Page 263 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 14: Strategic Evaluation and Control

14.2.2 Approaches to Strategic Control Notes

According to Dess, Lumpkin and Taylor, there are two approaches to strategic control.

Traditional Approach

Traditional approach to strategic control is sequential:
1. Strategies are formulated and top management sets goals
2. Strategies are implemented

3. Performance is measured against goals
4. Corrective measures are taken, if there are deviations.
Control is based on a feedback loop from performance measurement to strategy formulation.
This process typically involves lengthy time lags and often tied to a firm’s annual planning
cycle. This reactive measure is not sufficient to control a strategy. As already explained, this is
because a strategy takes a long period for implementation and to produce results. The uncertain
future requires continuous evaluation of the planning premises and strategy implementation.
There is a better contemporary approach for strategic control.
Contemporary Approach

Under this approach, adapting to and anticipating both internal and external environment
change is an integral part of strategic control.
This approach addresses the assumptions and premises that provide the foundation for the
strategy. The key question addressed here is: do the organisation’s goals and strategies still fit
within the context of the current environment?
This involves two key actions:

1. Managers must continuously scan and monitor the external and internal environment
2. Managers must continuously update and challenge the assumptions underlying the
strategy.

This may even need changes in the strategic direction of the firm.
While strategic control requires the contemporary approach, operational control is generally
done through traditional approach.

Task Indentify some control practices used in top companies in India.

14.3 Operational Control

Operational control provides post-action evaluation and control over short periods.
They involve systematic evaluation of performance against predetermined objectives. The major
differences between strategic control and operational control are summarised in Table 14.1.

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