EFFECTIVE STRATEGIC CONTROL Systems and Successful Strategy Execution

Introduction
​Successful strategy implementation requires, among others, a strategic control system that matches the organization’s strategy. Strategic control systems are management control systems designed by managers to help them successfully implement and execute the organization's strategies. Strategic control systems provide managers the tools to regulate and govern their activities.  Strategic managers should ensure that financial controls and output controls are supplemented with behavior controls for efficient achievement of goals.

Strategic Control Systems
Strategic controls systems are tools designed by managers to help them evaluate and monitor the progress of activities directed towards implementing strategies. ​​​An important task of managers is to design strategic control systems for successfully implementing a strategy. These systems can be both proactive (feed forward) and reactive (feedback).

• Proactive control systems - These systems help in keeping an organization on track, anticipating future events and responding to opportunities and threats.
• Reactive control system - These systems help detect deviations after events have occurred and then take corrective actions. Managers can adopt corrective actions through adjustments in the strategy if variations are detected.

These systems further help managers achieve superior efficiency, quality, innovation and responsiveness to customers. They can also help in encouraging employees to think about innovation. Strategic control systems make employees more responsive to customers through evaluating and monitoring employees' behavior and contact with customers.

Types of Strategic Controls
Strategic controls are mainly of three types:

• Financial Control - Managers use a financial control system to measure a company’s financial performance. For effective financial control, they establish financial goals (e.g., growth, profitability, return to shareholders) and then measure the actual achievement of those goals.
• Output Control - In the case of the output control system, managers forecast performance goals for each unit and employee. They measure the actual performance of the units and employees. Lastly, they compare the actual performance against the goals already set for them.
  When the performance of employees or units is linked to the reward system, the output control itself provides an incentive structure for employee motivation in the organization.
• Behavior Control - A behavior control system refers to a comprehensive system of rules and procedures. These are prescribed to direct the behavior/actions of employees at each level of the organization. Rules and procedures standardize the way of reaching the goals. Two forms of behavior control are;

1. operating budgets and
2. standardization of inputs, conversion activities (programming work activities so that they are done the same way time and again), and outputs.

Strategic managers can measure efficiency by comparing the total inputs with the total outputs (how many units of inputs are used to produce a unit of output). Strategic managers should ensure that financial and output controls are supplemented with behavior controls for efficient achievement of goals.