STRATEGIC EVALUATION
STRATEGIC EVALUATION PRESENTED BY, POORNIMA V NITHYA MOHANAN
LIRIN LEE JOSEPHDEFINITION:-Strategic evaluation is defined as the
process of determining the effectiveness of a given strategy in
achieving the organizational objectives & taking corrective
actions whereever required.Final step in SM process.Evaluation
makes sure that the organizational strategy as well as its
implementation meets the organizational objectives.
IMPORTANCE OF STRATEGIC EVALUATIONTo test the effectiveness of
the strategy.Helps to know whether the organisational objectives
are achieved with the strategies adopted.Performs a crucial task of
keeping the organisation on right track.In the absence of such
mechanism, there would be no means for strategists to find out
whether or not the strategy is producing the desired effect.
Helps to assess whether the decisions match the intended
strategy requirements.Provides a considerable amt of information
& experience to strategists that can be useful in new strategic
planning.Helps to analyze organisational as well as financial
performance of the firm.
PARTICIPANTS IN STRATEGIC EVALUATIONShareholdersBoard of
DirectorsChief ExecutivesFinancial controllersCompany
secretariesExternal & Internal auditorsMiddle level
managersAudit & Executive committees.PROCESS OF STRATEGIC
EVALUATIONFixing bench mark of performance.What benchmarks to be
set?How to set them & how to express them?To determine
benchmark-Special requirements for performing the main
task.Quantitative & Qualitative criteria for assessment of
performance.Quantitative- ROI, EPS, Cost of Pdn..etc..Qualitative
Skills & competencies, risk taking potential.,etc.Measurement
of performanceThe standard performance is the benchmark with which
the actual performance is to be compared.Reporting &
communication helps in measuring the performance.For measuring
performance- financial statements like B/S, Profit&loss a/c,
must be prepared on annual basis.Analyzing VarianceWhile measuring
actual perormance with std performance, there may be variances
which must be analyzed.Taking corrective actionOnce the deviation
in performance is identified, it is essential to plan for a
corrective action.If performance < Desired performance,
stategists must carry detailed analysis of the factors responsible
for such performance.
TECHNIQUES OF STRATEGIC EVALUATIONGAP ANALYSISMeasure the gap
b/w organisations current position & its desired
position.Evaluate a variety of aspects of business,from profit
& pdn to marketing, R & D, MIS.Financial data is analyzed
& compared to other businesses within the same industry to
evaluate the gap b/w the organisation & its strongest
competitors.SWOT ANALYSISEvaluates the organisations strengths,
weakness, opportunities & threats.SW- Internal factorsOT-
External factors.Helps to determine how to best focus resources to
take advantage of s & o and combat w & T.PEST
ANALYSISIdentify- political, economic,social & technological
factors that may impact organisations ability to achieve
objectives.Political factors- financial regulations, legislation
regarding wages & benefits.Economic factors- all shhifts in
economy, inflation, deflation..Social factors Demographics &
changing attitudes.Changes in technology.BENCHMARKINGEvaluate how
close the organisation has come to its final
objectives,.Organisations may benchmark themselves against other
organisations with in the same industry or prior to the
situation.Variety of performance measures as well as policies &
procedures evaluated regularly to identify & to maintain
sustainable competitive advantage.
