LECT-10-STRATEGY FORMULATION, IMPLEMENTATION, EVALUATION & CONTROL.pptx
- 1. STRATEGY FORMULATION, IMPLEMENTATION, EVALUATION & CONTROL BY: Dr. Debajani Palai
- 2. STRATEGY FORMULATION • Strategy formulation includes planning & decision-making and developing plans to achieve organizational goals & objectives. • It is an entrepreneurial activity based on strategic decision making to reach at vision. • It demands co-ordination of personnel of each and every level of organizational hierarchy. • It requires strong analytical and conceptual skill.
- 3. STRATEGIC CHOICE MAKING • Choice of strategy involves understanding and choosing the best formulated strategy across different strategic alternatives. • Its first step is SWOT analysis. • Management needs to seek to identify & evaluate alternative courses of action to ensure that the business reaches the objectives they have set. • It is a creative process of generating alternatives, building on the strengths of the business & allowing it to tackle new products or markets to improve its competitive position.
- 4. STEPS IN STRATEGIC CHOICE • Strategy formulation • Focusing on strategic alternatives • Evaluating strategic alternatives • Considering decision factors • Choice of strategy
- 5. STRATEGY IMPLEMENTATION • Strategy implementation involves all those means related to executing the strategic plans. • It is mainly a administrative task based on strategic & operational decisions. • It is an operational process which requires co-ordination among all employees. • It requires specific leadership & motivational traits
- 6. EVALUATION OF STRATEGY • Evaluation of strategy is as significant as strategy formulation because it throws light on the efficiency & effectiveness of comprehensive plans in achieving the desired results. • The managers can also assess the appropriateness of the current strategy in today’s dynamic world which is influenced by PEST (Political, Economic, Social & Technological ) • It is very significant because of various factors such as: developing inputs for new strategic planning, the urge for feedback, appraisal & reward, development of strategic management process, judging the validity of strategic choice etc.
- 7. PROCESS/ STEPS OF STRATEGIC EVALUATION • Setting standard performance or expected performance or benchmarking performance. • Measure the actual performance. • Analyzing the variance by comparing standard and actual performance. • Taking corrective action to achieve the target.
- 8. TYPES OF STRATEGIC CONTROL • Strategic control aims at monitoring the course of progress in the predetermined direction. There are different types of strategic controls. These are: • Premise control • Implementation control • Strategic surveillance • Special alert control • Strategic momentum control • Strategic leap control
- 9. PREMISE CONTROL • Premise control: A company must base its strategy on important assumptions related to environmental factors, industrial factors & organizational factors. • Premise control continually verifies whether such assumptions are right or wrong. If they are not valid corrective actions are taken. • The responsibility for premise control can be assigned to the corporate planning staff who can identify for assumptions & keep a regular check on their validity.
- 10. IMPLEMENTATION CONTROL • It can be done by milestone review. It is similar to the identification of smaller scale of events & activities I PERT/CPM networks. • After the identification of milestones, a comprehensive review of implementation is made to reassess its relevance to continue to achieve the objectives.
- 11. STRATEGIC SURVEILLANCE • Strategic surveillance is aimed at a more generalized & overarching control. • It can be done through a broader base, general monitoring on the basis of selected information sources to uncover events that are likely to affect the strategy of an organization.
- 12. SPECIAL ALERT CONTROL • Special alert control is based on a trigger mechanism for rapid response & immediate reassessment of strategy in the light of sudden & unexpected events. • It can be exercised through the formulation of contingency strategies & assigning the responsibility of handling unforeseen event to crisis management. • Examples: sudden fall of a government at the central or state level, instant changes in competitors’ posture, industrial disaster and natural disaster.
- 13. STRATEGIC MOMENTUM CONTROL • Strategic momentum control aims to find out what needs to be done in order to allow the organization to maintain its existing strategic momentum. • It uses techniques like: • Responsibility control centers (revenue, expense, profit, investment). • Generic strategies approach which is based on the assumption that the strategies adopted by a firm is similar to another comparable firm. • Continuous evaluate strategy to assess whether or not the strategies are helping in the organization’s goal achievement.
- 14. STRATEGIC LEAP CONTROL • Strategic leap control helps organizations to identify the new strategies required to cope with emerging environmental realities. • It can be of different types: • Strategic issue management : focuses on forthcoming development y identifying issues. • Strategic field analysis: examines the nature & extent of synergy that exists or lacks between components of organizations. • System modelling: computer based model that simulate the essential features of the organization & environment. • Scenarios: perceives about the likely environment a firm would face in the future.