STRATEGIC EVALUATION AND CONTROL

Nature of strategic evaluation

The purpose of strategic evaluation is to evaluate the effectiveness of strategy in achieving organizational objectives. The strategic evaluation &control can be designed as the process of determining the effectiveness of a given strategy in achieving the organizational objectives and taking corrective action whenever required.

Importance of strategic evaluation

The ability to coordinate the tasks performed by individual managers and also groups division or SBUs through control of performance . In the absence of coordination and controlling techniques the strategic evaluation is - need for feed back, appraisal and reward Check on the validity of strategic choice. congruence between Decisions & Intended Strategies. Successful culmination of the strategic Management Process. Creating Inputs for New strategic planning

PARTICIPANTS IN STRATEGIC EVALUATION

The main participants in strategic evaluation are

BODs CEOs SBU/profit center Heads. Financial controllers, Internal, External Auditors. Corporate Planning Staff. Middle level Managers.

Barriers in Evaluation There are five major types of barriers in Evaluation. They are:

Limits of controls. Difficulties in Measurement. Resistance to Evaluation. Short-termism. Relying on Efficiency Vs Effectiveness.

STRATEGIC CONTROL
It is a continuous evaluation system used in business processes. There may be some gap between the time a strategy is formulated and when it is implemented. The process of implementation is a time-consuming process. Strategic controls take into account the changing assumptions that determine a strategy, continuously evaluating the strategy as it is being implemented and take the necessary steps to adjust the strategy to the new requirements. Types of Strategic control
Premises control Implementatio n control

Strategic control

Strategic surveillance

Special Alert control

TYPES OF STRATEGIC
Premise control

CONTROL

It is necessary to identify the key assumptions and keep track of any change in them so as to assess their impact on strategy and its implementation . Eg:- Environmental factors, Organizational factors. Implementation control The implementation of a strategy results in a series of plans, programmes and projects. Implementation control is aimed at evaluating whether the plans, programmes and projects are actually guiding the Organization towards its pre-determined objectives or not. Implementation control leads to strategic rethinking. Strategic surveillance It is aimed at a more generalized and overaching control. It is designed to monitor a broad range of events inside and outside the company that are likely to threaten the course of a firms strategy. Special Alert control:- This is based on a trigger mechanism for rapid response and immediate reassessment of strategy in the sudden & unexpected events. Eg:- Crisis and critical situations.

OPERATIONAL CONTROL
Operational control is concerned with action or performance of an organization. Operational control aims at allocation and use of Organizational resources through evaluation of the performance of organizational units such as divisions, SBOS etc to assess their contribution to the achievement of organizational objectives Process of evaluation :The process of evaluation is applied for exercising operational control. It involves for steps.

OPERATIONAL CONTROL SETTING STANDARDS OF PERFORMANCE

MEASUREMENT OF PERFORMANCE

ANALYSING VARIANCE
TAKING CORRECTIVE ACTIONS

The strategies, plans and objectives result in a set of performance standards which form the basis for evaluation through measurement of performance.

DIAGRAM

STRATEGY PLAN OBJECTIVE S

SETTING STANDARDS OF PERFROMA NCE

ACTUAL PERFORMA NCE

MANAGEME NT OF PERFORMA NCE

R E F O R M U L A T E

C H E C K S T A N D A R D S

C H E C K P E R F O M A N C E

ANALYSING VARIANCE

FEEDBACK

Setting standards of performance

It involves the 3 questions like

1.What standards should be set? 2.How should these standards be set? 3.In what terms should these standards be expressed? Actual Performance Management of Performance Analyzing Variance

Techniques of Strategic Evaluation & Control

Evaluation Techniques for Strategic control
I . Strategic Momentum control

Responsibility control centers The Underlying success factors Generic Strategies

II . Strategic Leap control

Strategic Issue Management Strategic field Analysis Systems Modeling Scenarios

Evaluation Techniques for Operational Control

Internal Analysis. VRIO framework Value chain Analysis Quantitative Analysis Qualitative Analysis Comparative Analysis Historical Anal Industry Norms Bench Marking Comprehensive Analysis Key factor Rating Business Intelligence system The Balanced Score-card Special Purpose Techniques Network Techniques Management by Objectives(MBO) Memorandum of Understanding(MOU) Auditing Techniques Corporate Social Audit Environmental Audit

Role of Organisational Systems in Evaluation

The process of strategic evaluation and control does not operate in isolation; it works on the basis of different Organizational Systems that are used to implement strategies. This evaluation can be done in the form of information, control and Reward Systems. Role of Information System The use of Computerized information systems in Organizations are helpful in Performance Monitoring and reporting. In the control process, the evaluation is done by comparing actual performance with standard performance. The measurement of performance can be done on the basis of reports generated through the information system. The purpose of the information management system is to enable managers to keep track of performance through control reports. With the increasing sophistication of the information management systems and the use of I.T. , the evaluation is done. By using computerized information systems, it is benefit for the managers in availing of real-time information. SEM ;- Strategic Enterprise Management SAP:ERP:- Enterprise Resource Planning.

Role of Control System The control system is the heart of any evaluation process for Setting Standards, measuring performance, analyzing variances and taking corrective action. The central role of the control system in important. The role of the development system in evalution, is helpful for strategists to initiate and implement corrective action. Employee Performance Management Systems used through applications of I.T., play a helpful role in the development of a system for exercising control in organizations. Role of Reward System Organizations design and operate their reward systems on the basis of the Appraisal of performance of individuals. When the performance of managers is appraised, their contribution to Original Objectives increases. Hence Reward Systems contribute Organization success and effectiveness