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Strategic level - wherein we are concerned more with the consistency of strategy with the environment.

Operational level wherein the effort is directed at assessing how well the organization is pursuing a given strategy

Strategic evaluation and control could be defined as the process of determining the effectiveness of a given strategy in achieving the organizational objectives and taking corrective action wherever required.

strategic evaluation and control process is to test the effectiveness of strategy. During the two proceedings phases of the strategic management process, the strategists formulate the strategy to achieve a set of objectives and then implement the strategy There has to be a way of finding out whether the strategy being implemented will guide the organization towards its intended objectives. Strategic evaluation and control, therefore, performs the crucial task of keeping the organization on the right track.

In the absence of such a mechanism, there would be no means for strategists to find out whether or not the strategy is producing the desire effect

Nature of Strategic Evaluation Through the process of strategic evaluation and control, the strategists attempt to answer set of questions, as below

Are the premises made during strategy formulation proving to be correct?

s the strategy guiding the organization towards its intended objectives?


Are the organization and its managers doing things which ought to be done? Is there a need to change and reformulate the strategy? How is the organization performing? Are the time schedules being adhered to? Are the resources being utilized properly? What needs to be done to ensure that resources are utilized properly and objectives met?

Strategic evaluation helps to keep a check on the validity of a strategic choice. An ongoing process of evaluation would, in fact, provide feedback on the continued relevance of the strategic choice made during the formulation phase. This is due to the efficacy of strategic evaluation to determine the effectiveness of strategy.

During the course of strategy implementation managers are required to take scores of decisions.
Strategic evaluation can help to assess whether the decisions match the intended strategy requirements.

Shareholders Board of Directors Chief executives Profit-centre heads Financial controllers Company secretaries External and Internal Auditors Audit and Executive Committees Corporate Planning Staff or Department Middle-level managers

Premise control Implementation control Strategic surveillance Special alert control

Premise control is necessary to identify the key assumptions, and keep track of any change in them so as to assess their impact on strategy and its implementation. Premise control serves the purpose of continually testing the assumptions to find out whether they are still valid or not. This enables the strategists to take corrective action at the right time rather than continuing with a strategy which is based on erroneous assumptions. The responsibility for premise control can be assigned to the corporate planning staff who can identify key assumptions and keep a regular check on their validity.

Implementation Control Implementation control may be put into practice through the identification and monitoring of strategic thrusts such as an assessment of the marketing success of a new product after pre-testing, checking the feasibility of a diversification programme after making initial attempts at seeking technological collaboration.

Strategic surveillance can be done through a broad-based general monitoring on the basis of selected information sources to uncover events that are likely to affect the strategy of an organization.

Special alert control is based on trigger mechanism. for rapid response and immediate reassessment of strategy in the light of sudden and unexpected events.

Crises are critical situations that occur unexpectedly and threaten the course of a strategy. Organizations that hope for the best and prepare for the worst are in a vantage position to handle any crisis. Crisis management follows certain steps:

1. 2. 3. 4.

Signal detection Preparation/prevention, Damage limitation, Recovery leading to organizational learning.

Data Employees Owners Manager selection Qualitative analysis I'm the manager A vs I Implementation Investor Security

Data: finding data is a real challenge because


there is available statistics are far below those available in developing countries. Most companies try to keep any financial information and consider them secrets. It is not possible to know the demand in last year of a certain product or service. People are not used to market research and they dont want to talk to the marketing people

Employees: most employees and managers are not aware about the value of strategic planning and they may consider it waste of time and something that is applicable in developed countries Owners: Many owners of successful companies believe they dont need to do strategic planning and they do not know that their success will go one day when there are more competitors or there are changes in the market.

Managers selection: Most companys managers in developing countries are experts in the technical process of the organization but they are not well educated in management and thus they want to focus on what they know and neglect what they do not know. Accordingly, strategic management does not fall in their area of interest Qualitative Analysis: Strategic planning needs a lot of forecasting and qualitative analysis besides the quantitative analysis. Many technical managers are not used to neither the qualitative analysis nor the forecasting.

I am the manager: The strategy shows a guide for decisions, so, an employee may, sometimes, tell the senior manager that his decision is against the company strategy.

Thus the manager avoid having a strategy to keep his freedom to decide whatever he likes

Analysis versus Intuition: Most people do not think that a manager should do analysis or have done for him they think that some people are talented to take the right decision without doing many calculations or having subordinates make a study for them.

Implementation: To get every manager follow the same strategy is not an easy task Investors: Having a clear strategic plan and clear goals for the future (other than increasing sales of the current products) does not affect the stock price because most of the investors do not care about those issues

Security: Most managers feel that everything is asecret and obviously they think that no one else should know the strategy and thus no one else should make a study for our strategic plan.and there is no strategy

Corporate governance involves regulatory and market mechanisms, and the roles and relationships between a companys management, its board Its shareholders and other stakeholders and the goals for which the corporation is governed.

Lately, corporate governance has been comprehensively defined as

A system of law and sound approaches by which corporations are directed and controlled focusing on the internal and external corporate structures
with the intention of monitoring the actions of management and directors and thereby mitigating agency risks which may stem from the misdeeds of corporate officers.

Basic Principles of Corporate Governance:


Accountability Rights of Shareholders Transparency Interests of Stakeholders Fairness Good Faith Diligence Integrity Trust Disclosure Responsibility Controls Commitment