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

Rohit Engineering Ltd. assumed in its strategic plan that the rupee would stay stable and that government subsidies for electric vehicle components would continue. Management now reviews, every quarter, whether these underlying assumptions still hold. Which type of strategic control is being used?

The company is using premise control. It systematically checks whether the assumptions behind the strategy, such as rupee stability and continued subsidies, remain valid. Surveillance is broad and unfocused, special alert control responds to sudden events, and implementation control tracks execution milestones rather than assumptions.

  1. AImplementation control
  2. BSpecial alert control
  3. CStrategic surveillance
  4. DPremise controlCorrect

Explanation

Premise control checks whether the assumptions on which the strategy was based are still valid. Here the assumptions are exchange rate stability and subsidy continuity. Strategic surveillance is broad, unfocused monitoring and special alert control is a rapid response to a sudden unforeseen event, so neither fits a periodic check of stated assumptions.

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