The strategic-management process results in decisions that can have significant,
long-lasting consequences. Erroneous strategic decisions can inflict severe
penalties and can be exceedingly difficult, if not impossible, to reverse. Most
strategists agree, therefore, that strategy evaluation is vital to an organization's
well-being; timely evaluations can alert management to problems or potential
problems before a situation becomes critical. Strategy evaluation includes three
basic activities:
1. Examining the underlying bases of a firm's strategy
2. Comparing expected results with actual results
3. Taking corrective actions to ensure that performance conforms to plans
Strategy evaluation can be a complex and sensitive undertaking. Too much
emphasis on evaluating strategies may be expensive and counterproductive.
Yet, too little or no evaluation can create even worse problems. Strategy
evaluation is essential to ensure that stated objectives are being achieved. It is
impossible to demonstrate conclusively that a particular strategy is optimal, but it
Reading
Assignment
Chapter 9:
Strategy Review,
Evaluation, and Control
Supplemental
Reading
Click here to access a
PDF of the Chapter 9
Presentation.
Learning Activities
(Non-Graded)
See information below.
Key Terms
1. Balanced scorecard
2. Consonance
3. Contingency plans
4. Feasibility
5. Future shock
6. Management by
wandering around
7. Measuring
organizational
performance
8. Revised EFE Matrix
9. Revised IFE Matrix
10. Taking corrective
actions BBA 4951, Business Policy and Strategy 2
can be evaluated for critical flaws. Here are four criteria to use in evaluating a
strategy:
1. Consistency
2. Consonance
3. Feasibility
4. Advantage
These trends make strategy evaluation difficult:
1. Dramatic increase in environmental complexity
2. Difficult in predicting future
3. Increasing number of variables
4. Rapid rate of obsolescence
5. Increase in the number of world events affecting the organization
6. Decreasing time spans for planning
Strategy evaluation is necessary for all sizes and kinds of organizations.
Strategy evaluation should initiate managerial questioning of expectations and
assumptions, trigger a review of objectives and values, and stimulate creativity in
generating alternatives and formulating criteria of evaluation. Evaluating
strategies on a continuous rather than a periodic basis allows benchmarks of
progress to be established and more effectively monitored. Managers and
employees of the firm should continually be aware of progress being made
toward achieving the firm's objectives. As critical success factors change,
organizational members should be involved in determining appropriate corrective
actions.