Example

A courier business decides to boost

performance by setting an on-time delivery goal
of 100%. Managers are alerted by the control
system as it automatically reports problems
even if delivery rate falls by 1%.

By using such a control strategy, the

organization allows its managers to undertake
immediate corrective measures for every
delivery-performance issue that’s raised.   
Purpose or Reason of Strategic control
1. Measurement of organizational progress,
2. Measuring the performance
3. Comparison of your strategy performance
2. Feedback for future actions, and
3. Linking performance and rewards.
4. Take corrective actions to avoid changes or
variation in achieving goals through strategy.
Establish or Set Control Standards:
 The second step in the strategic control process
is establishing standards. A control standard is a
target against which subsequent performance
will be compared. Standards are the criteria
that enable managers to evaluate future,
current, or past actions. They are measured in a
variety of ways, including physical, quantitative,
and qualitative terms. Five aspects of the
performance can be managed and
controlled: quantity, quality, time
cost, and behavior.
 Example of Establish standard
•  An organizational goal to increase market share, for
example, may be translated into a top-management
performance standard to increase market share by
10 percent within a twelve-month period.

• Helpful measures of strategic performance include:

sales (total, and by division, product category, and
region), sales growth, net profits, return on sales,
assets, equity, and investment cost of sales, cash
flow, market share, product quality, valued added,
and employees productivity.
Measure Performance:
•  Once standards are determined, the next step is
measuring performance. The actual performance
must be compared to the standards. Many types of
measurements taken for control purposes are based
on some form of historical standard.

• These standards can be based on data derived from

the PIMS (profit impact of market
strategy) program, published information that is
publicly available, ratings of product / service quality,
innovation rates, and relative market shares
standings.
 Compare Performance to Standards:
• The comparing step determines the degree of
variation between actual performance and standard.
If the first two phases have been done well, the third
phase of the controlling process – comparing
performance with standards – should be
straightforward.

• However, sometimes it is difficult to make the

required comparisons (e.g., behavioral standards).
Some deviations from the standard may be justified
because of changes in environmental conditions, or
other reasons.
 Take Corrective Action:
• The final step in the strategic control process is
determining the need for corrective action. Managers can
choose among three courses of action: (1) they can do
nothing (2) they can correct the actual performance (3)
they can revise the standard.

• When standards are not met, managers must carefully

assess the reasons why and take corrective action.
Moreover, the need to check standards periodically to
ensure that the standards and the associated
performance measures are still relevant for the future.