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Formal control system: Written, management initiated mechanisms that influence the behaviour of employees in achieving the organizations goals. Ex- plans, budgets. Informal control systems: Unwritten, typically worker initiated mechanisms that influence behaviour of individuals or groups ex- group norms and organizational culture

Input controls Actions taken by a company before a planned activity is implemented. Helps select the right way to undertake any activity. Includes selection criteria, recruitment and training programs, resource allocations. Process Controls Tracking certain variable and taking corrective action whenever there is any deviation from specified parameters Output Controls Performance standards are set and monitored, and the results are evaluated

Self control- Establishment of personal objectives by the individual, monitoring their attainment and adjusting their behaviour in the organization to attain the goals. Social Controls Refers to the prevailing social perspectives and interpersonal interactions within subgroups of the firm. Cultural Controls can be realized by norms of social interaction, stories , rituals and legends related to the organization

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Strategic Planning Budget Preparation Execution Evaluation of Performance

It is the process of deciding on the major programmes that the organization will undertake to implement its strategies and the amount of resources devoted to each

A firm develops its strategies by matching its core competencies with industry opportunities.

Environment Analysis Competitor Customer Supplier Government Social/ Political

Internal Analysis Technology Know how Manufacturing Marketing Distribution Logistics Infrastructure

Opportunities and Threats Identify Opportunity

Strengths and Weaknesses Identify core competence

Fit internal competence with external opportunities

Firms strategies

Corporate level : Which business to add, retain or divest? Concerned with the question of where to compete. Business unit level: How to deploy resources among the businesses?

Corporate level strategy occupies the highest level of strategic decision-making and covers actions dealing with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various SBUs for optimal performance. Top management of the organization makes such decisions. The nature of strategic decisions tends to be valueoriented, conceptual and less concrete than decisions at the business or functional level.

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Mission Objectives Situation analysis Strategy formulation Implementation Control

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Reason for which it exists Conveys a sense of purpose to employees Projects the companys image to outsiders like customers, shareholders, creditors etc. Determines the resource allocation of the company Determines the size of the company Three components Core values. Core purpose, Goals

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Single industry firms Unrelated diversified firms Related diversified firms

Business-level strategy is applicable in those organizations, which have different businesses-and each business is treated as strategic business unit (SBU). The fundamental concept in SBU is to identify the discrete independent product/market segments served by an organization. Since each product/market segment has a distinct environment, a SBU is created for each such segment. For example, Reliance Industries Limited operates in textile fabrics, yarns, fibers, and a variety of petrochemical products. For each product group, the nature of market in terms of customers, competition, and marketing channel differs.

Dimensions Time Horizon Type of decision Risk involved Impact Profit potential Flexibility Adaptability Innovations Levels of decision making

Corporate level Long Philosophical High Significant High High Poor Innovative Highest

Business unit level Medium Mixed Medium Major Medium Medium Medium Mixed Middle

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Hold Build Harvest Divest

Corporate Strategy

Top Management

Functional Strategies

Middle Management

Operations Strategy

Marketing Strategies

Financial Strategies

HR Strategies

New Entrants

Suppliers

Industry Competitors

Customers

Substitutes

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Intensity of rivalry among competitors Bargaining power of the customers Bargaining power of suppliers Threat from substitutes Threat of new entry

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Low Cost Differentiation Value Chain Analysis