STRATEGIC CONTROL
Strategic control is generally concerned with tracking the manner in which things are
working within the context of organization’s strategy.
Strategic control is concerned with tracking a strategy as it is being implemented,
detecting problems or changes in its underlying premises, and making necessary
adjustments as activities proceed.
Its relevance is based on the need to ensure that the various activities undertaken
within the organization do not spin out of control in a manner that may derail the
overall strategic effort and expectations within the organization.
By their nature, strategies are forward looking, designed to be accomplished into the
distant future and usually based on management assumptions about numerous events
that have yet to occur. It is thus necessary to track a strategy in order to keep it on the
right course.
The full execution of a strategy often takes a long time, often five or more years
during which time many changes occur that have major reunifications for the
strategy’s ultimate success.
Strategic control is concerned with guiding action as that action is taking place and
when the end result is still a long time away into the future. The control of strategy
can thus be compared to a form of “steering control” as in the case of controlling a
vehicle as it si being driven or piloting a plane whereby all manner of indications have
to be monitored constantly. Unless such close monitoring is correctly done, the
vehicle or plan may simply crash before it gets to its destination.
Key Issues in Strategic Control
Managers responsible for the success of a strategy are typically concerned with two
sets of considerations:
i) A strategy’s premises, and
ii) The organization’s performance levels
Considerations relating to a strategy’s premises may comprise:-
i) Whether the organization is moving toward the right direction
ii) Whether manager’s assumptions about major trends and changes are correct
iii) Whether key expectations are turning out to be right
iv) Whether the organization is engaged in the critical things that need to be done
v) Whether, on the basis of outlook of things, the strategy should be adjusted or
even aborted altogether.
Considerations relating to organization’s performance may comprise:-
i) Whether objectives and schedules are being realized
ii) Whether costs, revenues, and cash flows are matching projections
iii) Whether there is need to make operational changes
Ordinarily, a good deal of time elapses between the initial implementation of a
strategy and achievement of its intended results. During that time, investments are
made and numerous projects and actions are undertaken to implement the strategy.
Also, during that time, changes are taking place in both the environmental situation
and the organization’s internal situation. Strategic controls are thus necessary to steer
the organization through such numerous events. The controls must provide the basis
for adapting the organization’s strategic actions and directions in response to such
developments and changes.
Mechanisms for Evaluating and Controlling Strategy
i) Premise Control
ii) Implementation control
iii) Strategic surveillance, and
iv) Special alert control
Premise Control
Every strategy is based on certain planning premises which comprise various assumptions or
predictions. It is designed to check systematically and continuously whether such premises on
which the strategy is based remain valid.
The relevant premises to be monitored are those planning-oriented ones that are primarily
concerned with environmental and industry factors. Environmental factors may include
inflation, technology, interest rates, regulations, demographic changes, etc. Industry factors
may include competitors, suppliers, product substitutes and barriers to entry.
The manner in which the premises impacts on strategy should be assessed with a view to
making the necessary adjustments and revisions.
Implementation Control
Strategies are implemented by converting broad plans into concrete, increamental actions and
results of specific units and individuals. Implementation control must thus be exercised as
those events unfold.
It is designed to assess whether the overall strategy should be changed in light of the results
associated with the incremental actions that implement the overall strategy.
Strategic Surveillance
This is designed to monitor a broad range of events inside and outside the organization that
are likely to affect the course of its strategy.
The basic idea behind strategic surveillance is that important yet un anticipated information
may be uncovered by a general monitoring of multiple information sources, such as media,
trade conferences, conservations, political statements. Etc.
Strategic surveillance provides an ongoing, broad based vigilance that may help uncover
information relevant to the organization’s strategy.
Special Alert Control
This involves a thorough, and often rapid, reconsideration of the organization’s strategy
because of a sudden, unexpected event such as sudden change in regulation, abrupt exit or
entry into the industry of a leading competitor, unexpected invasion of the industry by
formidable competitors. etc. Such an event should trigger an immediate and intense
reassessment of the organizations’s strategy.
Operational Control
These guide, monitor and help evaluate progress especially in meeting short term objectives.
Operational controls provide post-action evaluation and cover short and medium term
strategies. To be effective therefore, they must incorporate such requirements which are
characteristic of the conventional control such as:
i) Setting standards of performance
ii) Measuring actual performance
iii) Identifying deviations from the set standards, and
iv) Initiating corrective action