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Nature of Strategic EvaluationEvaluate effectiveness of organisational strategy in

achieving organisational objectives

Perform the task of keeping organisation on track

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Importance of Strategic EvaluationThe need for feedback

Appraisal and reward

Check on the validity of strategic choice

Congruence between decisions and intended strategy

Successful culmination of the strategic management

processCreating inputs for new strategic planning

Ability to coordinate the tasks performed

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Barriers in Evaluation

Limits of Controls

Difficulties in measurementResistance to evaluation

Short-termism

Relying on efficiency versus effectiveness

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Requirements of Effective Evaluation

Control should involve only the minimum amount of

information

Control should monitor only managerial activities andresults

Control should be timely

Long term and short term control should be used

Control should aim at pinpointing exceptions

Rewards for meeting or exceeding standards should

be emphasized

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Strategic Control

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Four Types of Strategic ControlsPremise Control

Implementation Control

Strategic Surveillance

Special alert control

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Premise ControlPremises control is necessary to identify the keyassumptions and its implementation. Premisescontrol serves the purpose of continually testingthe assumptions to find out whether they are stillvalid or not. This enables the strategists to takecorrective action at the right time rather than

continuing with a strategy which is based onerroneous assumptions.

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Implementation Control

Implementation control is aimed at evaluating

whether the plans, programmes, and projects are

actually guiding the organization towards its

predetermined objectives or not.

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Strategic Surveillance

Strategic surveillance aimed at a more generalized

and overarching control designed to monitor a

broad range of events inside and outside the

company that are likely to threaten the course of afirms strategy.

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Special Alert Control

Special alert control, which is based on a triggermechanism for rapid response and immediate

reassessment of strategy in the light of sudden and

unexpected events

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Operational Control

Aimed at the allocation and use of organisational

resources

Concerned with action or performance

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How do Strategic Control and Operational

Control Differ

Attribute Strategic Control Operational Control

1. Basic question Are we moving in the rightdirection?

How are we performing?

2. Aim Proactive, continuousquestioning of the basic

direction of strategy

Allocation and use oforganisational resources

3. Main Concern Steering the organizations

future directionAction control

4. Focus External environment Internal organization

5. Time Horizon Long- term Short- term

6. Main Techniques Environmental scanning,information gathering,questioning and review

Budgets, schedules, andMBO

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Process of EvaluationSetting standards of performance

Measurement of performance

Analyzing variances

Taking corrective action

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Setting of StandardsQuantitative Criteria

It has performed as compared to its past achievements

Its performance with the industry average or that of

major competitors

Qualitative Criteria

There has to be a special set of qualitative criteria for a

subjective assessment of the factors like capabilities, corecompetencies, risk- bearing capacity, strategic clarity,flexibility, and workability

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Measurement of PerformanceThe evaluation process operates at the performance level

as action takes place. Standards of performance act as the

benchmark against which the actual performance is to be

compared. It is important, however, to understand how the

measurement of performance can take place.

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Analyzing VariancesThe measurement of actual performance and itscomparison with standard or budgeted performanceleads to an analysis of variances. Broadly, the

following three situations may arise:

The actual performance matches the budgetedperformance

The actual performance deviates positively over thebudget performance

The actual performance deviates negatively from thebudgeted

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Taking Corrective Actions

There are three courses for corrective action: checking ofperformance, checking of standards, and reformulating

strategies, plans, and objectives.

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Techniques of Strategic Evaluation and

Control

Evaluation Techniques for Strategic Control

Evaluation Techniques for Operational Control

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Evaluation Techniques for Strategic

Control

Techniques for strategic control could be classified

into two groups on the basis of the type ofenvironment faced by the organisation. The

organisation that operate in a relative stable

environment may use strategic momentum control,

while those which face a relatively turbulentenvironment may find strategic leap control more

appropriate.

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Evaluation Techniques for Operational

ControlOperational control is aimed at the allocation and useof organisational resources

The evaluation techniques are classified into threeparts:

Internal analysis

Comparative analysis

Comprehensive analysis.

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