What is strategic cost control?

Budgetary control should be looked at like a check book - if the account is empty you can't spend


strategic is longer reaching, overall a bigger picture; tactical is more immediate (almost short term) and with amore precise target.


The advantages are easy - strategic planning for budgets allows you to stay out of trouble and be fiscally sound (perhaps).


to understand the disadvantage look at 'systems driven' models - resources can best be directed by those doing, not those planning.


any good strategic plan allows for movement within budgets to maintain the bottom-line.


so the disadvantage is simply that managers cannot alter strategic budgets. budgets made at the high level often miss what is obvious at the 5 foot level.


in example: cap ex may need to be increased for new production runs predicted in the next cycle, or new for market changes, etc.