STRATEGY EVALUATION AND
CONTROL
STRATEGY EVALUATION AND CONTROL
• Strategic Evaluation– is defined as the process
determining the effectiveness of a given strategy
in achieving the organizational objectives and
taking corrective action wherever required.
• It is the final step of strategy management
process.
• Evaluation makes sure that the organizational
strategy as well as its implementation meets the
organizational objectives.
Purpose of Strategic Evaluation
• To test the effectiveness of strategy.
• Strategic Evaluation and Control performs the
crucial task of keeping the organization on the
right track.
PURPOSE OF STRATEGIC CONTROL
Through the process of strategic evaluation and control, the strategies
attempt to answer the following questions:
• 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?
• Have there been increases in profitability?
• Have sales increased?
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 strategies that can be useful in
new strategic planning
• There is a need for feedback, appraisal and reward
• To check on the validity of strategic choice
• Congruence between decisions and intended strategy
• Creating inputs for new strategic planning
STRATEGY EVALUATION PROCESS
1. Setting standards of performance
2. Measurement of performance
3. Analyzing variances
4. Taking corrective actions
QUALITIES OF A GOOD EVALUATION AND
CONTROL SYSTEM
• Every decent evaluation and control system
must possess certain basic elements. Since
they all play a major role, the absence of any
one of them can make the whole system
weak.
• Hence, managers must ensure that their
evaluation and control systems contain the
following basic elements.
QUALITIES OF A GOOD EVALUATION AND
CONTROL SYSTEM
1. Feedback: Feedback is the backbone of all
control systems. This feedback is nothing but
the information that managers use to correct
their actual performance.
2. Objectivity: The second essential
requirement of a good control system is that
it must always be objective. A subjective
criterion should never be the basis of
evaluating actual performances.
QUALITIES OF A GOOD EVALUATION AND
CONTROL SYSTEM
3. Timely reporting of deviations: If some work
is not going according to plans, relevant
managers must take notice of this
immediately. Delays in reporting problems
and taking corrective measures can lead to
financial losses for a business.
4. Forward-looking: This will help in predicting
deviations in advance as well as giving
adequate time for course correction.
QUALITIES OF A GOOD EVALUATION AND
CONTROL SYSTEM
5. Flexibility: A rigid control system can often make
it ineffective in extraordinary and unpredictable
situations. Be flexible and open to changes.
Managers must be able to adapt their control
measures as per the requirements of every
possible scenario.
6. Hierarchical suitability: Every manager must have
adequate powers for this purpose and the flow of
information for evaluation should be effective.
QUALITIES OF A GOOD EVALUATION AND
CONTROL SYSTEM
7. Economical: Every good controlling system has to be
economical when it comes to its implementation and
maintenance. In other words, its benefits should
outweigh its costs. An organization must be able to
afford it and also derive all possible advantages from it.
8. Strategic control points: Not all deviations require the
same level of attention and importance. For example, if
an infrastructure company loses one government
tender for constructing roads, it can work on other
projects.
QUALITIES OF A GOOD EVALUATION AND
CONTROL SYSTEM
9. Simplicity: Sophisticated policies can often make
elements of control systems difficult to understand
and implement. A good system, however, is always
simple to comprehend and work on.
10.Focus on workers: Good control systems always
focus on workers instead of the work itself. Since it
is workers who implement these systems,
everybody should be able to work with them
effectively.
