Towards a descriptive theory of strategic control: A study of the nature and effects of the organizational controls applied to strategies and strategic planning
How do organizations maintain their strategic thrust over time? The present study frames this broad research question in terms of investigating the formal and informal procedures by which business units monitor, evaluate, adjust, and control their strategies and planning processes. The literature addressing the topic of "strategic control" is diffuse, and lacks an empirical foundation of basic, descriptive research. Thus, many fundamental questions about the nature of strategic controls in organizations have not yet been clearly asked, let alone answered. The objective of this study is to raise some of these fundamental questions. As a general thesis, it is argued that business units respond to environmental and firm-specific contingencies by adjusting the tightness of three types of strategic controls: quality, anticipatory, and corrective strategic controls. A research model is formulated which relates measures of strategic control tightness (for all three types of control) to: (1) contingency variables--environmental uncertainty and hostility, relative organizational size, and generic competitive strategy; (2) the perceived effectiveness of the controls; and (3) measures of relative business performance. Data were gathered via a questionnaire instrument mailed to planning executives; 54 valid responses were received. Proposed model relationships were tested using multivariate statistical procedures. The findings support four aspects of the proposed research model. First, business units appear to fall into common patterns of control tightness: five distinct strategic control configurations emerged from cluster analysis, with the "tight" and the "moderately loose" configurations being the most popular. Second, environmental uncertainty, relative organizational size, and generic competitive strategy are all significantly related to the tightness of strategic controls. Third, respondents perceive tight controls to be more effective than loose controls. Fourth, business units rating their strategic controls to be effective achieve significantly greater relative business performance than business units with less effective controls. Implications of these findings for the design of strategic control systems, and for future research of the topic, are also discussed.
|Year of publication:||
|Authors:||Fiegener, Mark Kevin|
|Type of publication:||Other|
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