1.

Strategic control

Strategic control can be defined as process of monitoring as to whether to various strategies

adopted by the organization are helping its internal environment to be matched with the external
environment. Strategic control processes allow managers to evaluate a company's program from
a critical long-term perspective. This involves a detailed and objective analysis of a company's
organization and its ability to maximize its strengths and market opportunities.

There are four types of strategic control as follows:

1. Premise control: is designed to check systematically and continuous whether or
not the premises set during the planning and implementation process are still valid
2. Implementation control: is designed to assess whether the overall strategy result
associated with incremental steps and actions that implement overall strategy.
3. Strategic surveillance: It is designed to monitor a broad range of events inside and
outside the company to threaten the course of firm's strategy.
4. Special alert control: is the need to thoroughly and often rapidly reconsider the
firm's basic strategy based on a sudden unexpected event.

2. Top 7 Outsourcing Advantages

As you evaluate your choices and decisions in outsourcing different components of your
operations, you will need to consider the advantages of outsourcing. When done for the right
reasons, outsourcing will actually help your company grow and save money. There are other
advantages of outsourcing that go beyond money. Here are the top seven advantages of
outsourcing.

Focus On Core Activities

In rapid growth periods, the back-office operations of a company will expand also. This
expansion may start to consume resources (human and financial) at the expense of the core
activities that have made your company successful. Outsourcing those activities will allow
refocusing on those business activities that are important without sacrificing quality or service in
the back-office.

Example: A company lands a large contract that will significantly increase the volume of
purchasing in a very short period of time; Outsource purchasing.

Cost And Efficiency Savings

Back-office functions that are complicated in nature, but the size of your company is preventing
you from performing it at a consistent and reasonable cost, is another advantage of outsourcing.

Example: A small doctor’s office that wants to accept a variety of insurance plans. One part-time
person could not keep up with all the different providers and rules. Outsource to a firm
specializing in medical billing.
Reduced Overhead
Overhead costs of performing a particular back-office function are extremely high. Consider
outsourcing those functions which can be moved easily.

Example: Growth has resulted in an increased need for office space. The current location is very
expensive and there is no room to expand. Outsource some simple operations in order to reduce
the need for office space. For example, outbound telemarketing or data entry.

Operational Control
Operations whose costs are running out of control must be considered for outsourcing.
Departments that may have evolved over time into uncontrolled and poorly managed areas are
prime motivators for outsourcing. In addition, an outsourcing company can bring better
management skills to your company than what would otherwise be available.

Example: An information technology department that has too many projects, not enough people
and a budget that far exceeds their contribution to the organization. A contracted outsourcing
agreement will force management to prioritize their requests and bring control back to that area.

Staffing Flexibility
Outsourcing will allow operations that have seasonal or cyclical demands to bring in additional
resources when you need them and release them when you’re done.

Example: An accounting department that is short-handed during tax season and auditing periods.
Outsourcing these functions can provide the additional resources for a fixed period of time at a
consistent cost.

Continuity & Risk Management

Periods of high employee turnover will add uncertainty and inconsistency to the operations.
Outsourcing will provided a level of continuity to the company while reducing the risk that a
substandard level of operation would bring to the company.

Example: The human resource manager is on an extended medical leave and the two
administrative assistants leave for new jobs in a very short period of time. Outsourcing the
human resource function would reduce the risk and allow the company to keep operating.

Develop Internal Staff

A large project needs to be undertaken that requires skills that your staff does not possess. On-
site outsourcing of the project will bring people with the skills you need into your company.
Your people can work alongside of them to acquire the new skill set.

Example: A company needs to embark on a replacement/upgrade project on a variety of custom

built equipment. Your engineers do not have the skills required to design new and upgraded
equipment. Outsourcing this project and requiring the outsourced engineers to work on-site will
allow your engineers to acquire a new skill set.
Or
--> Advantage #1: Outsourcing can save you money.
--> Advantage #2: Outsourcing can help you share risk.
--> Advantage #3: Outsourcing can help accommodate peak loads.
--> Advantage #4: Outsourcing can help develop your internal staff.

EMERGING INDUSTRIES:

WHAT IS AN EMERGING INDUSTRY?

• Market is new & unproven

• Buyers first-time users
• Companies in grow-and-build mode
• Technological know-how emerging
• Information about customers & market conditions hard to get
• Uncertainty about how fast demand for product will grow &
how big market will get
• First-generation products improved rapidly

FEATURES OF AN EMERGING INDUSTRY

• No “rules of the game”

• Technological know-how is proprietary
• Entry barriers tend to be low
• Experience curve effects often permit significant cost
reductions as volume builds
• Marketing task involves inducing initial purchase & overcoming
customer concerns
• Difficulties in securing raw materials
• Firms run short of funds for R&D & start-up

STRATEGY OPTIONS: COMPETING IN EMERGING INDUSTRIES

• Try to win early race for industry leadership by employing a bold, creative
strategy
• Push hard to
o Perfect technology
 o Improve product quality
o Develop attractive performance features
o Shape rules of competition
• Try to capture potential first-mover advantages
• Pursue new
o Customers & user applications
o Geographical areas to enter
• Shift advertising focus from building product awareness to
o Increasing frequency of use &
o Creating brand loyalty
• Move quickly when technological uncertainty clears & a “dominant”
technology emerges
• Use price cuts to attract price-sensitive buyers
• Expect established firms looking for growth opportunities to enter market when
risk lessens
• Strategic success in an emerging industry calls for
o Bold entrepreneurship
o Willingness to pioneer & take risks
o Intuitive feel for what buyers will like & how they will use product
o Quick response to new developments
o Opportunistic strategy-making

MATURING INDUSTRY

FEATURES OF MATURE INDUSTRIES

• Demand grows slower than economy-wide average or begins

declining
• Competitive pressures intensify, resulting in heated battle for
market share
• To grow & prosper, firm must take market share away from
rivals
• Industry consolidates to smaller number of key players.

STRATEGY OPTIONS: COMPETING IN A MATURING INDUSTRY

• Prune product line

• Emphasize process innovation
• Push hard for cost reduction
• Find ways to increase sales to present customers
 • Purchase rival firms at bargain prices
• Expand internationally

STRATEGY OPTIONS: COMPETING IN A MATURE/DECLINING

INDUSTRY

• Pursue focus strategy by exploiting growth segments within

industry
• Pursue differentiation strategy
• Work diligently to drive costs down by
o Outsourcing activities
o Redesigning internal business processes
o Consolidating under-utilized production facilities
o Closing low-volume, high-cost distribution outlets
o Cutting marginal activities out of value chain

3. FRAGMENTED INDUSTRY:

COMPETITIVE FEATURES OF FRAGMENTED INDUSTRIES

• Absence of visible market leaders

• Low entry barriers & absence of scale economies
• Market for product is local
• Small quantities of customized products required
• Market is so large & diverse it takes numerous firms to
accommodate buyer needs
• High transportation costs prevent serving large market area
• Local regulatory requirements make each geographic area
unique
• Newness of industry

STRATEGY OPTIONS: COMPETING IN A FRAGMENTED INDUSTRY

• Construct & operate “formula” facilities

• Become a low-cost producer
• Increase customer value via vertical integration
• Specialize by product type
• Specialize by customer type
 • Focus on limited geographic area

4. DIFFERENT ORGANISATIONAL STRUCTURES:

Organizations are structured in a variety of ways, dependant on their objectives and culture. The
structure of an organization will determine the manner in which it operates and its performance.
Structure allows the responsibilities for different functions and processes to be clearly allocated
to different departments and employees.

The wrong organization structure will hinder the success of the business. Organizational
structures should aim to maximize the efficiency and success of the Organization. An effective
organizational structure will facilitate working relationships between various sections of the
organization. It will retain order and command whilst promoting flexibility and creativity.

Internal factors such as size, product and skills of the workforce influence the organizational
structure. As a business expands the chain of command will lengthen and the spans of control
will widen. The higher the level of skill each employee has the more the business will make use
of the matrix structure to maximize these skills across the organization.

Different Structures

The most common organization structures are:

Tall Structure Organisation

In its simplest form a tall organisation has many levels of management and supervision. There is
a “long chain of command” running from the top of the organisation eg Chief Executive down to
the bottom of the organisation eg shop floor worker. The diagram below neatly captures the
concept of a tall structure.
Flat Structure Organisation

In contrast to a tall organisation, a flat organisation will have relatively few layers or just one
layer of management. This means that the “Chain of Command” from top to bottom is short and
the “span of control is wide”. Due to the small number of management layers, flat organisations
are often small organisations.

Diagram: Flat Structure

Hierarchical Organisation

In a hierarchical organisation employees are ranked at various levels within the organisation,
each level is one above the other. At each stage in the chain, one person has a number of workers
directly under them, within their span of control. A tall hierarchical organisation has many levels
and a flat hierarchical organisation will only have a few.

The chain of command (ie the way authority is organized) is a typical pyramid shape.

Centralised and Decentralised Organisation

In a centralised organisation head office (or a few senior managers) will retain the major
responsibilities and powers. Conversely decentralised organisations will spread responsibility for
specific decisions across various outlets and lower level managers, including branches or units
located away from head office/head quarters.