MS351: Business Strategy (CMA: Advance Level-II)

D: Performance Measurement and Control

Re-imaging Strategy: Failure and Renewal of Strategy

What does successful strategy look like?

To be a good strategy, it must precisely diagnose the problem being solved; set a guiding policy that will address that
problem; and propose a set of coherent actions which will deliver that policy.

The Kernel of Good Strategy

Much like a good strategy, The Kernel of Good Strategy is simple and practical. It contains three elements:
1) The first is a thorough diagnosis. This is more than a description of the situation; it is an articulation of the problems
and challenges that need to be addressed, a simplified version of reality.
2) The second is a clear guiding policy. This is an overarching approach or method for solving the diagnosed challenges.
Importantly, the guiding policy must rule out actions, as well as directing us towards a number of actions.
3) Finally, a good strategy will include coherent actions. These must be practical, coordinated activities. The key
word here is ‘coherent’. Actions should complement each other, and create a ‘greater sum’ like effect, where
actions add power to each other.

Success factors of strategy:

 securing adequate resources and budgets
 a fluid strategy for a fluid environment
 anticipate potential change management issues
 engage and incentivize employees and stakeholders

Why strategy execution fails?

Here are some reasons why strategic initiatives and plans fail.
1) Unrealistic goals or lack of focus and resources
2) Plans are overly complex
3) Financial estimates are significantly inaccurate
4) Plans are based on insufficient data
5) Inflexible/undefined team roles and responsibilities

How can they be avoided?

1) Track at a Higher Level:
2) Create a Cadence of Accountability
3) Link the Quantitative and the Qualitative
4) Decide on a Software Tool to Drive It Home

What is strategic renewal?

Strategic Renewal exists to serve the local church through personal renewal by of way coaching, resources, and prayer
driven events.

When strategy renewal is needed?

When a corporate strategy is designed to address declining performance, then this type of strategy is called a renewal
strategy. This type of strategy helps an organization stabilize operations, revitalize organizational resources and
capabilities, and prepare to compete once again.
Strategic renewal includes the process, content, and out- come of refreshment or replacement of attributes of an
organization that have the potential to substantially affect its long-term prospects.

Omar Faruque Shohag Page 1 of 7 Advance Level-II (MS-351)

 MS351: Business Strategy (CMA: Advance Level-II)
How strategy renewal to be done?

Strategic renewal is all about responding rapidly to change, adjusting your business model to fit the market, and
reconstructing it in a way that adds value for your customers.

Leading a strategic transformation

The aim of the Lead Strategic Transformation unit is to prepare students to become professional organizational leaders
who will accept leadership responsibility and make significant contributions toward the sustained success of their
organizations.

Omar Faruque Shohag Page 2 of 7 Advance Level-II (MS-351)

 MS351: Business Strategy (CMA: Advance Level-II)

E. Business Planning and Strategy for Cost and Management Accountants (Bangladesh Aspect)

Corporate Social Responsibility and sustainability:

Corporate social responsibility is a business model by which companies make a concerted effort to operate in ways
that enhance rather than degrade society and the environment. CSR helps both improve various aspects of society as
well as promote a positive brand image of companies.
Sustainability consists of fulfilling the needs of current generations without compromising the needs of future
generations, while ensuring a balance between economic growth, environmental care and social well-being.

Approaches to sustainability and CSR vary according to industry and how an individual organization defines and
embraces these ideas. Some companies and economists reject the idea of CSR because it implies an obligation to
society and future generations beyond those contained in the binding legal requirements of business. However, most
companies now embrace some notion of CSR. Some companies invest in CSR as reputation management or to sustain
the profitability of a company, and some invest in CSR out of a sense of moral obligation to society.
These resources focus on sustainability and CSR primarily in terms of moral obligation. They offer insight into ethics
concepts relevant to economic sustainability, environmental sustainability, and social equity. Among other things, the
resources describe how companies may determine what factors to favor in ethical decisions, the impact of intangible
factors in ethical dilemmas, and best practices for developing ethical culture in organizations.

Not-for-profit organization and public sector organization:

Not-for-profit organizations exist in both the public sector and the private sector. Most, but not all, public sector
organizations do not have profit as their primary objective and were established in order to provide what economists
refer to as public goods.
Not-for-Profit Organizations are the establishments that are for utilized for the welfare of the community and are
set up as charitable associations which operate without any motive for profit. Their primary objective is to provide
service to a specific class or the public at the larger picture.
The public sector is a part of the economy that consists of government entities. It is responsible for providing services
and managing resources to citizens, businesses, and other organizations. These activities are funded by taxes, grants,
borrowing money, and other government-controlled sources.

Governance of government, public and non-profit organizations:

 Government –areas like defense and the law, which are the responsibility of the nation state.
 Public –the provision of health, transport, energy and other services which may be the responsibility of the state
or may have been privatized, depending on the political views of the government.
 Not-for-profit –institutions that work for the common public good but are independent of the state –for example,
charities, trusts and similar institutions.

Ethics and morals:

The meanings of the words 'ethics ' and 'morals' are intermingled and difficult to distinguish. For example, the Concise
Oxford Dictionary offers the following two definitions.
 Morals are 'standards of behaviour or principles of right and wrong'.
 Ethics are 'the moral principles governing or influencing conduct'.
Such definitions mean that we could use the two words interchangeably. Another area in which ethics can be invoked
is Corporate Social Responsibility (CSR).

Omar Faruque Shohag Page 3 of 7 Advance Level-II (MS-351)

 MS351: Business Strategy (CMA: Advance Level-II)
For present purposes the field can be simplified by suggesting that business ethics exist at three levels.
1) Personal ethical behaviour: This relates to the way you as an individual conduct yourself. Bad behaviour would
include bullying, stealing, discrimination against a colleague and giving away business secrets to a rival.
2) Business ethics: This is the way a firm as a whole behaves. Bad conduct here would include offering bribes to win
contracts, distorting the accounts, victimisation or discrimination against certain workers and telling lies to
regulators.
3) Corporate social responsibility: This is the belief that a firm owes a responsibility to society as well as to
shareholders. Bad behaviour would be pollution, mass redundancies and dangerous products.

Ethical issues in the marketing concept:

Ethics concerns the moral implications of courses of action.
The most fundamental ethical issue facing marketing is the potential accusation that marketing wastes the world's
resources by making things that people don't really need and then using promotion to convince people that they are
not satisfied without them.

It is hard to accept this argument in the areas of essential products, but the destruction of clothes, electrical
appliances etc on the basis that they are outmoded or have obsolete technologies, and the huge amount of paper used
to advertise products and to direct-mail promotional material (junk mail) does lend weight to the argument.

The envy created by development and presentation of products that only some can have, such as personal digital
players, mobile phones, expensive trainers etc also contributes to street crime. Sports shoe manufacturer Nike were
caught-up in accusations that its slogan 'just do it' was encouraging street thefts of its shoes.

To tilt the argument back in favour of marketing the following points can be made:
 Value judgements: Phrases like 'things that people don't really need' are not helpful because if people will spend
money and effort to get them, who is to say they don't need them?
 Employment effects: The production of goods and services creates jobs. This is an ethical good to come from
marketing.
 Proper target marketing may reduce waste: Marketing tries to ensure that unwanted products and marketing
effort is reduced. This saves resources.
 Ethical marketing: Marketing has been used to promote alternative and more ecologically responsible products
and ways of life (e.g. quit smoking). This suggests that it is not the practice of marketing that is unethical but
rather some of the ends to which it has been put.

Corporate governance and related compliance strategy:

Corporate governance:
The set of rules which governs the structure and determines objectives of a company and regulates the relationship
between the company's management, its board of directors and its shareholders.
Good corporate governance is a foundation attribute for a healthy organization. It sets the tone as to how the
organization operates and behaves both internally and to the market generally. It defines the relationship between
the Board of Directors, management and the rest of the organization. It is a performance issue.

A comprehensive corporate governance framework will address:

 oversight of the company's performance and the contribution to corporate success from the Board of Directors in
the context of the company's strategic goals and objectives
 the relationship of the Board with the President or Chief Executive Officer
 appointment and performance of the Directors
 board membership, conduct, operations and performance
Omar Faruque Shohag Page 4 of 7 Advance Level-II (MS-351)
 MS351: Business Strategy (CMA: Advance Level-II)
 the ethical tone for the organization and the transparency of its conduct
 effective oversight of risk management, corporate compliance and the integrated framework of internal controls
 communication, reporting and information flows between the Board and management
 communication with and protecting the rights and interests of shareholders and all other stakeholders
 division of responsibility between the Board and management
 reliability of financial reporting, both internal and external.

Corporate Governance vs. Compliance

Governance:
 Governance is the overall management approach board members and senior executives use to control and direct
an organization.
 Governance integrates information gleaned from reporting with management control structures.
 Governance ensures that important information is communicated to appropriate organizational levels in a
complete, accurate and timely fashion.
 Governance instills control mechanisms to make sure strategies, directives and instructions from management are
carried out systematically and effectively.
 Governance attempts to balance the interests of a company’s many stakeholders, such as shareholders,
management, customers, suppliers, financiers, government and the community at large. Corporate governance is
intended to increase accountability and to facilitate prudent management.

Compliance:
 Compliance is the process through which companies demonstrate that they have conformed to specific
requirements in laws, regulations, contracts, strategies and policies.
 Compliance assessments determine the present state of compliance and measure the projected cost of
implementing compliance against the potential cost of noncompliance.
 Compliance initiatives prioritize, fund and implement any corrective actions deemed necessary.

Disaster recovery Plan, IT Emergency response plan:

A disaster recovery (DR) plan is a formal document created by an organization that contains detailed instructions on
how to respond to unplanned incidents such as natural disasters, power outages, cyber-attacks and any other disruptive
events.
Geographic information systems (GIS) are extremely valuable to emergency responders. This analytical mapping
technology helps them understand where hazards are located, how many people are affected and what response is
needed.

Business Planning and Strategy in dealing Big data analytic, Process automation, Artificial intelligence, Data
visualization, Block chain, and other emerging issues;

Big data analytics describes the process of uncovering trends, patterns, and correlations in large amounts of raw data
to help make data-informed decisions. These processes use familiar statistical analysis techniques—like clustering and
regression—and apply them to more extensive datasets with the help of newer tools.

Process automation is defined as the use of software and technologies to automate business processes and functions
in order to accomplish defined organizational goals, such as producing a product, hiring and onboarding an employee,
or providing customer service.

Omar Faruque Shohag Page 5 of 7 Advance Level-II (MS-351)

 MS351: Business Strategy (CMA: Advance Level-II)
Artificial intelligence (AI) refers to the simulation or approximation of human intelligence in machines. The goals of
artificial intelligence include computer-enhanced learning, reasoning, and perception. AI is being used today across
different industries from finance to healthcare.

Data visualization is the representation of data through use of common graphics, such as charts, plots, infographics,
and even animations. These visual displays of information communicate complex data relationships and data-driven
insights in a way that is easy to understand.

Blockchain technology is an advanced database mechanism that allows transparent information sharing within a
business network. A blockchain database stores data in blocks that are linked together in a chain.

Real life Strategy formation protocol in different industries in Bangladesh

There are three types of network protocols:
 Network management (ICMP, SNMP)
 Network security (HTTPS, SFTP, SSL)
 Network communication (TCP/IP, HTTP)

GAP between real life strategy formation process vs. Theoretic norms
Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is
using a "high end" strategy. Strategy is position; that is, it reflects decisions to offer particular products or services in
particular markets. Strategy is perspective, that is, vision and direction.
A prominent strategic alliance example is the partnership between Spotify and Uber. The strategic alliance between
the two organizations allows Uber users to connect to Spotify and stream their favorite music while on a ride.

A social norm exists when individuals practise a behaviour because they believe that others like them or in their
community practise the behaviour (descriptive norms), or because they believe that those who matter to them approve
of them practising the behaviour (injunctive norm).
Social norms are shared standards of acceptable behavior by groups. Social norms can both be informal understandings
that govern the behavior of members of a society, as well as be codified into rules and laws. Social normative
influences or social norms, are deemed to be powerful drivers of human behavioural changes and well organized and
incorporated by major theories which explain human behaviour.

How Strategy formation role out in Multinational environment?

Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of
organizational goals and objectives and thereby achieving the organizational vision. The process of strategy
formulation basically involves six main steps. Though these steps do not follow a rigid chronological order, however
they are very rational and can be easily followed in this order.
A) Setting Organizations’ objectives: The key component of any strategy statement is to set the long-term
objectives of the organization. It is known that strategy is generally a medium for realization of organizational
objectives. Objectives stress the state of being there whereas Strategy stresses upon the process of reaching
there. Strategy includes both the fixation of objectives as well the medium to be used to realize those objectives.
Thus, strategy is a wider term which believes in the manner of deployment of resources so as to achieve the
objectives. While fixing the organizational objectives, it is essential that the factors which influence the selection
of objectives must be analyzed before the selection of objectives. Once the objectives and the factors influencing
strategic decisions have been determined, it is easy to take strategic decisions.
B) Evaluating the Organizational Environment: The next step is to evaluate the general economic and industrial
environment in which the organization operates. This includes a review of the organizations competitive position.

Omar Faruque Shohag Page 6 of 7 Advance Level-II (MS-351)

 MS351: Business Strategy (CMA: Advance Level-II)
It is essential to conduct a qualitative and quantitative review of an organizations existing product line. The
purpose of such a review is to make sure that the factors important for competitive success in the market can be
discovered so that the management can identify their own strengths and weaknesses as well as their competitors’
strengths and weaknesses. After identifying its strengths and weaknesses, an organization must keep a track of
competitors’ moves and actions so as to discover probable opportunities of threats to its market or supply sources.
C) Setting Quantitative Targets: In this step, an organization must practically fix the quantitative target values for
some of the organizational objectives. The idea behind this is to compare with long term customers, so as to
evaluate the contribution that might be made by various product zones or operating departments. Aiming in
context with the divisional plans - In this step, the contributions made by each department or division or product
category within the organization is identified and accordingly strategic planning is done for each sub-unit. This
requires a careful analysis of macroeconomic trends.
D) Performance Analysis: Performance analysis includes discovering and analyzing the gap between the planned or
desired performance. A critical evaluation of the organizations past performance, present condition and the
desired future conditions must be done by the organization. This critical evaluation identifies the degree of gap
that persists between the actual reality and the long-term aspirations of the organization. An attempt is made by
the organization to estimate its probable future condition if the current trends persist.
E) Choice of Strategy: This is the ultimate step in Strategy Formulation. The best course of action is actually chosen
after considering organizational goals, organizational strengths, potential and limitations as well as the external
opportunities.

Omar Faruque Shohag Page 7 of 7 Advance Level-II (MS-351)