Strategic control

Strategic control
See also
Definition of controlling Strategic controlling Organizational planning Strategy deployment Importance of strategic management Capital planning Differences between control and controlling Strategic priorities Strategic planning functions

Process of strategic control is in close relationship with the implementation of strategy phase. It can be generally understood as a comparison of measures of the effects of implementing the strategy with the objectives of the strategic plan. Strategic control is closely linked to the implementation of management information function.

Objectives of strategic control

The main task of strategic control is stating whether the goals to which company aspires, are accomplished or to indicate as early as possible the need for modification of action plans and objectives - according to changes in the environment. This task is intended as a continuous process of obtaining and processing information, done in parallel with strategic planning (formulation and execution).

The essence of strategic control

The essence of strategic control can be summarized as follows:

• Strategic control involves constant monitoring of external and internal determinants of action and progress in achieving strategic objectives,
• Strategic control involves the company, treated as an organization, as well as the strategic unit, the main functions of business and markets, and basic operating processes running in the enterprise,
• Strategic control is focused on the evaluation of processes and results of operations, but also detection and interpretation of signals about upcoming changes (emerging problems) before they trigger negative consequences for the company,
• Strategic control is conducted using management information systems,
• Strategic control is closely linked to strategic planning. Control operations and tools are built into the planning process, and control is an important strategic instrument for the implementation and execution of strategy.

See also:

• Strategic controlling
• Strategic planning functions

Examples of Strategic control

• Dashboards: Dashboards are a popular tool for strategic control. They are used to present a company's performance in terms of key performance indicators (KPIs) and metrics. They are often presented visually, allowing executives to quickly review performance in an easily understandable format.
• Strategic Reviews: Strategic reviews are a systematic review of the organization's strategies and operations. The review looks at the organization's performance and objectives and identifies areas where strategies may need to be revised or improved.
• Performance Reviews: Performance reviews are a form of strategic control that assesses the performance of individual employees or teams. Performance reviews provide a snapshot of how well employees and teams are meeting their objectives and can help identify areas of improvement or development.
• Budgetary Control: Budgets are a fundamental tool for strategic control. Budgets provide a framework for measuring performance and ensuring that the organization is operating within its means.
• Risk Management: Risk management is a form of strategic control that looks at potential risks to the organization and takes measures to mitigate those risks. Risk management involves identifying potential risks and taking steps to minimize their impact, such as implementing appropriate insurance policies or developing risk management plans.

Advantages of Strategic control

• Strategic control helps to ensure that the organization is achieving the desired outcomes and objectives.
• It helps to identify any obstacles that may be preventing the organization from achieving its goals.
• Strategic control also helps to identify any changes that may be needed in order to maximize the effectiveness of the strategy.
• It enables the organization to measure the success of its strategy and make necessary adjustments and improvements if needed.
• Strategic control also enables the organization to measure the performance of the strategy against the competition.
• It helps to ensure that the organization is staying on track with its strategic plan and making the necessary adjustments to stay ahead of the competition.
• Strategic control also helps to identify any potential risks associated with the strategy and take steps to mitigate or address them.

Limitations of Strategic control

• Strategic control is limited by the availability of data. In order to effectively control a strategy, accurate, timely, and relevant data must be available. Unfortunately, not all organizations have the resources to keep up with the influx of data. This makes it difficult to measure performance and ensure that the strategy is following the intended path.
• Another limitation of strategic control is that it does not always reflect the full picture. Strategic control focuses on specific metrics and goals, but it fails to consider the broader context. This can lead to strategies that are not well adapted to the changing environment.
• Additionally, strategic control can be limited by the capabilities of the people responsible for implementing the strategy. If the individuals responsible for executing the strategy do not have the necessary skills or knowledge to do the job properly, then the strategy is unlikely to succeed.
• Lastly, strategic control can be limited by the organization's culture. If the organization has a culture of resistance to change, then it may be difficult to implement a new strategy. This can result in the strategy failing to achieve its goals.

Other approaches related to Strategic control

• Balanced Scorecard – this approach is based on the idea of establishing a set of measures that take into account both financial and non-financial objectives.
• Activity-based budgeting – this approach is used to allocate resources to specific activities that are necessary for the implementation of the strategy.
• Strategic mapping – this approach is used to visually analyze the relationship between the organization and its external environment, in order to identify opportunities and threats.
• Strategic analysis – this approach is used to evaluate current strategies and to identify areas of improvement.
• Risk analysis – this approach is used to assess the potential risks associated with the implementation of a strategy.

In summary, strategic control is a process that is closely linked to the implementation of a strategy. It involves the use of various approaches such as the Balanced Scorecard, activity-based budgeting, strategic mapping, strategic analysis, and risk analysis to monitor the progress of the strategy and identify areas of improvement.

References

• Asch, D. (1992). Strategic control: A problem looking for a solution. Long Range Planning, 25(2), 105-110.
• Bungay, S., & Goold, M. (1991). Creating a strategic control system. Long range planning, 24(3), 32-39.
• Hill, C., Jones, G., & Schilling, M. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
• Lorange, P., Morton, M. S. S., & Ghoshal, S. (1986). Strategic control systems. West Group.
• Mintzberg, H. (1990). The design school: reconsidering the basic premises of strategic management. Strategic management journal, 11(3), 171-195.
• Pearce, J. A., Robinson, R. B., & Subramanian, R. (2000). Strategic management: Formulation, implementation, and control. Columbus, OH: Irwin/McGraw-Hill.