STRATEGIC EVALUATION

AND CONTROL
 Introduction
It could be defined as the process of
determining effectiveness of given strategy in
achieving the organisational objectives and
taking corrective action wherever required.
It brings the organisation on the right track. It
answers two sets of questions:
First set of questions are more generalized
eg. Is the strategy guiding the organisation
is the management on the right track.
Second set of questions deals with
performance and operational control
issues.
 Evaluate effectiveness of
organizational strategy in achieving
organizational objectives

Perform the task of keeping

organization on track
 Characteristics
Suitable
Simple
Selective
Flexible
Forward looking
Reasonable
Objective
Responsibility for Failures
Acceptable
 Importance
Motivational Tool
Means to secure Feedback
Better and updated strategies
Evaluation of Decision Making
Checks on validity
 Strategic Control
It is concerned with tracking the strategy as
it is being implemented, detecting any
problems areas or potential problem area
and making any necessary adjustments.
It involves the monitoring and evaluation of
plans, activities and results with a view
towards future action, providing a warning
signal through diagnosis data and triggering
appropriate interventions be they either
tactical adjustments or strategic re-
orientations.
 Importance
Control & Efficiency
Control & Quality
Control & Innovation
Control & Responsiveness to customers
 Types of Strategic Control
Premise Control
Implementation Control
Strategic Surveillance
Special Alert Control
Financial Control
Output Control Behavior Control
 What is operational control
Operational control systems are designed to
ensure that day-to-day actions are consistent
with established plans and objectives.
It focuses on events in a recent period.
Corrective action is taken where performance
does not meet standards.
Allocation and use of organizational resources.
Short term objectives and main is to control
the actions.
Process of evaluation for
operational control
 The standards have to be set on the basis of..

Quantitative criteria:-
It includes the criteria like net profits, stock
price, dividend rates, return on capital, growth in
sales, production cost and efficiency etc.
Qualitative criteria:-
Qualitative criteria is the subjective assessment
of factors such as capabilities, core competences,
risk-bearing capacity, strategic clarity, flexibility
and workability.
 Measurement of performance
The evaluation process operates at the
performance level as action takes
place.
Standards of performance act as a
benchmark against which the actual
performance is to be compared.
Measurement is done through the
accounting, reporting and
communication systems.
 Apart from this the other important aspect of
measurement relate to following.

1. Difficulties in measurement
2. Timing of measurement
3. Periodicity in measurement
 Analyzing variances
The actual performance matches the budgeted
performance.

The actual performance is better.

The actual performance is below.

 Taking corrective actions
Checking of performance

Checking of standards

Reformulating strategies, plans and objective.

Difference b/w Strategic and Operational
Control
Attribute Strategic control Operation
control Are we moving in
Basic question right direction? How are we
Proactive,continu performing?
Aim ous questioning Allocation & use
of the basic of org resources
direction of
strategy
Main concern Steering the Action control
future direction of
Focus the org Internal
External Environ organization
Time Horizon Short-term
Exercise control Long-term Mainly by
Exclu by top mgt,
executive or
may be thru
lower level middle mgt on
Main techniques the direction of
support
Envir scanning, top
 Balanced Scorecard
Approach
The Balanced Scorecard translates an
organizations mission and strategy into
goals and measures, organized into four
different perspectives
customer
financial
internal business process
innovation and learning
 What is a Balanced
The BalancedScorecard?
Scorecard is a strategic
planning and management system used to
align business activities to the vision and
strategy of the organization by monitoring
performance against strategic goals.
 Balanced Scorecard
Concept
Was first published in 1992 by Kaplan and
Norton, a book followed in 1996.
Traditional performance measurement that
only focus on external accounting data are
obsolete.
The approach is to provide 'balance' to the
financial perspective.
 Why Use a Balanced
Scorecard?
Improve organizational performance by
measuring what matters
Increase focus on strategy and results
Align organization strategy with workers
on a day-to-day basis
Focus on the drivers key to future
performance
Improve communication of the
organizations Vision and Strategy
Prioritize Projects/ Initiatives
 4 Original Business
Perspectives
The Balanced
Scorecard model
suggests that
we view the
organization
from 4
perspectives.

Then Develop
metrics, collect
data and
analyze it
relative to each
of these Adapted from The Balanced Scorecard by Kaplan & Norton
perspectives
Balanced Scorecard
Measurements
 Balanced Scorecard Approach
(Contd)
The Balanced Scorecard helps an organization
to:
determine progress towards its
goals/objectives
communicate strategic direction
determine success or failure of its
strategies/initiatives
define future strategies
establish benchmarks
demonstrate value-added
 Balanced Scorecard Approach
(Contd)
The best Balanced Scorecards will tell the
story of the organizations strategy and cause
the overall performance to be managed such
that the stated mission is accomplished.