UGC NET Study Notes on Strategic Control || Commerce || Management

By BYJU'S Exam Prep

Updated on: September 14th, 2023

Strategic control is present to ensure the strategy is being implemented as planned and the results produced by the strategy are those intended. Strategic control is a process by which critical evaluation of plans, activities and results are done, thereby providing information to the future action.

Types of Strategic Control:

  1. Premise Control
  • Planning premises or assumptions are established at the beginning of the strategic planning process. They act as a basis for formulating strategies.
  • Premise control has been created to check the validity of the premises set during the planning and implementation processes.
  • Premises are mainly concerned with two types of factors, such as environmental factors and industry factors.
  • Environmental factors include inflation, interest rates, social changes etc. while Industry factors include competitors, suppliers, substitutes etc.
  1. Implementation Control
  • The strategy implementation control is designed to analyse whether the overall strategy should be changed in light of emerging events and results.
  • The strategy implementation control are of two types., Strategic Thrusts and Milestone Reviews.
  • Strategic thrusts help in providing information that helps the organisation determine whether the overall strategy is shaping up as planned.
  • Milestone reviews help to monitor the progress of the strategy at various intervals or milestones.
  1. Strategic Surveillance
  • Strategic surveillance is designed to keep a close watch on a broad range of events inside and outside the organisation that are likely to threaten the course of its strategy.
  • The basic idea behind strategic surveillance is that one can expose important and unanticipated information by monitoring of multiple information sources.
  • It concentrates on general monitoring of multiple sources of information for the purpose of controlling.
  • It is a continuous process which helps in safeguarding the strategy of the organisation.
  1. Special Alert Control
  • Special Alert control is the thorough and rapid revision of the strategy on the basis of a sudden unexpected event.
  • It is the rapid reassessment of an organisation’s strategy due to the occurrence of an immediate, unforeseen event.
  • It includes modification of strategies due to natural disasters, defect in the product, hostile takeovers etc.


Operational control is designed to ensure the day to day activities of the organisation are consistent with the established plan and objectives. It focuses on current events. Corrective action is taken when performance doesn’t match the standards. The idea behind operational control is to minimise the costs and work as quickly and efficiently as possible.

Difference between Strategic Control and Operational Control

  • Strategic control requires a wide range of data, both from internal as well as external sources. Operational control uses data from very few sources, confined to internal operating factors.
  • Strategic control is future-oriented, while operational control is related to immediate decisions that give immediate results.
  • The time taken for strategic control is longer as it deals with a process over time which may take weeks or months to finish while Operational control is exercised for the recent period. It takes place on a day to day basis, examining everyday problems as and when they arise.

Models and Tools of Strategy evaluation and Control

  1. Value Chain Analysis
  • Value chain analysis helps in identifying and evaluating the competitive potential of resources and capabilities.
  • By examining the primary and support activities, a clear understanding of the cost structure and the activities which can generate value can be identified.
  1. Quantitative Performance Measurements
  • Preparation of formal reports such as sales growth, profit growth and ratio analysis etc. are used as quantitative performance measurement tools.
  • These measurements are generally linked to the standards set in the first step of the control process.
  • Adequate steps are taken to correct variations if any.
  1. Benchmarking
  • It is the process of studying the performance of other firms in the industry which are performing exceptionally well.
  • This helps the firm in staying shoulder to shoulder with its competitors.
  1. Key Factor Rating
  • It is based on a close examination of the key factors affecting the performance of the organisation such as financial, marketing, human resources etc.
  • Then, an overall assessment of the organisational capability is also made on the basis of the collected information.
  • Modifications are made depending on the results of the comparative analysis between the key factors and the overall organisational efficiency.
  1. Budgetary Control
  • Budgetary control establishes a plan or target of performance which becomes the basis of measuring the progression of activities in the organisation.
  • Budgetary control pinpoints deviations between budgeted standards and actual outcomes.
  • This helps managers to take suitable actions to overcome the deviations and achieve the goals.
  1. Strategy Audit
  • Strategy audit is useful in evaluating the performance of the implemented strategy.
  • A strategy audit is a review of an organisation’s strategies to identify the weaknesses and shortcomings.
  • Based on the audit results, the management adjusts operations to maximise progress towards the strategic goals.
  1. Financial Ratio Analysis
  • Financial ratio analysis identifies the relationship between two financial variables in order to arrive at a meaningful conclusion about their performance.
  • Generally, 4 types of ratios are most commonly used to measure overall performance. They are liquidity ratios, activity ratios, leverage ratios and profitability ratios.
  1. Return on Investment (ROI)
  • The efficiency of an organisation depends upon the amount of profit it earns in relation to the amount of investment. This is popularly known as return on investment.
  • The rate of return is normally calculated by dividing the profit by total investment.

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