Describe the steps in strategic evaluation and control process.

Steps in the Strategic Evaluation and Control Process

The strategic evaluation and control process is a systematic approach to ensure that organizational strategies are effectively implemented and achieving desired outcomes. It typically involves the following steps:

1. Establishing Standards of Performance

The first step involves setting clear, measurable standards against which actual performance will be compared. These standards can be quantitative (e.g., sales targets, market share, return on investment) or qualitative (e.g., customer satisfaction, employee morale). Standards should be aligned with the overall strategic objectives and be realistic yet challenging. For example, a company aiming for market leadership might set a standard of achieving 25% market share within three years.

2. Measuring Actual Performance

This step involves collecting and analyzing data to determine the actual performance levels. Performance measurement should be objective and reliable. Key Performance Indicators (KPIs) are often used to track progress. Data can be gathered from various sources, including financial statements, sales reports, customer surveys, and operational data. Regular monitoring and reporting are essential. For instance, a retail chain might track daily sales figures, inventory turnover rates, and customer foot traffic.

3. Comparing Actual Performance with Standards

Once actual performance is measured, it is compared against the established standards. This comparison reveals variances – the differences between planned and actual results. Variances can be positive (favorable) or negative (unfavorable). Analyzing the magnitude and direction of these variances is crucial. A significant negative variance signals a potential problem that requires attention. For example, if actual sales are 10% below the target, it indicates a negative variance.

4. Analyzing Deviations

This step involves identifying the causes of significant variances. The analysis should go beyond simply identifying *that* a deviation exists; it should determine *why* it occurred. Possible causes include ineffective implementation, changes in the external environment, inaccurate forecasting, or flawed strategies. Techniques like root cause analysis and Pareto analysis can be helpful. For example, a decline in sales might be attributed to increased competition, a change in consumer preferences, or a poorly executed marketing campaign.

5. Taking Corrective Action

Based on the analysis of deviations, appropriate corrective actions are taken to bring performance back on track. Corrective actions can range from minor adjustments to major strategic changes. Possible actions include revising the implementation plan, reallocating resources, modifying the strategy, or improving employee training. The chosen action should be proportionate to the severity of the deviation. For example, if a marketing campaign is underperforming, the company might adjust the messaging, target a different audience, or increase the budget.

Strategic Control Types: There are different types of strategic control, including feedforward control (preventing problems before they occur), concurrent control (monitoring activities while they are ongoing), and feedback control (taking corrective action after problems have occurred). A combination of these control types is often most effective.

Control Type	Description	Example
Feedforward Control	Prevents problems by anticipating and controlling inputs.	Training employees before launching a new product.
Concurrent Control	Monitors ongoing activities and makes adjustments as needed.	Regularly reviewing project milestones and providing feedback.
Feedback Control	Takes corrective action after problems have occurred.	Analyzing sales data to identify underperforming products.