STRATEGY REVIEW, EVALUATION, AND CONTROL
| |The Nature of Strategy Evaluation | | |A Strategy-Evaluation Framework | | |Published Sources of Strategy-Evaluation Information | | |Characteristics of an Effective Evaluation System | | |Contingency Planning | | |Auditing | | |Using Computers to Evaluate Strategies |
After studying this paper, you should be able to do the following:
|1. |Describe a practical framework for evaluating strategies. | |2. |Explain why strategy evaluation is complex, sensitive, and yet essential for organizational success. | |3. |Discuss the importance of contingency planning in strategy evaluation. | |4. |Discuss the role of auditing in strategy evaluation. | |5. |Explain how computers can aid in evaluating strategies. |
The best formulated and implemented strategies become obsolete as a firm’s external and internal environments change. It is essential, therefore, that strategists systematically review, evaluate, and control the execution of strategies. This Paper presents a framework that can guide managers’ efforts to evaluate strategic-management activities, to make sure they are working, and to make timely changes. Computer information systems being used to evaluate strategies are discussed. Guidelines are presented for formulating, implementing, and evaluating strategies.
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THE NATURE OF STRATEGY EVALUATION
Importance of Strategy Evaluation
The strategic-management process results in decisions that can have significant, long-lasting consequences. Erroneous strategic decisions can inflict severe penalties and can be exceedingly difficult, if not impossible, to reverse.
Most strategists agree, therefore, that strategy evaluation is vital to an organization’s well-being; timely evaluations can alert management to problems or potential problems before a situation becomes critical.
Strategy evaluation includes three basic activities:
Examining the underlying bases of a firm’s strategy. b.
Comparing expected results with actual results. c.
Taking corrective actions to ensure that performance conforms to plans.
The strategy-evaluation stage of the strategic-management process.
5. Strategy evaluation can be a complex and sensitive undertaking. Too much emphasis on evaluating strategies may be expensive and counterproductive. Yet, too little or no evaluation can create even worse problems. Strategy evaluation is essential to ensure that stated objectives are being achieved.
6. It is impossible to demonstrate conclusively that a particular strategy is optimal, but it can be evaluated for critical flaws. Here are four criteria to use in evaluating a strategy:...
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