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Topic 11 - Strategy Monitoring (Strategy Evaluation (Corrective Actions…
Topic 11 - Strategy
Monitoring
Strategy
Evaluation
Basic
Activities
Examine the underlying bases of a firm's strategy
Compare expected results with actual results
Take actions to ensure performance conforms to plans
Criteria
Consonance
Consistency
Advantage
Feasibility
Why Is It
Difficult?
Increase in the environment's complexity
Difficult to predict the future accurately
Increase number of variables
Rapid rate of obsolescence of the best plans
Increase in number of domestic and would events affecting organisation
No planning can be done in a short period of time
Process
Should initiate managerial questioning of expectations and assumptions - trigger objectives and values - stimulate creativity in generating alternatives - formulate criteria of evaluation
Should be continuous and not periodic basis - allow benchmark of progress to be established and more effectively monitored.
Need patience and willingness to take corrective actions when necessary
Corrective
Actions
Alter firm's structure
Replace one or more key individuals
Divest a division
Revise objectives
Alter strategies
Devise new policies
Raise capital with stock and debt
Allocate resource differently
Outsource business functions
Add / terminate managers / employees
Balanced
Scoreboard
Aims
to
Balance long- term and short - term concerns
Balance financial and non - financial concerns
Internal and external concerns
Characteristics of and Effective
Evaluation System
Activities must be economical
Activities should be meaningful
Activities should provide timely information
Activities should be designed to provide a true picture of what is happening
Activities should not dominate decisions
Contingency
Planning
Explanation
Alternative plans to react to events that are not expected to happen
Effective
Identify good and bad events that could jeopardise strategies
Determine when the events are likely to occur
Determine the expected pros and cons of each contingency event
Develop contingency plans for key contingency events
Determine early warning trigger points for key contingency events
Auditing
A systematic process of objectively obtaining and evaluating evidence
Strategic
Management
21st Century Challenges
in Strategic Management
Decide whether the process should be more an art and science
Decide whether strategies should be visible or hidden from stakeholders
Decide whether process should be more top - down or bottom - up in their firm
Guidelines
Keep the process simple and easy to understand
Eliminate vague planning jargan
Keep the process non - routing
Welcome bad news and encourage devil's thinking
Do not allow technicians to monopolise the planning process
Involve managers from all areas of the firm