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

Nirmaan Infra, a diversified group, uses a control system under which each business unit head is judged on financial outcomes such as return on investment and profit, while the corporate office avoids interfering in the unit's day-to-day operations. Which strategic control orientation is most accurately described?

This is a financial control approach by the corporate centre. Unit heads are evaluated on financial outcomes like return on investment and profit, with little interference in daily operations. A strategic planning style would involve deep corporate participation, while premise and special alert controls monitor assumptions or sudden events.

  1. AFinancial control approach by the corporate centreCorrect
  2. BStrategic planning approach with detailed corporate involvement
  3. CPremise control over environmental assumptions
  4. DSpecial alert control after a sudden event

Explanation

Judging units on financial results such as ROI and profit with limited operational interference reflects financial control. Strategic planning style involves heavy corporate participation in unit plans, so it is wrong. Premise control and special alert control are types of strategic control tracking assumptions or reacting to sudden events, and are not described here.

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