Learning Outcomes
After reading this article, you should be able to explain the main strategic control levers in performance management system design, distinguish between feedback and feedforward control, and apply these principles to real ACCA APM exam scenarios. You will also learn how these levers support strategic alignment and effective organisational control.
ACCA Advanced Performance Management (APM) Syllabus
For ACCA Advanced Performance Management (APM), you are required to understand the architecture of performance management systems and their control mechanisms. This article aids your revision by focusing on:
- The design and implementation of strategic control levers in performance management systems
- The distinction between feedback and feedforward controls in performance management
- The role of information timing and type in strategic versus operational control
- How different control mechanisms drive strategic objectives and mitigate risks
- Application of these controls in exam-style organisational scenarios
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
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Which of the following best describes a feedforward control mechanism?
- Comparing actual outcomes with targets after activities are completed
- Taking corrective action only after deficits occur
- Anticipating deviations in advance and implementing preventive measures
- Monitoring outcomes without subsequent action
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Strategic control levers may include:
- Only feedback controls
- Only financial KPIs
- Both diagnostic and interactive control mechanisms
- Only compliance-based systems
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True or false? Feedback control is primarily used to monitor and adjust ongoing processes before they are completed.
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List and briefly describe two key differences between feedback and feedforward controls in performance management systems.
Introduction
Strategic control levers are critical elements in designing performance management systems that help organisations monitor, direct, and achieve their objectives. For ACCA Advanced Performance Management (APM), you need to analyse how these control levers—such as feedback and feedforward controls—are structured to support both strategic planning and operational execution. This article outlines the main types of control levers, explains the feedback-feedforward distinction, and demonstrates how to apply these concepts in practice.
Key Term: strategic control levers
The main mechanisms an organisation uses to direct, monitor, and influence performance towards its objectives, balancing different types of controls.
STRATEGIC CONTROL LEVERS IN PERFORMANCE MANAGEMENT
Effective performance management systems use multiple levers to drive organisational behaviour. The choice and design of these controls impact how well strategies are implemented and risks are managed.
Diagnostic Controls
Diagnostic controls are traditional systems where actual outcomes are compared to targets or standards. Variances are analysed, and corrective actions are taken if results deviate from plans.
Key Term: diagnostic control
A system that uses performance targets and variance analysis to highlight exceptions and trigger corrective action.
Interactive Controls
Interactive controls are used by senior managers to regularly engage with key strategic uncertainties. This type of control system encourages debate, organisational learning, and adjustment when changes occur.
Key Term: interactive control
A formal information system that managers frequently use to involve themselves in subordinate decisions, focusing attention on critical strategic issues.
Belief and Boundary Systems
- Belief systems communicate core values and mission, motivating behaviour aligned with strategy.
- Boundary systems establish the rules, limits, and risks to be avoided.
Both play a supporting role alongside diagnostic and interactive controls.
FEEDBACK VS FEEDFORWARD CONTROL
Control mechanisms can be classified according to the timing of corrective action:
Feedback Control
Feedback control examines outcomes after activities are performed, compares them to desired targets, and uses this information to adjust future actions.
Key Term: feedback control
A process by which results are measured and compared to standards after completion, with any variance prompting corrective action.
Feedforward Control
Feedforward control focuses on monitoring inputs, anticipated risks, or early indicators to prevent issues before they arise. It acts proactively to align future activities with strategic intent.
Key Term: feedforward control
A process that analyses forecasts, trends, or inputs to anticipate and avoid deviations from objectives before operations are complete.
Timing and Information
- Feedback uses historical information, often quantitative, suited for variance analysis.
- Feedforward relies on projections, forecasts, or leading indicators, requiring timely and often less structured data.
Worked Example 1.1
A pharmaceutical company has set an annual target for R&D spending. It uses monthly budget reports to track expenditure and takes action if spending exceeds budget. Is this feedback or feedforward control?
Answer:
This is feedback control. The system analyses actual spend after the period and takes corrective action based on the variance between actual and budgeted expenditure.
Worked Example 1.2
A retail chain closely monitors economic forecasts and consumer trends to adjust its stock purchasing plans ahead of anticipated demand shifts. Is this feedback or feedforward control?
Answer:
This is feedforward control. The company proactively responds to predicted changes, adjusting plans before any performance shortfall occurs.
Using Multiple Levers
Most organisations use a combination of control levers and both feedback and feedforward systems. Feedback is valuable in identifying and correcting issues after they have occurred, while feedforward is essential for managing uncertainties and aligning future actions with strategy.
Exam Warning
In APM scenarios, do not assume feedback control alone ensures strategic objectives are achieved. Always consider how feedforward systems and interactive controls can prevent strategic drift or emerging risks. Mixed control levers are commonly assessed in exam case studies.
Summary
Strategic control levers in performance management systems include diagnostic, interactive, belief, and boundary controls. Both feedback (result-focused, retrospective) and feedforward (input-focused, proactive) mechanisms are essential for effective control. For ACCA Advanced Performance Management (APM), apply these principles by recognising which levers and controls are most appropriate for achieving alignment between strategy and day-to-day operations.
Key Point Checklist
This article has covered the following key knowledge points:
- Define strategic control levers and their function in performance management system design
- Explain diagnostic and interactive control mechanisms
- Distinguish between feedback and feedforward control, including timing and information differences
- Apply the appropriate mix of control levers to practical strategic scenarios
- Recognise how feedback and feedforward are tested in ACCA APM exam questions
Key Terms and Concepts
- strategic control levers
- diagnostic control
- interactive control
- feedback control
- feedforward control