Strategic Control

Presented By:Pankaj Kumar

Rai Business School
(Meadows)

What Is Strategic Control ?

Strategic control
The selection of an organizational strategy and
matching structure for the organization.
Creation of control systems to monitor and
evaluate strategic performance of the organization.

The importance of strategic control

Achieving operational efficiency
Maintaining focus on quality
Fostering innovation
Insuring responsiveness to customers

Strategic control
Typically consists of three steps
Monitoring performance
Comparing performance to standards
Taking corrective action where needed

Traditional V/S Contemporary

Traditional control system
Based largely on the feedback approach
Little or no action taken to revise strategies, goals
and objectives until the end of the time period

Contemporary control system

Continually monitoring the environments (internal
and external)
Identifying trends and events that signal the need to
revise strategies, goals and objectives

Traditional Approach to Strategic Control

Traditional approach is sequential

Strategies are formulated and top management sets goals
Strategies are implemented
Performance is measured against the predetermined goal set
Control is based on a feedback loop from performance
measurement to strategy formulation

Traditional Approach to Strategic Control

Process has time lags, often tied to the annual
planning cycle
This single-loop learning control system
simply compares actual performance to a
predetermined goal
Most appropriate when
Environment is stable and relatively simple
Goals and objectives can be measured with certainty
Little need for complex measures of performance

Contemporary Approach to Strategic

Control
Informational
control

Behavioral
control

Relationships between strategy formulation,

implementation and control are highly
interactive
Two different types of control
Informational control
Behavioral control

Contemporary Approach to Strategic

Control
Informational control
Concerned with whether or not the
organization is doing the right things

Behavioral control
Concerned with whether or not the
organization is doing things right in the
implementation of its strategy

Both types of control are necessary

conditions for success

Strategic Control
Should motivate people toward desired organizational
behavior rather than promote dysfunctional behavior
Traditional

What is
Measured?

1990s thru 21st

Century

Meeting Budget

Customer Satisfaction

Production Efficiency

New Product
Development Rates

Inputs
Quantitative
Performance(Mostly
Financial)

Outcomes
Quantitative & Qualitative
Performance

Who is evaluated?

Traditional
Individuals
Functions
Responsibility
Centers

1990s thru 21st

Century

Individuals
Teams (Groups)
Cross-Functional
People

Basis of Rewards control Systems

Traditional

1990s thru 21st

Century

Efficiency

Quality

Profits

Innovation

ROI

Creativity
Overall Company
Performance

Focus of Contemporary Control Systems

Traditional

Internal

1990s thru 21st

Century

Macro Environment
Industry Environment
Internal

Strategic Control Systems

Steps in designing
an effective control
system

Thank you
Have a Nice Day