Unit 5: Strategy Evaluation

Difference Between Strategic Control and

Operational Control

Strategic Control is all about following the trail or movements of the

strategy as it is implemented in order to identify the areas of issue or
potential areas of the issue so that necessary adjustments can be made.
On the other hand, operational control is a subset of management
control whose aim is to regularly monitor and check the routine business
operations so as to confirm the consistency and quality in business
activities.

Strategic Control focuses on attaining future goals and not past

performance. The main idea behind that is to look for room for
improvements and corrections so as to lead the organization in the
desired direction, rather than pointing out mistakes or errors that took
place in the past.

In contrast, an operational control system is designed in a manner that

confirms – the day-to-day activities of the business are directed towards
the achievement of predetermined goals and objectives.

Concept of Control
In an organization, there are three stages of action in which control is
being exercised:

 Feedforward Control: In feedforward control, inputs are evaluated

and necessary corrective steps are taken prior to the completion of
a particular sequence of operation.
 Steering Control: In steering control, action is evaluated and
corrective actions are put in force, while the operation is
undertaken. This is also called concurrent, or real-time control.
 Feedback control: In feedback control, the results of the action as
assessed and corrective steps are taken after the operation is
complete so that desired results are produced in the future.

In this post, we have covered all the points that will clear your doubts
regarding the difference between strategic control and operational
control.

Content: Strategic Control Vs Operational Control

1. Comparison Chart
2. Definition
3. Key Differences
4. Relevant Questions
5. Types of Strategic Control
6. Conclusion

Comparison Chart

BASIS FOR
STRATEGIC CONTROL OPERATIONAL CONTROL
COMPARISON

Meaning Strategic Control implies Operational Control systems

a process of controlling are framed to make certain
the formulation and that the routine operations
implementation of an are in line with the
organization's plan and company's plans and
strategy. objectives.
 BASIS FOR
STRATEGIC CONTROL OPERATIONAL CONTROL
COMPARISON

Based on Feedforward and Steering Feedback Control

Control

Exercised by Top-level executives Functional level executives

Primary concern Guiding the future Action control

direction of the company

Determines Is the company moving in How efficiently the company

the right direction? is performing?

Factors External environment Internal Environment

Affecting

Strives for Effectiveness Efficiency

Time Horizon Long Term Short Term

Focuses on Monitoring and evaluation Individual tasks and

of the strategic operations
management process.

Definition of Strategic Control

Strategic Control is a type of organizational control, which ensures

that the organization is functioning in the right direction. It is better
known as steering control. Its objective is to attain the results which are
established at the time of formulation of the strategy. Thus, it helps the
top management to analyze whether the strategic management process
is appropriate, compatible, and performing as desired.
It ascertains whether the opted strategy is proceeding in the
intended direction and bringing out the desired results and taking
necessary steps to avoid deviations whenever required. It evaluates the
extent to which the firm concentrates on the need to implement
strategies.

At the time of formulation of strategy, assumptions are made by the

strategists about the company’s internal and external environment. So,
the lag in time exists between strategy formulation and its
implementation and due to this time lag, the assumptions made by the
strategists would come out as invalid or no longer relevant.

In addition, the process of strategy implementation is a time-consuming

one. Hence, it is pertinent to assess the validity of the strategy on a
continuous basis and alter it as per requirements and conditions
prevalent.

What Strategic Control does?

  Checks performance of strategic decisions
 Ensures optimum implementation of plans and policies
 Identifies problems
 Makes changes in the established standards (if possible and
required)
 Takes corrective actions if required for the desired objective

Definition of Operational Control

The process of ensuring that there is an effective and efficient

performance of the task is called operational control. It imposes post-
action evaluation and control, for a short period, which encompasses
evaluation of performance against the objectives set by the firm.

Its aim is to ensure optimum allocation and utilization of the

organization’s resources by way of performance evaluation of the
organizational units like divisions, departments, or SBUs in order to
ascertain their contribution to the achievement of organizational
objectives. That is why the evaluation techniques depend on internal
analysis and not on environmental monitoring.

Steps for Operational Control

 1. Set performance standards
2. Measure actual performance
3. Identify deviations (if any)
4. Introduce corrective actions

The focus of operational control is on the result of the strategic action,

that assesses the overall organization’s performance, different SBU’s
and other divisions and units.

Techniques used for Operational Control

 Financial Techniques
 Network Techniques
 Management by Objectives
 Memorandum of Understanding

Also Read: Difference Between Strategic Planning and Operational

Planning

Key Differences Between Strategic Control and

Operational Control
As we have discussed the basic concept of the two forms of
organizational control, we will talk about the difference between strategic
control and operational control, in points:

1. Strategic Control is a tool to keep a check on the execution of the

strategic plan just like an early warning system, which ensures
that the necessary steps for the achievement of the organizational
goals are performed effectively. On the contrary, Operational
Control keeps a check on the allocation and utilization of
resources, which is a post-action control, which determines the
 contribution of various units in the attainment of the organization’s
objectives.
2. Strategic Control is based on feedforward and steering control,
whereas Operational Control relies on feedback control.
3. The power of exercising strategic control is in the hands of top-
level executives. As against, operational control is exercised by
functional-level executives as directed by top-level management.
4. The primary concern of strategic control is to guide the future
direction of the company. In contrast, the primary concern of
operational control is to control the activities,
5. Strategic Control ascertains whether the company is progressing
in the right direction. On the contrary, operational control
ascertains how efficiently the company is performing?
6. Strategic Control takes into account external factors, as the
relevancy of the strategy is primarily dependent on the external
business environment. Conversely, operational control takes into
account internal factors.
7. Strategic Control strives for effectiveness, whereas Operational
Control strives for efficiency.
8. Strategic Control is a long-term process as it attempts to steer the
company over a long period of time typically five years or more. In
contrast, operational control is a short-term process that attempts
to take necessary steps to correct the deviations from the set
standards and so it ranges from one month to one year.
9. Strategic Control stresses the changing assumptions which
determine a strategy, evaluate it on a continuous basis, as it is
executed, and take those steps which are essential so as to adjust
the strategy to prevalent needs and conditions. Oppositely,
operational control focuses on the events that occurred recently for
the uninterrupted functioning of business operations.
Types of Strategic Control

There are four main types of strategic control:

 Premise Control: A strategy relies on a premise or

assumption about the internal and external factors of the
business. Its aim is to identify the primary assumptions, monitor
changes, and determine the effect of these changes on the
company’s strategy and implementation.
 Implementation Control: It ascertains whether the plans and
programs framed for the implementation of the strategy are leading
the organization towards the accomplishment of predetermined
objectives or not. In addition, if it is found that the resources
allocated are not reaping the benefits which are expected of them,
then the resources allocated are withheld. In conclusion, it
causes strategic rethinking.
 Strategic Surveillance: Strategic Surveillance is
about generalized and comprehensive control that tends to
observe an array of activities and events, inside and outside the
 firm, which is expected to intimidate the progress of the firm’s
strategy.
 Special Alert Control: Special alert control is based on a trigger
mechanism to facilitate instant response and reassessment of the
strategy while considering abrupt events. To exercise such control,
contingency strategies can be formulated and responsibility can be
assigned to the crisis management department to handle
unanticipated events.

Conclusion

Strategic Control allows the top management to look at the big picture
and ensuring that all the pieces of the picture are aligned in the manner,
it should have been aligned. On the other hand, operational control
ensures that specific tasks and actions are performed in a proper
manner.