In the entire scheme of strategic management, strategy formulation makes it clear that strategy formulation is done on the basis of a number of assumptions or premises. It goes without saying that these postulations relate to both environmental and organisational forces which are certainly dynamic and eventful-having a time dimension.
One can not deny the fact that there is good amount of gap between the time of strategy formulation and its implementation. There is every possibility that the assumptions made while formulating a strategy may or may not remain same or valid or they are valid for a short period-during the time gap of strategy formulation and strategy implementation. Therefore, the strategic controls take into account the changing postulations that determine a given strategy, continuously evaluating the strategy as it is implemented and take essential steps to match the strategy to new era or requirements of change.
That is, the strategic controls are early warning signals or warning systems which differ from post-action controls that evaluate only after the completion of implementation stage. Strategic control is perpetual than periodical.
Types of Strategic Control
(1) Premise Control – It is already noted that every strategy is founded on certain assumptions relating to environmental and organisational forces. Certainly some of these forces or factors are very sharp and any change in them is sure to affect the strategy to a great extent. Hence, premise control is a must to identify the key postulations and keep track of any change in them in order to assess their impact on strategy and, therefore, its implementation.
For example, these presumption may relate to changing government policies, market competition. Change in composition due to sudden killing virus or widespread war conditions or natural calamities and organisational factors such as improvision of production technology, VRS scheme to get high tech employees, market innovation strategies. Here, premise control serves to test continuously these assumptions to determine whether they are still valid or not. This facilitates the strategists to take necessary corrective action at the right time than just pulling on with the strategy based on vitiated or invalid postulations. The responsibility for premise control is generally assigned to the corporate planning department that identifies the key assumptions and keep a regular check on their validity.
(2) Implementation Control – In order to implement a chosen strategy, there is need for preparing quite good number of plans, programs and projects. Again resources are allocated for implementing these plans, programs and projects. The purpose of implementation control is to evaluate as to whether these plans, programs and projects are actually guiding the organisation towards its pre-determined goals or not. In case it is felt, at any time, the commitment of resources to a plan, program or project is not yielding the fruits as expected, there is need for matching revision. That is implementation control is nothing but rethinking or strategic rethinking to avoid wastes of all kinds.
One way of using implementation control may to identify and monitor the strategic beat points or throb points such as an assessment of marketing success of a new product after pretesting or checking the feasibility of a diversification programme after preliminary attempts at seeking technological collaboration.
In the first case, the company is to evaluate whether the new product launch will really benefit or it should be forgone in favour of another programme.
In second case, implementation control helps to ascertain whether a diversification move is going to succeed or not. Another tool of implementation control is the milestone reviews through which critical points in strategy implementation are identified in terms of events, major resource allocation, or even time. This is almost similar to identification of events and activities in programme evaluation review technique (PERT)/critical path method (CPM) networks. Once the milestones are identified, a comprehensive review of implementation is made to reasses its continued relevance to attain the objectives.
(3) Strategic Surveillance – If premise and implementation strategic controls are more specific by nature, strategic surveillance, is more generalised and overriding control which is designed to monitor a broad range of events both inside and outside the organisation which are likely to threaten the very course of a firm’s strategy. Such strategic surveillance can be done through a broad- based, general monitoring based on selected information sources to uncover events that are likely to affect the strategy of an organisation.
Professor David A. Aker, in his book “Developing Business Strategies-Published by John Wiley and Sons of N.Y in 1984 P. 128, suggests a “formal yet simple strategic information scanning system which can enhance the effectiveness of the scanning effort and preserve much of the information now lost within the organisation.”
(4) Special Alert Control – This special alert control is based on a trigger mechanism for a rapid response and immediate reassessment of a given strategy in the light of a sudden and unexpected events. Special alert control can be exercised via the formulation of contingency strategies and assigning the responsibility of handling unforeseen events to crisis management teams. The instances of such sudden and unexpected events can be say, sudden fall of government at centre or even state, terrorist attacks, industrial disaster or any natural calamity of earthquake, floods, fire and so on.