Comparison between Strategic and Operational Controls: Before we continue to Strategic and Operational Controls, it is useful to make a comparison of strategic and operational control. Because the emphasis in both differs though an integrated control system may contain both.
Strategic and Operational Controls: At first I want to discuss Strategic control which is the process of taking into account the changing assumptions both external and internal to the organization on which a strategy is based, continually evaluating the strategy as it is being implemented and taking corrective measures to adjust strategy according to changing conditions or taking necessary actions to realign strategy implementation. For strategic evaluation and control following questions are relevant:
- Are the premises made during the strategy formulation process proving to be correct?
- Is the strategy being implemented properly?
- Is there any need for change in the strategy? If yes, what is the type of change required to ensure strategic effectiveness?Operational control focuses on the results of strategic action and is aimed at evaluating the performance of the organization as a while, different SBUs (Strategic Business Unit) and other units. The relevant questions for operational control are:
- How is the organization performing?
- Are the organizational resources being utilized properly?
- What are the actions required to ensure the proper utilization of resources in order to meet organizational objectives?
Operational control is used by almost every organization in some form or the other. There are two types of operational control post-action and Steering to evaluate the outcome of a strategy. In post action control measures the results after an action is completed. For example, measurement of organizational performance in terms of return on investment. Second is the steering control, which is designed to detect deviations from standards and to permit corrective actions before an operation is fully completed. For example, quality control. Both these are used in the organization system different purposes and at different levels.
For example, post-action control is mostly used by the top management so as to identify the total results of a strategy, while second type of control is exercised by functional and tower level managers to affect periodic control so that the results are achieved.