SM

STRATEGIC EVALUATION AND CONTROL:

By: Jyoti (048) Shankar (049) STRATEGIC EVALUATION AND CONTROL

INTRODUCTION:

INTRODUCTION Strategic evaluation and control: Final phase of strategic management. Operates at 2 levels: * strategic (consistency) * operational (pursuing strategy )

Definition:

Definition Strategic evaluation and control could be defined as the process of determining the effectiveness of a given strategy in achieving the organizational objectives and taking corrective action wherever required.

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EVALUATION FRAMEWORK I. Review Underlying Bases Continue present course II. Measure Firm Performance III. Take Corrective Actions Differences? Differences? Yes NO Yes NO

NATURE of Strategic Evaluation and Control:

NATURE of Strategic Evaluation and Control Purpose: - test effectiveness of strategy; -take corrective action; -keep it continually effective. Keeps the organization on the right track 3 Basic Activities : Examine the underlying bases of a firm’s strategy Compare expected to actual results Identify corrective actions to ensure that performance conforms to plans

Importance of Strategic Evaluation and Control:

Importance of Strategic Evaluation and Control Ability to coordinate tasks performed by individual managers- and also by groups, division or SBUs- through control of performance. Need for Feedback , Appraisal and Reward . Check on Validity of Strategic Choice . Congruence between Decisions and Intended Strategy . Successful Culmination of the Strategic Management Process . Creating inputs for New Strategic Planning.

Difficulties in Strategy Evaluation:

Difficulties in Strategy Evaluation Increase in environment’s complexity Difficulty predicting future with accuracy Increasing number of variables Rate of obsolescence of plans Domestic and global events Decreasing time span for planning certainty .

Strategic Control:

Strategic Control Control is taking measures that synchronize outcomes as closely as possible with plans Traditionally, has been almost completely based on financial performance Hence, top internal accounting officer became the “In Charge” official for organization control policies and procedures

The control cycle:

The control cycle PLANNING IMPLEMENTING ADJUSTING MEASURING CONTROL CYCLE

TYPES of Strategic Control:

TYPES of Strategic Control Premise control Implementation control Strategic surveillance Special alert control

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Premise control : Identify key assumptions Keep track of any change Assess impact on strategy and implementation Eg. Govt. policies, breakthrough in R&D, changing nature of competition. Premise control Implementation control Strategic surveillance Special alert control

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Implementation control: Evaluating plans, programmes and projects guide org. towards objectives Revision of plans and projects Strategic rethinking 2 methods: Indentification and monitoring of strategic thrusts. Milestones reviews. Premise control Implementation control Strategic surveillance Special alert control

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Strategic surveillance: More generalised and overarching control. Monitor events inside and outside the company. Must be kept as unfocused as possible. Despite its looseness, it provides an ongoing, broad-based vigilance in all daily operations. Implementation control Strategic surveillance Special alert control

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Special alert control : For rapid response & immediate reassessment of strategy in light of sudden and unexpected events. Methods: - Contingency strategy. -Crisis management team. Eg. Fall of govt., industrial disaster, natural catastrophe. Implementation control Strategic surveillance Special alert control

Operational control:

Operational control Operational control is concerned with action and performance . It is extensively used in organisations.

Process of evaluation:

Process of evaluation Strategy/ Plan/ Objectives Setting standards of performance Actual performance Management of performance Analysing variance Reformulate Check Std Ch-eck Performance Feedback