Term
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Definition
The process of monitoring and correcting a firm's strategy and performance.
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Term
| Traditional approach to strategic control |
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Definition
1. Strategies are formulated and top management sets goals
2. Strategies are implemented
3. Performance is measured against the predetermined goal set
Formulate strategies -> Implement strategies -> Strategic control |
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Term
| Contemporary approach to Strategic Control |
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Definition
Continually monitoring the environments (internal and external)
- Identifying trends and events that signal the need to revise strategies, goals and objectives
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Term
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Definition
| Informational control deals with the internal environment as well as the external strategic conext in order to obtain the best fit between the organization's goals and strategies and the strategic environment. |
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Term
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Definition
| A method of organizational control in which a firm influences the actions of employees through culture, rewards and boundaires. |
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Term
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Definition
| A system of shared values (what is important) and beliefs (how things work) that shape a company's people, organizational structures, and control systems to produce behavioral norms (the way we do things around here). |
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Term
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Definition
| Policies that specify who gets rewarded and why |
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Term
| Boundaries and constraints |
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Definition
| Rules that specify behaviors that re acceptable and unacceptable |
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Term
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Definition
| The relationship among various participants in determining the direction and performance of corporations. The primary particpants are 1. the shareholders 2. the management 3. the board of directors |
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Term
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Definition
| A theory of the relationship between principals and their agents, with emphasis on two problems: 1. the conflicting goals of principals and agents, along with the difficulty of principals to monitor the agents, and 2. the different attitudes and preferences towards risk of principals and agents. |
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Term
| External governance control mechanisms |
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Definition
Methods that ensure that managerial actions lead to shareholder value maximization and do not harm other stakeholder groups and that are outside the control of the corporate governance system.
5 external control mechanisms:
1. Auditors
2. Banks and Analysts
3. Regulatory Bodies
4. Media and Public Activists
5. The Market for Corporate Control |
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