STRATEGIC EVALUATION AND CONTROL

 Nature of strategic evaluation

 The purpose of strategic evaluation is to evaluate the effectiveness of strategy in achieving
organizational objectives.
 “The strategic evaluation &control can be designed as the process of determining the effectiveness of
a given strategy in achieving the organizational objectives and taking corrective action whenever
required”.
 Importance of strategic evaluation
“The ability to coordinate the tasks performed by individual managers and also groups division or
SBU’s through control of performance “.
 In the absence of coordination and controlling techniques the strategic evaluation is
- need for feed back, appraisal and reward

Check on the validity of strategic choice.

congruence between Decisions & Intended Strategies.
 Successful culmination of the strategic Management
Process.
Creating Inputs for New strategic planning
 PARTICIPANTS IN STRATEGIC
EVALUATION
The main participants in strategic evaluation are
 BOD’s
 CEO’s
 SBU/profit center Heads.
 Financial controllers, Internal, External Auditors.
 Corporate Planning Staff.
 Middle – level Managers.

Barriers in Evaluation
There are five major types of barriers in Evaluation. They are:
 Limits of controls.
 Difficulties in Measurement.
 Resistance to Evaluation.
 Short-termism.
 Relying on Efficiency Vs Effectiveness.
 STRATEGIC CONTROL

It is a continuous evaluation system used in business processes. There may be some gap between the
time a strategy is formulated and when it is implemented.
The process of implementation is a time-consuming process.
Strategic controls take into account the changing assumptions that determine a strategy, continuously
evaluating the strategy as it is being implemented and take the necessary steps to adjust the strategy
to
the new requirements.

Types of Strategic control Implementati

Premises on
control control

Strategic
control

Special
Strategic
Alert
surveillance
control
 TYPES OF STRATEGIC CONTROL

Premise control
It is necessary to identify the key assumptions and keep track of any change in them so as to assess
their impact on strategy and its implementation .
 Eg:- Environmental factors, Organizational factors.
Implementation control
The implementation of a strategy results in a series of plans, programmes and projects.
Implementation control is aimed at evaluating whether the plans, programmes and projects are
actually guiding the Organization towards its pre-determined objectives or not.
Implementation control leads to strategic rethinking.
 Strategic surveillance
It is aimed at a more generalized and overaching control.
 It is “designed to monitor a broad range of events inside and outside the company that are likely to
threaten the course of a firms strategy.”
Special Alert control:- This is based on a trigger mechanism for rapid response and immediate
reassessment of strategy in the sudden & unexpected events.
Eg:- Crisis and critical situations.
 OPERATIONAL CONTROL

Operational control is concerned with action or performance of an organization.

Operational control aims at allocation and use of Organizational resources through evaluation of
the performance of organizational units such as divisions, SBO’S etc to assess their contribution
to the achievement of organizational objectives

Process of evaluation :-
The process of evaluation is applied for exercising operational control.
It involves for steps.

OPERATIONAL
CONTROL

SETTING STANDARDS
OF PERFORMANCE

MEASUREMENT OF
PERFORMANCE

ANALYSING
VARIANCE

TAKING CORRECTIVE
ACTIONS

•The strategies, plans and objectives result in a set of performance standards which form
the basis for evaluation through measurement of performance.
DIAGRAM

STRATEGY SETTING MANAGEME

STANDARDS ACTUAL NT
PLAN
OF PERFORMAN OF
OBJECTIVE PERFROMAN CE PERFORMAN
S CE CE

C
C H
H E
E C
R C K
E K
P
F E ANALYSING
S
O T R VARIANCE
A F
R O
N
M D M
U A A
R N
L D C
A S E
T
E

FEEDBACK
 Setting standards of performance It involves the 3 questions like
1.What standards should be set?
2.How should these standards be set?
3.In what terms should these standards be expressed?

Actual Performance
Management of Performance
Analyzing Variance
Techniques of Strategic Evaluation & Control

Evaluation Techniques for Strategic control

I . Strategic Momentum control

Responsibility control centers
The Underlying success factors
Generic Strategies

II . Strategic Leap control

Strategic Issue Management
Strategic field Analysis
System’s Modeling
Scenarios
 Evaluation Techniques for Operational Control

Internal Analysis.

VRIO framework
Value chain Analysis
Quantitative Analysis
Qualitative Analysis

Comparative Analysis

Historical Anal
Industry Norms
Bench Marking

Comprehensive Analysis

Key factor Rating

Business Intelligence system
The Balanced Score-card

Special Purpose Techniques

Network Techniques
Management by Objectives(MBO)
Memorandum of Understanding(MOU)
Auditing Techniques

Corporate Social Audit

Environmental Audit
 Role of Organisational Systems in Evaluation
The process of strategic evaluation and control does not operate in isolation; it works on the basis of
different Organizational Systems that are used to implement strategies.
This evaluation can be done in the form of information, control and Reward Systems.

Role of Information System

The use of Computerized information systems in Organizations are helpful in “Performance Monitoring” and “
reporting.”
In the control process, the evaluation is done by comparing actual performance with standard performance.
The measurement of performance can be done on the basis of reports generated through the information system.
The purpose of the information management system is to enable managers to keep track of performance
through control reports.
With the increasing sophistication of the information management systems and the use of I.T. , the
evaluation is done.
By using computerized information systems, it is benefit for the managers in “availing of real-time
information”.
•SEM ;- Strategic Enterprise Management
•SAP:-
•ERP:- Enterprise Resource Planning.
Role of Control System

The control system is the heart of any evaluation process for Setting Standards, measuring
performance, analyzing variances and taking corrective action.

The central role of the control system in important.

The role of the development system in evalution, is helpful for strategists to initiate and implement
corrective action.
Employee Performance Management Systems used through applications of I.T., play a helpful role in
the development of a system for exercising control in organizations.

Role of Reward System

Organizations design and operate their reward systems on the basis of the Appraisal of performance of individuals.
When the performance of managers is appraised, their contribution to Original Objectives increases.
Hence Reward Systems contribute Organization success and effectiveness