Difference stratgc and oprtnal contrl

The relationship between action and outcome is weaker in strategic control.

This is not surprising, as the most desirable area for control in strategic problems -
the environment -is the least subject to direct action.
The key action variables in strategic control are organizational. In the
operational control problem, technical factors such as labor levels, production levels,
choice of materials, and the like are the predominant control levels.
Alternative actions in strategic control are less easy to choose in advance. In
strategic control problem, it is possible to choose all possible action responses to
received data in advance. In an operational control problem, the few responses
possible can usually all be worked out before any operating data received.
The worst failing in strategic control is omitting a worthwhile action. In
operating control, the most typical sins are those of omissions (e.g., complaints
about too many people employed, too many defects, and too much inventory). In
the strategic control problem, sins of omission are much more serious (e.g., not
moving into a business opportunity when it presents itself, not undertaking a
particular social program, not applying resources to meet that challenges in the best
fashion).
The time for strategic control is longer. The period in which control has an
impact is longer for strategic problems that for operating problems.
The timing of strategic control is events oriented. By contrast, operating
decisions tend to be made on a periodic basis, and they are usually measured
accordingly.
Strategic control has little repetition. Not even the structure is the same as past
problems of a like kind, much less the technical details. Operating problems, by way
of contrast, tend to repeat their structure.
Analysis:
Strategic control models are less precise. This is in contrast to operational
control models, which are generally very precise in the narrow domain they apply.
Strategic control models are less formal. The models that govern the
considerations in a strategic control problem are much more intuitive, therefore, less
formal.
The principal variables in a strategic control model are structural. In strategic
control, the whole structure of the problem, as represented by the model, is likely to
vary, not just the values of the parameters.
The key need in analysis for strategic control is model flexibility. This is in
contrast to operating control, for which efficient quantitative computation is usually
most desirable.
The key activity in management control analysis is alternative generation.
This is different from the operational control problem, in which in many cases all
control alternatives have been specified in advance. The key analysis step in
operations is to discover exactly what happened.
The key skill required for management control analysis is creativity. In
operational control, by contrast, the formal review of outcomes to discover causes
means that they skill required is the ability to do technical, even statistical, analysis
of the data received.















Strategic Control
Strategic control focuses on the dual questions of whether:
(1) the strategy is being implemented as planned; and
(2) the results produced by the strategy are those intended.
Strategic control is the critical evaluation of plans, activities, and results, thereby
providing information for the future action. There are four types of strategic control:
premise control, implementation control, strategic surveillance and special alert
control
Premise Control: Planning premises/assumptions are established early on in the
strategic planning process and act as a basis for formulating strategies. Premise
control has been designed to check systematically and continuously whether or not the
premises set during the planning and implementation processes are still valid. It
involves the checking of environmental conditions. Premises are primarily concerned
with two types of factors:
Environmental factors (for example, inflation, technology, interest rates,
regulation, and demographic/social changes).
Industry factors (for example, competitors, suppliers, substitutes, and barriers to
entry).
All premises may not require the same amount of control. Therefore, managers must
select those premises and variables that (a) are likely to change and (b) would a major
impact on the company and its strategy if the did.

Implementation Control: . Implementation control is designed to assess whether
the overall strategy should be changed in light of unfolding events and results
associated with incremental steps and actions that implement the overall strategy.
The two basis types of implementation control are:
1. Monitoring strategic thrusts (new or key strategic programs). Two approaches
are useful in enacting implementation controls focused on monitoring strategic
thrusts: (1) one way is to agree early in the planning process on which thrusts are
critical factors in the success of the strategy or of that thrust; (2) the second
approach is to use stop/go assessments linked to a series of meaningful thresholds
(time, costs, research and development, success, etc.) associated with particular
thrusts.
2. Milestone Reviews. Milestones are significant points in the development of a
programme, such as points where large commitments of resources must be made.
A milestone review usually involves a full-scale reassessment of the strategy and
the advisability of continuing or refocusing the direction of the company. In order
to control the current strategy, must be provided in strategic plans.

Strategic Surveillance: is designed to monitor a broad range of events inside and
outside the company that are likely to threaten the course of the firms strategy. The
basic idea behind strategic surveillance is that some form of general monitoring of
multiple information sources should be encouraged, with the specific intent being the
opportunity to uncover important yet unanticipated information. Strategic surveillance
appears to be similar in some way to environmental scanning. The rationale,
however, is different. Environmental, scanning usually is seen as part of the
chronological planning cycle devoted to generating information for the new plan. By
way of contrast, strategic surveillance is designed to safeguard the established
strategy on a continuous basis.

Special Alert Control: Special alert controls are the need to thoroughly, and often
rapidly, reconsider the firms basic strategy based on a sudden, unexpected
event. (i.e., natural disasters, chemical spills, plane crashes, product defects, hostile
takeovers etc.). Special alert controls should be conducted throughout the entire
strategic management process.





Operational Control
Operational control systems are designed to ensure that day-to-day actions are
consistent with established plans and objectives. It focuses on events in a recent
period. Operational control systems are derived from the requirements of the
management control system. Corrective action is taken where performance does not
meet standards. This action may involve training, motivation, leadership, discipline,
or termination.
Evaluation Techniques for Operational Control:
Value chain analysis: Firms employ value chain analysis to identify and evaluate
the competitive potential of resources and capabilities. By studying their skills
relative to those associated with primary and support activities, firms are able to
understand their cost structure, and identify their activities through which they can
create value.
Quantitative performance measurements: Most firms prepare formal reports of
quantitative performance measurements (such as sales growth, profit growth,
economic value added, ration analysis etc.) that managers review at regular
intervals. These measurements are generally linked to the standards set in the first
step of the control process. For example if sales growth is a target, the firm should
have a means of gathering and exporting sales data. If the firm has identified
appropriate measurements, regular review of these reports helps managers stay
aware of whether the firm is doing what it should do. In addition to there, certain
qualitative bases based on intuition, judgement, opinions, or surveys could be used
to judge whether the firms performance is on the right track or not.
Benchmarking: It is a process of learning how other firms do exceptionally high-
quality things. Some approaches to bench marking are simple and
straightforward. For example Xerox Corporation routinely buys copiers made by
other firms and takes them apart to see how they work. This helps the firms to stay
abreast of its competitors improvements and changes.
Key Factor Rating: It is based on a close examination of key factors affecting
performance (financial, marketing, operations and human resource capabilities)
and assessing overall organisational capability based on the collected information