Strategic Control System - Essay Example

Introduction
The Application and Importance of Strategic Control System
The process can be considered as fundamental due to the fact that it involves even strategic management accounting as one of the essential aspects. Basically, SMA is one of the specializing areas in strategic control systems due to the fact that it deals primarily with management accounting issues specifically by using data and information related to finances and accounting (SMA Supplementary Notes 2-3).

The strategic control management then can be considered essential in the operation of the whole system and in the specific aspects of the operation as well. In relation to management accounting, the said process can be considered to be involved in the study of the different groups involved in the market along with the market’s behavior, the determination of most effective solutions, and implementation of the said strategies (SMA Supplementary Notes 3).

The main role of the strategic control system in accounting is evident in the dimensions covered by the SMA. Specifically, it is the planning of possible projects and implementations of different plans related to financial issues. Due to the characteristic of being strategic, there are different alternatives and contingencies that are presented to ensure the success of the operation.

It is important to consider though that management accounting is not the sole field wherein a strategic control system is involved. Although the majority of the companies concentrate on the strategies to improve and achieve profits for the company, the coverage of the system is extensive due to the involvement in different aspects and departments of the company or organization.

Based on the study by Ittner & Larcker, the main processes included in the strategic control system are the strategic implementation process, the internal and the external monitoring (3). The said processes are applied in different manners but planning and research of baseline information and the synthesis of plans are considered the initial phases (Ittner & Larcker 3-5).

The management procedures that are implemented in the organizations and companies are commonly based on plans that had already passed the study and research by the strategic control system. Such methods are commonly the basis of the operations undertaken by the managers and other leaders. Upon study of the results of such application, the methods and techniques used are commonly established as part of the operation or discarded to be able to improve on different areas needed.

The determination of the effectiveness of the application and implementation of the strategic control system can be determined by the study of a particular organization that can evidently be recognized to apply such techniques.

Caterpillar Inc. can be considered an established and competitive company in its field of expertise. The application of the strategic control system in the said company can be considered advantageous and effective when it was able to revive the status following the problems encountered in the 80s due to competition. When it started to lose capital, the job of the people in the company was affected causing labor union issues. Instead of stopping operation, the company decided to let other smaller firms operate under the company. The said plan helped in the issues of operation with less human resources but earning due to the operation of then smaller companies. With regards to the coverage of different states, profits were achieved by localizing manufacturers in different states in the southern US. It decreased delivery costs while maximizing the resources of the branches (CAT website).

In addition to such techniques, the “6 sigmas” were used by the company as a management tool. This can be compared to a strategic control system due to the fact that the method can monitor the success and performance and even guide the members and groups in the company to be able to achieve success. The said technique is used in the research and development by the scientist, in the operations by the engineers, and in the system management by the problem-solvers (CAT website).