201 - Strategic Management [Unit 5: Evaluation and Control] [BBA II, Rajasthan University]

STRATEGIC MANAGEMENT
UNIT 5: SYLLABUS
Strategic Evaluation and Control
Meaning
Techniques
(as per University of Rajasthan)
Criteria

MEANING
01
SETTING
MISSION AND

OBJECTIVES
02
03
05
CHOOSING THE
APPROPRIATE

STRATEGY
04
06
07
ENVIRONMENTAL

ANALYSIS
ORGANIZATIONAL
ASSESSMENT
FORMULATION OF
STRATEGIC

ALTERNATIVES
IMPLEMENTATION OF
STRATEGY
EVALUATION
AND
CONTROL
- Strategic Evaluation is the last phase in the process

of Strategic Management.
- It focuses on efficiency and effectiveness of

strategies in achieving the desired results.
1/13
OF STRATEGIC EVALUATION
STRATEGIC MANAGEMENT - UNIT 5: EVALUATION AND CONTROL

COORDINATION
Helps in coordinating the task performed by

different department.
APPRAISAL
DECISION MAKING
Helps in evaluating decisions taken by

Management to Implement Strategy and

whether goals and objectives are achieved
CONTROL
Upon evaluating current strategy, Management

can decide whether the current strategy is

contributing towards goals and objectives or not.

If not then new strategies are being formulated
Good performance should be rewarded.

This is essential for motivating the

employees. Strategic evaluation and

control help a lot here.
1/2
IMPORTANCE/SIGNIFICANCE
2/13
EFFECTIVENESS
Determines the effectiveness of the

strategies.

PROVIDES DIRECTION
Provides direction to employees to evaluate

Strategy on whether it is helping

organization to achieve its Goals and

Objectives or not.
CONFIDENCE ANALYSIS
With Strategic Evaluation, management

gathers data and analyze on how Strategy is

being implemented and how much it is

contributing towards organization's Goals

and Objectives.
VALIDITY CHECK
Helps management to check where the strategies

they made in past are still valid and contribution

to Goals and Objectives or not.
If not, then new Strategies will be formulated or

modify existing strategies to align them with

Goals and Objectives
Management gains confidence when their

Strategy is being implemented and

contributing towards achieving

organizational Goals and Objectives.
3/13
2/2
IMPORTANCE/SIGNIFICANCE

TO RECEIVE FEEDBACK
Strategic Evaluation gathers feedback

within an organization, there is a need to

receive feedback on current performance,

so that appraisal can be done
OBJECTIVES
4/13
TO APPRAISE/REWARD
Good performance should be rewarded.
This is essential for motivating the

employees.
CHECKS STRATEGY VALIDITY
Strategic evaluation and control help to

keep a check on the validity of a strategic

choice. It helps to identify the faults and

errors in a strategy.
ALIGNS STRATEGY
Strategic Evaluation And Control helps to

assess whether the decisions are aligned

with intended Strategy Requirements.
1/2

TO OVERCOME RESISTANCE
Strategic Evaluation and control help

identify the barriers of a given strategy and

take corrective actions wherever required.
5/13
CONCLUDES STRATEGIC MGT.
Strategic Evaluation, through its process of

control, feedback, rewards, and review
help in a successful conclusion of the

strategic management process.
CREATE NEW INPUTS
Strategic Evaluation and Control process

provides a considerable amount of

information and experience to strategists

that can be useful in new strategic planning.
2/2
OBJECTIVES

STRATEGIC CONTROL
01
Strategic Evaluation checks
- the accuracy of formulated strategy
- and align it with Mission and Objectives.
It is short term in nature.
It focuses on External Environment of organization.
6/13
1/6
IN STRATEGIC EVALUATION AND CONTROL

1/2
CHECKS ACCURACY
Checking the accuracy of formulated

strategy and to align it with operation of

organisations
EFFECTIVENESS
GOAL ORIENTED
Helps to achieve Goals and Objectives of

organization easily by monitoring the strategies

and taking corrective actions.
Follows the Effectiveness rule i.e
"Doing the Right Things" and taking

corrective measure to implement

effectiveness
IMPORTANCE
7/13
2/6
OF STRATEGIC CONTROL

HELPS MITIGATING RISK
Helps to mitigate or avoid risk associated

with implementation of strategy failure.
DEVIATION CORRECTION
Evaluation helps in controlling the Strategy when

it is deviated and not fulfilling the criteria of

organization Mission and Objectives
MEASURE PERFORMANCE
Measure the actual performance with

standards set by organization as well as

benchmarking (comparing figures with

competitor)
8/13
3/6
2/2
IMPORTANCE

01
ESTABLISHING

PERFORMANCE

STANDARDS
02 03
05
REVISE STRATEGY
AND IMPLEMENTATION

PROCESS
04
MEASURING

ACTUAL

PERFORMANCE
IDENTIFYING DEVIATION

FROM EXPECTED

STANDARDS
ANALYSE DEVIATIONS

FROM STANDARDS
9/13
4/6
1/3
PROCESS

Management set performance targets, standards and tolerance limits.
(1) ESTABLISHING PERFORMANCE STANDARDS
10/13
Management measures actual performance with standards set in previous step.
(2) MEASURING ACTUAL PERFORMANCE
Management identifies the deviations from the standards set initially.
(3) IDENTIFYING DEVIATION FROM EXPECTED STANDARDS
5/6
2/3
PROCESS

11/13
After identifying the deviations, Management will analyze deviations from

standards set by Management initially
(4) ANALYZE DEVIATIONS FROM STANDARDS
After analyzing the deviations, Management will revise the Strategies and

implement the revised strategy.
Sometimes management can add new strategies or remove existing ones in

order to achieve standard set by Management.
(5) REVISE STRATEGY
AND IMPLEMENTATION PROCESS
6/6
3/3
PROCESS

GOAL ORIENTED
PROVIDES INFORMATION
Every manager in the organization must have adequate

information about his performance, standards and how

manager is contributing to the achievement of

organizational objectives.
GOAL ORIENTED
GIVE MOTIVATION
GOAL ORIENTED
EMPLOYEE PERFORMANCE EVALUATION
- It involves systematic evaluation of the individual

with regard to his performance on the job and his

potential for development.
- While evaluating an individual, not only his
performance is taken into consideration but also

his abilities and potential for better performance.
PLANNING AND CONTROLLING
- It emphasizes that there is a plan which directs

the behavior and activities in the organization.
- Control measures these behavior and activities

and suggests measures to remove deviation.
- The basic objective of evaluation and control is to

ensure that organizational objectives are achieved.
- Motivation plays a central role in this process.
- It energizes managers and other employees in the

organization to perform better which is the key for

organizational success.
12/13
1/2
ROLE OF ORGANIZATION SYSTEM
IN EVALUATION

GOAL ORIENTED
DEVELOPMENT OF PERSONNEL
- It is concerned with developing personnel to perform better in their present positions and
likely future positions that they are expected to occupy.
- Thus, development system aims at increasing organizational capability through people to
achieve better results.
- These results become the basic for evaluation and control. Role of organizational systems
in strategic evaluation should not be undermined.
13/13
2/2
ROLE OF ORGANIZATION SYSTEM
IN EVALUATION

It is necessary for strategists to know about the techniques of

strategic evaluation and control in order to make a choice

from available alternatives and to use
them.
Techniques include evaluating internal and external forces

that influence strategy execution, measuring company

performance and determining appropriate corrective

measures.
TECHNIQUES
1/5
OF STRATEGIC EVALUATION AND CONTROL

STRENGTHS
What are you doing well? What
sets you apart? What are your
good qualities?
OPPORTUNITIES
What are your goals? Are
demands shifting? How can it
be improved?
THREATS
What are the blockers you're
facing? What are factors
outside of your control?
WEAKNESSES
Where do you need to
improve? Are resources
adequate? What do others do
better than you?
(1) SWOT ANALYSIS
2/5
IN TECHNIQUES

(2) GAP ANALYSIS
This technique identifies the gap between
Actual Performance and Expected Performance
As per Strategy made by Management.
Gap Analysis is used to evaluate variety of aspects of

business from profit to production to marketing.
A variety of financial data is analyzed and compared with

competitors to evaluate gap between orgnization and
competitors
3/5
IN TECHNIQUES

This technique identifies political, economic, social

and technological factors that may impact the

organization's ability to achieve its objectives.
(3) P.E.S.T ANALYSIS
Political | Economic | Social | Technological
GOAL ORIENTED
POLITICAL
- Government Policies
- Political In-stability
- Corruption
- Tax Policies
GOAL ORIENTED
ECONOMIC
- Economic Growth
- Exchange Rates
- Inflation
- Interest rates
- Unemployement Rates
GOAL ORIENTED
SOCIAL
- Population Growth Rate
- Age Distribution
- Income Level
- Career, Health, Lifestyle
- Cultural Barriers
GOAL ORIENTED
TECHNOLOGICAL
- Innovations
- Obsolence
- Automation
- Technological change
4/5
IN TECHNIQUES

- Benchmarking is a technique which is used to evaluate how

close the orgnization has come to achieving its objectives.
- Organizations benchmark themselves against their

competitors or self benchmarking, depending on situation.
- Based on benchmark results, Management identifies and

made adjustments in Strategy to sustain in competitive market.
(4) BENCHMARKING
5/5
IN TECHNIQUES

STRATEGIC CONTROL
Strategic control is a method to manage and execute a

strategic plan.
Knowing the different types of strategic control can allow

management to better analyze a business’ capability to

maximize its strength and open up opportunities in an

industry.
Each type of strategic control offers a different perspective

and way of analysis to boost the effectiveness of a business

strategy
01
1/5

A strategy is based on an assumption of how certain events

will take place in the future.
Premise control allows us to examine whether or not that

assumption holds true after the strategy has been

implemented and adapt to changes accordingly.
Environmental factors like inflation, interest rates, or

industry factors like competition or supply affect this type of

strategic control.
(1) PREMISE CONTROL
2/5
IN STRATEGIC CONTROL

It focuses on implementation of strategy.
It assesses implementation activities, events, and results step-by-step

and ensures that no changes are needed.
There are two types of implementation control:
- Monitoring Strategic Thrusts
To analyze and assess thrusts or projects that are meant to drive the

larger strategy and gain market share
- Milestone reviews
To assess a business at designated points or different milestones in a

strategy
(2) IMPLEMENTATION CONTROL
3/5

Special alert control allows assessing a business in

particular circumstances such as natural disasters or a

market crash.
This type of strategic control helps us analyze a strategy

under new circumstances and handle them with

appropriate tools, procedures and priorities.
(3) SPECIAL ALERT CONTROL
4/5

Strategic surveillance control identifies overlooked factors,

inside and outside an organization, that can affect its strategy.
Smaller businesses mainly use it as a broader information scan

for awareness of an industry and its trends.
The implementation period is riddled with evolution and

changes.
Managers must know the different types of strategic control to

prevent strategies from going awry and yielding undesired

outcomes.
(4) STRATEGIC SURVEILLANCE CONTROL
5/5

OPERATIONAL CONTROL
- Operational control aim to bring synchronisation
- between the daily activities of organisation and the strategic

goals and objectives.
- It is long term in nature.
- It focuses on Internal Environment of organization.
-Evaluation techniques for operational control are based on

organisational appraisal rather than environmental

monitoring,.
01
1/5

(1) INTERNAL ANALYSIS
- An internal analysis is the thorough examination of a

company's internal components, both tangible and

intangible, such as resources, assets and processes.
- An internal analysis helps the company decision-

makers accurately identify areas for growth or revision

to form a practical business strategy or business plan
2/5
IN OPERATIONAL CONTROL

- Firms employ value chain analysis to identify and

evaluate the competitive potential of resources and

capabilities
- By studying their skills relative to those associated

with primary and support activities, firms are able to

understand their cost structure and identify their

activities through which they can create value.
(2) VALUE CHAIN ANALYSIS
3/5
Cost reduction: By making each activity in the value chain more

efficient and, therefore, less expensive
Product differentiation: By investing more time and resources into

activities like research and development, design, or marketing
Example:

- Firms prepare formal reports of quantitative

performance measurements (such as sales growth,

profit growth, etc.) that managers review at regular

intervals.
- These measurements are generally linked to the

standards set in the first step of the control process
(3) QUANTITATIVE PERFORMANCE MEASUREMENTS
4/5
Sales Growth: The firm should have a means of gathering and

exporting sales data.
If the firm has identified appropriate measurements, regular review

of these reports which helps managers stay aware of whether the

firm is doing what it should do.
Example:

- It is based on a close examination of key factors

affecting performance (financial, marketing, operations,

and human resource capabilities) and assessing overall

organizational capability based on the collected

information.
- Balanced Scorecard (BSC) was developed in response to

this need. BSC introduced the idea of measuring the

drivers of performance, while retaining the measures of

financial performance
(4) KEY FACTOR RATING
5/5

DIFFERENCE STRATEGIC CONTROL OPERATIONAL CONTROL
MEANING
Strategic Control checks the

accuracy of formulated strategy

and align it with Goals and

Objectives
Operations control aim to bring

synchronisation between the daily

activities of
organisation and the strategic goals

and objectives.
FOCUS
External Environment of

Organization
Internal Environment of Organization
TERM Long Term Short Term
MANAGEMENT
Top Level Management usually

makes strategy with assistance

of Middle Level Management
Middle Level Management implements

the strategy trough Lower Level

Management
STRATEGIC CONTROL VS OPERATIONAL CONTROL
1/1

Organizational performance evaluation is generally based

on certain standards.
These standards can be of previous year or based on

competitor's performance or newly set by management.
A good business strategy defines and prioritizes the

actions required to achieve longterm goals.
CRITERIA
1/7
OF EVALUATION

Many business owners struggle with business strategy

evaluations, as many evaluation methods are confusing and

difficult.
Richard Rumelt attempts to simply the process using four criteria

to assess whether a strategy is efficient, effective and aligned with

a business’s Mission and Goals.
It is known as Rumelt Evaluation Method which is named after its

creator.
2/7
RUMELT'S EVALUATION METHOD
IN CRITERIA

01
CONSISTENCY
02 03
04
ACCESSING

STRATEGY'S

ADAPTABILITY
ANALYSIS OF

COMPETITIVE

ADVANTAGE
EVALUATE BUSINESS

STRATEGY FOR

FEASIBILITY
3/7
STEPS OF RUMELT'S EVALUATION METHOD
IN CRITERIA

First criteria is to review short-term goals, objectives and policies to make sure

each one supports your long-term business strategy.

- Red flags that point to inconsistencies between short-term goals and long-

term strategy plans include interdepartmental conflicts and competition,

miscommunications or lack of communication and authority challenges.
(1) CONSISTENCY
4/7
IN CRITERIA

Second criteria is to determine how well strategy matches and adapts to its

environment
- First, determine whether strategy is helping the company to realize the
Social and Economic Ideals outlined with Business Mission.
- Second, analyze how well Strategy acknowledges, manages and deals with

changing economic and legislative trends.
- A well-developed strategy ecourages anticipation and proactiveness
rather than reacting later when problems occur.
(2) ASSESSING STRATEGY'S ADAPTABILITY
5/7
IN CRITERIA

Third criteria is to analyze how well strategy matches and adapts to its

environment

- It allows to develop, promote and sustain company's competitive

advantage like whether strategy encourages innovation and creativity or

whether it demands process-oriented thinking.
- It affects whether business is able to distinguish itself from direct

competitors through its products or services or not by developing

specialized resources such as patents and trademarks or developing

goodwill.
(3) COMPETITIVE ADVANTAGE ANALYSIS
6/7
IN CRITERIA

Fourth criteria is to evaluate business strategy as whole to assess its long term

feasibility.

- Examine the strategy from a financial perspective and identify its limitations
- Assess staffing in terms of requirements, knowledge and the skill set

required to achieve long-term strategy goals.
- Consider whether core personnel, including both managers and employees,

are willing to contribute to and support the business strategy.
(4) EVALUATE BUSINESS STRATEGY FOR FEASIBILITY
7/7
IN CRITERIA

201 - Strategic Management [Unit 5: Evaluation and Control] [BBA II, Rajasthan University]

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