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Strategic Management

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Learning objectives
This topic covers various aspects concerning with the strategy evaluation and enables you to understand
the process of strategy evaluation.

Four Criteria (Richard Rummelt):
He explains four criteria for strategy valuation. These four criteria are
as follow


Strategy should not present inconsistent goals and policies.
Conflict and interdepartmental bickering symptomatic of managerial disorder and
strategic inconsistency


Need for strategies to examine sets of trends
Adaptive response to external environment
Trends are results of interactions among other trends

Neither overtaxes resources nor creates unsolvable sub problems
Organizations must demonstrate the abilities, competencies, skills and talents to
carry out a given strategy


Creation or maintenance of competitive advantage
Superiority in resources, skills, or position

Difficulty in strategy evaluation –

1. Increase in environment’s complexity
2. Difficulty predicting future with accuracy
3. Increasing number of variables
4. Rate of obsolescence of plans
5. Domestic and global events
6. Decreasing time span for planning certainty

The process of evaluating Strategies

1. Strategy evaluation is necessary for all sizes and kinds of organization. Strategy evaluation should
initiate managerial questioning of expectations and assumptions should trigger a review of objectives
and values and should stimulate creativity in generating alternative and formulating criteria of
2. Evaluating strategies on continuous rather than a periodic basis allows benchmark of progress to
established and o\more effectively monitored
3. Managers and employees of the firm should be continually aware of progress being made towards
achieving the firm’s objectives. As a critical success factors change, organization members should be
involved in determining appropriate corrective action.

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