Strategic Management: Formulation and Implementation

Take Corrective Action

The final step in the control process is determining the need for corrective action. Managers can choose among three courses of action:

  1. they can do nothing
  2. they can correct the actual performance; or
  3. they can revise the standard.

Maintaining the status quo if preferable when performance essentially matches the standards. When standards are not met, managers must carefully assess the reasons why and take corrective action. Moreover, the need to check standards periodically to ensure that the standards and the associated performance measures are still relevant for the future.

The final phase of controlling process occurs when managers must decide action to take to correct performance when deviations occur. Corrective action depends on the discovery of deviations and the ability to take necessary action. Often the real cause of deviation must be found before corrective action can be taken. Causes of deviations can range from unrealistic objectives to the wrong strategy being selected achieve organizational objectives. Each cause requires a different corrective action. Not all deviations from external environmental threats or opportunities have progressed to the point a particular outcome is likely, corrective action may be necessary.

There are three choices of corrective action:

  1. Normal mode - follow a routine, no crisis approach; this take more time
  2. As hoc crash mode - saves time by speeding up the response process, geared to the problem ad hand.
  3. Preplanned crisis mode - specifies a planned response in advance; this approach lowers the response time and increases the capacity for handling strategic surprises.

The below checklist suggest the following five general areas for corrective actions:

Managers can also attempt to influence events or trends external to itself through advertising or other public awareness programs. In such case, the changes should be made only after the most intense scrutiny.

Management must remember that adjustments in any of the above areas may require adjustments in one or more of the other factors. For example, adjusting the objectives is likely to require different strategies, standards, resources, activities, and perhaps organizational structure and systems.