Customer Competitor
With respect to the role of information systems and technology, IS and IT can play a vital role in terms of supporting the business strategy and consequently help in the
achievement of organizational strategic objectives. Q'Brien
(1993)
believes the role ofinformation technology in supporting the business strategic objectives can take three
• improve operational efficiency • build strategic IT resources • promote business innovation.
Previous IS research has, also proved that IT was instrumental in achieving organizational strategies in practice (Ward, 1990; Earl, 1993 ; O'Brien, 1996; Applegate et al., 1996).
2.4.2.3
Strategic ImplementationStrategic implementation is the last phase of lohnson and Sholes' model of strategic management process. It is concerned with putting the chosen strategy into effect. The phase, according the lohnson and Sholes, should focus on three areas:
• resource planning
• organization structure, and • people and systems.
Naturally, before starting strategy implementation, the fIrst step that must be considered is the determination of the nature and quantity of resources required for successful implementation. Secondly, managers should review the existing organization structure in the light of the chosen strategy, to determine the structure's suitability for successful implementation, and to decide if changes are required. The last action that should be considered is to consider how the existing systems and people can best be organized to serve successful implementation of the chosen strategy.
While the model of Johnson and Scholes provides an excellent framework for understanding the strategic management process, the model pays very little attention to the issue of strategic control, despite its importance in the strategic management process. The next section discusses the concepts of and previous research work done on strategic control.
2.4.3 Strategic Control
Changes in business circumstances are likely to affect strategic plan performance attributes such as feasibility, consistency, capability, reliability or validity, and to reduce their ability to achieve the business strategic objectives. For example, if some variable(s) related to the five competitive forces of Porter (1985) mentioned above, change(s) significantly, the impact on the implemented strategic plan may be significant because old assumptions of the changed variable(s) will no longer apply. Therefore, it becomes necessary to monitor, review and update the strategic plans accordingly (Rumelt, 1980; Lorange, 1993; King & Cleland, 1 978; Pearce & Robinson 1982).
In addition to monitoring and revIewmg the performance of the strategy, King and Cleland (1978) argue that a planning system that does not have a strategy to review and improve the efficacy of strategic planning efforts in the organization is unlikely to achieve its fullest potential. Hill and Jones ( 1994) also believe that implementing a
strategy requires the adoption of appropriate organizational structures and control systems, and the existence of proper feedback loops.
The concept of strategic control is relatively new. As the focus of literature shifted from the traditional view of strategic planning to the broader view of strategic management, for example (Ansoff, 1 979), little attention was given to the concept of management control from a strategic perspective. Bales ( 1 977) described strategic control as the concern of a company president to assure that his organization is acting in a manner consistent with management's wishes. Lorange, Morton, and Ghoshal's ( 1986) provided a clearer but brief definition of strategic control. They defined it as "systematically monitoring the organization's progress along relevant strategic dimensions and modifying the organization's strategy on the basis of this evaluation" (p. 1).
Pearce and Robinson (1 982) suggest that in addition to the usual monitoring and controlling activities during the initial business strategy implementation, it is necessary to carry out a review and evaluation of the business strategy from a strategic perspective, which they refer to as strategic control. They contend that during strategic control, top management must focus on both the qualitative and quantitative dimensions of business strategy.
The qualitative dimension of strategy review and evaluation seeks to confinn or refute critical assumptions on which the strategy is based. Rumelt ( 1980) proposes four criteria with which to review and evaluate the critical assumptions of the current strategy:
Consistency, Consonance, Advantage and Feasibility. The quantitative dimension of review and evaluation, on the other hand, seeks to measure the impact of the business strategy on specific criteria relevant to the long-term objectives of the firm.
The results of the review and evaluation are fed back to the strategic management process in order not only to update the current strategy, but also to improve the strategy formulation process itself. Therefore, the existence of learning feedback loops is important as they make use of the relevant information resulting from the review of the strategy to improve the efficacy of the strategic management process.
Bungay and Goold ( 1 99 1) argue that in addition to short-term financial budgetary measures, companies need some specific non-financial measures to be built into the control system to monitor their long-term strategies. They argue that a strategic control system ensures that the immense effort often put into preparing lengthy and detailed strategic plans is in fact translated into action, and that .the learning process is consolidated in the strategic planning process.
B ungay and Goold's strategic control system is based mainly on the monitoring aspect of the business strategy performance, using proper performance measures (controls). They put less emphasis on the issue of monitoring the organizational internal and external environments to identify events or issues that could have a significant impact on either the current or future performance of a business strategy. Bungay and Goold have suggested four stages for creating a strategic control process in an organization.
• aligning appropriate structures • building skills
• setting control targets • dismantling the bureaucracy.
B ased on their research results, Bungay and Goold ( 1 99 1 ) proposed four reasons for developing and implementing strategic controls in an organization.
• strategic controls are means of clarifying what good performance is
• strategic controls confer an ability to make explicit trade-offs between profit and
investment/growth
• strategic controls can be a way to introduce strategic 'stretch' as well as financial
stretch, by the setting of competitive goals
• strategic controls allow management in the business unit and at the center to take
action in more timely way, by giving an early warning if the situation of the business is deteriorating.