Role of Strategic Control Systems in Achieving Strategic Goals

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Role of Strategic Control Systems in Achieving Strategic Goals

Opoku-Ware Yeboah, Berlinda Diaba, Abdul Rauf Mohammed, Peter A. Boateng
Valley View University, School of Graduate Studies, P. O. Box AF595, Adenta, Accra Ghana
Received: 04 July 2023; Revised: 17 July 2023; Accepted: 21 July 2023; Published: 26 August 2023

Abstract: – This article seeks to investigate the role of strategic control systems in achieving strategic goals. The research is based on a comprehensive literature review of academic articles and research reports that have addressed the topic of strategic control system. The study identifies that strategic control systems are important tools for achieving strategic goals in organizations. The study points out that strategy is key to developing and implementing an effective control system. The use of strategic planning provides an understanding of the company’s environment, the company’s strategic objectives, the company’s critical success factors, and the development of a strategic action plan. The study confirms that performance measurement and feedback are critical components in monitoring the progress of the organization towards achieving its strategic goals. Based on the findings discussed, some major recommendations have been made. These include the need to incorporate into the control systems, key components such as premise control, implementation control, strategic surveillance, and special alert control. This paper also shares further light on some of the challenges that may be associated with establishing a strategic control system. It brings out some other issues for future research.

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Keywords: strategic control systems, organizational performance, strategic goals

I. Introduction

Rapidly changing environments necessitate organizations to respond promptly and effectively. Strategic control serves as a crucial mechanism in this adaptation process, enabling organizations to identify and interpret triggers for change ((Bozionelos, 2021; Simons, 1995). Despite extensive attention given to the relationship between business strategy and the use of management controls, our current understanding of this relationship and its effects remains fragmented (Chenhall, 2003; Otley, 2016).
Strategic control systems are vital components of organizational performance management (Merchant & Van der Stede, 2007). These systems enable organizations to monitor and adjust their strategies in response to both internal and external environmental changes (Merchant & Van der Stede, 2007; Simons, 1995). Effective implementation of strategic control systems can help organizations achieve their goals and enhance their performance (Ittner & Larcker, 2003; Widener, 2007). Organizations operate in highly competitive environments with rapidly changing customer demands and technological advancements (Hitt, Ireland, & Hoskisson, 2020; Venkatraman, 1989). To succeed and remain relevant, organizations must develop strategies that enable them to adapt to these challenges (Hitt et al., 2020). Strategic control systems have emerged as crucial elements of organizational management for achieving strategic objectives (Ittner & Larcker, 2003; Otley, 1999). This paper aims to analyze the role of strategic control systems in managing organizational performance to attain strategic objectives. Organizational performance refers to the extent to which an organization achieves its strategic objectives (Otley, 2016). Various metrics, such as financial measures, customer satisfaction surveys, employee satisfaction surveys, or balanced scorecards, can be utilized to evaluate organizational performance (Chenhall, 2003; Otley, 2016). High levels of organizational performance are essential for remaining competitive and meeting growth targets (Nouri & Parker, 2015; Widener, 2007). Therefore, strategic control systems play a critical role in ensuring sustained high organizational performance (Nouri & Parker, 2015; Widener, 2007).

Recent studies have found that the inability of organizations to achieve their strategic goals may be attributed to a lack of effective strategic control systems (Balachandra & Pinowski, 2021; Sun, Chen, & Teng, 2020; Gamble & Baker, 2020; Keegan et al., 2019; Wu et al., 2017). These studies highlight the importance of strategic control systems in guiding and monitoring the execution of strategies, enabling organizations to align their actions with their intended goals (Balachandra & Pinowski, 2021; Sun, Chen, & Teng, 2020; Gamble & Baker, 2020). Without robust strategic control systems in place, organizations may face challenges in adapting to dynamic environments, effectively managing resources, and aligning their activities to achieve strategic objectives (Keegan et al., 2019; Wu et al., 2017). The objective of this paper was to investigate the role of effective strategic control systems in attaining strategic goals. The study aimed to explore the components that help bridge the gap between strategy formulation and implementation, ultimately leading to the achievement of strategic goals. It examined the mechanisms responsible for controlling, monitoring, and evaluating the progress of strategic goals. The study encompasses the three key elements that constitute strategic control system.