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SBA Assignment

Strategy evaluation is the process of determining the effectiveness of a strategy in achieving organizational objectives and taking corrective actions. It involves comparing actual results to expected results, examining the underlying strategy, and ensuring the strategy and its implementation meet objectives. Effective strategy evaluation is important as it assesses whether decisions match intended strategy, helps ensure successful strategy management through control and feedback, and provides experience for future strategic planning. Barriers can include limits of control, difficulties in measurement, and short-term thinking. Strategy evaluation requires monitoring only key information and actions, timely controls, and emphasis on meeting standards to motivate managers.

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38 views7 pages

SBA Assignment

Strategy evaluation is the process of determining the effectiveness of a strategy in achieving organizational objectives and taking corrective actions. It involves comparing actual results to expected results, examining the underlying strategy, and ensuring the strategy and its implementation meet objectives. Effective strategy evaluation is important as it assesses whether decisions match intended strategy, helps ensure successful strategy management through control and feedback, and provides experience for future strategic planning. Barriers can include limits of control, difficulties in measurement, and short-term thinking. Strategy evaluation requires monitoring only key information and actions, timely controls, and emphasis on meeting standards to motivate managers.

Uploaded by

Sana Asif
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Strategy Evaluation:

 Finding out what is going on is what evaluation is all about. Strategy Evaluation means
collecting information about how well the strategic plan is progressing.

 Strategic Evaluation is defined as the process of determining the effectiveness of a


given strategy in achieving the organizational objectives and taking corrective action
wherever required.

 Strategic Evaluation is the final step of strategy management process. The key
strategy evaluation activities are:
 Examining the underlying bases of a firm’s strategy
 Comparing actual results with expected results, and taking remedial/corrective
actions. Evaluation makes sure that the organizational strategy as well as it’s
implementation meets the organizational objectives.

Nature of Strategic Evaluation

 Nature of the strategic evaluation and control process is to test the effectiveness of
strategy.

 During the strategic management process, the strategists formulate the strategy to
achieve a set of objectives and then implement the strategy.

 There has to be a way of finding out whether the strategy being implemented will guide
the organisation towards its intended objectives. Strategic evaluation and control,
therefore, performs the crucial task of keeping the organisation on the right track.

 In the absence of such a mechanism, there would be no means for strategists to find out
whether or not the strategy is producing the desired effect.

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 strategists that can be useful in new strategic planning.
Participants in Strategic Evaluation:

 Shareholders
 Board of Directors
 Chief executives
 Financial controllers
 Company secretaries
 External and Internal Auditors
 Audit and Executive Committees
 Corporate Planning Staff or Department
 Middle-level managers

Process of Strategic Evaluation:

 Fixing benchmark of performance


 Measurement of performance
 Analyzing Variance
 Taking Corrective Action

Barriers Or limitation of Strategic Evaluation:

can be defined as the process of determining the effectiveness of a given strategy in achieving
the organizational objectives and taking corrective action wherever required. Actually, it is a
system of monitoring, supervision, and follow-up. The fundamental strategy evaluation and
control activities are: reviewing internal and external factors that are the bases for
current strategies, measuring performance, and taking corrective actions.

There are some reasons or barriers for which strategic evaluation and control (SEC) system
fails. These are as follows:

 Limits of control: It is never an easy task for ‘strategists to decide the limits of control.
Too much control may damage the ability of managers; on the other hand, too less
control may make the strategic evaluation process ineffective.

 Difficulties in measurement: The process of strategic evaluation is fraught with the


danger of difficulties in measurement. The control system may measure element which
is not intended to be evaluated.

 Resistance: The evaluation process involves controlling the behavior of individuals. It is


likely to be resisted by managers.
 Short-termism: Managers often tend to measure the immediate results. As a result, the
extended effect of strategy on performance is ignored.

 Relying on efficiency Vs effectiveness: Efficiency is “doing things right” and


effectiveness is “doing the right thing”. There is often a genuine confusion among
managers as to what constitutes effective performance.

Difficulties in Evaluation:

Startegic Evaluation is become increasingly difficult due to the following reasons:

 A dramatic increase in the environment’s complexity


 The increasing difficulty of predicting future with accuracy
 The increasing num of variables
 The rapid rate of obsolescence of even the best plans
 The increase in the number of both domestic & world events affecting the organizations
 The decreasing time span for which planning can be done with any degree of certainty.

Requirements for affective evaluation:

 Control should involve only minimum amount of information as too much information creates
confusion.
 Control should monitor only managerial activities and results
 Controls should be timely so that corrective actions can be taken quickly
 Rewards of meeting or exceeding standards should be emphasized so that managers are
motivated to perform.

Criteria for evaluation of strategy:


Techniques of Evaluation of startegies:
Continue….
CONCLUSIONS . . .

As process, strategy evaluation is the outcome of activities and events which are strongly shaped by the
firm’s control and reward systems. Its information and planning systems, its structure, and its history
and particular culture. Thus, its performance is, in practice, tied more directly to the quality of the firm’s
strategic management than to any particular analytical scheme.

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