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STRATEGY REVIEW, EVALUATION

AND CONTROL
NATURE OF STRATEGY EVALUATION

A vital task for organization’s growth


Three basic activities:
1. Examining the underlying bases of a firm’s
strategy
2. Comparing actual results with the expected results
3. Taking corrective actions
REMULT’S CRITERIA TO EVALUATE
STRATEGY
1. Consistency: Strategy, policies and goals should be
consistent. Organizational conflicts and
interdepartmental bickering are the signs of
inconsistency
Signs of inconsistency:
a. continuation of managerial, mainly issue based,
problems,
b. Success of one department leading to failure of
other department
c. Policy problems and issues brought to the top for
resolution
REMULT’S CRITERIA TO EVALUATE
STRATEGY
2. Consonance:
It refers to the need for examining set of trends
including individual trends in evaluating strategies
Are strategies adopted in consonance with the firm’s
key internal and external factors?
Examining individual trends and their interactions
REMULT’S CRITERIA TO EVALUATE
STRATEGY
3. Feasibility:
Can strategy be attempted within the physical,
human, and financial resources of the firm?

Strategy should not overtax available resources nor


create unsolvable sub-problems
REMULT’S CRITERIA TO EVALUATE
STRATEGY
4. Advantage:
Create and maintain competitive advantage in
selected areas of activities.
Competitive advantages come from superiority in
(a) resources, (b) skills or (c) position
PROCESS OF EVALUATING
STRATEGIES
A continuous process
1. Reviewing bases of strategy
EFE Matrix and IFE Matrix provide the base.
Review and Revise the Matrices to incorporate
competitors’ strategies and reaction, their
strengths and weaknesses, internal strengths and
weaknesses, opportunities and threats etc.
PROCESS OF EVALUATING
STRATEGIES
2. Measuring Organizational Performance
Comparing actual results with the expected results,
investigating the deviations from plans, evaluating
individual performance, and examining the progress
in meeting the objectives
Long-term and short-term objectives to be
examined
PROCESS OF EVALUATING
STRATEGIES
 Evaluate the performance on both quantitative and
qualitative criteria
Compare firm’s performance over different
periods.
Compare firm’s performance with those of
competitors, and
Compare with the industry average
Use different financial ratios
PROCESS OF EVALUATING
STRATEGIES
3. Taking Corrective actions
To keep firm on track towards achieving
objectives
To lead changes in strategy formulation and
implementation
To place organization in a better competitive
position
To capitalize on strengths and opportunities
CHARACTERISTICS OF AN EFFETIVE
EVALUATION SYSTEM
1. It must be economical and simple: neither too much
nor too less information
2. It must provide timely information.
3. It should provide a true picture of what is
happening
4. It should not dominate decisions
5. It should foster mutual understanding, trust, and
common sense