. You can think of
retrenchment as digging out of a hole; companies are looking for ways to cut ties with weaknesses or
any aspect of the business that’s causing loss. In the retrenchment strategy, there are three different
ways to accomplish this: turnaround, captive, sell-out, and liquidation. Depending on the severity of the
situation, a turnaround strategy should probably be used first to transform what’s currently happening
into something more efficient. A captive strategy ensures that business still runs but the firm is basically
becoming captive to a larger firm, whether it be a customer or a competitor. They merge themselves
with the “angel” company which guarantees sales but also cuts losses for operational costs and so forth.
