This content introduces the crucial phase of strategic implementation, focusing on strategic control and corporate governance as essential mechanisms to ensure strategies are effectively executed and aligned with organizational goals.
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Hi everyone, how are you? I hope you're
doing great. I'm really sorry our class
is going to be holding virtually, but I
trust you all understand. Um, I had to
have this assumption.
So, we're going to be going into our
week seven class, and I hope you're all
doing great.
Give me a second while I share my
So like I told you last week, we are
done with the first two phases of
strategic management.
We have been talking about strategic
analysis, strategic formulation, and now
we're going to be talking about
strategic implementation.
And today's going to be the first class
about strategic implementation.
We will be talking about strategic
control and corporate governance. And I
hope you enjoy the class. So before we
get started, I acknowledge that UCW is
seated on the considered territory of
the coalish peoples, the Mosqu
nations. And I'm personally grateful for
a very beautiful and peaceful
environment for us to study in.
All right. So what do we mean by
strategic control and corporate governance?
Today we're going to be understanding
what those two words mean and then we'll
talk about informationational control,
attaining behavioral control and the
role of corporate governance. So I want
you to know that there is no way
strategy can be implemented without the
need for control.
Why do we need control? Because
by default people won't do what is
expected of them until there is a kind
of check.
There are standards in place, policies
in place, there are um performance
measurement techniques in place. So the
organization needs to put some measure
of control to ensure everybody first
understand what they need to do and then
they are actually doing it. So that's
what we're going to be talking about today.
today.
is very important because
once strategy is formulated, it's not
going to be done until it is communicated
communicated
and there is the right structure in
place to support its implementation.
So part of implementation is
establishing a mechanism that ensures
people know what to do and then someone
is checking to see what they do. While I
was working in the bank, we had internal
audit team. They would always monitor
remotely or go from branch to branch of
the bank to ensure people are doing
things the right way. So it will be too
costly for organizations to wait till
when something goes wrong before they
realize oh some staff were actually not
doing things the right way. So there has
to be a form of control to ensure
strategy is implemented the right way in
a way that is not going to be costly but
rather it supports the success of the
strategy. Okay. So there has to be
monitoring and correcting um um
mechanism in place. So this control
mechanism must be consistent with the
strategy the firm is following. Okay.
Now for instance if the farm strategy is
cost leadership
one thing that has to be in the control
system is
appraising people making sure they
measure how people
get things done efficiently
within minimum time with minimum
resources because a cost leadership
approach requires reducing cost. Okay.
So they going to have to have a process
in place that rewards staff getting
things done very well with minimal resources.
resources.
All right. How does a firm make sure all
key stakeholders are moving in the right direction?
direction?
I want to believe we all understand what
it means to be a stakeholder.
Okay. Um, a stakeholder is someone that
can affect or be affected by the
achievement of a company's goals. So,
who are the people that can affect it?
You talk about your shareholder, you
talk about the employees, talk about the
managers, talk about the board of
directors, talk about the customers for
sure, talk about the suppliers, talk
about the competitors
and the media. Okay? Even the general
public, anyone that can impact the
the
progress of the company in achieving its
profit orientation goal is a
stakeholder. You have to be mindful of
them. So, however, strategic control is
about the internal stakeholders, the
employees, the managers. How do we
ensure that what they are doing align
with the strategy of the company and
supports the success of that strategy?
Very important. So strategic control
involves monitoring performance towards
strategic goals.
So I want you to notice that it requires
monitoring. Okay? So there will be
strategic goals and then are we actually
meeting them. So if you remember one of
the weeks we talked about balance score card.
card.
So balance score card helps to check
individual employees if actually they
are meeting some key performance indices.
indices.
Okay. So depending on where you work, if
you're in customer service, they are
checking are you actually satisfying
customers? What do customer service see?
Are people usually satisfied or they
complain? Do they mention your name that
you are doing making them want to come
back or you are actually you know giving
them a wrong vibe. So that's what um
strategy control is about monitoring
performance towards strategic goals and
taking corrective action when needed. So
sometimes the performance is um is not
the way is expected. People are not
doing things up to the standard the
company wants or they are actually
unethical. Next week we're going to be
talking about ethics. So strategic
control ensures that people are doing
And the information control system is
one of the ways strategic control is achieved.
achieved.
Another way is the behavioral control
system. And the third one we're going to
be talking about today is corporate
governance. Okay, corporate governance.
Now let's talk about information control
system. Okay, just before that I would
like you to know that
there was a traditional model for sustaining
sustaining
for ensuring control within the organization
organization
and that model is sequential like a step
happens before another step. So the
number one is strategies are formulated
just like we have talked about analysis formulation
formulation
and then the next thing that is expected
is that they will be implemented
and the third part of the traditional
approach is that performance is measured
against predetermined goals.
Performance is measured. So that means
um you know usually companies have a
financial year that is 12 months and
then they expect people this is our goal
we want to make 1.5 billion profits
every quarter and then they expect
people to implement the strategy in
terms of the um um the profit goal and
then all different kind of goals
learning goals. Maybe they tell people
you have to be trained or to attain some
professional qualifications. So the um
um professional qualification before the
end of the financial year things like
that. So the strategies will
now be um be measured at the end of the
financial year to check if the company
and its people have performed according
to predetermined goals.
So the traditional approach usually
start with formulate strategies moves on
to implement strategy and they now
control. But what do you guys think?
Don't you think this is a big risk
waiting till the end before you know if
people are doing the right thing? So
that was the traditional approach. It's
very risky. It's usually too late. It's
not proactive. Okay. So agile companies
are constantly monitoring.
So they have moved from traditional
approach to the strategic
control that is
constantly ongoing. There's a feedback
loop. There are systems in place to
check if things are happening the right
way. They're not waiting till when
performance um
um is checked at the end of the
financial year. So feedback loop from
performance measurement to strategic formulation.
formulation.
the new mechanism which is called the
contemporary approach model is that it
is iterative
and then it is also interactive. It is
not sequential.
So if for instance while formulating strategy
strategy
um you discover that there is a need to
adjust the current strategy in place you
know while you're still planning okay we
need to change our strategy while you
are in the um you're going through the
process of strategic formulation
something may happen within the
organization that needs an adjustment
so that
affect the strategy you're formulating
and it will also require
a change within the loop. So you're not
waiting and saying oh it's until we are
done with performance before we can
start formulating strategies.
While implementing strategies, if
something happens, you can go back to
the drawing board and formulate strategy
again or you come back to or you keep
monitoring control, information control,
behavioral control. Okay. So the
contemporary approach model is highly
interactive. It is not sequential. So
either you can see that the arrows will
go either way. Anything can happen but
this three is constantly ongoing. So how
how does formulating strategies happen
there has to be information control.
Remember that before we formulate
strategy we always need to analyze
internal environment analysis external
environment analysis. So there has to be
information gathering to know what is
happening. constantly within both environments.
environments.
So that information leads to correct
strategy formulation.
Okay. And then
while implementing strategy, if
something happens,
you can either
implement some form of behavioral
control or you go back to the drawing
board. Okay? And then you adjust your
strategy. So I want you to think of
strategy as something that is not rigid.
It doesn't mean companies have to keep
changing it like this but they will they
can there will be need for them to tweak
it to update it and so on. If you work
with, if you look at organizations you
have worked for or those of you that
have some employment experience, you
know that they could tell you that the
employee code of conduct has been
updated, that there's a new policy
around um vacation, around sick leave
and so on. So that is strategic
adjustment to make sure that what is
happening within the organization still
aligns with strategy. Okay. So
there's need for information control in
this contemporary approach model.
There's need for information control.
There's need for behavior control. Let's
talk about each one. Now
what do we mean when we say information
control? Information control deals with
knowing what is happening in the
Is the organization doing the right things?
things?
Remember that
every organization
makes profits by creating value.
You create value and that people are
willing to pay for. Okay. So it is
important for the organization to keep
checking that are we still doing the
right things? Are we still creating value?
How do you think they're going to do
that? They'll keep checking with the
customer. Are you satisfied? Is there a
way we can do better? That's why
products for instance like Apple, like
different kind of phones and software
that we all use, they keep updating.
They keep updating their software
because they adjusting to what people need.
need.
When WhatsApp started, it was a chat
medium and then you could make calls
with it and then later I moved on to
video calls and then I think it was
after video calls that we could record
voice notes and send voice chats and so
on. And right now you have AI on it. So
different things, different capabilities.
capabilities.
The reason is because the organization
keeps checking are we doing the right
things? Are we still satisfying our
customers? Okay. So there has to be that
constant information control to know
what the customer wants to know what
internal stakeholders want. You don't
want to lose the employees. Okay.
Okay.
So do the organization's goals and
strategies still fit within the context
of the current strategic environment?
very important to ask that question.
Then so how do they answer these
questions? By constantly scanning and
monitoring the external environment.
Your midterm report you you scanned the
um macro environment.
You talked about your pestal factors and
so on. So that should not be a one time
thing. You have to constantly know what
is happening with the government. What
has the government said? Because whether
you like it or not, whatever the
government says, whatever policies the
law makers make will impact every
citizen including corporate citizens.
Okay? And you should continuously the
organization must continuously monitor
the internment. So I always tell you
that this course you you can apply to
your personal life while you are in that workplace.
workplace.
Are you constantly monitoring
opportunities in other organizations?
You know when you in a position in one
company the competitor will be happy to
hire you to give them ideas of what
their composition is doing well. So you
can negotiate for a higher level with
the competitor. And if you really love
the organization you're working for, you
want to grow there, you still need to
monitor what is the power dynamics, what
what what makes for success in this
company. You have to constantly monitor
the internal environment. Okay. So
theformational control
requires ongoing process of organization
learning also. So why did we say
organizational learning? Because when we
have information about the external
environment, we need to tell our people
this is what is happening now. For
instance, UCW
um when the
government adjusted um made rules on
study permits in terms of the limit of
the amount of approvals in every year
and so on.
We we had that communication within UCW
faculty because I'm a member of faculty
so I can speak for faculty. So whatever
is happening in the environment we have
to talk about it so that we know how to
align ourselves and make sure our
strategy is still winning. Okay. So
information control must lead to
organizational learning. You can't
assume that people know the news. They
know what is happening.
Find a way of scanning the environment
and share the information. Let everyone
be on the same page.
So the focus is constantly
monitoring, changing information,
continuous monitoring, testing and
review to make sure your strategy is
still relevant. Okay.
So the information many times will be
discussed face to face. There are some
um um when I um when I was actively in
it in the morning the first thing we do
is early morning brief 15 minutes what's
happening what are you working on this
and this what's happening with our
stakeholders and so on because
information must lead to organizational
learning everybody has to be kept in the
on the changing circumstances because we
all know that Nothing is static, right? Yeah.
Yeah.
So, changes in the competitive
environment has to be detected very
early. So, one of the things you can do
to make yourself stand out in your place
of work is being that person that
quickly alerts your supervisor, your
manager to some changes in the
environment, internal or external, that
could impact the organization.
the organization can take advantage of
it or it could be a threat thing and
then you mention it, you're going to be
seen as a very valuable employee for sure.
sure.
All right. Now, apart from theformational
theformational
control, we also have the behavioral
control. Remember, this is part of the
contemporary way of ensuring strategic
control. There's informationational
control which we just talked about and
then we're going to be talking about the
behavioral control. Okay. So the
behavioral control is focused on
implementation doing things right.
Information control is focused on is the
organization still doing the right things
things like
like
are we still um satisfying our
customers, our clients. But behavior
control is about our employees or our
contractors. Are they doing things right?
right?
For instance, I believe many of you or
most of you or all of you took business ethics.
ethics.
Do our employees
align with company policies on how to
speak to customers?
Um, one of the places I work in Canada,
we were taught how to respond to
customer complaints. Three steps.
First of all, you apologize. Never be on
the defensive. Even when the customer is
wrong, apologize.
And then you
you
you thank them for for for
giving you that feedback. and then you
call your manager to solve it.
So you apologize, calm the customer down
and take them and get the manager. So
everybody acts in that way because that
is a standard way of managing customer
complaint. Okay. So doing things right,
behavioral control.
Do the does the company have the right
culture in place to support employee
doing things right? Is there a reward mechanism?
mechanism?
And are there boundaries?
Are there boundaries? Little children
will do anything if you allow them. They
can decide to jump from a story building
down but you have to let them know that
there are boundaries. If you jump from
that place you can al yourself and you
may never be able to walk again. So
human beings need to be given
boundaries. What is the extent to which
I can behave? How many sick leave do I
have? How many times can I be sick and
still be paid? Things like that. These
are boundaries. Okay.
All right. So, behavioral control.
The first one is culture.
The organization must have a culture.
How we do what we do. I just told you
about how we apologize to customer in
that place I worked for. And when I was
working in the bank, there's a way to
dress. You can't dress casually in my
place of work.
You have to look corporates look like
yes people can trust you with their fund.
fund. So
So
there has to be shared values of what is important
important
and then
beliefs on how we do things.
There are some organizations when you go there
there
if you have um if you have to do
business with them you see everybody is
very friendly very polite they do their
work quickly they smile it's the culture
it's the organizational culture
while some organization
in fact you're ready to take flights
like you just want to get it done and
get out
I want you to think back
from one time to another you may you
would have taken an air flight and if
you have taken air flights with two different
different
airlines can you tell me what you
noticed about their culture
there are some airlines that is just
water any other thing you have to buy
um I'm talking about short trips while
there are some they will still make sure
they give you drinks and then um a small snack.
snack.
Okay. So, it's about culture. It's about
culture. Okay. Is the way things are
done within the organization.
Now, the role of culture. Culture sets
implicit boundaries.
These are boundaries that guide people internally
internally
on how to dress
ethical matters. Ethetical matters has
to do with things that are morally acceptable.
acceptable.
I may have told you in one of our
classes that I learned in Canada that
smiling is very important. You can't
come to work and be carrying a long
face. You have to be smiling even when
you don't feel like smiling.
That is so important. Okay. So, it's the
way an organization conducts its business.
business.
All right. And a strong culture would
lead to greater employee engagement.
What do we mean by strong culture? Is
well communicated. There's the leaders
are leading
with examples. They are good examples of
the culture themselves. Okay. So that's
a strong culture. It's well
communicated. Everybody irrespective of
their role within the organization understand
understand
how to conduct themselves.
So it leads to greater employee
engagement. Nobody is guessing uh what
do I do? What is acceptable? Now it
provides provides a common purpose and
identity and can also introduce inflexibilities.
inflexibilities. Okay.
Okay. Now,
how can an effective culture be
sustained? It must be cultivated. It
must be encouraged. It must be fertilized.
fertilized.
So, some of the ways this can be done is
through storytelling.
I usually tell a lot of stories. Number
one, to make sure you don't forget the
points. And then the other thing is that storytelling
storytelling
makes people relaxed and they listen
more than if you're just dishing out instructions.
instructions.
So storytelling is a great way to maintain
maintain
organizational culture.
And also top executives can give pep talks.
talks.
I've worked in places where the top
executive moves around, says hello to
people, have small chats with them and
so on, both in Nigeria and in Canada.
It's not just a Canadian thing. So such
pep talks really help company culture.
It makes employees feel like they have a
sense of belonging. They can freely
express themselves and they they
actually want to be a part of making
things work.
So those are effective
culture mechanisms.
All right.
So I told you the um discussion you're
going to be doing. I'll be mentioning
during the lecture.
So there are two things I would want you
to do. Number one, we have talked about
information control.
In an organization that you worked for
or if you have never worked before, in
an organization you hope to work for,
how is information controlled?
How is information controlled? So I want
you to talk to me about it
based on what I told you about scanning
and monitoring the environment. So I
want you to give me real life example of
how it is done. And if you have never
worked in an organization before
then you want to tell me how you think
it could be done. Okay, you can Google
find out about the organization and how
they do things and then you mention it.
So, and then the second thing I want you
to do is talk about the culture.
So, that's behavioral control. Now, in
that organization that you're going to
be talking to me about, how does the
culture, how did it when you worked
there or if you are still working there
and if you hope to work there, how does
the culture support the achievement of
the company strategy? Okay, I want you
to talk about that. So that will be your assignment.
assignment.
Put it in the discussion that will be
linked to this um class recording.
Mention how information control is done.
Mention how behavioral control through
culture is done. How does culture
support the achievement of the company's
strategy? Okay.
So behavioral control also includes
rewards. There has to be reward
mechanism in place to guide to encourage employees.
employees.
Whatever you reward, you're going to get people
people
um interested in performing better. In
fact, I've seen rewards as simple as $10
gift card, $15 gift card make people
want to be the best employee in the
world. Okay? And then sometimes it could
be a recognition reward not financial
and look look at who wouldn't want to be
this guy that is standing aside on a
staff standing out from his colleagues.
So that's what reward can do. So it is
used to control behavior to make people
desire to do the right things. Okay.
Um but there are downsides of reward systems.
systems.
There is um sometimes if it's a sales
goal for instance sometimes people do
unethical things to achieve sales target
you could Google to find out some
companies that have been found doing
some wrong things to do that there was a
employees were actually banned to they
um they would say they have listened to
some training and they they do it at the
same time like maybe they are told you
have to listen to three trainings before
the end of the month. So they found out
that some employee are listening to two
trainings at the same time. So they were
the company actually punished
punished
them for lack of integrity. They said,
"How are you going to listen to the
training effectively when you're doing
it at the same time?" So,
So,
it was something I I read on LinkedIn
and they were saying people were saying
that okay, it's because the company
encourages multitasking and so on, but
look at it sincerely. If not that, most
likely there's an integrity issue. How
do people how is it possible for you to
listen to two trainings at the same
time? Well, if if you can do it, let me
know. Just chat me and let me know if
it's possible. Okay. So, I want to run
because I have six minutes to go. Let me
see how many slides I have left. Okay.
All right. So,
apart from the reward system, we know we
talked about behavioral control has to
do with culture, rewards, and then
boundaries. So, boundaries has to do
with setting goals for people to
achieve. There has to be things like
everybody has their score card. They
know how they going to be appraised
based on what is expected of them. So
such boundaries should be available. You
should know boundaries around if you
look at the balance law card there
financial goals, there are goals,
learning goals and there are even goals
when it comes to relationship with
customer. How customers perceive the
finally, the third way we're going to
talk about strategic um control is
through corporate governance.
The information control, the behavioral
control will not be successful if the
company does not have a strong board. If
it's a large corporation, they're going
to have a board of directors. These are
the people that actually
formulate strategies and make sure there
are policies in place to guide what is
being done within the organization. So
the corporate governance is very
important and corporate governance talks
about the relationship
among various participants within a
corporation. Number one, shareholders appoints
appoints
board of directors and the CEO. So
there's a relationship between owners
and managers. Okay? So
there is separation
between the owners and managers. you
know that for large corporations owners
except in um in some exceptional
corporations like Tesla owners don't are
not involved in running the business. So
usually they appoint CEOs and board of
directors. So but in a place like um um sometimes
sometimes
the owner may be involved. Okay. Now
how are things done? There is an agency
theory where the
the the
managers act as agents of the
shareholders. They are working on behalf
of the shareholders to achieve the
profit goals. Okay. And
And
this board of directors must be
committed and involved.
They have to be committed to the goal of
the owners of the organization. For
instance, now we have organizations that
say everything we do, we want to do it
sustainably. The board of directors must
be committed to that ensuring
sustainability in the different ways
things are done within the organization.
Saving time saving energy and so on.
Okay. Shareholder active act activism
and active engagement. This is a new
trend now. Before shareholders will just
fold their hands and wait for
for the profit to be declared and they
get their dividends. But now
shareholders are getting involved. They
becoming more active. Okay. They want to
know what is happening. They not waiting
till the end of the financial year. So
an effective board of director would
have active critical participants and
and
shareholders that are very active also
would be interested in what is happening
within the organization and still checking
checking
um on the CEO the board of directors.
Okay. So the boards are responsible for
managerial rewards and incentives. They
set incentives and rewards that
encourage employees to do the right
thing. So apart from the strategy and
setting performance targets, they also
put managerial rewards in place. Okay. And
And
sometimes there's something called CEO
duality. In some organization the CEO is
also the chairman of the board of directors.
directors.
So it reduces friction between the board
of directors and CEO. But in some other
organizations there is a separation. The
CEO is not part of the board of
directors so that they are able to check
what the CEO is doing and make sure that
there is no conflict of interest. Okay.
So whichever one different companies use
which um which whichever method whether
CEO being playing a dual role or is
separate from the board of directors it
all depends on what the shareholders
want. Okay.
And this would be my final slide as I
round off in a few seconds. So please
note that apart from all the information
control, behavioral control and
corporate governance, the markets, the
stock market also controls organization
through the fall and rise of the share
price. So there are always control
mechanism in in place but good
organizations must set the standard and
make sure they monitoring they are
making sure behaviors are high so that
their strategies are achieved. Thank you
everyone and I'll be expecting to see
your discussions. Thank you. Take care.
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