Assignment On Strategic

Evaluation & Control

SUBMITTED BY: SUBMITTED TO:

SHUBHAM SINGH PROF. JAIDEEP
M.B.A II Sem 4th SINGH
ROLL NO. 21
 Strategic Management Process

 Strategic Evaluation is defined as the process of determining the

effectiveness of a given strategy in achieving the organizational
objectives and taking corrective action wherever required.

 Strategy evaluation is the final step of strategy management process.

The key strategy evaluation activities are: appraising internal and
external factors that are the root of present strategies, measuring
performance, and taking remedial / corrective actions. Evaluation
makes sure that the organizational strategy as well as it’s
implementation meets the organizational objectives.
 Nature of Strategic Evaluation

 Nature of the strategic evaluation and control process is to test the

effectiveness of strategy.
 During the strategic management process, the strategists formulate the
strategy to achieve a set of objectives and then implement the
strategy.
 There has to be a way of finding out whether the strategy being
implemented will guide the organisation towards its intended
objectives. Strategic evaluation and control, therefore, performs the
crucial task of keeping the organisation on the right track.
 In the absence of such a mechanism, there would be no means for
strategists to find out whether or not the strategy is producing the
desired effect.
 Through the process of strategic evaluation and control,
the strategists attempt to answer set of questions, as
below.
 Are the premises made during strategy formulation proving
to be correct?
 Is the strategy guiding the organization towards its intended
objectives?
 Are the organization and its managers doing things
which ought to be done?
 Is there a need to change and reformulate the strategy?
 How is the organization performing?
 Are the time schedules being adhered to?
 Are the resources being utilized properly?
 What needs to be done to ensure that resources are utilized
properly and objectives met?
 Importance of Strategic
Evaluation
 Strategic evaluation can help to assess whether the
decisions
match the intended strategy requirements.

 Strategic evaluation, through its process of control, feedback,

rewards, and review, helps in a successful culmination of the
strategic management process.

 The process of strategic evaluation provides a considerable

amount of information and experience to strategists that can be
useful in new strategic planning.
 Participants in Strategic
Evaluation

 Shareholders
 Board of Directors
 Chief executives
 Profit-centre heads
 Financial controllers
 Company secretaries
 External and Internal Auditors
 Audit and Executive Committees
 Corporate Planning Staff or Department
 Middle-level managers
 Process of Strategic Evaluation
1) Fixing benchmark of performance
 While fixing the benchmark, strategists encounter questions
such as - what benchmarks to set, how to set them and how to
express them.
 In order to determine the benchmark performance to be set, it
is essential to discover the special requirements for performing
the main task.
 The organization can use both quantitative and qualitative
criteria for comprehensive assessment of performance.
 Quantitative criteria includes determination of net profit, ROI,
earning per share, cost of production, rate of employee turnover
etc. Among the Qualitative factors are subjective evaluation of
factors such as - skills and competencies, risk taking potential,
flexibility etc.
2) Measurement of performance
 The standard performance is a bench mark with which the actual performance is to be
compared.
 The reporting and communication system help in measuring the performance.
 For measuring the performance, financial statements like - balance sheet, profit and loss
account must be prepared on an annual basis.

3) Analyzing Variance
 While measuring the actual performance and comparing it with standard performance
there may be variances which must be analyzed.
 The strategists must mention the degree of tolerance limits between which the variance
between actual and standard performance may be accepted.

4)Taking Corrective Action

 Once the deviation in performance is identified, it is essential to plan for a corrective
action.
 If the performance is consistently less than the desired performance, the strategists must
carry a detailed analysis of the factors responsible for such performance.
 Techniques of Strategic
Evaluation

1)Gap Analysis
 The gap analysis is one strategic evaluation technique used to
measure the gap between the organization’s current position and its
desired position.
 The gap analysis is used to evaluate a variety of aspects of business,
from profit and production to marketing, research and development
and management information systems.
 Typically, a variety of financial data is analyzed and compared to
other businesses within the same industry to evaluate the gap
between the organization and its strongest competitors.
2) SWOT Analysis
 The SWOT analysis is another common strategic evaluation
technique used as a part of the strategic management process. The
SWOT analysis evaluates the organization’s strengths, weaknesses,
opportunities and threats.
 Strengths and weaknesses are internal factors, while opportunities
and threats are external factors.
 This identification is essential in determining how best to focus
resources to take advantage of strengths and opportunities and
combat weaknesses and threats.
3) PEST Analysis
 Another common strategicevaluation technique is the
analysis, which identifies political, PEST
economic, social and
the
technological factors that may impact the organization’s ability to
achieve its objectives.
 Political factors might include such aspects as impending legislation
regarding wages and benefits, financial regulations, etc
 Economic factors include all shifts in the economy, while social
factors may include demographics and changing attitudes.
Technological pressures are also inevitable as technology becomes
more advanced each day.
 These are all external factors, which are outside of the
organization’s control but which must be considered throughout
the decision making process.
4) Benchmarking
 Benchmarking is a strategic evaluation technique that’s often used
to evaluate how close the organization has come to its final
objectives, as well as how far it has left to go.
 Organizations may benchmark themselves against other
organizations within the same industry, or they may benchmark
themselves against their own prior situation.
 A variety of performance measures, as well as policies and
procedures, may be evaluated regularly to identify where
adjustments are necessary to maintain the sustainable competitive
advantage.
Thank you…