the next step is to organize the company in a way to exploit these resources. If done successfully, the company can enjoy a period of sustained competitive advantage. There are many components to this question of organization. They include, but are not limited to, the company's formal reporting structure, management control systems and compensation policies. Formal reporting structures are simply a description of who in the firm reports to whom. Management control systems include both formal and informal means to make sure that managers’ decisions align with a firm's strategies. Formal control systems can consist of budgeting and reporting activities that keep top management informed of decisions made by employee's lower down in the firm. Informal controls can include a company's culture and encouraging employees to monitor each other. Firms incentivize their employees to behave a desired way through compensation policies. These policies can include bonuses, stocks or salary increases but can also include non-monetary incentives such as additional vacation days or a larger office. These components of organization are known as complementary capabilities and resources because alone they do not provide much value. However, in combination with a firm's other resources and capabilities, it can result in sustained competitive advantage. Without the correct organization, even firms with valuable, rare and costly to imitate resources and capabilities can suffer competitive disadvantage (Barney & Hesterly, 2011). See also PEST analysis SWOT analysis Management Strategic management Strategic planning System dynamics Resource-based view References Barney, Jay B and Hesterly, William S. Strategic Management and Competitive Advantage: Concepts. 2005 Pearson Education, Inc., Upper Saddle River, New Jersey, 07458. Strategic Management Journal, 5, pp. 171–180. Barney, J.B. (1991). “Firm resources and sustained competitive advantage.” Journal of Management, 19, pp. 99–120. Hill, C.W.L., and G.R. Jones (1998). Strategic Management Theory: An Integrated Approach, 4th. Boston: Houghton Mifflin. Barney, J. B., & Hesterly, W. S. (2010). VRIO Framework. In Strategic Management and Competitive Advantage (pp. 68–86). New Jersey: Pearson. Business intelligence terms Strategic management Management theory