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,