Strategic vs Operational Control: Difference and Comparison

Key Takeaways

1. Strategic control is critical to effective organizational management for aligning its actions with its long-term objectives.
2. Operational control is a fundamental aspect of day-to-day management within an organization.
3. Strategic control deals with long-term goals, objectives and the overall direction of an organization. In contrast, operational control focuses on an organization’s day-to-day activities, processes, and immediate tasks.

What is Strategic Control?

Strategic control is a critical component of effective organizational management, serving as a compass that helps align an organization’s actions with its long-term objectives. This control mechanism evaluates and adjusts an organization’s overall strategy and direction. It ensures the organization remains on course toward achieving its mission, vision, and strategic goals.

One of the primary purposes of strategic control is to assess whether the organization’s strategic plan is still relevant and effective in the ever-changing business environment. This involves monitoring external factors such as market trends, competition, technological advancements, and regulatory changes. By continuously scanning the external landscape, an organization can identify potential threats and opportunities that may require adjustments to its strategy.

Strategic control involves assessing an organization’s resources, capabilities and performance about its strategic objectives. It operates at a high level within an organization and involves top-level management and the board of directors.

What is an Operational Control?

Operational control is a fundamental aspect of day-to-day management within an organization. It deals with the immediate activities and processes that drive an organization’s daily operations. It aims to optimize efficiency, productivity, and resource utilization to achieve short-term goals and targets.

The primary objective of operational control is to ensure that an organization’s routine activities align with its operating plans and goals. It involves monitoring and managing various aspects of the organization’s operations, including production, inventory management, customer service, and employee performance.

Some critical operational control elements include setting performance standards, measuring actual performance, comparing the two, and taking corrective actions when necessary. It plays a crucial role in resource allocation. It ensures that resources, such as labour, materials, and equipment, are used effectively and efficiently to meet production targets and customer demand.

Operational control focuses on managing an organization’s activities daily to ensure they align with operational objectives. It involves setting performance standards, monitoring performance, and making real-time adjustments to optimize efficiency and resource utilization.

Difference Between Strategic Control and Operational control

1. Strategic control deals with long-term goals, objectives and the overall direction of an organization. In contrast, operational control focuses on an organization’s day-to-day activities, processes, and immediate tasks.
2. Strategic control decisions involve CEOs and senior executives at the top management level. In contrast, operational control decisions are made at the middle and lower management levels, dealing with supervisors and department heads.
3. Strategic control involves high-level decisions related to market positioning, mergers, acquisitions, and significant resource allocation while operational control involves routine decisions about resource utilization, production schedules, and quality control.
4. Strategic control allows for less frequent but more substantial changes in organizational strategy, while operational control requires quick adaptability to address immediate challenges and opportunities.
5. Strategic control involves a higher level of risk as it deals with long-term investments and strategic shifts. In contrast, operational control tends to have lower risk tolerance, focusing on minimizing operational errors and ensuring consistency.

Comparison Between Strategic Control and Operational Control

Parameters	Strategic Control	Operational Control
Scope and focus	Long-term goals	Day-to-day activities
Decision making	Top-management level involving CEOs	Middle and lower management levels involving supervisors
Nature of decisions	High-level decisions	Routine decisions
Adaptability and flexibility	Less frequent but more substantial changes in organizational strategy	Quick adaptability to address immediate challenges and opportunities
Risk tolerance	Higher level	Lower level

References

1. https://www.emerald.com/insight/content/doi/10.1108/MD-07-2015-0324/full/html
2. https://www.sciencedirect.com/science/article/pii/S0090261697900267