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Strategic evaluation

Strategic evaluation
Learning objectives
1. Outline the role of strategic evaluation in the business strategy
process

2. Articulate the key principle of strategic evaluation, which is monitoring


strategic performance against strategic objectives
3.

Discuss the role of information systems in the strategic evaluation


process

4.

Outline and discuss how the balanced scorecard and triple bottom line
reporting systems may be used in the strategic evaluation process.

Strategic evaluation
Outline

Introduction
Systems to monitor strategic performance
Some strategic performance reporting systems
The balanced scorecard
Triple bottom line reporting

Conclusion
Strategic evaluation: Summary

References

Hanson et al., (2014) Chapter 12 (especially pp.377-379)


Article 10: Hubbard, G. (2004). Strategic Management: Thinking,
Analysis & Action, Pearson, Australia. Chapter 5 (especially pp. 107113) and Chapter 10 (especially pp. 245-253).
Article 1(e): Viljoen and Dann (2003) Chapter 8 (especially pp. 208211).

Readings in bold black are important.

A business strategy process: Rational or formal model

2.

Strategic analysis
3.

Analyse the
environment

Strategic
direction-setting

6.

Identify the
organisations
current vision,
mission and
strategic
objectives

Reassess the
organisations
vision, mission
and strategic
objectives

Analyse the
organisations
resources

Strategic
Strategic
implementation evaluation

Identify
opportunities
and threats

1.

4.

Strategic choice

7.
Formulate
business
strategies

8.

Implement
strategies

9.

Evaluate
results

5.
Identify
strengths and
weaknesses

(Source: Robbins, S. P., Bergman, R., Stagg, I. and Coulter, M. 2009. Management, 5th edition, Pearson Education,
Australia: 276; and Robbins, S. P., Bergman, R., and Stagg, I. 1997. Prentice Hall, Australia: 248 ).

Introduction

Strategic evaluation and control is the final stage in the


business strategy process.
The key principle of strategic evaluation is monitoring strategic
performance against strategic objectives.
Systems must be in place to collect, record and report performance
data against strategic objectives.

Systems to measure strategic performance


Examples of measurement systems
Financial control systems to measure performance against strategic
financial objectives:

Profit and loss


Capital expenditure
Cash flow
Balance sheets.

Resource allocation systems:

Staff allocation systems


Capital expenditure allocation systems
Vehicle fleet systems
Asset registers.

Systems to measure strategic performance

Examples of measurement systems

Quality control systems:


Manufacturing processes
Customer service levels
Delivery times.

Administrative systems:

Purchasing
Payments
Cash collection
Human resource management.

Some strategic performance reporting systems


Two strategic performance reporting systems used in many
firms:
The balanced scorecard
Triple bottom line reporting.
These strategic performance reporting systems are used to report firm
performance against those strategic objectives developed to meet
prioritised stakeholder demands developed in the strategic objectivessetting stage of the business strategy process.

Some strategic performance reporting systems


The balanced scorecard
(Hanson et al., 2014: 377-379)

Cash flow

Copyright 2014 Cengage Learning Pty Limited


Hanson et al., 2014: 378

Some strategic performance reporting systems


Triple bottom line reporting
(Viljoen and Dann, 2003: 208-211)

Focuses on evaluating strategic performance in three areas:


The environmental bottom line - the organisations achievement of
environmental objectives
The social justice bottom line - the organisations achievement of
community and relevant social objectives
Financial or economic bottom line the organisations achievement
of financial and related objectives.

Conclusion

Both the balanced score card and triple bottom line reporting
systems are designed to measure the extent to which firm
performance has satisfactorily progressed (or otherwise)
towards achieving the key strategic objectives identified
through the ethics and stakeholder analyses discussed in
the topic on strategic direction-setting.

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