Strategy Review,
Evaluation, and
Control
OBJECTIVES
At the end of this module, you
should be able to:
1. explain the nature of strategy
evaluation;
2. discuss the strategy-evaluation
framework.
The Nature of Strategy
Evaluation
Strategy evaluation is important for the organization’s well-being;
on-time evaluations can alert or warn the management to present
or potential problems before it occurs.
● Evaluating strategies regularly allows existing
standards to be enhanced and monitored effectively.
● People inside the firm, especially the managers
must have continuous tracking of progress being made.
● It is impossible to conclude that a particular
strategy is 100% guaranteed that it will give the result as
the way the organization wants.
Four main criteria that could be used to
evaluate a strateg
1. Consistency - A strategy should not present inconsistent
goals and policies
2. Consonance - Consonance refers to the need for strategists
to examine sets of trends, as well as individual trends, in
evaluating strategies
3. Feasibility - A strategy must neither overtax available
resources nor create unsolvable sub-problems. It needs to be
Feasible
4. Advantage - A strategy must provide for the creation and/or
maintenance of competitive advantage in a selected area of
activity
(i)Strategy-Evaluation Framework
(ii)Step 1 – According to David (2011), reviewing the
underlying bases of an organization’s strategy
could be done by developing a revised EFE Matrix
and IFE Matrix.
(iii) ● A revised EFE Matrix should indicate how
effective a firm’s strategies have been in
response to key opportunities and threats.
(iv)● A revised IFE Matrix focused on changes in
the internal department (marketing,
finance/accounting, management, etc.)’s
strengths and weaknesses.
(i)Strategy-Evaluation Framework
(ii) Step 2 – Plot the result of previous IFE Matrix and EFE Matrix
total scores together with the revised IFE Matrix and EFE
Matrix total scores in one table.
(iii)Step 3 - Conclude whether there is major changes or no major
changes in the internal and external strategic position by
following this principle:
(i) ● If the previous EFE Matrix total score is lesser than
the revised EFE Matrix total score, then it simply means that
there is a major change in the external strategic position.
(ii) ● However, if the previous total scores of either EFE
Matrix or IFE Matrix are the same as their revised total scores
then it simply means that there are no major changes
occurred in the firm internal/external strategic position.
(i)Comparing Expected Results with Actual
Results
(ii)● A sign that organization needs for
corrective action over their strategy is when the
organization fails to make satisfactory progress
in reaching its objective (whether long-term or
annual).
(iii)● In reality, there are a lot of factors why the
progression of organizations can be
unsatisfactory some of them are unexpected
trends and turns in the economy, employees
changing commitment in helping the
organization, unreliable external stakeholders,
(i)C. Taking Corrective Actions
(ii)● According to David (2011), here are some
corrective actions possibly needed to correct
unfavorable variances:
(iii)1. Alter the firm’s structure
(iv)2. Replace one or more key individuals
(v) 3. Divest a division
(vi)4. Alter the firm’s vision and/or mission
(vii)5. Revise objectives
(viii)6. Alter strategies
(ix)7. Devise new policies
(x) 8. Install new performance incentives
(xi)9. Raise capital with stock or debt
(xii)10. Add or terminate salespersons, employees, or
managers
(xiii)11. Allocate resources differently
