{"id":248,"date":"2018-10-11T09:49:43","date_gmt":"2018-10-11T09:49:43","guid":{"rendered":"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/?post_type=chapter&#038;p=248"},"modified":"2019-01-11T11:34:56","modified_gmt":"2019-01-11T11:34:56","slug":"strategic-control","status":"publish","type":"chapter","link":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/chapter\/strategic-control\/","title":{"rendered":"Strategic Control"},"content":{"raw":"<div><span style=\"float: right\"><a href=\"https:\/\/youtu.be\/K08tZyEbZNo\" target=\"_blank\" rel=\"noopener\"><img src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"epgp books\" width=\"75px\" height=\"75px;\" \/><\/a>\r\n<\/span><\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n1.\u00a0\u00a0\u00a0\u00a0\u00a0 Learning Outcome\r\n\r\n2.\u00a0\u00a0\u00a0\u00a0\u00a0 Introduction\r\n\r\n3.\u00a0\u00a0\u00a0\u00a0\u00a0 Strategic Control Process\r\n\r\n4.\u00a0\u00a0\u00a0\u00a0\u00a0 Barriers to Evaluation &amp; Control\r\n\r\n5.\u00a0\u00a0\u00a0\u00a0\u00a0 Types of Strategic Control\r\n\r\n6.\u00a0\u00a0\u00a0\u00a0\u00a0 Methods of Control\r\n\r\n7.\u00a0\u00a0\u00a0\u00a0\u00a0 Summary\r\n\r\n&nbsp;\r\n\r\n<strong>1.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><strong>Learning Outcome<\/strong>\r\n\r\nAfter completing this module the students will be able to understand:\r\n<ul>\r\n \t<li>\u00a0The nature and importance of strategic evaluation and control<\/li>\r\n \t<li>The barriers in the path of strategic control process<\/li>\r\n \t<li>The types of strategic control<\/li>\r\n \t<li>The methods of control<\/li>\r\n<\/ul>\r\n&nbsp;\r\n\r\n<strong>2.\u00a0\u00a0<\/strong><strong>Introduction<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">Strategic control is the terminal part of the strategic management process (Fig. 1). The control function holds its own importance in the process of strategic management. It is necessary, however, to introduce the process of strategy evaluation and control at the early stages of its implementation so as to take timely corrective measures if required, for achieving the desired goals and objectives of the corporation. The process of control is crucial as the internal and external factors of business environment may not follow the trends as anticipated at time of planning the strategy. For example: In 2010, Airtel as part of its international expansion strategy acquired the African operations of Kuwait-based Mobile Telecommunications Company referred to as Zain Group.<\/p>\r\n&nbsp;\r\n\r\n<strong>Image Source: <\/strong><a href=\"http:\/\/images.clipartpanda.com\/self-control-clipart-14551.jpg\">http:\/\/images.clipartpanda.com\/self-control-clipart-14551.jpg<\/a>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">At that time the business in India was tough. About 14 operators were competing in a strictly regulated environment that lowered the profit margin in the industry. Anticipating that Africa had almost everything similar to India, Airtel exported its high volume\/low cost business model to Africa, where operators used a fixed cost\/high tariffs approach so as to rewrite its success story in the African market. No doubt that the combined African population was ten times that of India\u2019s population, had a telecom penetration of 40%<\/p>\r\n\r\n<\/div>\r\n<div>\r\n<p style=\"text-align: center\"><strong>Fig. 1: <\/strong>Strategic Management Process<\/p>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n<img class=\"size-full wp-image-252 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-107.png\" alt=\"\" width=\"678\" height=\"207\" \/>\r\n\r\n&nbsp;\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">that was increasing at a good rate and had far more spectrum available but Airtel could not gain a strong footing in Africa as planned. The falling African currency, low average revenue per user (ARPU), high cost structures coupled with high debt burden back home for the acquisition of Zain group led to more troubles than the achievements for Airtel. Meanwhile, the India telecom industry started to show the signs of growth with the launch of 3G &amp; 4G services leading to steady rise in data revenues giving Airtel an opportunity for growth back home. Therefore, Airtel has to a adopt control systems to generate revenues from its African operations and make it profitable. This could include new network partners, IT (information technology) hardware and software partners, new network designs among others or the company may have to exit from not-so- promising African countries and to remain focused on markets like Kenya and Nigeria that hold high potential in the future.<\/p>\r\n<img class=\"size-full wp-image-253 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-108.png\" alt=\"\" width=\"387\" height=\"240\" \/>\r\n<p style=\"text-align: center\"><strong>Image Source: <\/strong>http:\/\/topnews.in\/files\/Bharti-Airtel-Zain_1.jpg<\/p>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n<strong>3.\u00a0\u00a0 Strategic Control Process<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">Strategic Control Process is the course of action for determining what is being accomplished and enabling the manager to take a corrective measure in case of any failure or deviations so that performance remains on the path of progress. Thus, strategic control engulfs the evaluation and is perpetual rather than periodical in nature. According to P. Drucker, \u2018Strategic control maintains equilibrium between ends and means, output and efforts\u2019.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">The strategic control process consists of three phases: Evaluation criteria; Performance evaluation and Feedback. The first phase i.e. the evaluation criteria can be done both quantitative as well as qualitative. The quantitative criteria of evaluation lay stress on the data which is a post facto analysis for the performance evaluation where the actual results are compared with the expected results. If there happen to be significant variations in the performance, the corrective measures are taken to meet the set objectives. While, the qualitative evaluation and control of strategy is a real time process where the performance is monitored and mid way corrective actions are taken.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">It is worth noting that if undesired performance results from the inappropriate use of the strategic management process, operational managers must know about it so that they can correct the employee activities. While, if the undesired performance results are the outcome of the processes themselves than both the top management and the operational managers, must know about it so that mid way corrections are taken or they could develop new implementation programs.<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>4.\u00a0\u00a0 Barriers to Evaluation and Control<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">The process of strategic evaluation and control is not that simple and plain. There fall certain hurdles or barriers in the path of strategy evaluation and control that are discussed as below:<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>4.1 Resistance to Evaluation: <\/strong>Any change in the business processes or activities may perhaps invite resistance from different quarters within an organization. Whenever, a strategy is formulated and implemented, certain quarters like employees or strategic business unit may develop a resistance for the<\/p>\r\n&nbsp;\r\n\r\n<img class=\"size-full wp-image-254 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-109.png\" alt=\"\" width=\"316\" height=\"321\" \/>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">same. This resistance is generally because measurement of performance in strategic formulation and implementation is always perceived as one\u2019s own performance by an individual or group of individuals involved in these activities or the processes. It is interesting to note that the evaluation of strategy is not distinguished from the evaluation of an individual or the group of individuals involved in the implementation of strategy. Therefore, it is important to understand that the evaluation of strategy is to ascertain whether the strategy formulated is moving in the right direction or not rather than the individual employee\u2019s contribution towards the strategic implementation.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>4.2 Short-term Orientation: <\/strong>A strategy followed by an organization comprises of two different targets i.e. short-term and long-term. If the corporation\u2019s short-term target does not coincides with that of long-term strategy target, the corporation may start giving importance to the short-term targets overlooking the long-term objectives so that compliance is made in the short run. This misalignment of the short-term objectives may lead to short fall in implementing the strategy and resulting to variation in the strategy evaluation. Therefore, the short-termism approach has to be avoided for successful strategic control in the process of strategic management.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>4.3 The Limits of Control: <\/strong>What should be the upper and lower limits of control? This remains a general dilemma of any control system. Though it is not impossible but is the toughest task undertaken by the strategist to determine the upper and lower limits of control. Imposing excess of control may lead to negative effect on to the performance of the employees in the organization. As a result the employees may<\/p>\r\n\r\n<\/div>\r\n<img class=\"size-full wp-image-255 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-110.png\" alt=\"\" width=\"666\" height=\"289\" \/>\r\n<div>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">not use the best of their potential and may lack creativity. On the contrary, too less a control too makes the employees non-serious about their performance thus, making the process of evaluation &amp; control ineffective and sometimes redundant. In order to overcome the above mentioned barriers to evaluation and control, the organizations have to make its people believe in its objectives at the very first step. The strategic intent of the organization has to be well communicated across all levels within the organization and its stakeholders outside the organization. Moreover, the best way to eliminate or reduce the impact of barriers to evaluation &amp; control is to change the attitude of people i.e. to limit the problem by increasing the perception of problems.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">Titan- Edge is a perfect example that how the company made its team believes that they could design the world\u2019s slimmest watch back in 2002. The catchphrase of \u2018we will do what the Swiss cannot\u2019 kept the people at Titan going and the world\u2019s slimmest watch was born. It was the first time ever that an Indian watch company pushed the boundaries to design and manufacture indigenously the slimmest watch, thereby gaining an entry into the Guinness Book of World Records. Ten years later, the new generation Edge 2012, was lighter than ever before at 36 grams, by using a skeletal structure encased in titanium- a new age material used in aircraft and spacecraft. The new EDGE was the slimmest and lightest watch in the universe. Its form and proportions are very contemporary. The watches have sapphire crested top and bottom, unique construction houses 1.15mm movement between 2 layers of sapphire which reduces overall thickness of watch to 4mm only (Source: <a href=\"http:\/\/titaninnovationnewsletter.com\/skeletal-edge-red-dot-award\/\">http:\/\/titaninnovationnewsletter.com\/skeletal-edge-red-<\/a><a href=\"http:\/\/titaninnovationnewsletter.com\/skeletal-edge-red-dot-award\/\">dot-award\/)<\/a>.<\/p>\r\n&nbsp;\r\n\r\n<strong>5.\u00a0\u00a0 Types of Strategic Controls<\/strong>\r\n\r\n&nbsp;\r\n\r\nThere are four types of strategic controls that are discussed as follows:\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>5.1 Premise Control: <\/strong>Business strategy is based on the assumptions that how things will occur in the future. Premise control allows the top management of the corporation to examine whether these assumptions will continue to hold true with the implementation of the strategy or not. Therefore, premise control helps the management to take corrective actions at the appropriate time and discontinue the original strategy that was based on invalid assumptions. These presumptions may relate to the changing government policies, environmental factors such as inflation, interest rates and social changes or by industry factors such as competitors, suppliers and barriers to entry. For example: Titan Company Limited (TCL) formerly known as Titan industries Limited had a successful jewelry purchase schemes named as Tanishq, Golden Harvest Scheme (GHS). This scheme helped the company to boost its sales in<\/p>\r\n\r\n<\/div>\r\n&nbsp;\r\n<div>\r\n<div><img class=\"size-full wp-image-256 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-111.png\" alt=\"\" width=\"682\" height=\"340\" \/><\/div>\r\n<strong><em>\u00a0<\/em><\/strong>\r\n<p style=\"text-align: justify\">times when the price of gold was on rise. Under this scheme, the consumers were allowed to make eleven equal monthly payments towards the purchase of jewelry, where the final &amp; twelfth installment was being made by the company itself. With the total accumulated amount the customer was finally allowed to make purchase of the jewelry post twelve months. This scheme was convenient for the consumers for making purchase of gold jewelry as it was based on systematic investment and gave a run to other financial products in the market as far as returns were concerned. However, with the newly enacted Companies Act, which became a law on 1st April 2014, certain new rules were introduced, specifically under Explanation to Section 2(1) (b) of the Companies (Acceptance of Deposit) Rules, 2014 which appeared to bring such schemes also under the definition of Public Deposits. TCL was now constrained to comply with this new law immediately and was required to wind off the level of \u201cdeposits\u201d (as these were termed now) in its current form. This meant that TCL was constrained to stop accepting any further installments from the existing account holders also. Tanishq later revised it \u2018Golden Harvest Scheme\u2019 which was discontinued earlier because of the new Companies Act. The new Act put a limit on the returns offered by the companies to deposit holders to 12 per cent and capped the total amount of deposits to 25 per cent of their net worth. The revised scheme now complied with the new law. (Source: https:\/\/www.tanishqgoldenharvest.co.in\/ online\/oldschemeclosure).<\/p>\r\n<strong><em>\u00a0<img class=\"size-full wp-image-257 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-112.png\" alt=\"\" width=\"344\" height=\"193\" \/><\/em><\/strong>\r\n\r\n&nbsp;\r\n\r\n<strong>5.2<\/strong>\u00a0<strong>Strategic Surveillance Control: <\/strong>Premise control and implementation control are looked upon as\r\n\r\nmore specific by nature whereas surveillance control is more generalized and overarching control. A\r\n\r\ncompany has to protect its business from the external threats that may hinder the success of the strategy\r\n\r\nimplemented.\u00a0 Strategic\u00a0\u00a0 surveillance\u00a0\u00a0 controls allow\u00a0 \u00a0the\u00a0 management\u00a0\u00a0\u00a0 to monitor multiple sources\u00a0 for these\u00a0 threats.\u00a0 The\u00a0 managers\u00a0 may safeguard the strategy by continually updating themselves\u00a0 about\u00a0 \u00a0 the\u00a0 industry specific information through trade journals &amp; magazines, attending trade conference etc.\r\n\r\n<strong><em>\u00a0<\/em><\/strong>\r\n\r\n<strong style=\"text-align: initial;font-size: 1em\"><em>Exhibit 4: AIRTEL- Open Network<\/em><\/strong>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<img class=\"size-full wp-image-258 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-113.png\" alt=\"\" width=\"372\" height=\"497\" \/><img class=\"size-full wp-image-259 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-114.png\" alt=\"\" width=\"357\" height=\"424\" \/>\r\n\r\n<strong>Exhibit 1: <\/strong>AIRTEL- Open Network\r\n<p style=\"text-align: justify\"><strong>5.3 Special Alert Control: <\/strong>This control is based on the trigger mechanism designed to enable rapid response to any unexpected or sudden events that may pose threat to the strategy implemented. Such a control is\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 based\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 on\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 the\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 immediate reassessment of the strategy formulated in a given contingency. For example: The country's largest commercial vehicle manufacturer Tata Motors had to shut production of its truck for the fourth time in 2013 as it struggled because of falling retail demand. The company had done it to avoid piling up of inventory with its dealers. The three- day block closure was planned to ensure alignment of production with demand so as to bring the costs under control that could have been elevated because of piling of inventory and to maintain the health of the ecosystem (\u2018Falling demand forces Tata Motors to shut truck plant\u2019 Business Standard, 14 January 2013), Exhibit 3.<\/p>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>5.4 Implementation Control: <\/strong>Once a strategy is formulated, it has to be implemented. As the managers take the necessary steps to put the strategy in action, implementation control is used to review whether the original plan, programs, and projects are being well implemented and the corporation is glided through its pre-determined objectives or not. Milestone reviews is another tool used in for implementation control. The milestone reviews allow the managers to determine the critical points in strategy implementation in terms of events, resources or even time. Exhibit 4; showcase an open email to the Airtel customer from the CEO, Bharti Airtel Limited, where an attempt is being\u00a0<span style=\"font-size: 1em;text-align: initial\">made by the company to provide the best network through its new initiative \u2013 Open Network. Through this initiative, the company provides its network information to its customers so that they could tell Airtel where the gaps are. This would help the company to improve its coverage and provide an experience like no other in the industry. The company acknowledges that there a coverage holes in India and are still a challenge. At some locations the company need to install new towers, while at some others, towers have been forcibly shut down. Such implementation control will help company like Airtel to optimally utilize its infrastructure and achieve its objective of being the best network service provider in India.<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>6.\u00a0\u00a0 Methods of Control<\/strong>\r\n\r\n&nbsp;\r\n\r\nThere are various methods\/tools\/techniques used in strategic control system. These methods are adopted by the organizations based on types of control required. No doubt, most of these methods are related to financial control and neglect the non-financial parameters. The financial reporting system provides the information of how a company has performed in the past but offers little information about how it might performance in the future. Some of these methods are discussed briefly in the following sections of the module so as to develop a basic understanding of various control methods.\r\n\r\n<img class=\"size-full wp-image-260 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-115.png\" alt=\"\" width=\"317\" height=\"371\" \/>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>6.1 Budgets and Budgetary Controls: <\/strong>Budgeting has been accepted as one of the efficient method of short-term planning and control. Though, it is employed in large business organizations but the small businesses are also using it at least in some informal manner. Budget is defined as \" A financial and\/or quantitative statement, prepared and approved prior to define period of time, of the policy to be persued during that period for the purpose of attaining a given objective\" by the Chartered Institute of Management Accountants, England. Therefore, a budget is taken as a document that usually deals the allocation of resources to different units with the organization and is classified under the three different modes:<\/p>\r\n\r\n<\/div>\r\n<img class=\"size-full wp-image-261 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-116.png\" alt=\"\" width=\"245\" height=\"183\" \/>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong><em>Time: <\/em><\/strong>Annual budgets, quarterly budgets, monthly budgets, zero base budgets, etc.\r\n\r\n&nbsp;\r\n\r\n<strong><em>Functional: <\/em><\/strong>Human resources, materials, marketing &amp; sales, research &amp; development, administration, etc.\r\n\r\n&nbsp;\r\n\r\n<strong><em>Flexibility: <\/em><\/strong>To evaluate the performance at different volume levels or capacity utilization, sensitivity to key parameters, etc.\r\n\r\n&nbsp;\r\n\r\nImage Source: <a href=\"http:\/\/www.expertmanagementtraining.com\/wp-content\/uploads\/2014\/08\/Financial-Budgets-Budgetary-Control-Alt.jpg\">http:\/\/www.expertmanagementtraining.com\/wp-content\/uploads\/2014\/08\/Financial-Budgets-Budgetary-Control-Alt.jpg<\/a>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">Further, budgetary control is the process of establishment of budgets relating to various activities and comparing the actual performance with the budgeted figures for calculating the deviations if any. It is to be noted that budgetary control is not possible without budgets.<\/p>\r\n&nbsp;\r\n\r\n<strong>6.2 Ratio Analysis: <\/strong>Ratio analysis is a form of financial statement analysis, used to obtain a quick snapshot of a firm\u2019s performance in various key areas. It is used to measure the company\u2019s operating and financial performances such as efficiency, liquidity, solvency and profitability. The trend of various ratios is studied over a period of time to check whether the strategy pursued so far is proceeding in the right direction or not.\r\n\r\n&nbsp;\r\n\r\n<img class=\"size-full wp-image-262 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-117.png\" alt=\"\" width=\"378\" height=\"326\" \/>\r\n<p style=\"text-align: justify\">Quantifying the 5Cs; Character, Capacity, Capital, Collateral and Conditions is a step forward in the process of strategic evaluation and control. These five parameters are discussed in brief as follows:<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><em>Character: <\/em>It represents the firm\u2019s moral and ethical approach towards it stakeholder especially creditors. Firm\u2019s repayment performance on past and current debts is considered as a measure to check this parameter.<\/p>\r\n\r\n<\/div>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><em style=\"text-align: initial;font-size: 1em\">Capacity: <\/em><span style=\"text-align: initial;font-size: 1em\">It refers to company\u2019s capability to maintain both profitability and solvency. Measures such as historic and present adequacy of working capital, income statements showcasing a history of good profit margins, analyze of income and expenses and realistic evaluation of current income generating capacity are important in evaluating this factor.<\/span><\/p>\r\n\r\n<div>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\"><em>Capital: <\/em>Capital is the long-term borrowings, shareholders\u2019 funds, and working capital borrowings and collectively represents the wealth of the business. The relevant ratios that determine the health of the company are: Liquidity ratios; Current ratio, Solvency ratios; Debt-to-Equity ratio, Debt-to-Asset ratio.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><em>Collateral: <\/em>Growth strategy is the most popular strategy. The companies that do business in growing industries must expand to survive for which monetary resources are absolutely necessary. For raising the required capital the companies negotiate for long and short-term borrowings from the current &amp;\u00a0\u00a0 prospective shareholders. In such situations the collaterals becomes the essential requisite and the extent of collateral therefore reflects the firm\u2019s capacity for borrowing. Net Realizable Value (NRV) is an important measure to check the collateral parameter.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><em>Conditions: <\/em>Every industry undergoes a business cycle which includes recession, depression, recovery and boom. These cycles affect the financial standing of the company. The performance of the corporation during these periods calls for the appropriateness of the strategy being implemented and taking any mid-course correction for the strategy employed.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>6.3 Audits: <\/strong>Audit is another method of control. An audit is the process by which the financial statements of a organization are evaluated so as to ensure that these are accurate representation of the transactions the organization claims for. The audits can be done both internally and externally. Internal audits are done by employees of the organization while external audits are conducted by independent agencies outside the firm.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>6.4 Time-related Control Methods: <\/strong>Critical Path Method (CPM) and Programme Evaluation and Review Technique (PERT) are the most popular graphical and analytical methods used in the strategic control process. These tools help the management to take remedial action and get the project back on course. The techniques take recognition of three factors that influence successful achievement of program objectives i.e. time, resource and technical performance specifications.<\/p>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n<strong>7.\u00a0\u00a0 Summary<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">A well thought strategy is of no purpose till its objectives are achieved as intended. Therefore, the strategy formulation and implementation should be followed up by strategic evaluation and control. It henceforth becomes important to know whether the strategy implemented has been assiduously following the intent and adhering to the time frame that was originally proposed. It is also important to note that strategic control engulfs the evaluation and is perpetual rather than periodical in nature. The phase of evaluation includes understanding the influence of internal and external environmental factors on the strategy during the time horizon of its implementation. This evaluation has to be supported by a proper control system so as to provide the necessary mid-course correction or modification of the strategy employed. Moreover, it becomes imperative for the managers to understand the barriers in the path of\u00a0<span style=\"text-align: initial;font-size: 1em\">strategy evaluation and control and overcoming these hurdles could help accomplishing the targeted strategy.<\/span><\/p>\r\n\r\n<\/div>\r\n&nbsp;\r\n<p style=\"text-align: justify\">Further, the strategic control can be classified under four heads: premise controls, implementation control, strategic surveillance control and special alert control. There are various methods\/tools of control used in strategic control system. These methods are adopted by the organizations based on types of control required. Budgets &amp; budgetary controls along with ratio analysis, audits and time-related control techniques are well suited methods for strategic control.<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>you can view video on Strategic Control<\/strong><\/td>\r\n<td><a href=\"https:\/\/youtu.be\/K08tZyEbZNo\" target=\"_blank\" rel=\"noopener\"><img class=\"alignnone wp-image-120\" src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"\" width=\"36\" height=\"36\" \/><\/a><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>","rendered":"<div><span style=\"float: right\"><a href=\"https:\/\/youtu.be\/K08tZyEbZNo\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"epgp books\" width=\"75px\" height=\"75px;\" \/><\/a><br \/>\n<\/span><\/div>\n<div>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>1.\u00a0\u00a0\u00a0\u00a0\u00a0 Learning Outcome<\/p>\n<p>2.\u00a0\u00a0\u00a0\u00a0\u00a0 Introduction<\/p>\n<p>3.\u00a0\u00a0\u00a0\u00a0\u00a0 Strategic Control Process<\/p>\n<p>4.\u00a0\u00a0\u00a0\u00a0\u00a0 Barriers to Evaluation &amp; Control<\/p>\n<p>5.\u00a0\u00a0\u00a0\u00a0\u00a0 Types of Strategic Control<\/p>\n<p>6.\u00a0\u00a0\u00a0\u00a0\u00a0 Methods of Control<\/p>\n<p>7.\u00a0\u00a0\u00a0\u00a0\u00a0 Summary<\/p>\n<p>&nbsp;<\/p>\n<p><strong>1.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><strong>Learning Outcome<\/strong><\/p>\n<p>After completing this module the students will be able to understand:<\/p>\n<ul>\n<li>\u00a0The nature and importance of strategic evaluation and control<\/li>\n<li>The barriers in the path of strategic control process<\/li>\n<li>The types of strategic control<\/li>\n<li>The methods of control<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>2.\u00a0\u00a0<\/strong><strong>Introduction<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Strategic control is the terminal part of the strategic management process (Fig. 1). The control function holds its own importance in the process of strategic management. It is necessary, however, to introduce the process of strategy evaluation and control at the early stages of its implementation so as to take timely corrective measures if required, for achieving the desired goals and objectives of the corporation. The process of control is crucial as the internal and external factors of business environment may not follow the trends as anticipated at time of planning the strategy. For example: In 2010, Airtel as part of its international expansion strategy acquired the African operations of Kuwait-based Mobile Telecommunications Company referred to as Zain Group.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Image Source: <\/strong><a href=\"http:\/\/images.clipartpanda.com\/self-control-clipart-14551.jpg\">http:\/\/images.clipartpanda.com\/self-control-clipart-14551.jpg<\/a><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">At that time the business in India was tough. About 14 operators were competing in a strictly regulated environment that lowered the profit margin in the industry. Anticipating that Africa had almost everything similar to India, Airtel exported its high volume\/low cost business model to Africa, where operators used a fixed cost\/high tariffs approach so as to rewrite its success story in the African market. No doubt that the combined African population was ten times that of India\u2019s population, had a telecom penetration of 40%<\/p>\n<\/div>\n<div>\n<p style=\"text-align: center\"><strong>Fig. 1: <\/strong>Strategic Management Process<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-252 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-107.png\" alt=\"\" width=\"678\" height=\"207\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-107.png 678w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-107-300x92.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-107-65x20.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-107-225x69.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-107-350x107.png 350w\" sizes=\"auto, (max-width: 678px) 100vw, 678px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">that was increasing at a good rate and had far more spectrum available but Airtel could not gain a strong footing in Africa as planned. The falling African currency, low average revenue per user (ARPU), high cost structures coupled with high debt burden back home for the acquisition of Zain group led to more troubles than the achievements for Airtel. Meanwhile, the India telecom industry started to show the signs of growth with the launch of 3G &amp; 4G services leading to steady rise in data revenues giving Airtel an opportunity for growth back home. Therefore, Airtel has to a adopt control systems to generate revenues from its African operations and make it profitable. This could include new network partners, IT (information technology) hardware and software partners, new network designs among others or the company may have to exit from not-so- promising African countries and to remain focused on markets like Kenya and Nigeria that hold high potential in the future.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-253 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-108.png\" alt=\"\" width=\"387\" height=\"240\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-108.png 387w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-108-300x186.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-108-65x40.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-108-225x140.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-108-350x217.png 350w\" sizes=\"auto, (max-width: 387px) 100vw, 387px\" \/><\/p>\n<p style=\"text-align: center\"><strong>Image Source: <\/strong>http:\/\/topnews.in\/files\/Bharti-Airtel-Zain_1.jpg<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><strong>3.\u00a0\u00a0 Strategic Control Process<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Strategic Control Process is the course of action for determining what is being accomplished and enabling the manager to take a corrective measure in case of any failure or deviations so that performance remains on the path of progress. Thus, strategic control engulfs the evaluation and is perpetual rather than periodical in nature. According to P. Drucker, \u2018Strategic control maintains equilibrium between ends and means, output and efforts\u2019.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">The strategic control process consists of three phases: Evaluation criteria; Performance evaluation and Feedback. The first phase i.e. the evaluation criteria can be done both quantitative as well as qualitative. The quantitative criteria of evaluation lay stress on the data which is a post facto analysis for the performance evaluation where the actual results are compared with the expected results. If there happen to be significant variations in the performance, the corrective measures are taken to meet the set objectives. While, the qualitative evaluation and control of strategy is a real time process where the performance is monitored and mid way corrective actions are taken.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">It is worth noting that if undesired performance results from the inappropriate use of the strategic management process, operational managers must know about it so that they can correct the employee activities. While, if the undesired performance results are the outcome of the processes themselves than both the top management and the operational managers, must know about it so that mid way corrections are taken or they could develop new implementation programs.<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>4.\u00a0\u00a0 Barriers to Evaluation and Control<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">The process of strategic evaluation and control is not that simple and plain. There fall certain hurdles or barriers in the path of strategy evaluation and control that are discussed as below:<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>4.1 Resistance to Evaluation: <\/strong>Any change in the business processes or activities may perhaps invite resistance from different quarters within an organization. Whenever, a strategy is formulated and implemented, certain quarters like employees or strategic business unit may develop a resistance for the<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-254 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-109.png\" alt=\"\" width=\"316\" height=\"321\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-109.png 316w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-109-295x300.png 295w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-109-65x66.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-109-225x229.png 225w\" sizes=\"auto, (max-width: 316px) 100vw, 316px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">same. This resistance is generally because measurement of performance in strategic formulation and implementation is always perceived as one\u2019s own performance by an individual or group of individuals involved in these activities or the processes. It is interesting to note that the evaluation of strategy is not distinguished from the evaluation of an individual or the group of individuals involved in the implementation of strategy. Therefore, it is important to understand that the evaluation of strategy is to ascertain whether the strategy formulated is moving in the right direction or not rather than the individual employee\u2019s contribution towards the strategic implementation.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>4.2 Short-term Orientation: <\/strong>A strategy followed by an organization comprises of two different targets i.e. short-term and long-term. If the corporation\u2019s short-term target does not coincides with that of long-term strategy target, the corporation may start giving importance to the short-term targets overlooking the long-term objectives so that compliance is made in the short run. This misalignment of the short-term objectives may lead to short fall in implementing the strategy and resulting to variation in the strategy evaluation. Therefore, the short-termism approach has to be avoided for successful strategic control in the process of strategic management.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>4.3 The Limits of Control: <\/strong>What should be the upper and lower limits of control? This remains a general dilemma of any control system. Though it is not impossible but is the toughest task undertaken by the strategist to determine the upper and lower limits of control. Imposing excess of control may lead to negative effect on to the performance of the employees in the organization. As a result the employees may<\/p>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-255 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-110.png\" alt=\"\" width=\"666\" height=\"289\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-110.png 666w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-110-300x130.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-110-65x28.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-110-225x98.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-110-350x152.png 350w\" sizes=\"auto, (max-width: 666px) 100vw, 666px\" \/><\/p>\n<div>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">not use the best of their potential and may lack creativity. On the contrary, too less a control too makes the employees non-serious about their performance thus, making the process of evaluation &amp; control ineffective and sometimes redundant. In order to overcome the above mentioned barriers to evaluation and control, the organizations have to make its people believe in its objectives at the very first step. The strategic intent of the organization has to be well communicated across all levels within the organization and its stakeholders outside the organization. Moreover, the best way to eliminate or reduce the impact of barriers to evaluation &amp; control is to change the attitude of people i.e. to limit the problem by increasing the perception of problems.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Titan- Edge is a perfect example that how the company made its team believes that they could design the world\u2019s slimmest watch back in 2002. The catchphrase of \u2018we will do what the Swiss cannot\u2019 kept the people at Titan going and the world\u2019s slimmest watch was born. It was the first time ever that an Indian watch company pushed the boundaries to design and manufacture indigenously the slimmest watch, thereby gaining an entry into the Guinness Book of World Records. Ten years later, the new generation Edge 2012, was lighter than ever before at 36 grams, by using a skeletal structure encased in titanium- a new age material used in aircraft and spacecraft. The new EDGE was the slimmest and lightest watch in the universe. Its form and proportions are very contemporary. The watches have sapphire crested top and bottom, unique construction houses 1.15mm movement between 2 layers of sapphire which reduces overall thickness of watch to 4mm only (Source: <a href=\"http:\/\/titaninnovationnewsletter.com\/skeletal-edge-red-dot-award\/\">http:\/\/titaninnovationnewsletter.com\/skeletal-edge-red-<\/a><a href=\"http:\/\/titaninnovationnewsletter.com\/skeletal-edge-red-dot-award\/\">dot-award\/)<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>5.\u00a0\u00a0 Types of Strategic Controls<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>There are four types of strategic controls that are discussed as follows:<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>5.1 Premise Control: <\/strong>Business strategy is based on the assumptions that how things will occur in the future. Premise control allows the top management of the corporation to examine whether these assumptions will continue to hold true with the implementation of the strategy or not. Therefore, premise control helps the management to take corrective actions at the appropriate time and discontinue the original strategy that was based on invalid assumptions. These presumptions may relate to the changing government policies, environmental factors such as inflation, interest rates and social changes or by industry factors such as competitors, suppliers and barriers to entry. For example: Titan Company Limited (TCL) formerly known as Titan industries Limited had a successful jewelry purchase schemes named as Tanishq, Golden Harvest Scheme (GHS). This scheme helped the company to boost its sales in<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<div>\n<div><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-256 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-111.png\" alt=\"\" width=\"682\" height=\"340\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-111.png 682w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-111-300x150.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-111-65x32.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-111-225x112.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-111-350x174.png 350w\" sizes=\"auto, (max-width: 682px) 100vw, 682px\" \/><\/div>\n<p><strong><em>\u00a0<\/em><\/strong><\/p>\n<p style=\"text-align: justify\">times when the price of gold was on rise. Under this scheme, the consumers were allowed to make eleven equal monthly payments towards the purchase of jewelry, where the final &amp; twelfth installment was being made by the company itself. With the total accumulated amount the customer was finally allowed to make purchase of the jewelry post twelve months. This scheme was convenient for the consumers for making purchase of gold jewelry as it was based on systematic investment and gave a run to other financial products in the market as far as returns were concerned. However, with the newly enacted Companies Act, which became a law on 1st April 2014, certain new rules were introduced, specifically under Explanation to Section 2(1) (b) of the Companies (Acceptance of Deposit) Rules, 2014 which appeared to bring such schemes also under the definition of Public Deposits. TCL was now constrained to comply with this new law immediately and was required to wind off the level of \u201cdeposits\u201d (as these were termed now) in its current form. This meant that TCL was constrained to stop accepting any further installments from the existing account holders also. Tanishq later revised it \u2018Golden Harvest Scheme\u2019 which was discontinued earlier because of the new Companies Act. The new Act put a limit on the returns offered by the companies to deposit holders to 12 per cent and capped the total amount of deposits to 25 per cent of their net worth. The revised scheme now complied with the new law. (Source: https:\/\/www.tanishqgoldenharvest.co.in\/ online\/oldschemeclosure).<\/p>\n<p><strong><em>\u00a0<img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-257 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-112.png\" alt=\"\" width=\"344\" height=\"193\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-112.png 344w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-112-300x168.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-112-65x36.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-112-225x126.png 225w\" sizes=\"auto, (max-width: 344px) 100vw, 344px\" \/><\/em><\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><strong>5.2<\/strong>\u00a0<strong>Strategic Surveillance Control: <\/strong>Premise control and implementation control are looked upon as<\/p>\n<p>more specific by nature whereas surveillance control is more generalized and overarching control. A<\/p>\n<p>company has to protect its business from the external threats that may hinder the success of the strategy<\/p>\n<p>implemented.\u00a0 Strategic\u00a0\u00a0 surveillance\u00a0\u00a0 controls allow\u00a0 \u00a0the\u00a0 management\u00a0\u00a0\u00a0 to monitor multiple sources\u00a0 for these\u00a0 threats.\u00a0 The\u00a0 managers\u00a0 may safeguard the strategy by continually updating themselves\u00a0 about\u00a0 \u00a0 the\u00a0 industry specific information through trade journals &amp; magazines, attending trade conference etc.<\/p>\n<p><strong><em>\u00a0<\/em><\/strong><\/p>\n<p><strong style=\"text-align: initial;font-size: 1em\"><em>Exhibit 4: AIRTEL- Open Network<\/em><\/strong><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-258 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-113.png\" alt=\"\" width=\"372\" height=\"497\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-113.png 372w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-113-225x301.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-113-65x87.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-113-350x468.png 350w\" sizes=\"auto, (max-width: 372px) 100vw, 372px\" \/><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-259 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-114.png\" alt=\"\" width=\"357\" height=\"424\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-114.png 357w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-114-253x300.png 253w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-114-65x77.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-114-225x267.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-114-350x416.png 350w\" sizes=\"auto, (max-width: 357px) 100vw, 357px\" \/><\/p>\n<p><strong>Exhibit 1: <\/strong>AIRTEL- Open Network<\/p>\n<p style=\"text-align: justify\"><strong>5.3 Special Alert Control: <\/strong>This control is based on the trigger mechanism designed to enable rapid response to any unexpected or sudden events that may pose threat to the strategy implemented. Such a control is\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 based\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 on\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 the\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 immediate reassessment of the strategy formulated in a given contingency. For example: The country&#8217;s largest commercial vehicle manufacturer Tata Motors had to shut production of its truck for the fourth time in 2013 as it struggled because of falling retail demand. The company had done it to avoid piling up of inventory with its dealers. The three- day block closure was planned to ensure alignment of production with demand so as to bring the costs under control that could have been elevated because of piling of inventory and to maintain the health of the ecosystem (\u2018Falling demand forces Tata Motors to shut truck plant\u2019 Business Standard, 14 January 2013), Exhibit 3.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>5.4 Implementation Control: <\/strong>Once a strategy is formulated, it has to be implemented. As the managers take the necessary steps to put the strategy in action, implementation control is used to review whether the original plan, programs, and projects are being well implemented and the corporation is glided through its pre-determined objectives or not. Milestone reviews is another tool used in for implementation control. The milestone reviews allow the managers to determine the critical points in strategy implementation in terms of events, resources or even time. Exhibit 4; showcase an open email to the Airtel customer from the CEO, Bharti Airtel Limited, where an attempt is being\u00a0<span style=\"font-size: 1em;text-align: initial\">made by the company to provide the best network through its new initiative \u2013 Open Network. Through this initiative, the company provides its network information to its customers so that they could tell Airtel where the gaps are. This would help the company to improve its coverage and provide an experience like no other in the industry. The company acknowledges that there a coverage holes in India and are still a challenge. At some locations the company need to install new towers, while at some others, towers have been forcibly shut down. Such implementation control will help company like Airtel to optimally utilize its infrastructure and achieve its objective of being the best network service provider in India.<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>6.\u00a0\u00a0 Methods of Control<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>There are various methods\/tools\/techniques used in strategic control system. These methods are adopted by the organizations based on types of control required. No doubt, most of these methods are related to financial control and neglect the non-financial parameters. The financial reporting system provides the information of how a company has performed in the past but offers little information about how it might performance in the future. Some of these methods are discussed briefly in the following sections of the module so as to develop a basic understanding of various control methods.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-260 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-115.png\" alt=\"\" width=\"317\" height=\"371\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-115.png 317w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-115-256x300.png 256w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-115-65x76.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-115-225x263.png 225w\" sizes=\"auto, (max-width: 317px) 100vw, 317px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>6.1 Budgets and Budgetary Controls: <\/strong>Budgeting has been accepted as one of the efficient method of short-term planning and control. Though, it is employed in large business organizations but the small businesses are also using it at least in some informal manner. Budget is defined as &#8221; A financial and\/or quantitative statement, prepared and approved prior to define period of time, of the policy to be persued during that period for the purpose of attaining a given objective&#8221; by the Chartered Institute of Management Accountants, England. Therefore, a budget is taken as a document that usually deals the allocation of resources to different units with the organization and is classified under the three different modes:<\/p>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-261 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-116.png\" alt=\"\" width=\"245\" height=\"183\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-116.png 245w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-116-65x49.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-116-225x168.png 225w\" sizes=\"auto, (max-width: 245px) 100vw, 245px\" \/><\/p>\n<div>\n<p>&nbsp;<\/p>\n<p><strong><em>Time: <\/em><\/strong>Annual budgets, quarterly budgets, monthly budgets, zero base budgets, etc.<\/p>\n<p>&nbsp;<\/p>\n<p><strong><em>Functional: <\/em><\/strong>Human resources, materials, marketing &amp; sales, research &amp; development, administration, etc.<\/p>\n<p>&nbsp;<\/p>\n<p><strong><em>Flexibility: <\/em><\/strong>To evaluate the performance at different volume levels or capacity utilization, sensitivity to key parameters, etc.<\/p>\n<p>&nbsp;<\/p>\n<p>Image Source: <a href=\"http:\/\/www.expertmanagementtraining.com\/wp-content\/uploads\/2014\/08\/Financial-Budgets-Budgetary-Control-Alt.jpg\">http:\/\/www.expertmanagementtraining.com\/wp-content\/uploads\/2014\/08\/Financial-Budgets-Budgetary-Control-Alt.jpg<\/a><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Further, budgetary control is the process of establishment of budgets relating to various activities and comparing the actual performance with the budgeted figures for calculating the deviations if any. It is to be noted that budgetary control is not possible without budgets.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>6.2 Ratio Analysis: <\/strong>Ratio analysis is a form of financial statement analysis, used to obtain a quick snapshot of a firm\u2019s performance in various key areas. It is used to measure the company\u2019s operating and financial performances such as efficiency, liquidity, solvency and profitability. The trend of various ratios is studied over a period of time to check whether the strategy pursued so far is proceeding in the right direction or not.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-262 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/2-117.png\" alt=\"\" width=\"378\" height=\"326\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-117.png 378w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-117-300x259.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-117-65x56.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-117-225x194.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/2-117-350x302.png 350w\" sizes=\"auto, (max-width: 378px) 100vw, 378px\" \/><\/p>\n<p style=\"text-align: justify\">Quantifying the 5Cs; Character, Capacity, Capital, Collateral and Conditions is a step forward in the process of strategic evaluation and control. These five parameters are discussed in brief as follows:<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><em>Character: <\/em>It represents the firm\u2019s moral and ethical approach towards it stakeholder especially creditors. Firm\u2019s repayment performance on past and current debts is considered as a measure to check this parameter.<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><em style=\"text-align: initial;font-size: 1em\">Capacity: <\/em><span style=\"text-align: initial;font-size: 1em\">It refers to company\u2019s capability to maintain both profitability and solvency. Measures such as historic and present adequacy of working capital, income statements showcasing a history of good profit margins, analyze of income and expenses and realistic evaluation of current income generating capacity are important in evaluating this factor.<\/span><\/p>\n<div>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><em>Capital: <\/em>Capital is the long-term borrowings, shareholders\u2019 funds, and working capital borrowings and collectively represents the wealth of the business. The relevant ratios that determine the health of the company are: Liquidity ratios; Current ratio, Solvency ratios; Debt-to-Equity ratio, Debt-to-Asset ratio.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><em>Collateral: <\/em>Growth strategy is the most popular strategy. The companies that do business in growing industries must expand to survive for which monetary resources are absolutely necessary. For raising the required capital the companies negotiate for long and short-term borrowings from the current &amp;\u00a0\u00a0 prospective shareholders. In such situations the collaterals becomes the essential requisite and the extent of collateral therefore reflects the firm\u2019s capacity for borrowing. Net Realizable Value (NRV) is an important measure to check the collateral parameter.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><em>Conditions: <\/em>Every industry undergoes a business cycle which includes recession, depression, recovery and boom. These cycles affect the financial standing of the company. The performance of the corporation during these periods calls for the appropriateness of the strategy being implemented and taking any mid-course correction for the strategy employed.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>6.3 Audits: <\/strong>Audit is another method of control. An audit is the process by which the financial statements of a organization are evaluated so as to ensure that these are accurate representation of the transactions the organization claims for. The audits can be done both internally and externally. Internal audits are done by employees of the organization while external audits are conducted by independent agencies outside the firm.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>6.4 Time-related Control Methods: <\/strong>Critical Path Method (CPM) and Programme Evaluation and Review Technique (PERT) are the most popular graphical and analytical methods used in the strategic control process. These tools help the management to take remedial action and get the project back on course. The techniques take recognition of three factors that influence successful achievement of program objectives i.e. time, resource and technical performance specifications.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><strong>7.\u00a0\u00a0 Summary<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">A well thought strategy is of no purpose till its objectives are achieved as intended. Therefore, the strategy formulation and implementation should be followed up by strategic evaluation and control. It henceforth becomes important to know whether the strategy implemented has been assiduously following the intent and adhering to the time frame that was originally proposed. It is also important to note that strategic control engulfs the evaluation and is perpetual rather than periodical in nature. The phase of evaluation includes understanding the influence of internal and external environmental factors on the strategy during the time horizon of its implementation. This evaluation has to be supported by a proper control system so as to provide the necessary mid-course correction or modification of the strategy employed. Moreover, it becomes imperative for the managers to understand the barriers in the path of\u00a0<span style=\"text-align: initial;font-size: 1em\">strategy evaluation and control and overcoming these hurdles could help accomplishing the targeted strategy.<\/span><\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Further, the strategic control can be classified under four heads: premise controls, implementation control, strategic surveillance control and special alert control. There are various methods\/tools of control used in strategic control system. These methods are adopted by the organizations based on types of control required. Budgets &amp; budgetary controls along with ratio analysis, audits and time-related control techniques are well suited methods for strategic control.<\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>you can view video on Strategic Control<\/strong><\/td>\n<td><a href=\"https:\/\/youtu.be\/K08tZyEbZNo\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-120\" src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"\" width=\"36\" height=\"36\" \/><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"author":3,"menu_order":30,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-248","chapter","type-chapter","status-publish","hentry"],"part":3,"_links":{"self":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/248","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":7,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/248\/revisions"}],"predecessor-version":[{"id":707,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/248\/revisions\/707"}],"part":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/parts\/3"}],"metadata":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/248\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/media?parent=248"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapter-type?post=248"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/contributor?post=248"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/license?post=248"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}