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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