Page 260 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes 7. Flexible: They must be flexible to take care of changing circumstances.
8. Suitable: Control systems should be suitable to the needs of the organisation. They must
conform to the nature and needs of the job and area to be controlled.

9. Reasonable: Control standards must be reasonable. Frequent measurement and rapid
reporting may frustrate control.
10. Objective: A control system would be effective only if it is unbiased and impersonal. It
should not be subjective and arbitrary. Otherwise, people may resent them.

11. Acceptable: Controls will not work unless they are acceptable to those who apply them.
12. Foster Understanding and Trust: Control systems should not dominate decisions. Rather
they should foster mutual understanding, trust and common sense. No department should
fail to cooperate with another in evaluating and control of strategies.
13. Fix Responsibility for Failure: An effective control system must fix responsibility for
failure. Detecting deviations would be meaningless unless one knows where they are
occurring and who is responsible for them. Control system should also pinpoint what
corrective actions are needed.

There is no ideal strategy evaluation and control system. The final design depends on the unique
characteristics of an organisation’s size, management style, purpose, problems and strengths.

14.2 Strategic Control

Strategic control is a type of “steering control”. We have to track the strategy as it is being
implemented, detect any problems or changes in the predictions made, and make necessary
adjustments. This is especially important because the implementation process itself takes a long
time before we can achieve the results. Strategic controls are, therefore, necessary to steer the
firm through these events.

14.2.1 Types of Strategic Control

There are four types of strategic controls:

1. Premise control
2. Strategic surveillance
3. Special alert control

4. Implementation control
Premise Control

Strategy is built around several assumptions or predictions, which are called planning premises.
Premise control checks systematically and continuously whether the assumptions on which the
strategy is based are still valid. If a vital premise is no longer valid, the strategy may have to be
changed. The sooner these invalid assumptions are detected and rejected, the better are the
chances of changing the strategy. The premise control is concerned with two types of factors:
1. Environmental factors
2. Industry factors
1. Environmental Factors: The performance of a firm is affected by changes in environmental
factors like the rate of inflation, change in technology, government regulations,
demographic and social changes etc. Although the firm has little or no control over

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