Strategic Evaluation and

Control

By
Rajat Verma
Roll No.95072238768
Strategic Evaluation and Control
 The purpose of strategic evaluation is to
evaluate the effectiveness of a strategy for
achieving organizational objectives.
 Thus , strategic evaluation and control
could be defined as the process of
determining the effectiveness of a given
strategy in achieving the organizational
objective and taking corrective action
where ever required.
Nature of Strategic Evaluation
and control
 Objective based
 Economic
 Objectivity
 Pervasiveness
 Simplicity
 Communication and involvement
Importance of Strategic Evaluation

Means to secure feedback

Motivational Tool
Check on the validity of strategic choice
Congruence between decisions and intended
strategy
Successful culmination of strategic management
process
Creating inputs for new strategic planning
Ability to coordinate the tasks performed
 Participants in Strategic
Evaluation
 Board of Directors
 Chief Executives
 Strategic Business Unit
 Financial Controller, Company Secretaries
and Auditors.
 Barriers in Evaluation

Limits of Controls
Difficulties in measurement
Resistance to evaluation
Short-term
Relying on efficiency versus effectiveness
Requirements of Effective Evaluation

Control should involve only the minimum amount

of information
Control should monitor only managerial activities
and results
Control should be timely
Long term and short term control should be used
Control should aim at pinpointing exceptions
Rewards for meeting or exceeding standards
should be emphasized
Levels of strategic evaluation
and control
1.Strategic Control
2.Operational Control
Four Types of Strategic Controls
Premise Control

Implementation Control

Strategic Surveillance

Special alert control

 Premise Control
Premises control is necessary to identify the
key assumptions and its implementation.
Premise control serves the purpose of
continually testing the assumptions to find out
whether they are still valid or not. This
enables the strategists to take corrective
action at the right time rather than continuing
with a strategy which is based on erroneous
assumptions.
 Implementation Control

Implementation control is aimed at evaluating

whether the plans, programmes, and projects
are actually guiding the organization towards
its predetermined objectives or not.
 Strategic Surveillance

Strategic surveillance aimed at a more

generalized and overarching control
“designed to monitor a broad range of events
inside and outside the company that are likely
to threaten the course of a firm’s strategy”.
 Special Alert Control

Special alert control, which is based on a

trigger mechanism for rapid response and
immediate reassessment of strategy in the
light of sudden and unexpected events
 Operational Control

Aimed at the allocation and use of

organisational resources

Concerned with action or performance

 How do Strategic Control and
Operational Control Differ

Attribute Strategic Control Operational Control

1. Basic question Are we moving in the How are we performing?

right direction?
2. Aim Proactive, continuous Allocation and use of
questioning of the basic organisational resources
direction of strategy
3. Main Concern Steering the
Action control
organization’s future
direction
4. Focus Internal organization
External environment

5. Time Horizon Long- term

Short- term

6. Main Techniques Environmental scanning, Budgets, schedules, and

information gathering, MBO
questioning and review
Evaluation Process For
Operational Control
 Setting
Strategy/ standards Actual Measuremen
Plan/ of performanc t of
Objectives performanc e performance
e

Check
Standard
s Check Analyzing
Performanc variance
Reformulate e

Feedback
 Setting of Standards
Quantitative Criteria
 It has performed as compared to its past
achievements
 Its performance with the industry average or
that of major competitors
Qualitative Criteria

There has to be a special set of qualitative criteria for a

subjective assessment of the factors like capabilities,
core competencies, risk- bearing capacity, strategic
clarity, flexibility, and workability
Measurement of Performance
The evaluation process operates at the
performance level as action takes place.
Standards of performance act as the
benchmark against which the actual
performance is to be compared. It is
important, however, to understand how the
measurement of performance can take
place.
 Analyzing Variances
The measurement of actual performance and its
comparison with standard or budgeted
performance leads to an analysis of variances.
Broadly, the following three situations may arise:
The actual performance matches the budgeted
performance
The actual performance deviates positively over
the budget performance
The actual performance deviates negatively from
the budgeted
 Taking Corrective Actions

There are three courses for corrective

action: checking of performance, checking
of standards, and reformulating strategies,
plans, and objectives.
 Techniques of Strategic
Evaluation and Control

Evaluation Techniques for Strategic Control

Evaluation Techniques for Operational Control

Evaluation Techniques for Strategic
Control

Techniques for strategic control could be

classified into two groups on the basis of the
type of environment faced by the organisation.
The organisation that operate in a relative stable
environment may use strategic momentum
control, while those which face a relatively
turbulent environment may find strategic leap
control more appropriate.
 Evaluation Techniques for
Operational Control
Operational control is aimed at the
allocation and use of organisational
resources
The evaluation techniques are classified
into three parts:
Internal analysis
Comparative analysis
Comprehensive analysis.
 Evaluation Techniques
Under Strategic Control Under Operational Control
1. Strategic momentum 1. Internal analysis
control
a) Value chain analysis
a) Responsibility control
b) Quantitative analysis
centers
b) Underlying success c) Qualitative analysis
factors 2. Comparative analysis
c) Generic strategies a) Historical analysis
approach
b) Industry norms
2. Strategic leap control
3. Comprehensive analysis
a) Strategic issue mgt.
a) Balancing score card
b) Strategic field analysis
b) Key factor rating
c) Systems modeling
d) scenarios