Lesson 1, Topic 1
In Progress

9.3 Strategy Evaluation Framework Copy

Nik Shazana November 1, 2022
The Three activities of strategy evaluation are:  
1.     Reviewing bases of strategy
Internal strengths and weaknesses, as well as external opportunities and threats, form the bases for a strategy. The opportunities, threats, strengths, and weaknesses are hot likely to remain valid for a long time. So, when the implementation of a strategy takes a long time (some strategies may even take several years for full implementation), these bases (i.e., SWOT data) of strategy should be reviewed.
A review would reveal how competitors have reacted to the firm’s strategies, how competitors have changed their strategies in response of company’s strategies, whether strengths and weaknesses have changed, whether new opportunities by now have emerged or new threats have surfaced, and above all whether the already-identified opportunities, threats, strengths, and weaknesses are still as they were at the time of SWOT analysis, an many other issues like these. Review of the bases of strategy enables the managers to identify the real reasons for unsatisfactory results.
It may so happen that ineffective strategy has been chosen or strategy has been implemented very poorly, or sudden changes in the external factors (such as changes in demand, changes in technology, new policies by government, or actions by competitors) have prohibited the company from achieving the objectives. The review helps in discovering these changes.
2.     Measuring organizational performance
The second component or activity of the strategy-evaluation framework is the measurement of organizational performance. Managers need to compare the planned activities against the actual progress toward achieving stated objectives.
That is, actual results are compared with the planned results. Then, deviations are detected, if there is any. Evaluation is also made of individual performance. Progress toward achieving original objectives is evaluated.
3.     Taking corrective actions
Corrective actions are not necessary if there are no significant differences between the planned resort and the actual results. In such a situation, managers will continue to present a course of action managers take corrective actions only when significant deviations exist.
Actions need to be undertaken on the basis of the nature of the deviation and the causes of such deviation. It may be necessary to make directives in objectives, the strategy itself, organization structure, human resources deployed on strategy implementation, policies, resource allocation, reword systems and more.
Strategy-evaluation activities in terms of key questions that should be addressed, alternative answers to those questions, and appropriate actions for an organization to take. Notice that corrective actions are almost always needed except when:
 (1) external and internal factors have not significantly changed
 (2) The firm is progressing satisfactorily toward achieving stated objectives