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2 The risk of market and operations performance becoming out of balance, which can
lead to ‘external’ and ‘internal’ operations-related risk.
3 The distinction between pure risks, involving events that will produce the possibil-
ity only of loss (or negative outcomes), and speculative risks, which emerge from
competitive scenarios and hold the potential for loss or gain (positive outcomes).
4 Controlling risk through prevention strategies (where an operation seeks to prevent
an event occurring), mitigating strategies (where an operation seeks to isolate an
event from possible negative consequences) and recovery strategies (where an opera-
tion analyses and accepts the consequences from an event but undertakes to mini-
mise or alleviate or compensate for them).
5 Adjustment cost risk – These are the losses that could be incurred before the new
strategy is functioning as intended.
6 Intervention risk, which is incurring ‘type I’ and ‘type II’ errors. Type I errors occur
when managers intervene when it is not necessary. Type II errors occur when the
managers fail to recognise the need for intervention where it actually exists.

how does learning contribute to strategic control?
Implementation risk is reduced as an organisation learns over time. Four issues are
important in understanding how learning affects implementation:
1 How can an operations strategy encourage the learning necessary to make sure that
operations knowledge is carried forward over time? Here the distinction between
single-loop and double-loop learning is important.
2 How can an operations strategy ensure that the organisation appropriates (captures
the value of) the competitive benefits that are derived from the build-up of opera-
tions knowledge?
3 How can an operations strategy take into account the fact that the innovations that
derive from the build-up of operations knowledge have a momentum of their own
and are strongly path dependent (they are influenced by what has happened before)?
4 How can an operation take into account the interaction between the extent of
resource and process change?
All implementation projects have stakeholders, who are the individuals and groups who
have an interest in the project process or outcome and who should be included in its
planning and executions. One approach to discriminating between different stakehold-
ers, and how they should be managed, is to distinguish between their power to influ-
ence the project and their interest in doing so. This results in the power– interest grid.
Stakeholders’ position on the grid gives an indication of how they might be managed.

Further reading
Alkhafaji, A.F. (2003) Strategic Management: Formulation, Implementation, and Control in a
Dynamic Environment. Philadelphia, PA: Haworth Press Inc.
Carlopio, J. (2003) Changing Gears: The Strategic Implementation of Technology. Basingstoke,
UK: Palgrave Macmillan.
Jessen, M., Holm, P.J. and Junghagen, S. (2007) Strategy Execution: Passion & Profit.
Copenhagen, Denmark: Copenhagen Business School Press.

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