This document discusses strategy evaluation and control. It explains that strategy evaluation ensures companies achieve their objectives by comparing performance to goals and taking corrective actions. An effective evaluation process determines metrics, sets standards, measures performance, and takes action if needed. The document also outlines Rumelt's criteria for evaluating strategies, which are consistency, consonance, feasibility, and competitive advantage. It notes that evaluating strategies is challenging due to increasing environmental complexity and uncertainty.

1. C
H
A
P
T
E
R
9
STRATEGY REVIEW,
EVALUATION,
and CONTROL
REPORTER:
MA. SYLVIA A. BAIS

2. COMPREHENSIVE STRATEGIC-MANAGEMENT MODEL
Develop
Vision and
Mission
Statements
CHAPTER 2
Perform
External
Audit
CHAPTER 3
Perform
Internal
Audit
CHAPTER 4
Establish
Long-term
Objectives
CHAPTER 5
Generate,
Evaluate,
and Select
Strategies
CHAPTER 6
Implement
Strategies –
Management
Issues
CHAPTER 7
Implement
Strategies –
Marketing,
Finance,
Accounting,
R&D, and MIS
Issues
CHAPTER 8
Measure and
Evaluate
Performance
CHAPTER 9
Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 3 (June 1988): 40.
Chapter 10: Business Ethics, Social Responsibility, and Environmental Sustainability
Chapter 11: Global/International Issues
STRATEGY FORMULATION
STRATEGY
IMPLEMENTATION
STRATEGY
EVALUATION

4. ?

5. The Nature of Strategy
Evaluation
Evaluation and Control ensures that a company is achieving
what it set out to accomplish by comparing performance with
desired results and taking corrective action as needed
Strategic-Management process result
Erroneous strategic decisions
Timely evaluations

6. Strategy Evaluation
- Adequate and timely feedback
- Complex and sensitive undertaking
- Essential to ensure that stated objectives are being achieved.
Too little or no evaluation can create even worse problem.
- An appraisal of how well an organization has performed.

7. EXAMININ
G
TAKING
CORRECTIVE

8. Evaluation and Control Process
Determine
what to
measure
Establish
standards of
performance
Measure
performance
Take
corrective
action
Does
performance
match
standards?
STOP
YES
NO

9. Evaluating an Implemented Strategy
ISSUE CONCLUSIONS
Were strategies poorly
executed?
Were strategies and their
requirements communicated
effectively?
Poor communication.
Were the underlying
assumptions and premises
valid?
Were the alternative
scenarios defined and
assessed?
Were the current situation
and important trends
properly diagnosed?
Did the existing strategies
produce the desired
results?
Did management commit to and
follow through with the strategies?
Were results monitored and
strategies revised as needed?
Was strategy formulation adversely
affected?
Were supporting functional
strategies consistent with the
business unit strategies?
Were resource allocations sufficient
and consistent with the selected
strategies?
Weak commitment of
operating management.
Failure to establish proper
feedback mechanism.
Invalid planning bases:
incorrect strategy
formulation.
Inconsistent functional
plans.
Incorrect assessment of
resource requirements.
Successful strategy and
results.
YES
YES
NONO
NO
YES
YES
YES
NO
YES
YES
NO
YES
NO
NO
YES
NO
NO
NO

10. Rumelt’s Criteria for
Evaluating StrategiesCONSISTENCY CONSONANCE FEASIBILITY ADVANTAGE
• If managerial problems continue despite changes in personnel and if they
tend to be issue-based rather than people-based, then strategies may be
inconsistent.
• If success for one organizational department means, or is interpreted to
mean, failure for another department, then strategies may
be inconsistent.
• If policy problems and issues continue to be brought to the top for
resolution, then strategies may be inconsistent.

11. Rumelt’s Criteria for
Evaluating StrategiesCONSISTENCY CONSONANCE FEASIBILITY ADVANTAGE
A strategy must represent an adaptive response to the external environment
and to the critical changes occurring within it. One difficulty in matching a
firm’s key internal and external factors in the formulation of strategy is that
most trends are the result of interactions among other trends.
For example, the day-care explosion came about as a combined result of many
trends that included a rise in the average level of education, increased inflation,
and an increase in women in the workforce. Although single economic or
demographic trends might appear steady for many years, there are waves of
change going on at the interaction level.

12. Rumelt’s Criteria for
Evaluating StrategiesCONSISTENCY CONSONANCE FEASIBILITY ADVANTAGE
The financial resources of a business are the easiest to quantify and are
normally the first limitation against which strategy is evaluated. It is sometimes
forgotten, however, that innovative approaches to financing are often possible.
A less quantifiable, but actually more rigid, limitation on strategic choice is that
imposed by individual and organizational capabilities. In evaluating a strategy, it
is important to examine whether an organization has demonstrated in the past
that it possesses the abilities, competencies, skills, and talents needed to carry
out a given strategy.

13. Rumelt’s Criteria for
Evaluating StrategiesCONSISTENCY CONSONANCE FEASIBILITY ADVANTAGE
Competitive advantages normally are the result of superiority in one of three areas:
(1) resources, (2) skills, or (3) position.
Positional advantage tends to be self-sustaining as long as the key internal and
environmental factors that underlie it remain stable. This is why entrenched firms can be
almost impossible to unseat, even if their raw skill levels are only average. Although not all
positional advantages are associated with size, it is true that larger organizations tend to
operate in markets and use procedures that turn their size into advantage, while smaller
firms seek product/market positions that exploit other types of advantage. The principal
characteristic of good position is that it permits the firm to obtain advantage from policies
that would not similarly benefit rivals without the same position.

14. REASONS WHY STRATEGY EVALUATION IS DIFFICULT TODAY
1. A dramatic increase in the environment’s
complexity
2.The increasing difficulty of predicting the
future with accuracy
3.The increasing number of variables
4.The rapid rate of obsolescence of even
the best plans
5.The increase in the number of both
domestic and world events affecting
organizations
6.The decreasing time span for which
planning can be done with any degree of
certainty

15. - Should initiate managerial questioning
of expectations and assumptions
- Should trigger a review of objectives
and values
- Should stimulate creativity in
generating alternatives and criteria of
evaluation

16. STRATEGY-EVALUATION FRAMEWORK

18. BENEFITS OF STRATEGY EVALUATION