Strategic Control
In the previous sections, we have discussed the importance of strategic evaluation in measuring the performance of a business strategy. However, it is equally important to have an effective strategic control system in place to ensure that the strategy is implemented and executed successfully.
Strategic control involves monitoring and adjusting the strategic plan to ensure that it remains aligned with the overall goals and objectives of the organisation. It helps in identifying any deviations from the planned strategy and taking corrective actions to bring the strategy back on track.
Elements of Strategic Control
There are several key elements of strategic control that need to be considered:
1. Setting Performance Standards
Performance standards define the expected level of performance for each strategic objective. These standards serve as benchmarks against which actual performance is measured. By setting clear and specific performance standards, organisations can effectively monitor their progress and identify any gaps that need to be addressed.
2. Measuring Actual Performance
Measuring actual performance involves collecting data and information on the progress made towards achieving the strategic objectives. This can be done through various methods such as financial reports, key performance indicators (KPIs), customer feedback, and employee surveys. The data collected should be reliable and accurate to provide a true reflection of the organisation’s performance.
3. Comparing Actual Performance with Standards
Once the actual performance has been measured, it needs to be compared with the pre-defined performance standards. This comparison helps in identifying any gaps or deviations from the planned strategy. Organisations can use various tools and techniques such as variance analysis and trend analysis to understand the reasons behind these deviations.
4. Taking Corrective Actions
If any deviations or gaps are identified, organisations need to take appropriate corrective actions to bring the strategy back on track. These actions may involve revising the strategic plan, reallocating resources, changing processes or procedures, or providing additional training to employees. The key is to address the root causes of the deviations and take proactive steps to rectify them.
Benefits of Strategic Control
An effective strategic control system offers several benefits to organisations:
1. Ensures Alignment
Strategic control helps in ensuring that the implemented strategy remains aligned with the overall goals and objectives of the organisation. It provides a mechanism to monitor and evaluate the progress made towards achieving these goals and take corrective actions if necessary.
2. Improves Decision-making
By providing timely and accurate information on the performance of the strategy, strategic control enables organisations to make informed decisions. It helps in identifying areas of improvement, reallocating resources, and making necessary adjustments to the strategic plan.
3. Enhances Accountability
Strategic control holds individuals and teams accountable for their performance. It helps in identifying the responsibilities and expectations associated with each strategic objective and ensures that individuals are held responsible for achieving them.
4. Facilitates Learning and Improvement
Strategic control provides organisations with valuable insights into the effectiveness of their strategies. It helps in identifying what works and what doesn’t, enabling organisations to learn from their mistakes and make necessary improvements in their future strategic plans.
Conclusion
Strategic control is an essential component of the strategic evaluation process. It ensures that the implemented strategy remains on track and helps in identifying any gaps or deviations that need to be addressed. By setting performance standards, measuring actual performance, comparing it with standards, and taking corrective actions, organisations can effectively monitor and control their strategic plans. Ultimately, strategic control helps in improving decision-making, enhancing accountability, and facilitating continuous learning and improvement.