ELEMENTS OF STRATEGIC MANAGEMENT, TY BBA (Marketing), Sem 6, VNSGU
CHAPTER 3
STRATEGY - EVALUATION AND CONTROL (SEC)
The last stage in Strategic Management is Strategy Evaluation and Control. All strategies require change
because internal and external factors are constantly changing. In the strategy evaluation and control
process managers determine whether the chosen strategy is achieving the organization's objectives.
DEFINITION
“Evaluation of strategy is that phase of strategic management process in which the top managers
determine whether their strategic choice (as implemented) is meeting the objectives of the
organisation”.
------------------------------------------------------------------------------------------------------------------------------
IMPORTANCE / ROLE OF STRATEGY EVALUATION AND CONTROL
Strategic Evaluation and Control (SEC) helps an organisation in several ways;
Feedback: SEC offers valuable feedback on how well things are moving ahead. It also throws
light on the relevance and validity of strategic choice. It helps to answer critical questions such
as: Are we moving in the proper direction? Are our assumptions about major trends correct?
Should we make adjustments in our strategy or should we abort strategy? This type of feedback
helps the organisation in properly implementing its current strategy.
Reward: SEC helps in identifying the responsibilities for failure. It also helps in identifying the
people responsible for success. Hence rewards can be given to such people as per their success or
punishment can be imposed on people for their failure. Because of strategic evaluation and
control system in the organisation, it becomes easy to identify the responsibilities of failure and
success. Accordingly organisation can provide rewards.
Progress: SEC helps in measuring the progress of the organisation when strategy is
implemented. When the organisation measures the actual performance, it becomes aware about
the current progress of the organisation.
Correction: SEC helps in identifying the corrective steps necessary to be taken if anything goes
wrong or does not work as per the plan. Corrective steps are necessary in an organisation in order
to achieve the objectives.
Future Planning: SEC offers a large amount of information and experience to decision makers.
This information can be very important in the formulation of new strategic plans. Hence future
plan depends on the evaluation and control of current strategies.
DR. ZAKIR PATEL, PROFESSOR, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
Whatsapp - 9586075954
, ELEMENTS OF STRATEGIC MANAGEMENT, TY BBA (Marketing), Sem 6, VNSGU
BARRIERS TO EVALUATION AND CONTROL
There are different types of barriers in evaluation of strategies. They are the limits of control, difficulties
in measurement, and motivational problems.
The Limits of Control:
It is not easy for strategists to decide the limits of control.
If there is too much control then managers will not try or experiment with new ideas. They will
not try to take any initiative or take risk.
On the other hand, when there is very little control people waste resources without any fear of
punishment and do not work with discipline.
All this will result into survival problem of the organisation.
Difficulties in Measurement:
It is not easy to find measurement techniques that are valid and reliable.
Validity is the extent to which an instrument measures what it intends to measure (for example
measuring the speed and accuracy of a typist in a typing test).
Reliability is the confidence that it will measure the same thing every time.
In the absence of reliability and validity, the control system gets distorted. It may fail to measure
results uniformly or measure attributes that are not required to be measured.
When people are not confident about the measures/actions used for judgment, they resist the
whole process.
Motivational Problems:
It is a common human behaviour that people do not accept their mistakes.
Hence, strategists also resist in accepting their mistakes when results are not achieved.
They try to shift the blame on others.
This will result into weak decision making, wrong decision making and wastage of resources.
Short term view:
Most of the top executives feel that they do not analyse the long term effect of current strategy.
They even do not analyse the current operational impact of the strategy on the organisation.
The reasons behind this behaviour are;
o 1. The top management does not realize the importance of evaluation.
o 2. They feel that short term analysis is more important and sufficient.
o 3. They feel that there is less time to conduct long term analysis.
Performance – Reward Relationship:
Sometimes in family business, the chairman of the board of directors is one of the family
members. Hence they may try to take the credit if everything goes right. But if things go wrong,
they are not willing to accept it.
Hence in the absence of proper performance-reward relationship in the organisation, employees
might not be motivated to perform evaluation activities properly. Important employees might
leave the job and might move to better organizations.
------------------------------------------------------------------------------------------------------------------------------
DR. ZAKIR PATEL, PROFESSOR, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
Whatsapp - 9586075954
CHAPTER 3
STRATEGY - EVALUATION AND CONTROL (SEC)
The last stage in Strategic Management is Strategy Evaluation and Control. All strategies require change
because internal and external factors are constantly changing. In the strategy evaluation and control
process managers determine whether the chosen strategy is achieving the organization's objectives.
DEFINITION
“Evaluation of strategy is that phase of strategic management process in which the top managers
determine whether their strategic choice (as implemented) is meeting the objectives of the
organisation”.
------------------------------------------------------------------------------------------------------------------------------
IMPORTANCE / ROLE OF STRATEGY EVALUATION AND CONTROL
Strategic Evaluation and Control (SEC) helps an organisation in several ways;
Feedback: SEC offers valuable feedback on how well things are moving ahead. It also throws
light on the relevance and validity of strategic choice. It helps to answer critical questions such
as: Are we moving in the proper direction? Are our assumptions about major trends correct?
Should we make adjustments in our strategy or should we abort strategy? This type of feedback
helps the organisation in properly implementing its current strategy.
Reward: SEC helps in identifying the responsibilities for failure. It also helps in identifying the
people responsible for success. Hence rewards can be given to such people as per their success or
punishment can be imposed on people for their failure. Because of strategic evaluation and
control system in the organisation, it becomes easy to identify the responsibilities of failure and
success. Accordingly organisation can provide rewards.
Progress: SEC helps in measuring the progress of the organisation when strategy is
implemented. When the organisation measures the actual performance, it becomes aware about
the current progress of the organisation.
Correction: SEC helps in identifying the corrective steps necessary to be taken if anything goes
wrong or does not work as per the plan. Corrective steps are necessary in an organisation in order
to achieve the objectives.
Future Planning: SEC offers a large amount of information and experience to decision makers.
This information can be very important in the formulation of new strategic plans. Hence future
plan depends on the evaluation and control of current strategies.
DR. ZAKIR PATEL, PROFESSOR, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
Whatsapp - 9586075954
, ELEMENTS OF STRATEGIC MANAGEMENT, TY BBA (Marketing), Sem 6, VNSGU
BARRIERS TO EVALUATION AND CONTROL
There are different types of barriers in evaluation of strategies. They are the limits of control, difficulties
in measurement, and motivational problems.
The Limits of Control:
It is not easy for strategists to decide the limits of control.
If there is too much control then managers will not try or experiment with new ideas. They will
not try to take any initiative or take risk.
On the other hand, when there is very little control people waste resources without any fear of
punishment and do not work with discipline.
All this will result into survival problem of the organisation.
Difficulties in Measurement:
It is not easy to find measurement techniques that are valid and reliable.
Validity is the extent to which an instrument measures what it intends to measure (for example
measuring the speed and accuracy of a typist in a typing test).
Reliability is the confidence that it will measure the same thing every time.
In the absence of reliability and validity, the control system gets distorted. It may fail to measure
results uniformly or measure attributes that are not required to be measured.
When people are not confident about the measures/actions used for judgment, they resist the
whole process.
Motivational Problems:
It is a common human behaviour that people do not accept their mistakes.
Hence, strategists also resist in accepting their mistakes when results are not achieved.
They try to shift the blame on others.
This will result into weak decision making, wrong decision making and wastage of resources.
Short term view:
Most of the top executives feel that they do not analyse the long term effect of current strategy.
They even do not analyse the current operational impact of the strategy on the organisation.
The reasons behind this behaviour are;
o 1. The top management does not realize the importance of evaluation.
o 2. They feel that short term analysis is more important and sufficient.
o 3. They feel that there is less time to conduct long term analysis.
Performance – Reward Relationship:
Sometimes in family business, the chairman of the board of directors is one of the family
members. Hence they may try to take the credit if everything goes right. But if things go wrong,
they are not willing to accept it.
Hence in the absence of proper performance-reward relationship in the organisation, employees
might not be motivated to perform evaluation activities properly. Important employees might
leave the job and might move to better organizations.
------------------------------------------------------------------------------------------------------------------------------
DR. ZAKIR PATEL, PROFESSOR, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
Whatsapp - 9586075954
