Friday, April 16, 2010

Traditional approach of strategic control

Traditional approach of strategic control
This approach emphasized operational control to ensure that right things were done at the right time in the right manager.It took corrective actions for variations in performance.This steps are :
  1. standards :Standards are set for implementation processes an d results to be measured.Standards are in the form of planners or budgeted performance.They are the performance targets for key performance areas.They are critical to the success of an organization.Performance targets relate to the outputs of an organization.It can be in terms of quality,quality,costs,profits and time.
  2. Measure actual performance :Actual performance is measured at predetermined times.It provides feedback about performance.
  3. Evaluation performance :Actual performance is compared against performance standard.It can to,be higher,or be lower than standard.Deviations,their magnitude,their causes and incidence are analyzed.They can be positive or negative.The responsibility for deviation is located.
  • Quantitative criteria :They can be profit,sales,market share,costs,dividends,share value,investment,earning per share,ratios,budget.
  • Qualitative criteria :They can be product quality,capacity utilization,market attractiveness,motivation,morale,loyalty,efficiency,effectiveness etc.
4.Corrective actions :Corrective actions are taken to bring performance in line with the standards.The actions can be :
  • Do nothing :If the deviations are within the allowable tolerance.The deviations is a chance fluctuation.
  • Correct deviations :Through design improvements,better materials.Greater employee motivation,more training etc.
  • Change standards :To make them appropriate and realistic.Strategies plans and budgets are reformulated.

No comments:

Post a Comment