Evaluation and Control of Strategy-A Module Note

Both formulation and implementation of organisational strategy is important for achieving

competitive advantage. Several corporations world over have exhibited one feature in common,
most of them are good in formulation strategy, but when it comes to implementation they are
not very successful. Hence there is a dire need to evaluate the implantation of strategy and the
desired results on a continuous basis, so as to take corrective action before it is too late.
A strategists need to take in to consideration following steps:
 Establish performance targets for objectives, strategy and implementation plans
 Measure the actual position in relation to the targets at a given time
 Analyses the deviations from acceptable uses
 Execute modifications if they are necessary
Both qualitative and quantitative criteria will help a strategist to evaluate the consequences of
strategic course of action.
Quantitative criteria:
Quantitative criteria includes variables which can be quantified and are explicit while
evaluating a strategic course of action which includes, stock price, net profit, dividend rates,
EPS, market share, ROE, ROCE, Strikes, employee turnover, distribution comparability, and
absenteeism and satisfaction index of the corporation.
Image in financial markets is reflected by -P/E ratio, technological reputation is captured by
the customer perception interviews and company morale is captured through employee
turnover.
Qualitative criteria:
Qualitative criteria includes, consistency of objectives, environmental assumptions, internal
conditions and administrative system. It also includes evaluation of resource capabilities,
critical resources, facilities equipment and competence. Risk preference of an organization
plays an important role here. Too much of risk may lead to a gap in resources or capability to
perform an important task. Time horizon defined by the organization forces it to complete its
activities in tune with a predetermined schedule. Whether a strategic plan is feasible or does
plan overtax our resources and management capabilities? If a strategic plan over taxes a
company’s resources, then the firm is bound to suffer from, competitive parity, not competitive
advantage. Stimulation is required to see the execution of strategy is successful and it requires
consensus among executives that the plan will work. Latest literature in the field of strategy
deals with the speed at which one can take corrective action during implementation. Successful
organisations speed up such processes to strike competitive advantage. One need to consider
both intended and unintended consequences of a particular strategic course of action, so as to
minimize the later, to increase the efficiency and effectiveness of strategy process.

This module note is written by Dr. V K Ranjith, Associate Professor, School of Management,
Manipal. Module notes are meant for providing overall idea of a direction of discussion in a
particular module, and is not a substitute for the content in the prescribed text in the subject.