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ANSWER SCHEME CHAPTER 9;

STRATEGY REVIEW, EVALUATION AND CONTROL


DEC 2014/PB/Q1(b)
JUNE 2013/PB/Q5
Which is the most difficult stage? Justify your answer.
The most difficult stage is strategy evaluation because;

A dramatic increase in the environments complexity


- A dramatic increase in the environments complexity is one of
the reasons to be difficulties in strategy evaluation.
- This happen because people usually try to hide their problem, so
this will lead to the difficulty to get the information.
The increasing difficulty of predicting the future with accuracy.
- The increasing difficulty of predicting the future with accuracy
also one reasons to the difficulties in strategy evaluation.
- When we make a new strategy for the future, it is not necessarily
it is better than strategy before because sometimes old
strategies are better and more effective.
- This is due to be difficulty of predicting the future.
The increasing number of variables.
- Next ,the increasing number of variables.
- For example, natural disasters like hurricane or earthquake.
- This will lead to the difficulty to predict in future because natural
disasters are unexpected.
The rapid rate of obsolescence of even the best plans.
- Next the rapid of obsolescence of even the best plans.
- The rapid rate of obsolescence will make the strategy not
applicable even it is best plans.
- This is because the data is not up to date.
The increase in the number of both domestic and world events affecting
organizations
- Next ,the increase in number or both domestic and world events
affecting organizations.
- This will lead to the difficulties in strategy evaluation.
- In order to solve this problem, we should know both domestic
and world events.
- So, it easy for us to make an effective strategy.
The decreasing time span for which planning can be done with any degree
of certainty.
- Lastly, the decreasing time span for which planning can be done
with any degree of certainty.
- This will lead to the difficulties in strategy evaluation because
time to pelan becomes shorter.

JUNE 2014/PB/Q5

JUNE 2013/PB/Q5(b)
Strategy evaluation is important so that firms can take corrective actions to
ensure that performance conform to their plans. Discuss the 4 Rumelts Criteria
for evaluating strategies.
1. Consistency
- A strategy must consistent with goals and policies
- There are 3 guidelines help determine if organization is
inconsistencies in strategy;
If managerial problems continues despite changes in
personnel.
If have success for one organizational department and failure
or another one organizational department in the firm.
If policy problems and issues continue to be bought to the top
for resolution.
- For example firm should compare one organizational department
to another organizational department to make sure that both of
the department can achieve the same organizational goals.
2. Consonance.
- Refer to the need for strategists to examine sets of friends as
well as individual trends.
- A strategy must represent an adaptive response to the external
environment and to the critical changes occurring within it.
- Organizational face difficulty in matching a firms key internal
and external factors in the formulation of strategy due to most
trends are the result of interactions among other trends.
- For example, food trend. Not all Malaysian people like to eat
Japanese food so that we must make sure that the food trend is
suitable to the individual trend also.
3. Feasibility
- The final broad test of strategy is its feasibility, that is can the
strategy be attempted within the physical, human and financial
resources of the enterprise or not.
- 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 vary out a
given strategy.
- For example, if strategy that organizational used in the firm is
not feasible to achieve the organizational goal, so firm should
not go ahead with that strategy because sometimes old
strategies are not effective to be use again in the future.

4. Advantage
- A strategy must provide for the creation and maintenance of a
competitive advantage in a selected area of activity.
- Competitive advantages normally are the result of superiority in
one of these areas such as resources skills or position.
- For example, if the firm different competitive advantage than
they rivals it is good for the firm because it mean that rival is not
easy to duplicate the firm competitive advantages strategy. So
that, the firm should maintain and create new competitive
advantages in their strategy in the future.

JAN 2013/PB/Q5

Elaborate 4 reasons why strategy evaluation is becoming more difficult in the


21st century and briefly explain any 2 challenges or issue that face by all
strategists today.
a) A dramatic increase in the environments complexity
- Difficult to get information as many people tends to hide
problems.
b) Increasing difficulty of predicting the future with accuracy.
- It is difficult to predict futures, as technology and education had
increase, sometimes in previous strategies perform way better
than the new ones
c) Increasing number of variables
- Unexpected factors such as natural disaster can make evaluation
getting more difficult
d) Increasing in number of both domestic and worlds event affecting
organizations
- External factors

2 particular challenges that faces all strategists today are;

Deciding whether the process should be more art or a science


- Art is the application of skills and capability (a room for
creativity) in the process of getting things done through people
and available resources
- Manager must be skilful to enable him made a sound.
- Science is making decision and implementing them based on
facts, data, policies and forth, as guidelines so that people can
perform works accordingly and perfectly also to predict future.
Deciding whether strategies should be visible or hidden from stakeholders.
- Strategists must decide whether the risk of rival firms easily
knowing and exploiting a firms strategies is worth the benefits
of improved employee and stakeholder motivation and input.

Reasons for open strategies;


Managers, employees and other stakeholder can readily contribute to the
process. They often have excellent ideas. Secrecy would forgo many
excellent ideas.
Investors, creditors and stakeholder have greater basis supporting a firm
when they know that the firm is doing and where the firm is going.
Visibility promotes democracy and freedom of opinion, whereas secrecy
promotes autocracy.
Participation and openness enhance understanding, commitment and
communication within the firm.

Reasons for hidden strategies;


Free dissemination of a firm strategies may easily translate into
competitive intelligence for rival firms who could exploit the firm given
that information.
Secrecy limits criticism, and guessing
Participation in a visible strategy process become more attractive to rival
firms who may lure them away.
Secrecy limit rival firms from imitating or duplicating the firms strategies
and undermining the firm
e.g ; close book management that doesnt reveal profit sharing practices or
another example, is war. War is certainly keeping its strategy secret.
In practice particularly sensitive and confidential information should always
remain strictly confidential to top managers.

JUN 2012/PB/Q3(a)
Discuss the condition for the corrective actions that are not require in the
strategy evaluation process.
corrective actions refer to the steps or measures taken by an organization to
correct unfavourable variance. Corrective actions is needed in order to ensure
the performance of the organization conform with the pelan as well as to
measure the effectiveness of the strategies that has been taken.
The circumstances in which corrective action would not be necessary in
strategy evaluation are;
I.

II.

III.

When major changes have not occurred in the firms internal strategic
position
Internal factor such as management, marketing, finance,
production & operation, research and development and
management information system will affect the decisions
making of the organization.
Any changes from above factor may affect the performance
of the organization.
Example, since Samsung did not change their marketing
strategies or their management team, therefore corrective
actions would not be necessary.
When major changes have not occurred in the firms external strategic
position.
External forces such as social, technological, economic, political
and competitive forces (STEPS) may bring opportunities and
potential threat to organization.
As long as there is no major changes occur, there is no need for
the corrective action to be taken.
Example ; stable economy condition (minimum inflation) would
not diminish the performance of the organization. Since there is
no possible threat from economic forces, no corrective actions
should be taken.
The firm is progressing satisfactorily towards achieving its stated
objective
The firm performance move on track towards achieving its
stated objective.
Does not have any major crisis that effect the performance of
the firm
Example ; since Air Asias is moving on track towards its
objective which is to be the largest low cost airlines in Asia,
there is no corrective action should be taken by the company.

JUN 2012/PB/Q3(b)
Explain why strategy evaluation has become very important in business today?
a. Internal & external factor are dynamic
- Any changes in internal & external factor should be monitor
closely
- Purpose; to take advantage of potential opportunities and
strength and to minimize the effect of the threat and
weaknesses
- Example; technology advancement may shorten the product life
cycle in mobile industry. Therefore, Samsung need to formulate
new strategies in order to cater/ cope up so that their product
will remain in the market
- Known as input stage.
- It summarizes basic information to formulate strategies.
- It consists of the EFE matrix, the IFE matrix and Competitive
Profile Matrix CPM
b. STAGE 2
- Called as matching stage
- Organization matching its internal strength or weaknesses with
the opportunities and threat created by its external factors.
- 5 techniques can be used;
o SWOT matrix
o Space matrix
o BCG Matrix
o IE Matrix
o Grand Strategy Matrix
- Matching external and internal critical success factors is the key
to effectively generating realistic alternative strategies
c. STAGE 3
- Decision stage
- QSPM; objectively indicates which alternative strategies are the
best
- Uses input from stage 1 analyses and matching result from stage
2 analyses to decide objectively among alternative strategies.