S T R A T E G IC

E V A LU A T IO N
AND
CONTROL

PRESENTED BY :
Abhradeep Paul
I.D 08MBAAB047
MBA(Agribusiness)
Allahabad Agricultural Institute
OVERVIEW
• Strategic evaluation and control
defined as the process of
determining the effectiveness of a
given strategy in achieving the
organizational objective and taking
corrective action whenever
required.
• Thus the nature of strategic
evaluation and control is to test the
effectiveness of strategy.
• In the absence of such a mechanism
there would be no means for
strategist to find out whether or
not the strategy is producing the
desired effect.
IMPORTANCE OF STRATEGIC
EVALUATION
• The importanceof strategic evaluation lies in it’s ability
to coordinate the tasks performed by individual
managers and also groups through the control of
performance. In the absence of controlling
mechanism individual managers may pursue goals
which are inconsistent with the overall objectives of
the department, division or whole organization.
• Other importance of strategic evaluation are –
• Need for feedback, appraisal and reward.
• Check the validity of strategic choice
• Congruence between decisions and intended strategy.
• Successful culmination of strategic management
process
 Requirements for Effective
Evaluation
 The basic issue in all evaluation should be that control
should be dictated by strategy. There needs to be
vertical fit between strategy requirments and the
evaluation and control exercised over performance. The
guidelines below will make controls effective :
I. Control should involve only minimum amount of
information as too much information tends to
clutter up the control systems and creates
confusion .
II. Control should monitor only managerial
activities and results even if the evaluation
is difficult to perform .
III. Controls should be timely so that corrective
actions can be taken easily .
IV . Long - term and short - term controls should be
§Controls should aim at pinpointing exceptions
as nitpicking does not result in effective
evaluation . The 80 : 20 principle where 20
percent of the activities result in 80
percent achievement , needs to be emphasized .
Getting bogged down with the activities that
do not really count for achievement makes the
evaluation ineffective .
§
§Rewards for meeting or exceeding standards
should be emphasized so that managers are
motivated to perform . Unnecessary emphasis on
penalties tend to pressurize the managers to
rely on efficiency rather than effectiveness .
 Participants in Strategic
evaluation:

PARTICIPANTS

Shareholders/ Chief Financial Middle

Landers Board of controllers level
Executives Managers
Directors
 BARRIERS IN
EVALUATION :
There are 5 major types of barriers in evaluation. These


are –

1.Limits of Control :
Ø By its very nature , any control mechanism presents
the dilemma of too much versus too little.
Ø Too much control may impair the abilities of manager ,
adversely affect initiative and creativity and create
unnecessary impediments to efficient performance.
Ø On the other hand, too less control may take the
strategic evaluation process ineffective and
redundant.
•
2. Difficulties in measurement :
ØThe process of evaluation is fraught with the danger of
difficulties in measurement.

ØThis mainly relate to the reliability and validity of measurement

techniques used for evaluation, lack of quantifiable objective or
performance standards and inability of information system to
provide timely and valid information.

3. Resistance to evaluation :
Ø The evaluation process involves controlling the behaviour of
individuals and like any other similar organizational mechanism is
likely to be resisted by managers.
4. Short –termism :
ØManagers often tend to rely on short term implications of
activities and try to measure the immediate results.
Ø
ØOften, the long term impact of performance on strategy and
extended effect of strategy on performance is ignored.
Ø
ØThis is so as immediate assessment seems to be easy way out
and taking the long term implications into account may be seen
as too tedious.

5. Relying on efficiency against

effectiveness :
ØIt is instructive to remember that efficiency is doing things
rightly while the effectiveness is doing the right things. Ther is
genuine confusion among managers as to what constitute
effective performance.
Ø
ØMeasuring the wrong parameters may lead to situation where
the right type of performance does not get rewarded.
Ø
ØIn fact, sometimes performance that does nor really contribute
to achievement of objectives may be rewarded if assessed on
the basis of efficiency alone
THANK YOU