Two Levels of Control: Strategic and Operational
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
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