Two Levels of Control: Strategic and Operational

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Two Levels of Control: Strategic and Operational

Imagine that you are the captain of a ship. The strategic controls make sure that your ship is going in the right direction; management and operating controls make sure that the ship is in good condition before, during, and after the voyage. With that analogy in mind, strategic controlstrategic controlThe process by which an organization tracks the strategy as it is being implemented, detecting any problem areas or potential problem areas that might suggest that the strategy is incorrect, and making any necessary adjustments. is concerned with tracking the strategy as it is being implemented, detecting any problem areas or potential problem areas suggesting that the strategy is incorrect, and making any necessary adjustments.[716] Strategic controls allow you to step back and look at the big picture and make sure all the pieces of the picture are correctly aligned. Operational control : A process concerned with executing the strategy., in contrast to strategic control, is concerned with executing the strategy. Where operational controls are imposed, they function within the framework established by the strategy. Normally these goals, objectives, and standards are established for major subsystems within the organization, such as business units, projects, products, functions, and responsibility centers.[717] Typical operational control measures include return on investment, net profit, cost, and product quality. These control measures are essentially summations of finer-grained control measures. Corrective action based on operating controls may have implications for strategic controls when they involve changes in the strategy.

Types of Control

It is also valuable to understand that, within the strategic and operational levels of control, there are several types of control. The first two types can be mapped across two dimensions: level of proactivity and outcome versus behavioral. The following table summarizes these along with examples of what such controls might look like.

Proactivity

Proactivity can be defined as the monitoring of problems in a way that provides their timely prevention, rather than after the fact reaction. In management, this is known as feedforward controlfeedforward controlsThe active monitoring of problems in a way that provides their timely prevention, rather than after-the-fact reaction.; it addresses what can we do ahead of time to help our plan succeed. The essence of feedforward control is to see the problems coming in time to do something about them. For instance, feedforward controls include preventive maintenance on machinery and equipment and due diligence on investments. Table 15.1. Types and Examples of Control

|Control Proactivity |Behavioral control |Outcome control | |Feedforward control |Organizational culture |Market demand or economic forecasts | |Concurrent control |Hands-on management supervision during a project |The real-time speed of a production line | |Feedback control |Qualitative measures of customer satisfaction |Financial measures such as profitability, sales | | | |growth |

Concurrent Controls

The process of monitoring and adjusting ongoing activities and processes is known as concurrent controlconcurrent controlsProcesses that entail monitoring and adjusting ongoing activities.. Such controls are not necessarily proactive, but they can prevent problems from becoming worse. For this reason, we often describe concurrent control as real-time control because it deals with the present. An example of concurrent control might be adjusting the water temperature of the water while taking a shower.

Feedback Controls

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