Chapter Seven:

Strategy Evaluation And

Control
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 The Nature of Strategy Evaluation

 The best formulated and best implemented

strategies become obsolete as a firm’s external and
internal environments change.
 Therefore, it is essential for strategists to
systematically review, evaluate, and control the
execution of strategies.
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 Strategy Evaluation includes three basic activities:

1) Examining the underlying bases of a firm’s strategy.

2) Comparing expected results to actual results.

3) Taking corrective actions to ensure that performance

conforms to plans.

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 Adequate and timely feedback is the cornerstone
of effective strategy evaluation.

 Strategy evaluation can be no better than the

information on which it is based.

 Strategy evaluation is essential to ensure that

stated objectives are being achieved.

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 Criteria for Evaluating Strategies

Consistency

4 Criteria Consonance

Feasibility

Advantage
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 Consistency: Strategy should not present inconsistent
goals and policies
 Consonance: Need for strategists to examine sets of trends,
as well as individual trends in evaluating strategies.
 Feasibility: Neither overtax resources nor create unsolvable
sub problems.
o Can the strategy be attempted within the physical, human,
and financial resources of the enterprise?
 Advantage: Creation or maintenance of competitive
advantage.

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Characteristics of an Effective Evaluation System

 Strategy evaluation must meet several basic

requirements to be effective:
o Economical
o Meaningful
o Provide useful information
o Provide timely information
o Provide a true picture of what is happening
o Should not dominate decisions
o Simple 8
 Strategic Control Process

1. Determine what to measure

2. Establish standards of performance
3. Measure actual performance
4. Compare actual performance with the
standards

5. Take corrective action 9

 Types of Control

a) Preventive /Preliminary / Input Control

b) Concurrent controls
c) Feedback controls

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 Control Techniques
 Each area within an organization, however, uses its own
specific control techniques:
 Financial controls
 Budget controls
 Marketing controls
 Human resource controls
 Computers and information controls

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WISH YOU ALL THE
BEST!!!

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