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Lesson#42
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STRATEGY EVALUATION
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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
• Consistency
• Consonance
• Feasibility
• Advantage
Consistency
Strategy should not present inconsistent goals and policies.
• Conflict and
interdepartmental bickering symptomatic of managerial disorder and
strategic inconsistency
Consonance
Need for strategies to examine sets of trends
• Adaptive response to
external environment
• Trends are results of
interactions among other trends
Feasibility
Neither overtaxes resources nor creates unsolvable sub problems
• Organizations must
demonstrate the abilities, competencies, skills and talents to
carry out a given strategy
Advantage
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
evaluation
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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