Strategic and Operational Control

Strategic 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 .
Characterized as a form of steering control.

Four Types of Strategic Control

Four Types of Strategic Control

Premise Control
Implementation Control Strategic Surveillance Special Alert Control

Premise Control
Premise

Control

is

designed

to

check

systematically

and

continuously

whether

the

premises on which the strategy is based are still valid.

What Premises Should Be Monitored?
Environmental Factors Industry Factors

How Are Premises Controls Enacted?

Implementation 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.
The two basic types of implementation control are:

Monitoring Strategic Thrusts

Milestone Reviews

Strategic 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.
Strategic Surveillance provides an ongoing, broad-based

vigilance in all daily operations.

Special Alert Control

A Special Alert Control is the thorough, and often rapid,

reconsideration of the firms strategy because of a sudden, unexpected event.

Special Alert Control, which is based on a trigger

mechanism

for

rapid

response

and

immediate

reassessment of strategy in the light of sudden and unexpected events.

Characteristics of the Four Types of Strategic Control

Operational Control
Operational Control is aimed at the allocation and

use of organizational resources through evaluation of the performance of organizational units such as

divisions, SBUs, etc.

Operational Control is concerned with action or

performance.
There are three types of operational control systems:

Budgets, Schedules and Key Success Factors.

How do Strategic Control and Operational Control Differ?

Attribute
1. Basic Question 2. Aim

Strategic Control
Are we moving in the right direction? Proactive, continuous questioning of the basic direction of strategy Steering the organizations future direction External environment Long- term Exclusively by Top management, may be through lower level support

Operational Control
How are we performing? Allocation and use of organizational resources Action control

3. Main Concern

4. Focus 5. Time Horizon 6. Exercise of Control

Internal organization Short- term Mainly by executive or middle level management on the direction of the top management Budgets, Schedules and MBO

7. Main Techniques

Environmental scanning, information gathering, questioning and review

Process of Evaluation
1.
2. 3. 4.

Setting Standards of Performance

Measurement of Performance Analyzing Variances Taking Corrective Action