Lesson 1, Topic 1
In Progress

9.6 Strategic Control Process Copy

Nik Shazana November 1, 2022

The final strategy-evaluation activity, taking corrective actions, requires making changes to reposition a firm competitively for the future. Examples of changes that may be needed are altering an organization’s structure, replacing one or more key individuals, selling a division, or revising a business mission. Other changes could include establishing or revising objectives, devising new policies, issuing stock to raise capital, adding additional salespersons, allocating resources differently, or developing new performance incentives. Taking corrective actions does not necessarily mean that existing strategies will be abandoned or even that new strategies must be formulated.

Management control refers to the process by which an organization influences its subunits and members to behave in ways that lead to the attainment of organizational objectives. Robert J. Mockler define management control as “Management control is a systematic effort to set performance standards with planning objectives, to design information feedback systems, to compare actual performance with these predetermined standards, to determine whether there are any deviations and to measure their significance, and to take any action required to assure that all corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives.”

 

Types of Control

Management can implement controls before an activity commences/start, while the activity is going on, or after the activity has been completed. The three respective types of control based on timing are feed forward, concurrent, and feedback.

i) Feed forward Control

Feed forward control focuses on the regulation of inputs (human, material, and financial resources that flow into the organization) to ensure that they meet the standards necessary for the transformation process.

Feed forward controls are desirable because they allow management to prevent problems rather than having to cure them later. Unfortunately, these controls require timely and accurate information that is often difficult to develop. Feed forward control also is sometimes called preliminary control, preventive control, or steering control. However, some authors use term “steering control” as separate types of control. These types of controls are designed to detect deviation from some standard or goal to allow correction to be made before a particular sequence of actions is completed.

ii) Concurrent Control

Concurrent control takes place while an activity is in progress. It involves the regulation of ongoing activities that are part of transformation process to ensure that they conform to organizational standards. Concurrent control is designed to ensure that employee work activities produce the correct results. Concurrent control sometimes is called screening or yes-no control, because it often involves checkpoints at which determinations are made about whether to continue progress, take corrective action, or stop work altogether on products or services.

iii) Feedback Control

This type of control focuses on the outputs of the organization after transformation is complete. Sometimes called post action or output control, fulfils a number of important functions. For one thing, it often is used when feed forward and concurrent controls are not feasible or are too costly.

The major drawback of this type of control is that, the time the manager has the information and if there is significant problem the damage is already done. But for many activities, feedback control fulfils a number of important functions.

iv) Multiple Controls

Feed forward, concurrent, and feedback control methods are not mutually exclusive. Rather, they usually are combined into a multiple control systems. Managers design control systems to define standards of performance and acquire information feedback at strategic control points.

Problems of Control Systems

There are a large number of problems associated with control systems for strategy evaluation. An efficient system may collect a lot of irrelevant data whereas a sophisticated system might ignore crucial information. Some of the typical problems in control:

  • There may not be a consensus on the criteria for measuring the effectiveness and efficiency of the strategy.
  • The reporting data may be invalid
  • The performance norms may be based on output on which the relevant business may not have a control
  • Often performance standards may be set with inherent contradictions. For example, an increase in market share may be expected in conjunction with an absolute decrease in marketing expenditure.
  • Employees may consider the system to be unfair and therefore may not accept it.
  • Overemphasis on measuring short-term performance may make managers forget about the strategy which inherently has long connotations.
  • It is very difficult to set “good”, “average”, and “poor” levels of performance in situations where the outputs are not very tangible. That is, Difficulty predicting future with accuracy.

Self-Check Activity

1. Explain the strategic control process.