Unit-06

Strategic Control
 Definition/Meaning
Strategic control is defined as finding different methods to implement
the strategic plan. It is unique to handle and intends to handle the
unknown and track the strategic implementation and its results. It is
primarily concerned with finding and assisting you in adapting to
different factors, including internal or external factors.
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.
Strategic control is concerned with guiding action on behalf of the
strategy as that action is taking place and when the end result is still
several years off.
 Focus of Strategic Control
 The primary objective of strategic control is to ensure that organization
has an effective balance and alignment with its internal and
external environment. This is very important when it comes to moving
forward towards achieving strategic goals.
 After a strategy is confirmed, it is to be implemented over a long time to
guide the organization and adapt to the internal and external environment.
These strategies are usually based on management’s assumptions about
different events that have not yet taken place. They are futuristic or forward-
looking in nature.
 The strategic control is concerned primarily with tracking the strategy as it
is being implemented. It detects any problems or implements necessary
changes that are necessary to make adjustments.
Establishing Strategic Controls /Types of strategy control

1. Premise control
2. Implementation control
3. Strategic surveillance
4. Special Alert control
 1. Premise control

Premise control is designed to check systematically and continuously

whether the premises on which the strategy is based are still valid.
If a vital premise is no longer valid, the strategy may have to be changed.
E.g. many software companies postponing the joining dates of new recruits
during slowdowns.
Strategies are usually founded on certain assumptions about the forces and
factors which affect the organization. These factors include internal factors
like the employees, profitability, product, etc. And external factors like
customers, shareholders, competition, nature, etc. Some of these forces are
very sharp, and any deviation in them affects the strategy greatly.
 Therefore premise control is necessary to identify and keep track of all
those changes to be assessed. The objective is to assess their impact on
strategy and its implementation in the organization.
 There could be many factors like changing government policies, rising or
decreasing market competition, changes due to killer virus in the market, or
natural and unforeseen calamities.
 Therefore, premise control is used to continually test all these assumptions
and determine if they are valid or they need to be modified. This helps the
strategy farmers to implement necessary and corrective action at the right
time rather than just being with a particular strategy for a long time.
 Usually, the corporate planning department’s job is to exert premise control
and identify the primary assumptions by regularly checking their validity.
Planning premises are primarily concerned with environmental and industry factors

Environmental factors
 Some of the factors are inflation, technology, interest rates, regulation, etc.
 Environmental factors exercise considerable influence over the success of a
firm's strategy as strategies usually are based on key premises about them.
–e.g. All the polluting industries in the vicinity of Taj Mahal at Agra were
asked to use cleaner fuel like natural gas. Some of the more polluting
industries like tannery were asked to shift their base.
Industry factors
 The performance of the firms in a given industry is affected by industry
factors.
• Competitors, suppliers, product substitutes, and barriers to entry are a few of
the industry factors about which strategic assumptions are made
 2. Implementation control
 When the strategy is chosen, it has to be implemented, and that is a
prerequisite to have an optimum number of programs, plans, and projects. The
entire purpose of implementation control is to confirm and ascertain that these
programs and projects help the organization achieve its goals.
 If it is seen that the commitment of resources has a predefined plan or a
program is not getting as many results as expected, then a matching revision
should be done. Therefore, implementation control is nothing but strategic
rethinking to avoid different wastes.
 One way of implementing control is to identify and monitor different throb
points like confirming new product marketing’s success after the pre-test
phase. This also involves checking the feasibility of the diversification program
after initial attempts at searching technological association.
 Strategy implementation takes place as a series of steps, programs, and
moves that occur over an extended time.
• Managers implement strategy by converting broad plans into concrete
incremental actions and results of specific units and individuals.
• Implementation control is the type of strategic control that must be
exercised as those events unfold.
• 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.
• There are two basic types of implementation control:
1. Monitoring strategic thrusts 2. Milestone reviews
Monitoring strategic thrusts or projects
• As a means of implementing broad strategies, many small
projects are undertaken which represent what needs to be done
if the overall strategy is to be accomplished.
• These strategic thrusts provide managers with information that
helps them determine whether the overall strategy is progressing
as planned or needs to be adjusted.
• One of the approaches to monitor strategic thrusts is to agree
early in the planning process which thrusts or which phases of
thrusts are critical factors in the success of the strategy.
• Managers responsible for these implementation controls will
single them out from other activities and observe them frequently
 When the strategy is chosen, it has to be implemented, and that is a prerequisite
to have an optimum number of programs, plans, and projects. The entire
purpose of implementation control is to confirm and ascertain that these
programs and projects help the organization achieve its goals.
 If it is seen that the commitment of resources has a predefined plan or a program
is not getting as many results as expected, then a matching revision should be
done. Therefore, implementation control is nothing but strategic rethinking to
avoid different wastes.
 One way of implementing control is to identify and monitor different throb
points like confirming new product marketing’s success after the pre-test phase.
This also involves checking the feasibility of the diversification program after
initial attempts at searching technological association.
 Milestone reviews
• Milestones like critical events, allocation of a major resource or passage of
a certain time can be used to monitor progress.
• The milestone reviews usually involves a full scale assessment of the
strategy and of the advisability of continuing or refocusing the firm's
direction.
• –e.g. Boeing had plans to develop supersonic transport airplanes. Initial
investment was made considering the potential and because another
competitor, Concorde, was doing it. But when another invest was to be
made Boeing did a thorough analysis and found that the project would be
very costly to develop, there would not be much demand to this service
considering the cost and the reason why Concorde would be able to do
would be because of the huge government subsidies. These factors led
Boeing to abort this project even though millions of dollars were already
invested
I the first scenario, the company should evaluate and analyze if the
new product launch will benefit or be dropped forever for another
program. In the second scenario, implementation control is used to
confirm if the diversification move will be successful or not.
Milestone review is another tool of implementation control. This
involves a critical review of the essential points in strategic
implementation. This is very similar to the identification of activities
and events in the CPM network or PERT.
After these milestones are identified, a detailed and in-depth review
of implementation is made to reconfirm its relevance to 18 different
objectives.
 Implementation control is also enabled through
• operational control system like budgets,
• schedules and key success factors.
• They provide post-action evaluation and control over short periods.
• To be effective, operational control systems must take four steps
common to all post-action controls:
1. Set standards of performance
2. Measure actual performance
3. Identify deviations from standards
4. Initiate corrective action
3. Strategic surveillance
Strategic surveillance is more generalized than the premise and
implementation controls, which are more specific by nature.
Strategic surveillance aims to monitor a wide range of events both
outside and inside the organization.
They usually are the ones who threaten the strategy of the
company. Such strategic surveillance can be performed by a broad-
based and general monitoring based on different selected
information sources. The objective is to uncover events that are
likely to affect the organizational strategy.
• The basic idea behind strategic surveillance is that important yet
unanticipated information may be uncovered by a general
monitoring of multiple information sources.

• Strategic surveillance must be kept as unfocused as possible.

Strategic surveillance provides an ongoing broad-based vigilance
in all daily operations that may uncover information relevant to the
firm‘s strategy.

-Xerox could know from its surveillance that the photocopying

market was shifting from black and white to color prints. This
helped them to focus on earning higher revenues by selling color
photocopying machines.
 4. Special Alert control

This is a special alert based on an immediate reassessment of the strategy

when an unexpected event hits and stops it. This special alert can be
implemented by formulating contingency strategies and assigning
different responsibilities for unforeseen events.

These incidences can be unexpected events like pandemic outbreaks,

sudden change or fall of government at Centre or state, industrial disaster,
terrorist attack or unforeseen natural calamity like floods, fire,
earthquake, etc
A special alert control is the thorough, and often rapid,
reconsiderations of the firm's strategy because of a sudden,
unexpected event.
• –e.g. change in the firm's strategy in events like SARS,
bombing of twin towers, etc.
Such events should trigger an immediate and intense
reassessment of the firm’s strategy and its current strategic
situation.
• Crisis teams and contingency plans can handle the firm’s
initial response to unforeseen events that may have an
immediate effect on its strategy.
 Steps of Strategy Control Process
1. Determine what to control
Consider the goals of the organization. The elements should be related to
your vision and mission. It may not be an easy task, but you should prioritize what to
control because it is impossible to monitor and control everything. Selectively
determine what to control.

2. Set standards
You should have something to compare your performance with. Whether in their
future, present, and past, managers must compare actions against a set standard.
This can be qualitative or quantitative, but it should help you determine your goals
and evaluate the nature of your progress.
3. Measure performance
Now that the standards are set, The next step is to measure your performance. It is
important to measure your performance because it will help you determine your
strategy’s progress. This measurement can be done in regular meetings which are
carried out in the company.
4. Compare performances
When you compare standards or targets, you should perform
competitive benchmarking. It will help you to determine the gaps in actuals and
targets.
5. Analyze deviations, if any
There could be multiple deviations in your strategy implementation. You must
analyze these performance standards and determine the cause if they go below the
expected standards.
This step essentially focuses on understanding what the causes of deviation are.
This also analyses internal issues such as shortages of resources.
6. Corrective action
It is important to determine if corrective action is needed or not. Once you
have determined the reason for performance deviation, decide what to do
about it. Determine if the goals should be adjusted or something you can do
internally, which will sort the issue.
It was entirely dependent on each deviation’s cause, which will help you
determine if you will take a corrective performance or revise the existing
standard or take no action at all.
Thank You