Strategy Review, Evaluation, and Control.

Narrative Report

The chapter that was assigned to group 5 was Chapter 9 - Strategy Review, Evaluation,
and Control. Upon the preparation, Ms. listed down the subtopics of the chapter and all the group
members were able to choose freely what topic they would like to report. The quiz and
powerpoint presentation were also made by her, but the content of the presentation was from all
the group members. On the other hand, this narrative report that we present was compiled by Ms.

To start the reporting, Ms. introduced the topic and a brief background of the importance
of strategy review, evaluation, and control. She also explained the chapter objectives and
learning outcomes that are expected to the students after listening to the report. After tackling
the background and learning objectives and outcomes of the chapter, Ms. began the discussion
by introducing the first subtopic which is about The Nature of Strategy Evaluation. She talked
about how strategic management entails making decisions that have long-term implications for a
company and therefore, strategy evaluation is regarded as critical to an organization's success.
She discussed that the strategic evaluation is an important tool for determining how well the
company has done in relation to its objectives. Strategy evaluation is said to be an effective way
to focus on accomplishments and shortcomings, as well as helpful for reexamining the goals
themselves. Miss also introduced the Richard Rumelt’s Rumelt Evaluation method that has four
criteria for evaluating business strategies namely, the consistency, consonance, feasibility and
advantage. She also mentioned the trends that tend to become the reasons why strategy
evaluation is more difficult today. She ended the first part with the process of evaluating
strategies wherein in consists of steps namely fixing benchmark of performance, measurement of
performance and taking corrective action

Mr. was the second reporter and he discussed the Strategy Evaluation Framework where
he discussed different steps in order to know different problems that are needed to be addressed
so that the organization can take actions. He also tackled how many evaluations are taken before
each step. These evaluations are important because it can help to assess whether the decisions
match the intended strategy requirements. He sited how an organization will address question or
problems to take actions accordingly

The subtopic about the Balanced Scorecard was discussed by Ms. It has been said that it
is an important strategy evaluation tool. It requires firms to seek answers to different questions. It
is an important tool to evaluate strategies from different companies. However, there are different
forms of Balanced Scorecard and it depends on different companies on how they construct and
present it.

The fourth subtopic was discussed by Ms. and it is about the published sources of
strategy-evaluation information. It has been said that a number of publications is helpful in
evaluating a firm's strategies. Published sources that contain related information are used by a
company as a basis. According to Ms., with their help, they can evaluate a company's strategy, so
they can establish strategies that they can use in their own company.

The fifth subtopic discussed by Ms. is all about the characteristics of an effective
evaluation system. An effective evaluation system should be economical, the information should
be enough for it to be considered effective. Also, it should be meaningful in a way that it
provides usefulness to the company. Additionally, it should provide timely information that when
there are instances when the managers may need daily information, it will be easy to provide
them. Another, it should provide a true picture of what is happening wherein bias is prevented.
Next, it should not dominate decisions. It means that there is a need for cooperation and trust
within the company. In addition, it should be simple for the reason that complex evaluation
systems might confuse people. Lastly, it should be elaborate and detailed wherein all the
information necessary should be able to be included.

The sixth subtopic is all about contingency planning and it was discussed by Ms.. In this
topic, she did tackle its major benefits together with the process of making an effective
contingency plan. Having an alternative plan for the expected events makes the company ready
to face the upcoming challenges that may come and it helps to lessen the damage that it may
cause. Contingency plan requires the company to seek answers and solutions to the different
events that may occur. To have an effective contingency plan, there are many points that we need
to consider. The first one is identifying the beneficial and unfavorable events that could possibly
derail current strategies and estimating what time would it possibly occur. Companies must know
the positive and negative events that may happen. Next is assessing the impact of those
unfavorable events. In making the contingency plan, it must be related to the current strategies
and always think of its counter-impact. Always be observant and be mindful of the early warning
signals. After identifying those early warning signals, the company needs to make another
alternative plan so that they will be ready if ever those signals occur. According to Ms. Perez, no
matter how we plan something, sometimes there are really unexpected events that come our way.
Companies always need to have an alternative plan so if the current strategy doesn't work, they
have other options on solving their problems.

For the seventh subtopic of this chapter, Mr. discusses auditing. In this part of the report
he discussed what auditing is and how it relates to strategy evaluation. He mentioned what the
purpose of auditing is in a company and how it helps in strategy evaluation. In the second part of
this subtopic he in turn discusses what an auditor is. He discusses here what the role of the
auditor is and what the do’s and don’ts of an auditor are. In the last part of his report, he
discussed the switching of accounting standards from GAAP to IFRS. The details of what will
happen with this switching are discussed here. His discussion focused on what impact it would
have specifically on U.S. companies.

The last subtopic of the report was discussed by Ms. which is the 21st century challenges
in Strategic Management. It was mentioned that it is a must to have a strategy in order to
effectively solve the problems that an organization faces. But the implementation of strategy is
becoming a problem too. It was discussed that there are three challenges that strategists face
today. First, deciding whether the process should be more an art or a science. Second, deciding
whether strategies should be visible or hidden from stakeholders, and last is deciding whether the
process should be more top-down or bottom-up in their firm.

The first issue, the art and science issue focused on the objectivity and subjectivity of the
strategy being formulated and implemented by the company. This is becoming an issue for the
strategists because there were conflicts on which basis should the organization take in making
and evaluating a strategy. The second challenge in strategic management is the visible or hidden
issue. An interesting aspect of any competitive analysis discussion is whether strategies
themselves should be secret or open within firms. There are certainly good reasons to keep the
strategy process and strategies themselves visible and open rather than hidden and secret. There
are also good reasons to keep strategies hidden from all but top-level executives.

In this part, explained the advantages of both perspectives. She discussed the reasons to
be completely open with the strategy process and resultant decisions which are: 1) Managers,
employees, and other stakeholders can readily contribute to the process. They often have
excellent ideas. Secrecy would forgo many excellent ideas. 2) Investors, creditors, and other
stakeholders have a greater basis for supporting a firm when they know what the firm is doing
and where the firm is going. 3) Visibility promotes democracy, whereas secrecy promotes
autocracy. Domestic firms and most foreign firms prefer democracy over autocracy as a
management style. And 4) Participation and openness enhance understanding, commitment, and
communication within the firm.

The other point that she reported were the reasons why some firms prefer to conduct
strategic planning in secret and keep strategies hidden from all but the highest-level executives.
This includes: 1) Free dissemination of a firm’s strategies may easily translate into competitive
intelligence for rival firms who could exploit the firm given that information. 2) Secrecy limits
criticism, second guessing, and hindsight. 3) Participants in a visible strategy process become
more attractive to rival firms who may lure them away. And 4) Secrecy limits rival firms from
imitating or duplicating the firm’s strategies and undermining the firm.

The very last part of this sub-topic was the last challenge in strategic management which
are the Top-Down and Bottom-Up Approach. Ms. discussed the top-down approach as it is
contend that top executives are the only persons in the firm with the collective experience,
acumen, and fiduciary responsibility to make key strategy decisions. On the other hand,
Bottom-up approach advocates argue that lower- and middle-level managers and employees who
will be implementing the strategies need to be actively involved in the process of formulating the
strategies to ensure their support and commitment. Before properly ending the report, it was
stated that strategists must reach a working balance of the two approaches in a manner deemed
best for their firms at a particular time and these issues should be taken into consideration to
have a better life for the organization and its people.