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CS Professional · Strategic Management and Corporate Finance · Business Policy and Formulation of Functional Strategy

During strategy implementation, a company finds that its reward system pays sales staff only on volume, while the new strategy aims at premium, service-led positioning. This situation best illustrates a lack of:

It illustrates a lack of alignment between incentives and strategy, a strategic control and implementation failure. Paying only for volume pushes staff toward behaviour that conflicts with a premium, service-led positioning, so the reward system must be redesigned to support the chosen strategy.

  1. AStrategic control through proper alignment of incentives with strategyCorrect
  2. BEnvironmental scanning of macro factors
  3. CMission statement clarity
  4. DDiversification into related businesses

Explanation

Incentives that reward volume conflict with a differentiation strategy based on service, so behaviour will not support the strategy. This is an alignment and control problem in implementation, not scanning, mission or diversification.

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