str ateg i c e v a

8/14/2019 Str Ateg i c e v A

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S T R A T E G ICE V A LU A T IO N

AND

CONTROL

:PRESENTED BY

Abhradeep Paul.I D 08MBAAB047( )MBA Agribusiness

Allahabad Agricultural Institute


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OVERVIEW Strategic evaluation and control

defined as the process ofdetermining the effectiveness of agiven strategy in achieving theorganizational objective and taking

corrective action wheneverrequired.

Thus the nature of strategicevaluation and control is to test theeffectiveness of strategy.

In the absence of such a mechanismthere would be no means forstrategist to find out whether ornot the strategy is producing the

desired effect.


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IMPORTANCE OF STRATEGICEVALUATION

The importanceof strategic evaluation lies in its abilityto coordinate the tasks performed by individualmanagers and also groups through the control of

performance. In the absence of controllingmechanism individual managers may pursue goalswhich are inconsistent with the overall objectives ofthe department, division or whole organization.

Other importance of strategic evaluation are

Need for feedback, appraisal and reward.

Check the validity of strategic choice

Congruence between decisions and intended strategy.

Successful culmination of strategic management

process


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Requirements for EffectiveEvaluation

The basic issue in all evaluation should be that controlshould be dictated by strategy. There needs to bevertical fit between strategy requirments and the

evaluation and control exercised over performance. Theguidelines below will make controls effective :

.I ontrol should involve only minimum amount ofnformation as too much information tends to

lutter up the control systems and creates.onfusion

.I ontrol should monitor only managerialctivities and results even if the evaluation

.s difficult to perform.II ontrols should be timely so that corrective

.ctions can be taken easily.V - -ong term and short term controls should be


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ontrols should aim at pinpointing exceptionss nitpicking does not result in effective

. :valuation The 80 20 principle where 20ercent of the activities result in 80

, .ercent achievement needs to be emphasizedetting bogged down with the activities that

o not really count for achievement makes the.valuation ineffective

ewards for meeting or exceeding standardshould be emphasized so that managers are

.otivated to perform Unnecessary emphasis onenalties tend to pressurize the managers to .ely on efficiency rather than effectiveness


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Participants in Strategicevaluation:

PARTICIPANTS

Shareholders/Landers Board of

Directors

ChiefExecutives

Financialcontrollers

MiddlelevelManagers


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BARRIERS INEVALUATION :

There are 5 major types of barriers in evaluation. Theseare

1.Limits of Control : By its very nature , any control mechanism presents

the dilemma of too much versus too little.

Too much control may impair the abilities of manager ,adversely affect initiative and creativity and createunnecessary impediments to efficient performance.

On the other hand, too less control may take thestrategic evaluation process ineffective andredundant.


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2. Difficulties in measurement :The process of evaluation is fraught with the danger of

difficulties in measurement.

This mainly relate to the reliability and validity of measurementtechniques used for evaluation, lack of quantifiable objective orperformance standards and inability of information system toprovide timely and valid information.

3. Resistance to evaluation : The evaluation process involves controlling the behaviour ofindividuals and like any other similar organizational mechanism islikely to be resisted by managers.


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4. Short termism :Managers often tend to rely on short term implications ofactivities and try to measure the immediate results.

Often, the long term impact of performance on strategy andextended effect of strategy on performance is ignored.

This is so as immediate assessment seems to be easy way outand taking the long term implications into account may be seenas too tedious.

5. Relying on efficiency against

effectiveness :It is instructive to remember that efficiency is doing thingsrightly while the effectiveness is doing the right things. Ther is

genuine confusion among managers as to what constituteeffective performance.

Measuring the wrong parameters may lead to situation wherethe right type of performance does not get rewarded.

In fact, sometimes performance that does nor really contributeto achievement of objectives may be rewarded if assessed onthe basis of efficienc alone


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HANK YOUHANK YOU

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