Motivation is the process of arousing and sustaining goal-directed behavior. Motivation theories attempt to explain and predict observable behavior. There are number of Motivational Problems in Strategic Evaluation and Control:
1. Psychological Barriers Open Motivational Problems
Managers are seldom motivated to evaluate their strategies because of the psychological barriers of accepting their mistakes. Top management formulates the strategy, which is very conscious about its sense of achievement. It hardly appreciates any mistake it may community at the level of strategy formulation. Even if something goes wrong at the level of strategy formulation, it may put the blame on the operating management and tries to find out the faults at the level of strategy implementation.
This over-conscious approach of top management may prevent the objective review of whether correct strategy has been chosen and implemented. This may result into delay in taking correct alternative action and bringing the organization back at satisfactory level. This happens more in the case of retrenchment strategy, particularly divestment strategy where a particular business has failed because of strategic mistake and in order to save the organization from further damage, the business has to be sold.
2. Lack of Direct Relationship between Performance and Rewards
Another one of motivational problems is the lack of direct relationship between performance achievement and incentives. It is true that performance achievement itself is a source of motivation but this cannot always happen. Such a situation hardly motivates the managers to review their strategy correctly. This happens more in the case of family-managed businesses where professional managers are treated as outsiders and top positions, particularly at the board level, are reserved for insiders.
Naturally very bright managers are not motivated to review correctness or otherwise of their strategy. The family managers of such organizations are even more prone to psychological problem of not reviewing their strategy and admit their mistakes.
Thus, what is required for motivating managers to evaluate their performance and strategy is the right type of motivational climate in the organization. Linking performance and rewards as closely as possible can set this climate. This linking is required not only for the top level but for the lower down in the organization too.
Many forward-looking companies though few in number have taken this step when they have adopted the policy of taking board members from outside their families and friend groups. These companies have taken this- step not only to satisfy the requirements of financial institutions of broad basing the directorship but they have taken this step to motivate their top level managers.
Naturally top managers in such companies can take any step to fulfill the organizational requirements including the evaluation of their strategy.
