Strategic Review & Audit03

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Ashutosh.S



Strategic Review

Each Strategy, once approved, is operative for a period of five to ten years. Upon the expiry date a Strategy will bereviewed.

The review may result in :

y the extension of the strategy in its existing or amended formy cessation of a strategy if the objectives have been meet,

circumstances change or a strategy is not having the desiredimpact.

An organization may initiate a review within the scheduledtime period if it considers that a strategy is failing to meet its

objective(s) or circumstances have changed significantly.



A reas for Strategic Review



Strategic Aud it

Strategic Aud it is a process in which the resources

and competencies need to take advantage of the

external opportunities and quell the external threat

are understood and evaluated. This is a veryimportant part of any business strategy.

Thus, to summarize, Strategic Aud it is one of the

methods for evaluating the performance of a

considered strategy.



Ch ecklist of Strategic Aud it

ManagementConstituents

Record of Performance

CurrentSituation

StrategyImplementation

& Control

InternalEnvironment

ExternalEnvironment

Evaluation of Strategy



Process of Strategic Audit

Resource AuditValue Chain Analysis

Core Competence Analysis

Performance Analysis

Portfolio AnalysisSWOT Analysis

Resource AuditValue Chain Analysis

Core Competence Analysis

Performance Analysis

Portfolio AnalysisSWOT Analysis



Strategic C ontrol ± G u i d ing & Eval u ating Strategies

³The purpose of Strategic Evaluation is to monitor andevaluate progress towards organisation¶s objectives andto guide or correct the process or change the strategic

plan to better accord with current condition and

purpose´

- Arthur Sharplin

Strategic control is concerned with tracking a strategy as it isbeing implemented, detecting problems or changes in its

underlying premises, and making necessary adjustments. Strategic control is concerned with guiding action on behalf of

the strategy as that action is taking place and when the endresult is still several years off.



Establis h ing Strategic C ontrols

The control of strategy can be characterized as a form of "steering control".

As time lapses between the initial implementation of astrategy and achievement of its intended result,investments are made and numerous projects and actions

are undertaken to implement the strategy. During that time changes are taking place in both the

environmental situation (e.g. competitors launching newproducts or change in government regulations) and thefirm's internal situation (core competencies beingachieved, learning curve effect).

Strategic controls are necessary to steer the firm throughthese events.

Strategic controls must provide the basis for adopting thefirm's strategic actions and directions in response to thesedevelopments and changes.



Typ es of Strategic C ontrol

StrategicSurveillance

Special AlertControl

Implementation Premise Control



Im p ortance of Strategic Eval u ation &C ontrol



O p erational C ontrol

Operational Control is aimed at allocation and use

of organizational units, such as divisions, SBU¶s,

etc., to assess their contribution to the

achievement of organizational objectives.Operational Control is concerned with action or

performance, and is one of the main reasons as to

why it is used so extensively in an organization.



Strategic C ontrol v/s O p erational C ontrol

Strategic C ontrol :

Proactive

External Environment

Usually concerns TopManagement

Environment Scanning,Reviews

O p erational C ontrol :

Action OrientedInternal Organization

Middle/Lower Management

Budgets, Schedules &MBO¶s



M eas u re m ent of Perfor m ance

QualitativeTechniques

QuantitativeTechniques

StakeholderMeasures

(Economic ValueAdded, MVA)

Z - ScoreModel

eturn

¡

n Investment(

¡

I)

Consistency With The

Environment

Time Horizon

Internal Consistency



Eval u ating Deviations

Comparative study between the ActualP

erformance and theP

rojectedPerformance leads to the evaluation of any form of deviation present.

ActualPerformanceDeviatesNegatively FromThe EstimatedPerformance

The ActualPerformanceMatchesEstimatedPerformance

Actual performanceDeviates PositivelyOver The EstimatedPerformance



Ch allenges in Strateg y Im p le m entation

1. Identifying short term strategies which would help in achievinglong term strategies

2. Developing functional strategies to achieve short term strategies

3. Developing and communicating concise policies which wouldhelp in achieving functional strategies through empowerment

4. Designing effective reward systems that would motivate peopleat all levels to achieve objectives

5. Reengineering business processes to improve efficiency

6. Designing an effective organizational structure to meet the longterm objectives and also being adaptive to changes needed

7. Allowing multiple structures to operate simultaneously within theorganization to accommodate products, geography, innovationand customers

8. Overcoming resistance to changes in the existing organizationalstructure

«continued



9. Balancing the demands for control/differentiation with the need for

coordination/integration

10. Making the best use of technology to create virtual organization

where possible

11. Redefining the role of corporate headquarters from control to

support and coordination

12. The leadership challenge is to galvanize commitment among

people within an organization as well as stakeholders outside the

organization to embrace change and implement strategies.

13. To get the management support for all the activities taken up by the

leadership.



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Strategic Review & Audit03

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