Page 267 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 14: Strategic Evaluation and Control

Reformulating Strategies, Plans and Objectives Notes

A more radical and infrequent corrective action is to reformulate strategies, plans and objectives.
Strategic control, rather than operational control, generally leads to changes in strategic direction,
which will take the strategist back to the process of strategy formulation and choice.
Techniques like total quality management (TQM) and ISO 9000 standards series are examples of
very good control mechanisms. These are explained in exhibits 40.3. and 40.4 respectively.

Notes TQM is a management philosophy that aims at total customer satisfaction through
continuous improvement of all organisational processes. The main elements of TQM are:
1. Intense focus on the customer: The customer includes not only outsiders but also
internal customers.
Concern for continuous improvement: TQM is committed to improve quality
continuously.

2. Improvement in the quality of everything the organisation does: TQM relates not
only to the final product but also how the organisation handles deliveries, responds
to complaints etc.
3. Accurate measurement: TQM uses statistical techniques to measure every critical
performance variable in the organisation’s operations. These performance variables
are then compared against standards or benchmarks to identify problems. The
problems are traced to their roots, and causes are eliminated.

4. Empowerment of Employees: TQM involves all the employees in the improvement
process. Teams are widely used in TQM programmes as empowerment vehicles for
finding and solving problems.

14.4 Techniques of Strategic Control

Organisations use many techniques or mechanisms for strategic control. Some of the important
mechanisms are:
1. Management Information systems: Appropriate information systems act as an effective
control system. Management will come to know the latest performance in key areas and
take appropriate corrective measures.
2. Benchmarking: It is a comparative method where a firm finds the best practices in an area
and then attempts to bring its own performance in that area in line with the best practice.
Best practices are the benchmarks that should be adopted by a firm as the standards to
exercise operational control. Through this method, performance can be evaluated
continually till it reaches the best practice level. In order to excel, a firm shall have to
exceed the benchmarks. In this manner, benchmarking offers firms a tangible method to
evaluate performance.
3. Balanced scorecard: It is a method based on the identification of four key performance
measures i.e. customer perspective, internal business perspective, innovation and learning
perspective, and the financial perspective. This method is a balanced approach to
performance measurement as a range of financial and non-financial parameters are taken
into account for evaluation.

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