Professional Documents
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(ii) Strategic control- It takes into account the changing assumptions that
determine a strategy, continually evaluate the strategy as it is being implemented
and take the necessary steps to adjust the strategy to the new requirements.
The firm must identify the areas of operational efficiency in terms of people,
processes, productivity and pace. Standards set must be related to key management
tasks. The special requirement for performance of these task must be studied. It can
be expresses in terms of performance indicators.
(C) Analyzing variances – The two main tasks are noting deviations and finding
the cause of deviations.
♦ When actual performance is equal to budgeted performance tolerance limits
must be set.
♦ When actual performance is greater than budgeted performance one must check
the validity of standards and efficiency of management.
Does the organization have the capacity to respond to the changes needed?