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Barriers in Evaluation
Limits of Controls Difficulties in measurement Resistance to evaluation Short-termism Relying on efficiency versus effectiveness
Strategic Control
Premise Control
Premises control is necessary to identify the key assumptions and its implementation. Premises control serves the purpose of continually testing the assumptions to find out whether they are still valid or not. This enables the strategists to take corrective action at the right time rather than continuing with a strategy which is based on erroneous assumptions.
Implementation Control
Implementation control is aimed at evaluating whether the plans, programmes, and projects are actually guiding the organization towards its predetermined objectives or not.
Strategic Surveillance
Strategic surveillance aimed at a more generalized and overarching control designed to monitor a broad range of events inside and outside the company that are likely to threaten the course of a firms strategy.
Operational Control
Aimed at the allocation and use of organisational resources Concerned with action or performance
Strategic Control
Operational Control
Are we moving in the right How are we performing? direction? Proactive, continuous questioning of the basic direction of strategy Steering the organizations future direction Allocation and use of organisational resources Action control Internal organization
External environment
Long- term
Environmental scanning, information gathering, questioning and review
Short- term
Budgets, schedules, and MBO
Process of Evaluation
Setting standards of performance
Measurement of performance Analyzing variances Taking corrective action
Setting of Standards
Quantitative Criteria
It has performed as compared to its past achievements Its performance with the industry average or that of major competitors
Qualitative Criteria
There has to be a special set of qualitative criteria for a subjective assessment of the factors like capabilities, core competencies, risk- bearing capacity, strategic clarity, flexibility, and workability
Measurement of Performance
The evaluation process operates at the performance level as action takes place. Standards of performance act as the benchmark against which the actual performance is to be compared. It is important, however, to understand how the measurement of performance can take place.
Analyzing Variances
The measurement of actual performance and its comparison with standard or budgeted performance leads to an analysis of variances. Broadly, the following three situations may arise: The actual performance matches the budgeted performance The actual performance deviates positively over the budget performance The actual performance deviates negatively from the budgeted