Performance Management Systems and Strategies

CREATING STRATEGIC PLANS AND THEIR ALIGNMENT WITH THE PERFORMANCE PLANS

Without going into the details of various types of organizational strategies, we need to focus on Porter's (1980) generic strategies, which yield competitive advantages for the organizations. Cost leadership, product differentiation, and focus are the three generic strategies suggested by Porter. He suggested that to ensure long-term profitability, organizations need to make a choice between one and more of the generic strategies. The concept of strategy–performance relationships has its origin in the theory of industrial organization (IO), pioneered by Bain (1956) and Mason (1939). At the outset, it is important to understand that strategy–performance relationships still ...