The essence of strategic control is that it has two kinds of control, namely Feedback Control (FBC) and Feed-forward control (FFC). In the feedback control, performance indicators are determined, their pre-determined standards are established. The performance is measured with respect to those standards to identify critical gaps to take corrective action. Its weakness is that the corrective actions come too late and this is reactive in nature. To enable the business entity to act in a pro-active manner, feed-forward control is used which is a real strategic control. Feed-forward control monitors /requires early warning about unexpected developments in the environments. It informs about ‘surprises’. It always varies if the plans are still adequate. It always verifies if the plans are still adequate or the plans need change due to change in the environment. It is some kind of strategic auditing which leads us to redoing our strategic plan. As compared to feedback control, the main benefit of feed-forward control is that it adopts the corrective measures during the process of any strategic activity itself and applies corrective action, or rather modifies its course of action, concurrently to get the anticipated desired result.
Strategic controls deals with the basic strategic direction of the business entity in terms of its relationship with the environment. If focuses on the organisation as a whole measures and emphasis long term measures such as Return on Investment and changes in the Shareholders’ value.
The purpose of the control process is to ensure that the business entity is achieving what it set out to accomplish. It compares performance with desired results and provides the feedback necessary to evaluate results; it also ensures taking corrective actions as needed.
The process can be represented as a five – step feed-back model as below: