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CA Intermediate · Financial Management and Strategic Management · Strategy Implementation and Evaluation

Anand Retail Ltd assumed that consumer spending in its target cities would grow at 8% a year when it formed its expansion strategy. Management now tracks regularly whether this assumption still holds, and will revisit the strategy if growth falls to 3%. Which type of strategic control is this, and what does it check?

This is premise control, which checks whether the assumptions underlying the strategy still hold. Management monitors the specific assumption of 8% consumer spending growth and will reconsider the strategy if it falls to 3%, unlike milestone tracking, sudden-event response or general surveillance.

  1. APremise control, checking the validity of assumptions on which the strategy was basedCorrect
  2. BImplementation control, checking milestones of projects
  3. CSpecial alert control, responding to a sudden unforeseen event
  4. DStrategic surveillance, scanning all sources without a specific focus

Explanation

Premise control tests whether the assumptions underlying the strategy, here consumer spending growth, remain valid. Implementation control tracks milestones and special alert control reacts to sudden events, while surveillance is unfocused scanning. The specific tracked assumption with a trigger level identifies premise control.

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