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8/3/2019 Strategic Evaluation and Control- Asif
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Strategic Evaluation & Control
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Nature of Strategic Evaluation
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Participant in strategic evaluation
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Requirementof Effective
evaluation
Control should involve
only the minimum
amount of information.
Control should monitor
only managerial
activities and results.
Control should betimely..
Long term and shortterm control should be
used.
Control should aim atpinpointing exceptions.
Rewards for meeting
or exceeding standards
should be emphasized.
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Strategic Control
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Four Types of Strategic Controls
Premise Control
Implementation Control
Strategic Surveillance
Special alert control
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Premise Control
Necessary to identify the key assumptions andits implementation.
Serves the purpose of continually testing theassumptions to find out whether they are stillvalid or not.
Which enables the strategists to take correctiveaction at the right time rather than continuingwith a strategy which is based on erroneousassumptions.
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Implementation Control
Implementation control is aimed at evaluatingwhether the plans, programs, and projects are
actually guiding the organization towards its
predetermined objectives or not.
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Strategic Surveillance
Strategic surveillance aimed at a moregeneralized and overarching control designed
to monitor a broad range of events inside and
outside the company that are likely to threaten
the course of a firms strategy.
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Special Alert Control
Special alert control, which is based on a trigger
mechanism for rapid response and immediatereassessment of strategy in the light of sudden
and unexpected events
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Operational Control
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Operational Control
Aimed at the allocation and use of organizational
resources
Concerned with action or performance
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How do Strategic Control and
Operational Control Differ ?
2. Aim2. Aim Proactive, continuousProactive, continuous
questioning of the basicquestioning of the basicdirection of strategydirection of strategy
Allocation and use ofAllocation and use of
organizational resourcesorganizational resources
Attribute Strategic Control Operational Control
1. Basic question1. Basic question Are we moving in the rightAre we moving in the right
direction?direction?
How are we performing?How are we performing?
3. Main Concern3. Main Concern Steering the organizationsSteering the organizations
futurefuture
directiondirection
Action controlAction control
4. Focus4. Focus External environmentExternal environment Internal organizationInternal organization
5. Time Horizon5. Time Horizon Long Long-- termterm ShortShort-- termterm
6. Main Techniques6. Main Techniques Environmental scanning,Environmental scanning,
information gathering,information gathering,
questioning and reviewquestioning and review
Budgets, schedules, andBudgets, schedules, and
MBOMBO
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Process of Evaluation
Setting standards of performance
Measurement of performance
Analyzing variances
Taking corrective action
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Setting of Standards
Quantitative
Criteria
It has performed as compared to its pastachievement.
Its performance with the industry average or
that of major competitors
Qualitative Criteria
Criteria for capabilities, core competencies,
risk bearing capacity, strategic clarity, flexibility,and workability
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Measurement ofPerformance
The evaluation process operates at theperformance level as action takes place.
Standards of performance act as the benchmarkagainst which the actual performance is to becompared. It is important, however, tounderstand how the measurement ofperformance can take place.
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Analyzing Variances
The measurement of actual performance and itscomparison with standard or budgetedperformance leads to an analysis of variances.
There may arise three situations: The actual performance matches the budgetedperformance
The actual performance deviates positively overthe budget performance
The actual performance deviates negativelyfrom the budgeted
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Taking Corrective Actions
There are three courses for corrective action:
Checking of performance, Checking of standards, and
Reformulating strategies, plans, and objectives.
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Techniques of Strategic Evaluation and
Operational Control
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Evaluation Techniques for Strategic Control
Techniques for strategic control could be classifiedinto two groups:-
Strategic momentum control :-Used by the organization that operate in arelative stable environment.
Strategic leap control:-
Used by organizations those which face arelatively turbulent environment.
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Evaluation Techniques forOperational
ControlOperational control is aimed at the allocation
and use of organizational Resources.
The evaluation techniques are classified intothree parts:
Internal analysis
Comparative analysis Comprehensive analysis.
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Role ofOrganizational Systems In
Evaluation
Role of Information System
Helps managers to keep the track ofperformance through control reports.
Role ofControl SystemUsed for setting standards, measuring
performance, analyzing variances , & takingcorrective action.
Role of Appraisal SystemHelps to measure the actual performance
and provides for the control system to work.
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