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BBS 3rd Strategy Chapter 15

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20 views11 pages

BBS 3rd Strategy Chapter 15

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binodthapa2008
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© © All Rights Reserved
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Chapter 15 STRATEGIC CONTROL

Concept
AND EVALUATION
Strategic control is one of the most important functions of
strategic management. It is concern with tracking a
strategy as it is being implement detecting problems or
changes in its underlying assumption or premises and
making necessary adjustment. Strategic control is exercised
by top level management. It is long term oriented. It focuses
on external environment. It is proactive and providing early
warning about the performance of the strategy. Further, it
monitors the progress of various activities undertaken while
implementing the strategy and deviations exist, start the
corrective action. Mainly strategic control involves the
following activities of strategic management.
Reexamination of assumptions
Measuring performance
Strategic Adjustment.
Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Process of evaluation and control
Determine what to measure
Set control standard
Measure performance
Compare performance to standard
Determine the reasons for the deviations
Take corrective action.
Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Types of control
A. Control based on focus
Input controls
Behavioral control
Output control
B. Control based on strategic
management/Strategic control
1. Premise control: Premise control is required
to identify the main assumptions on which the
strategy is based and keep a close watch on
them, to see if there is any change in the
assumptions and if these change are making an
Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Cont….
2. Implementation control: It evaluates whether the
plans, programs, project and budget are guiding the
organization towards objectives achievement.
 Monitoring strategic trust or projects:
Milestone Reviews
3. Strategic Surveillance: Strategic surveillance
monitor a broad range of event inside and outside the
organization which threaten the course of the
strategy.
Selective Surveillance
Organization Surveillance
4. Special Alert Control: Special alert control is
triggered by detection of crisis.
Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Meaning of strategy evaluation
Strategy evaluation is a process by which
management measure progress towards the
attainment of organizational goals so that
timely actions can be taken to improve
performance or modify the goal if
performance is not in accordance with plans.
It ensures that a company is achieving what
it set out to accomplish. It compare
performance with desired result and
provides the feedback necessary for
management to evaluate results and take
Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Criteria for evaluating strategies
Consistency
Consonance
Feasibility
Advantage
Characteristics of strategic evaluation
Provide direction
Continuous activities
Early warning system
Top management actively
Focus on key performance

Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Measuring corporate performance
Measuring performance is a crucial
part of evaluation and control.
Corporate performance is one of the
important categories of performance
measurement of an organization. To
measure the performance a difference
should be identified between actual
and expected outcomes. The objectives
set or standard fixed during strategy
formulation work as deciding criteria
to measure the performance.
Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Methods of measuring corporate
performance
1. Traditional financial measure
ROE, EPS, ROI, Operating cash flow,
2. Stakeholder Measure
3. Shareholder value
EVA=Economic value added.
MVA=Market value added.
4. Balanced scorecard Approach
5. Evaluating top management and the Board
of directors
Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Operating evaluation
Operating evaluation compare the
performance standard of different
functional units and their actual
performance. If the performance does not
match with the standards, corrective actions
are taken.
Process of operating evaluation
Setting of performance standard
Measurement of performance
Identify deviations

Chapter 15 STRATEGIC CONTROL
AND EVALUATION
Guidelines for proper evaluation and control
Economical
Timelines
Provide true picture
Action oriented
Mutual understanding, trust and common
sense
Simple
Corrective action
Minimum amount of information
Forward looking
Chapter 15 STRATEGIC CONTROL
AND EVALUATION

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