Strategic control is a critical process used by organizations to monitor and ensure that their strategic plans are being effectively implemented and yielding the desired results. This involves continually assessing the internal and external environments to identify deviations from the intended strategy and making necessary adjustments to stay aligned with the organization’s goals.
Elements of Strategic Control
Types of Strategic Control
Premise Control:
- Ensures that the assumptions on which the strategy is based are still valid. For example, an organization may verify if its forecasted market growth rates are accurate.
Implementation Control:
- Monitors the progress of strategy implementation. This can include tracking project milestones and budget adherence.
Strategic Surveillance:
- Broad-based vigilance across a wide range of sources to detect unforeseen developments. For instance, a company might monitor economic indicators or industry trends.
Special Alert Control:
- Rapid response mechanisms that address immediate threats or opportunities. An example here would be a crisis management plan in response to a natural disaster affecting supply chains.
Historical Context
Strategic control concepts have evolved alongside modern management theories. Early foundations were laid by theorists like Henri Fayol, who emphasized control as a key managerial function. In the latter half of the 20th century, the development of strategic management as a field marked a more structured approach to strategic control.
Applicability and Examples
Example 1: Technology Firm
A technology firm developing new software might use strategic control to ensure that its innovation aligns with market demands and technological trends, adjusting its roadmap based on feedback from early adopters.
Example 2: Manufacturing Sector
In manufacturing, strategic control might involve regular reviews of supply chain logistics to ensure efficiency and cost-effectiveness, adjusting strategies based on fluctuations in material costs.
Comparisons with Related Terms
Strategic Planning vs. Strategic Control
- Strategic Planning: Focuses on formulating strategies.
- Strategic Control: Centers on executing and monitoring these strategies effectively.
Operational Control vs. Strategic Control
- Operational Control: Day-to-day activities and performance metrics.
- Strategic Control: Long-term goals and adaptation based on strategic plan execution.
Frequently Asked Questions (FAQ)
What are the primary tools used in strategic control?
Common tools include balanced scorecards, key performance indicators (KPIs), SWOT analysis, and real-time data analytics.
How often should strategic control processes be reviewed?
It depends on the industry and organization; however, quarterly reviews are a common practice to ensure alignment with the rapidly changing external environment.
Who is responsible for strategic control within an organization?
Typically, this responsibility lies with top-level management, such as CEOs, CFOs, and strategic planning departments, but it can also involve cross-functional teams.
References
- “Strategic Management: Concepts and Cases” by Fred R. David and Forest R. David
- “Competitive Strategy: Techniques for Analyzing Industries and Competitors” by Michael E. Porter
- Harvard Business Review articles on strategic management and control
Summary
Strategic control is essential for ensuring that an organization’s strategies are effectively implemented and remain aligned with its goals. By using various types of control mechanisms - premise, implementation, strategic surveillance, and special alert control - organizations can adapt to changes and correct deviations in their strategic plans. This proactive approach supports sustained success and long-term viability in a constantly evolving business environment.
