Strategic Evaluation and Control- Asif

8/3/2019 Strategic Evaluation and Control- Asif

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Strategic Evaluation & Control


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Nature of Strategic Evaluation


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Participant in strategic evaluation


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Requirementof Effective

evaluation

Control should involve

only the minimum

amount of information.

Control should monitor

only managerial

activities and results.

Control should betimely..

Long term and shortterm control should be

used.

Control should aim atpinpointing exceptions.

Rewards for meeting

or exceeding standards

should be emphasized.


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Strategic Control


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Four Types of Strategic Controls

Premise Control

Implementation Control

Strategic Surveillance

Special alert control


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Premise Control

Necessary to identify the key assumptions andits implementation.

Serves the purpose of continually testing theassumptions to find out whether they are stillvalid or not.

Which enables the strategists to take correctiveaction at the right time rather than continuingwith a strategy which is based on erroneousassumptions.


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Implementation Control

Implementation control is aimed at evaluatingwhether the plans, programs, and projects are

actually guiding the organization towards its

predetermined objectives or not.


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Strategic Surveillance

Strategic surveillance aimed at a moregeneralized and overarching control designed

to monitor a broad range of events inside and

outside the company that are likely to threaten

the course of a firms strategy.


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Special Alert Control

Special alert control, which is based on a trigger

mechanism for rapid response and immediatereassessment of strategy in the light of sudden

and unexpected events


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Operational Control


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Operational Control

Aimed at the allocation and use of organizational

resources

Concerned with action or performance


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How do Strategic Control and

Operational Control Differ ?

2. Aim2. Aim Proactive, continuousProactive, continuous

questioning of the basicquestioning of the basicdirection of strategydirection of strategy

Allocation and use ofAllocation and use of

organizational resourcesorganizational resources

Attribute Strategic Control Operational Control

1. Basic question1. Basic question Are we moving in the rightAre we moving in the right

direction?direction?

How are we performing?How are we performing?

3. Main Concern3. Main Concern Steering the organizationsSteering the organizations

futurefuture

directiondirection

Action controlAction control

4. Focus4. Focus External environmentExternal environment Internal organizationInternal organization

5. Time Horizon5. Time Horizon Long Long-- termterm ShortShort-- termterm

6. Main Techniques6. Main Techniques Environmental scanning,Environmental scanning,

information gathering,information gathering,

questioning and reviewquestioning and review

Budgets, schedules, andBudgets, schedules, and

MBOMBO


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Process of Evaluation

Setting standards of performance

Measurement of performance

Analyzing variances

Taking corrective action


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Setting of Standards

Quantitative

Criteria

It has performed as compared to its pastachievement.

Its performance with the industry average or

that of major competitors

Qualitative Criteria

Criteria for capabilities, core competencies,

risk bearing capacity, strategic clarity, flexibility,and workability


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Measurement ofPerformance

The evaluation process operates at theperformance level as action takes place.

Standards of performance act as the benchmarkagainst which the actual performance is to becompared. It is important, however, tounderstand how the measurement ofperformance can take place.


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Analyzing Variances

The measurement of actual performance and itscomparison with standard or budgetedperformance leads to an analysis of variances.

There may arise three situations: The actual performance matches the budgetedperformance

The actual performance deviates positively overthe budget performance

The actual performance deviates negativelyfrom the budgeted


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Taking Corrective Actions

There are three courses for corrective action:

Checking of performance, Checking of standards, and

Reformulating strategies, plans, and objectives.


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Techniques of Strategic Evaluation and

Operational Control


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Evaluation Techniques for Strategic Control

Techniques for strategic control could be classifiedinto two groups:-

Strategic momentum control :-Used by the organization that operate in arelative stable environment.

Strategic leap control:-

Used by organizations those which face arelatively turbulent environment.


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Evaluation Techniques forOperational

ControlOperational control is aimed at the allocation

and use of organizational Resources.

The evaluation techniques are classified intothree parts:

Internal analysis

Comparative analysis Comprehensive analysis.


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Role ofOrganizational Systems In

Evaluation

Role of Information System

Helps managers to keep the track ofperformance through control reports.

Role ofControl SystemUsed for setting standards, measuring

performance, analyzing variances , & takingcorrective action.

Role of Appraisal SystemHelps to measure the actual performance

and provides for the control system to work.


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Strategic Evaluation and Control- Asif

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