There are two broad types of control- strategic control and operational control. Strategic control focus on pre-action evaluation and control of the company over extended time period, while operational control provides post-action evaluation and control over short time period.
Operational control shows more concern to action and performance of particular division or SBU of the company. It is aimed at the allocation and use of organizational resource in optimum level. The operational control is exercised by middle level management on the direction of the top level management. Budget, program schedule, short term objective may be the main techniques of operational control.
Strategic control shows the more concern on early warning system. It is the process of evaluating strategy that is practiced both after the strategy is formulated and after it is implemented. It is aimed at proactive and continuous questioning on the fundamental direction of strategy. It is exclusively exercised by top level management getting support from operating level management. Environmental scanning, information gathering, logical reasoning, questioning and reviewing may the techniques of strategic control.
Strategic control possesses the following features;
- Requires more data from external sources,
- Future oriented,
- More concerned with measuring the accuracy of the decision premise,
- Control standards are based on external factors,
- Relies on variable reporting interval,
- Proactive. Following are the four basic types of strategic control;
- Premise control
- Implementation control
- Strategic surveillance
- Special alert control
Any assumption or prediction made by the management just before setting the plan, decision making and controlling mechanism, is known as premise. Almost accurate assumption is essential to establish adaptive control mechanism as per complex and dynamic environment. Premises are made regarding the potential environment in which the company operates or going to operate.
Premise control checks the assumptions regarding the potential environment. It is a process of checking whether the key assumptions have been made or not accurately, and keep in track the possible changes of environmental assumptions so as to assess their impact on strategy implementation. Premise control aims to check the validity of environmental assumptions continuously. Assumptions on following factors have to be considered to make effective premise control;
- Factors those are likely to change,
- Factors those are likely to have a major change in the strategy of the company.
In the process of premise control, the premises are mainly made in following two factors;
- Premises regarding environmental factors- Premises are made regarding the general environmental factors like- political legal, economic, socio-cultural, technological and global factors.
- Premises regarding industry factors- Premises are made regarding industry related tasks- competition, buyers, suppliers, substitute product, new entrants etc.
Implementing a strategy takes place as a series of steps, activities, investments and acts over a lengthy period. Implementation control is designed to assess whether the series of steps, activities, investment, programs and projects are actually going towards its predetermined objectives or not.
As a manager, one has to mobilize resources, carry out special projects and employ or reassign staff unless the completion of predetermined plans and projects. So, implementation control continually focuses on monitoring and reviewing the strategic issues and resources necessary for its implementation.
There are two types of implementation control;
- Monitoring strategic thrusts (new or key strategic programs). Strategic thrust is the main subject or idea that guides others in the organization. Strategic thrusts provide information that helps to determine whether the overall strategy is shaping up as planned or not. There are two approaches on monitoring strategic thrusts:
- one way is to agree early in the planning process on which thrusts are critical factors in the success of the strategy;
-the second approach is to use stop/go assessments linked to a series of meaningful thresholds (time, costs, research and development, success, etc.) associated with particular thrusts.
- Milestone Reviews. Milestones are significant points in the development of a programme, such as points where large commitments of resources must be made. A milestone review usually involves a full-scale reassessment of the strategy and the advisability of continuing or refocusing the direction of the company. With milestone reviews, managers monitor the progress of the strategy at various intervals or milestones
Strategic surveillance consists of environmental scanning to monitor the happenings within the organizational periphery. Strategic surveillance is designed to observe a wide range of events within and outside the organization that are likely to affect the track of the organization's strategy. Multiple information sources include trade magazines, journals, trade conferences, conversations and observations are useful in the strategic surveillance.
Special Alert Control
Special alert control is a quick response to sudden and unexpected events. It is the rigorous and rapid reassessment of an organization's strategy because of the occurrence of an immediate, unforeseen event. The basic theme of strategic alert control is to continually assess the dynamic environment that may significantly affect the organizational strategy.