Strategic Evaluation and Control

Yashodeep K. More

Definition Strategic evaluation and control could be

defined as the process of determining the effectiveness of a given strategy in achieving the organisational objectives and taking corrective action wherever required.

Purpose of Strategic Evaluation

The purpose of strategic evaluation is to evaluate the effectiveness of strategy in achieving organizational objectives.

Participants in Strategic Evaluation Shareholders Board of Directors Chief executives Profit-centre heads Financial controllers Company secretaries External and Internal Auditors Audit and Executive Committees Corporate Planning Staff or Department Middle-level managers

Strategic Evaluation and Control Strategic evaluation operates at two

levels: • Strategic level - wherein we are concerned

more with the consistency of strategy with the environment.

• Operational level – wherein the effort is directed at assessing how well the organisation is pursuing a given strategy.

Process of Strategic Evaluation and Control

Barriers in Evaluation Limits of control Difficulties in measurement Resistance to evaluation Rely on short-term implications of

activities

Performance Measurement Performance Measurement & &

Monitoring Monitoring

Purpose of Performance Measurement

Provide evidence of how well the approved procedures are meeting the requirements.

Obtaining the best value for money spent Enabling fair competition Encouraging competitive and efficient

markets. Improve decision making and facilitate

continuous improvement

Appropriate Measure Measuring in organizational performance is

one of the important part of Strategic Evaluation.

It Consist two Criteria:1. Quantitative Factor2. Qualitative Factors

Quantitative Factors Return on investment Return in Equity Profit Margin Market Share Debt-to-Equity Earning per Share

Qualitative Factors

Consistency Consonance Advantage Feasibility

Problems in Measuring & Monitoring PerformanceShort-Term Orientation

Goal Displacement• Behavior Substitution• Sub-Optimization.

Summary

Strategic Evaluation and Control

Performance Measurement & Monitoring

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