Important Differences Between Strategic Control and Operational Control

Strategic Control

Strategic control is a management control process used by organizations to monitor and adjust their overall strategy to ensure it is aligned with their goals and objectives. It involves regularly reviewing the company’s mission, goals, and objectives and comparing them with actual performance to identify areas for improvement. This type of control helps companies stay focused on their long-term objectives, even as conditions change and new opportunities arise.

Strategic control includes activities such as:

• Setting and monitoring strategic goals and objectives
• Conducting SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to identify areas of strength and weakness
• Regularly reviewing and adjusting the company’s business plan and strategy
• Monitoring changes in the external environment, such as market trends and competitors, to ensure that the company’s strategy remains relevant
• Evaluating the effectiveness of the company’s strategy and making necessary adjustments.

Examples of Strategic Control

• Setting performance targets: Organizations set performance targets and regularly review their progress towards achieving these targets to see if their strategy is working.
• Conducting regular performance evaluations: Companies evaluate their performance on a regular basis, using metrics such as sales, profit margins, market share, and customer satisfaction.
• SWOT analysis: Organizations conduct SWOT analysis to identify their strengths, weaknesses, opportunities, and threats. They use this information to adjust their strategy as needed.
• Budgeting and forecasting: Companies create budgets and financial projections to help guide their decision-making and ensure their strategy remains financially feasible.
• Competitive analysis: Companies monitor the activities of their competitors and adjust their strategy as needed to remain competitive.
• Customer feedback: Companies regularly gather and analyze customer feedback to understand their needs and preferences, and adjust their strategy to better serve their customers.
• Market trends analysis: Companies analyze market trends and adjust their strategy to stay ahead of emerging trends and changing market conditions.

What Strategic Control does?

Strategic control is a management process that helps organizations monitor and adjust their overall strategy to ensure it aligns with their goals and objectives. Some of the key things that strategic control does are:

Helps organizations stay focused on their long-term goals: Strategic control helps companies stay focused on their long-term goals, even as conditions change and new opportunities arise.

Monitors progress towards strategic goals: Strategic control involves regularly reviewing the company’s progress towards its strategic goals and objectives and making necessary adjustments.

Identifies areas for improvement: Through regular evaluations, strategic control helps organizations identify areas for improvement in their strategy, operations, and performance.

Ensures the company’s strategy remains relevant: Strategic control helps organizations monitor changes in the external environment, such as market trends and competitors, and adjust their strategy as needed to remain relevant.

Facilitates decision-making: By regularly evaluating the company’s performance and strategy, strategic control provides organizations with the information they need to make informed decisions about their future direction.

Types of Strategic Control

There are several types of strategic control, including:

1. Output control: This type of control focuses on monitoring the results of a company’s strategy and adjusting it as needed to achieve the desired outcomes.
2. Action control: Action control involves monitoring the implementation of a company’s strategy to ensure it is being executed effectively and efficiently.
3. Performance control: Performance control involves regularly evaluating a company’s performance and comparing it to its goals and objectives to identify areas for improvement.
4. Pre-action control: This type of control involves monitoring the development and planning stages of a company’s strategy to ensure it is aligned with its goals and objectives.
5. Post-action control: Post-action control involves monitoring the results of a company’s strategy after it has been implemented to identify areas for improvement.
6. Feedforward control: Feedforward control involves monitoring potential problems before they occur and taking proactive steps to address them.

Process of Strategic Control

The process of strategic control typically involves the following steps:

1. Setting goals and objectives: The first step in the process of strategic control is to clearly define the company’s goals and objectives. This helps to establish a common understanding of what the company wants to achieve.
2. Developing a strategy: Once the goals and objectives are defined, the next step is to develop a strategy to achieve them. This may involve conducting a SWOT analysis, gathering information about market trends and competitors, and considering the company’s strengths and weaknesses.
3. Implementing the strategy: After the strategy is developed, it is then implemented in the company’s operations. This may involve changes to the company’s processes, products, or organizational structure.
4. Monitoring performance: Regular monitoring of performance is a key part of the strategic control process. This involves regularly evaluating the company’s performance against its goals and objectives and collecting data on its operations and processes.
5. Making adjustments: Based on the results of performance monitoring, adjustments may be made to the company’s strategy, operations, or processes as needed.
6. Reviewing and updating the strategy: Finally, the process of strategic control involves regularly reviewing and updating the company’s strategy to ensure it remains aligned with its goals and objectives and continues to be effective.

Operational Control

Operational control is the process of monitoring and adjusting a company’s day-to-day operations to ensure they are aligned with its goals and objectives. It involves monitoring the implementation of a company’s processes, policies, and procedures to ensure they are being followed correctly and efficiently. The goal of operational control is to improve the effectiveness and efficiency of a company’s operations, while also ensuring they are aligned with its overall strategy.

Examples of operational control include:

• Quality control: Monitoring and controlling the quality of products and services to ensure they meet customer expectations and comply with industry standards.
• Inventory control: Monitoring and managing a company’s inventory levels to ensure they are sufficient to meet customer demand, but not so high that they result in unnecessary costs or waste.
• Resource allocation: Monitoring and adjusting the allocation of resources, such as staff, equipment, and supplies, to ensure they are used efficiently and effectively.
• Process improvement: Continuously evaluating and improving a company’s processes to reduce waste, improve efficiency, and increase customer satisfaction.
• Compliance monitoring: Monitoring and enforcing compliance with regulations, policies, and procedures to ensure the company operates within legal and ethical boundaries.

Steps for Operational Control

The steps for operational control typically include:

1. Defining policies and procedures: The first step in the process of operational control is to define the policies and procedures that will be followed in the company’s day-to-day operations. This helps to establish a common understanding of how things should be done and provides a framework for monitoring and control.
2. Implementing policies and procedures: After the policies and procedures have been defined, they are then implemented in the company’s operations. This may involve changes to the company’s processes, products, or organizational structure.
3. Monitoring performance: Regular monitoring of performance is a key part of the operational control process. This involves collecting data on the company’s operations, processes, and products to ensure they are being executed effectively and efficiently.
4. Making adjustments: Based on the results of performance monitoring, adjustments may be made to the company’s operations, processes, or products as needed. This may involve changes to policies and procedures or the implementation of new process improvements.
5. Reviewing and updating policies and procedures: Finally, the process of operational control involves regularly reviewing and updating the company’s policies and procedures to ensure they remain relevant and effective.

Types of Operational Control

There are several types of operational control, including:

1. Output control: Output control focuses on monitoring and controlling the end products or services of an organization’s operations. This type of control involves measuring the quality and quantity of products and services produced and making adjustments as necessary.
2. Process control: Process control focuses on monitoring and controlling the processes used to produce a company’s products and services. This type of control involves evaluating the efficiency and effectiveness of processes and making improvements as needed.
3. Input control: Input control focuses on monitoring and controlling the resources used in an organization’s operations, such as materials, labor, and equipment. This type of control involves monitoring resource utilization and making adjustments as necessary to ensure resources are used efficiently.
4. Compliance control: Compliance control focuses on ensuring that an organization’s operations comply with relevant regulations, policies, and procedures. This type of control involves monitoring compliance and taking corrective action as needed.
5. Quality control: Quality control focuses on monitoring and controlling the quality of an organization’s products and services. This type of control involves evaluating the quality of products and services and taking corrective action as needed to ensure quality standards are met.

What Operational Control does?

Operational control is a management process that involves monitoring and adjusting a company’s day-to-day operations to ensure they are aligned with its goals and objectives and are functioning effectively and efficiently. The goal of operational control is to improve the quality of a company’s products and services, reduce waste and inefficiencies, and ensure compliance with regulations, policies, and procedures.

Operational control helps organizations to achieve the following outcomes:

Improved quality: By monitoring and controlling the quality of products and services, operational control helps to ensure they meet customer expectations and comply with industry standards.

Increased efficiency: By continuously evaluating and improving the company’s processes, operational control helps to reduce waste and increase efficiency, resulting in cost savings and increased productivity.

Compliance: By monitoring and enforcing compliance with regulations, policies, and procedures, operational control helps to ensure the company operates within legal and ethical boundaries.

Better decision-making: By collecting and analyzing data on the company’s operations, operational control provides valuable information that can be used to make informed decisions about the company’s operations and strategies.

Comparison Between Strategic Control and Operational Control

Here’s a comparison of the features of strategic control and operational control:                          

Important Differences Between Strategic Control and Operational Control

Here are some additional differences between strategic control and operational control:

1. Level of Abstraction: Strategic control is more abstract and deals with the overall strategy and direction of the company, whereas operational control is more concrete and deals with the day-to-day operations of the company.
2. Focus on Goals: Strategic control is focused on ensuring that a company’s long-term goals and objectives are being met, whereas operational control is focused on ensuring that a company’s day-to-day operations are aligned with its goals and objectives.
3. Time Horizon: Strategic control has a long-term time horizon, whereas operational control has a short-term time horizon.
4. Responsibility: Strategic control is typically the responsibility of senior or top management, whereas operational control is typically the responsibility of middle or lower management.
5. Feedback Loop: Strategic control has a less frequent feedback loop, as it is only performed occasionally, whereas operational control has a continuous feedback loop, as it is performed on a daily or weekly basis.
6. Tools and Techniques: Strategic control uses tools and techniques such as strategic planning, SWOT analysis, and scenario planning, whereas operational control uses tools and techniques such as performance metrics, process metrics, and resource utilization analysis.

Conclusion Between Strategic Control and Operational Control

In conclusion, strategic control and operational control are two important processes that organizations use to ensure their success. Strategic control focuses on the long-term goals and objectives of a company and is primarily the responsibility of senior or top management. Operational control focuses on the day-to-day operations of a company and is primarily the responsibility of middle or lower management. Both processes use different tools and techniques, have different time horizons, and provide different levels of feedback.

Strategic control helps organizations to ensure that they are on track to achieve their long-term goals and objectives, while operational control helps organizations to ensure that their day-to-day operations are functioning effectively and efficiently. Both processes are complementary and work together to help organizations achieve their goals and objectives.

In short, strategic control provides direction and focus for the company, while operational control ensures that the company’s operations are aligned with that direction and are functioning as efficiently and effectively as possible.