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Strategic
Control
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Strategic Management ProcessStrategic Management Process
Establish
StrategicIntent
Strategic
Evaluation& Control
Implement
Strategies
Formulate
Strategies
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Strategic ControlStrategic Control
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.
Are we moving in the proper direction? Are assumptions
correct? Are things in right place? Should we adjust or abort
the strategy?
How are we performing? Are objectives and Schedules being
met? Do we need to make operational changes?
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Importance of Strategic ControlImportance of Strategic Control
Checking performance against Expectations
Achieving Strategic efficiency
Maintaining focus on Targets & Objectives Checking on activities i.e. Schedules
Fostering right direction
Matching costs, revenues and cash flows against
projections
Insuring responsiveness to Deviations
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CONCEPT OF CONTROL
Tolerable
Expected
Intolerable
Control is a technique of monitoring and adjustment.
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Strategic Control and Control Systems
1990s thru 21st
Century
What is
Measured?Meeting Budget
Production Efficiency
Inputs
Quantitative
Performance (Mostly
Financial)
Customer Satisfaction
New Product Development
Rates
Outcomes
Quantitative & Qualitative
Performance
Traditional
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Who is evaluated?
Traditional1990s thru 21st
Century
Individuals
Functions
Responsibility
Centers
Individuals
Teams (Groups)
Cross-Functional
People
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Basis of Rewards Control Systems
Traditional 1990s thru 21st
Century
Efficiency
Profits
ROI
Quality
Innovation
Creativity
Overall Company
Performance
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Focus of Contemporary Control Systems
Traditional 1990s thru 21st
Century
Internal Macro Environment
Industry Environment
Internal
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KEY CONTROL AREAS
PRODUCTION
Quality
Quantity
Cost
Performance
Time
MARKETING
Sales
Sales Expenses
Adv.Expenses
Performanceof
Sales force
AfterSales Exp.
Distribution
Incentives tomiddle
people
FINANCE
CapitalCost
Inventories
FlowofCapital
UseofCapital
PERSONNEL
LaborCost
Labor Relations
Absenteeism
Turnover
Trng. & Dev.Cost
Incentives ofother
benefits
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Establishing ControlsEstablishing Controls
Premise Control
Strategic Surveillance
Special Alert Control
Implementation Control
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Premise ControlPremise Control
Premise control is designed to check systematically and
continuously whether the premise on which the strategy is
based are still valid. Planning premises are primarily concerned with
Environmental Inflation, Technology, Regulations, Social /
Demographic changes etc.
Industry Factors Competitors, suppliers, product substitutes,
barriers etc.
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Strategic SurveillanceStrategic Surveillance
Strategic Surveillance is designed to monitor a broad
range of events inside and outside the firm that are likely
to affect the course of its strategy.
Its done generally through a general kind of monitoring
based on selected information sources to uncover events
that are likely to affect the strategy of an organization.
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Implementation ControlImplementation Control
Implementation Control 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.
Monitoring Strategic Thrusts / Projects
Milestone Reviews
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Control Systems / TechniquesControl Systems / Techniques
Budgets
Resource Allocation Plan
RevenueBudgets
CapitalBudgets
ExpenditureBudgets
Benchmarking
Quantitative Performance Measurements
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Control Systems / TechniquesControl Systems / Techniques
Scheduling
Time
Sequence
Key Success Factors
Critical Factors in Firms successAttention
Each Function has its own KSFs
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Effective Control SystemEffective Control System
Suitable
Simple
Selective
Sound and economical
Flexible
Forward Looking
Reasonable
Objectives
Responsibility for failures
Acceptable