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MODYULE-8
The strategic management process is not complete after a strategy has been formulated
and implemented. A means of evaluating its success and failure must also be established.
Strategic Control consists of deterring the extent to which the organization’s process is
tracked and adjustments to the strategy are made as necessary. It is during the process of
strategic control that gaps between the intended and realized strategies (what was planned
and what really happened) are identified and addressed.
The strategic control: The process of deterring the extent to which an organization’s
strategies are successful in attaining in goals and objectives
The evaluation of strategy is that phase of the strategic management process in which the
top managers determine whether their strategic choice as implemented is meeting the
objectives of the enterprise.
There are two aspects in this phase of strategic management: evaluation which
emphasizes measurement of results of a strategic action and control which emphasizes on
taking necessary actions in the light of gap that exists between intended results and actual
results in the strategic action. However, because of on-going nature of strategic
evaluation and control process, both these are intertwined. In practice, the term control is
used in the broad sense which includes evaluative aspect too because unless the results of
an action known, control actions cannot be taken.
If performance meets or exceeds the standards, corrective action is usually not necessary.
If performance fails below the standard, then management must take remedial action
Strategic Control is the process of taking into account the changing assumptions, both
external and internal to the organization, on which the strategy is based, continually
evaluating the strategy as it is being implemented, and taking corrective actions to adjust
the strategy to the new requirements. This process is necessitated because strategy
formulation is based on certain assumptions. Since there is time lag between strategy
formulation and its implementation, some of these assumptions may not hold good, either
fully or partially. To that extent, the strategy may not work as collectively as the
strategist might have thought.
Strategic controls by which top management monitors and steers the basic direction of
the company should be supplemented by a control system at the operational level of
strategy implementation. “Operational control systems guide, monitor and evaluate
progress in meeting annual objectives. While strategic controls attemps to steer the Co
over an extended time period (usually 5 years or more), operational controls provide
post-action evaluation and control over short time periods – usually from one month to
one year.
1. Objective Based - Clarity about the purpose of evaluation is very much essential for
choosing the appropriate evaluation system. It will provide adequate, useful and timely
information for effective control.
2. Economic: Strategy evaluation system must be economical. The costs must be
justifiable with its utility. Too much information, time consuming leading to confusion is
to be avoided.
3.Objectivity: Must be reality oriented ,purposeful, logical. The standards or targets
must reflect the internal and external realities. The recession or boom or changes in the
competitive environment must receive due consideration in setting or revising standards.
4. Pervasiveness: In the sense that the need for it is appreciated throughout the
organization in general and by the functional areas concerned and people directly
associated with it in particular. This wil improve the confidence level of people. The
strategy evaluation process should not dominate decisions, it should foster mutual
understanding, trust, common sense and generate co-operation.
5.Simplicity: Not to adopt complex systems of evaluation. Variables to be monitored and
measured, accuracy required, size of the organization and diversity of activities etc are to
be fair and not cumbersome.
6.Communication and Involvement: It is necessary to take people into confidence to
ensure their positive and active involvement at both the mental and activity level in
achieving the objective. This is done through a good communication system. All parties
must appreciate the evaluation system whole heartedly.
7. Congruence: Consistent with the events measured/ The scope, range, magnitude and
accuracy of measurement should be related to the objective and usefulness.
8.Operational: Must be focused on action rather than information is their purpose. The
findings of the control must react the persons responsible to take need action.
Contingency Planning;
A company should also be well prepared to deal with contingencies i.e. unforeseen or
other critical developments that affect the company, like major changes in competitive
environment, government policy or budget allocation, strikes, boycotts, war, internal
disturbances, natural calamities etc. A contingency plan thus, is a plan to cope with
critical developments which mark major deviations from the strategic planning premise.
Crisis Management
The process of planning for and implementing the response to a wide range of negative
events that could severely affect an organization
Crisis are threats from outside. At the forecasting stage, one has to foresee the negative
factors and events that are coming in the way. Remedial steps are to be (r problem
solving) are to be incorporated. This approach is called as Crisis Management. Crisis are
foreseen and possible steps are knitted to the same. Disasters, terrorists attacks, natural
calamities which are generally beyond the control of man are considered as crisis.
Stategies suffer due to crisis. Hence at the planning stage, the safe-guards are provided
which acts as a Control over Strategic Management.