STRATEGY IMPLEMENTATION AND EVALUATION

1. INTRODUCTION
Implementation involves putting the plans into action.
evaluation refers to the process of measuring the effectiveness of these actions.

2. STRATEGIC MANAGEMENT PROCESS (BOOK)

Environmental
Analysis

Develop Vision, Generate, Analyse Strategic

Implement
Mission and and Select Evaluation and
Strategies
Objectives Strategies Control

Organisation
Appraisal

3.

Formulation Implementation Evaluation

4. Figure: Strategic Management Model (Fred R
David)

2.1 STAGES IN STRATEGIC MANAGEMENT PROCESS

Strategic management involves the following stages:

1. Developing a strategic vision and formulation of statement of mission, goals and
objectives.
2. Environmental and organisational analysis.
3. Formulation of strategy.
4. Implementation of strategy.
5. Strategic evaluation and control
Stage 1: Strategic Vision, Mission and Objectives
 Mission: it is important for both stakeholders and managers to be clear about what
the organisation wants to achieve and, how to achieve. At this level strategic direction is
main concern.

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 Strategic vision : Top management’s views about the company’s direction and the product-
customer-market- technology-focus provides a strategic vision.
 A strategic vision communicates management’s aspirations to stakeholders and steer the
personnel in a common direction.
 goals and objectives flow from the mission and growth ambition of the corporation. they
represent the growth the firm seeks to achieve in the given time frame.
 The objective is the basis for decisions making and realization of organisational
performance.
 The managerial purpose of setting objectives is to convert the strategic vision into
specific performance targets and use the objective for stretching an organisation to its full
potential for improving both financial performance and position.
 objectives need to be broken down into performance targets for each business, line,
department. each area of the organisation shall contribute to the results.
Stage 2: Environmental and Organisational Analysis
two types of analysis:
1. Environmental analysis
2. Organisational analysis
The firm’s external environment (economic, social, technological) is dynamic and
uncertain which affect its functioning. So, the management must systematically
analysed various elements of environment to determine opportunities and future
prospects.
Organisational analysis involved a review of financial & technological resources,
production, marketing and distribution effectiveness, R & D, HR and so on provides us
framework for SWOT analysis.
Stage 3: Formulating Strategy
several alternatives
i. Should the company continue in the same business with same volume of activities?
ii. In case of continuation, should it grow by expanding the existing units or by
establishing new units or by acquiring other units in the industry?
iii. In case of diversification, should it diversify into related areas or unrelated areas?
iv. Should it get out of an existing business fully or partially?
The above strategic alternatives may be designated as stability,
growth/expansion and retrenchment, combination strategy.

strategy-execution & implementation process includes the following

principal aspects:

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♦ Developing budgets that steer resources into activities for strategic success.
♦ Staffing needed skills.
♦ policies and procedures facilitate effective execution.
♦ Using the best-known practices to perform core business activities
♦ Installing information and operating systems for carrying out better strategic roles.
♦ Motivating people to pursue objectives energetically.
♦ Creating a company culture and work climate for successful strategy implementation
internal leadership to drive implementation and keep improving execution.
♦ Good strategy execution involves creating strong “fits” between strategy and
organisational capabilities, reward structure, internal operating systems,
organisation’s work climate and culture
Stage 4: Implementation of Strategy
In most situations, strategy-execution process includes the following
principal aspects:
♦ Developing budgets that steer ample resources into those activities critical to strategic
success.
♦ Staffing the organisation with the needed skills and expertise, consciously building
and strengthening strategy-supportive competencies and competitive capabilities
and organising the work effort.
♦ Ensuring that policies and operating procedures facilitate rather than impede effective
execution.
♦ Using the best-known practices to perform core business activities and pushing for
continuous improvement.
♦ Installing information and operating systems that enable company personnel to
better carry out their strategic roles day in and day out.
♦ Motivating people to pursue the target objectives energetically.
♦ Creating a company culture and work climate conducive to successful strategy
implementation and execution.
♦ Exerting the internal leadership needed to drive implementation forward and keep
improving strategy execution. When the organisation encounters stumbling blocks or
weaknesses, management has to see that they are addressed and rectified quickly.
Good strategy execution involves creating strong “fits” between strategy and
organisational capabilities, between strategy and the reward structure, between

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strategy and internal operating systems, and between strategy and the
organisation’s work climate and culture.
Stage 5: Strategic Evaluation and Control
is the trigger point for deciding whether to continue or change the company’s vision,
objectives, strategy.
Continue: direction and strategy matches to industry and competitive conditions and
performance targets are met
Change: whenever a company encounters disruptive changes in its external
environment
Successful strategy execution involves continuous improvement and then making
corrective adjustments whenever required

2.2 Strategy Formulation

Corporate Strategy: The game plan that really directs the company towards success is called
“corporate strategy”.

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Corporate Strategy

Strategic planning Operational planning

Characteristics of
Strategic planning Characteristics of
Operational planning
Shapes the organisation and its
resources. Deals with current deployment
of resources.
Assesses the impact of
environmental variables. Develops tactics rather than
strategy.
Takes a holistic view of the
Projects current operations into
organisation. the future.
Develops overall objectives and
strategies.
Makes modifications to the
Is concerned with the long-term business functions but not
success of the organisation. fundamental changes.
Is a senior management Is the responsibility
responsibility. of
functional managers.

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Strategic Planning:
 process of determining the objectives of the firm, resources required to attain these
objectives and formulation of policies for acquisition, use and disposition of resources
 involves interactive and overlapping decisions leading to the development of strategy
 determines where an organisation is going over the next year or more
 process is organisation-wide or focused on a major function
Strategic uncertainty and how to deal with it?
Strategic uncertainty refers to the unpredictability of future
events(market, technology, competition, regulation, and other external
factors) and circumstances that can impact an organization's strategy
and goals.
♦ Flexibility: to quickly adapt to changes in the environment.
♦ Diversification: product portfolio, markets, and customer base can reduce the
impact
♦ Monitoring and Scenario Planning: to understand how different future scenarios
impact their strategies.
♦ Building Resilience, such as strengthening operational processes, increasing their
financial flexibility, and improving their risk management capabilities.
♦ Collaboration and Partnerships: pool resources, share risk, and gain access to new
markets and technologies
Impact of uncertainty: The impact of a strategic uncertainty will depend on the importance
of the impacted SBU to a firm. The importance of SBUs may be indicated by their
associated sales, profits, or costs.
5.2.3 Strategy Implementation
Strategic implementation is concerned with translating a strategic decision
into action, which presupposes that the decision itself (i.e., the
strategic choice) was made with some thought being given to feasibility
and acceptability. The allocation of resources to new courses of action
will need to be undertaken, and there may be a need for adapting the
organization’s structure to handle new activities as well as training
personnel and devising appropriate systems.

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Relationship with strategy formulation

A B

Soun
d
Formulation
Strategy C D
Flawe
d Weak Excellent
Figure: Strategy formulation and implementation matrix
Square A: situation competitive strategy but difficulties in implementing it
successfully. (factors, such as the lack of experience (e.g. for startups),
the lack of resources, missing leadership) .company will aim at moving
from square A to square B.
Square B sound and competitive strategy and has been successful
implementing it.
Square C is denotes for companies that haven’t succeeded in coming up
with a sound strategy formulation and in addition are bad at implementing
their flawed strategic model. Their path to success also goes through
business model redesign and implementation/execution readjustment.
Square D is the situation where the strategy formulation is flawed, but
the company is showing excellent implementation skills. When a
company finds itself in square D the first thing, they have to do is to
redesign their strategy before readjusting their
implementation/execution skills.
BOOK

Strategic Formulation

Effective Ineffective
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Operational Management
1 2
Thrive Die
Slowl
y
3 4
Survive Die
Quickly

Figure: Principal combinations of efficiency and effectiveness

An organization that finds itself in cell 1 is well placed and thrives, since it is
achieving what it aspires to achieve with an efficient output/input ratio. In
contrast, an organization in cell 2 or 4 is doomed, unless it can establish
some strategic direction. The particular point to note is that cell 2 is a
worse place to be than is cell 3 since, in the latter, the strategic direction
is present to ensure effectiveness even if rather too much input is being
used to generate outputs. To be effective is to survive whereas to be
efficient is not in itself either necessary or sufficient for survival.
In crude terms, to be effective is to do the right thing, while to
be efficient is to do the thing right. An emphasis on efficiency rather
than on effectiveness is clearly wrong. But who determines effectiveness?
Any organization can be portrayed as a coalition of diverse interest
groups each of which participates in the coalition in order to secure some
advantage. This advantage (or inducement) may be in the form of
dividends to shareholders, wages to employees, continued business to
suppliers of goods and services, satisfaction on the part of consumers,
legal compliance from the viewpoint of government, responsible
behaviour towards society and the environment from the perspective of
pressure groups, and so on.

Even the most technically perfect strategic plan will serve little purpose if
it is not implemented effectively. Many organizations tend to spend an
inordinate amount of time, money, and effort on developing the strategic
plan, treating the means and circumstances under which it will be
implemented as afterthoughts. Change comes through implementation
and evaluation, not through the plan. A technically imperfect plan that is
implemented well will achieve more than the perfect plan that never
gets off the paper on which it is typed.

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Successful strategy formulation does not guarantee successful strategy

implementation. It is always more difficult to do something (strategy
implementation) than to say you are going to do it (strategy
formulation).
5.2.4 Difference between Strategy Formulation and Implementation
Strategy Formulation Vs. Strategy Implementation

Strategy Formulation Strategy Implementation

Strategy Formulation includes Strategy Implementation involves
planning and decision-making all those means related to executing
involved in developing the strategic plans.
organization’s strategic goals
and plans.
In short, Strategy In short, Strategy
Formulation is placing the Implementation is managing
Forces before the action. forces during the action.

An Entrepreneurial Activity An Administrative Task based

based on strategic decision- on strategic and operational
making. decisions.
Emphasizes on Emphasizes on efficiency.
effectiveness.
Primarily an Primarily an operational process.
intellectual and
rational process.
Requires co-ordination among Requires co-ordination among many
few individuals at the top level. individuals at the middle and lower
levels.

Requires a great deal of Requires specific motivational

initiative, logical skills, and leadership traits.
conceptual intuitive and
analytical skills.
Strategic Formulation Strategy Implementation
precedes Strategy follows Strategy
Implementation. Formulation.
Book
2.5 Linkages and issues in Strategy Implementation
♦ Forward Linkages: The different elements in strategy formulation starting with
objective setting through environmental and organizational appraisal, strategic
alternatives and choice to the strategic plan determine the course that an

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organization adopts for itself. With the formulation of new strategies, or

reformulation of existing strategies, many changes have to be affected within the
organization. For instance, the organizational structure has to undergo a change in the
light of the requirements of the modified or new strategy. The style of leadership has
to be adapted to the needs of the modified or new strategies. In this way, the
formulation of strategies has forward linkages with their implementation.
♦ Backward Linkages: Just as implementation is determined by the formulation of
strategies, the formulation process is also affected by factors related with
implementation. While dealing with strategic choice, remember that past strategic
actions also determine the choice of strategy. Organizations tend to adopt those
strategies which can be implemented with the help of the present structure of
resources combined with some additional efforts. Such incremental changes, over a
period of time, take the organization from where it is to where it wishes to be.
Issues in Strategy Implementation
♦ Strategies, by themselves, do not lead to action. They are statement of intent.
Implementation tasks are meant to realise the intent. Strategies, therefore, have to
be activated through implementation.
♦ Strategies lead to formulation of programmes. A programme includes goals, policies,
procedures, rules, and steps to be taken into action. Programmes are supported by
funds allocated for implementation.
♦ Programmes lead to the formulation of projects. Thus, research and development
programme may consist of several projects, each of which is intended to achieve a
specific and limited objective, requires separate allocation of funds, and is to be
completed within a set time schedule.
Given below in sequential/ simultaneous manner the issues in strategy
implementation which are to be considered:
♦ Project implementation
♦ Procedural implementation
♦ Resource allocation
♦ Structural implementation
♦ Functional implementation
♦ Behavioural implementation
implementation requires a shift in responsibility from strategists to divisional and functional
managers. Implementation problems can arise because of this shift in responsibility, especially
if strategic decisions come as a surprise to middle and lower-level managers.
Therefore, it is essential that divisional and functional managers be

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involved as much as possible in the strategy-formulation process.

similarly, strategists should also be involved as much as possible in
strategy-implementation activities.
BOOK
5.3 STRATEGIC CHANGE THROUGH DIGITAL TRANSFORMATION
5.3.1 STRATEGIC CHANGE
Strategic change is a process that involves a corporate strategy focused on
new markets, products, services and new ways of doing business.
Steps to initiate strategic change: For initiating strategic change, three steps can be identified
as under:

i) Recognize the need for change: The first step is to diagnose which facets of the
present corporate culture are strategy supportive and which are not, involving
appraisal of both internal and external capabilities may be through SWOT analysis
and then determining where the lacuna lies and scope for change exists.
ii) Create a shared vision to manage change: Objectives of both individuals and
organization should coincide. This is possible only if the management and the
organization members follow a shared vision. Senior managers have to convince all
those concerned that the change in business culture is not superficial.
iii) Institutionalise the change: This is basically an action stage which requires
implementation of changed strategy. Creating and sustaining a different attitude
towards change is essential to ensure that the firm does not slip back into old ways
of thinking or doing things. Capacity for self-renewal should be a fundamental
anchor of the new culture of the firm. Besides, change process must be regularly
monitored and reviewed to analyse the after-effects of change. Any discrepancy
should be brought to the notice. It takes time for the changed culture to prevail.
Kurt Lewin’s Model of Change: To make the change lasting, Kurt Lewin
proposed three phases of the change process for moving the
organization from the present to the future. (The process of unfreezing,
changing and refreezing is a cyclical one and remains continuously in
action)
(a)Unfreezing the situation: The process of unfreezing simply
makes the individuals aware of the necessity for change and
prepares them for such a change. Lewin proposes that the
changes should not come as a surprise to the members of the
organization. Sudden and unannounced change would be socially
destructive and morale lowering. Unfreezing is the process of
breaking down the old attitudes and behaviours, customs and

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traditions so that they start with a clean slate. This can be

achieved by making announcements, holding meetings and
promoting the new ideas throughout the organization.
(b) Changing to the new situation: Once the unfreezing process has been completed
and the members behaviour patterns need to be redefined. three methods for
reassigning new patterns of behaviour.
a. Compliance: It is achieved by strictly enforcing the reward and
punishment strategy for good or bad behaviour. Fear of punishment,
actual punishment or actual reward seems to change behaviour for the
better.
b. Identification: Identification occurs when members are psychologically
impressed upon to identify themselves with some given role models
whose behaviour they would like to adopt and try to become like them.
c. Internalization: Internalization involves some internal changing of the
individual’s thought processes in order to adjust to the changes
introduced. They have given freedom to learn and adopt new behaviour
in order to succeed in the new set of circumstances.
(c) Refreezing: The new behaviour must replace the former behaviour completely
for successful and permanent change to take place. In order for the new
behaviour to become permanent, it must be continuously reinforced so that this
new acquired behaviour does not diminish or extinguish.
5.3.2 How does digital transformation work
The use of digital technologies to develop fresh, improved, or entirely new company
procedures, goods, or services is known as "digital transformation."
Change management enters into the picture here. Organizations can plan, prepare for, and
carry out changes to their operations, including digital transformations, with the aid of the
discipline of change management. When implemented correctly, change management may
assist firms in overcoming the obstacles posed by the digital transition and reaping the full
rewards of their investment.
Change management in the digital transition consists of four essential elements:
1. Defining the goals and objectives of the transformation
2. Assessing the current state of the organization and identifying gaps
3. Creating a roadmap for change outlining the steps needed to reach desired state
4. Implementing and managing the change at every level of the organization
To navigate a digital transformation successfully, each of these elements is necessary and how
they collaborate to support organisations in achieving their goals.

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How does change management work?

Change management is a process used to manage changes in an organization. It assists in making
changes in a safe and regulated manner, reducing the possibility of detrimental effects on the
company. Any sort of organisation, including enterprises, organisations, governmental bodies,
and even families, can utilise change management to manage changes.
Change management models and methods come in a wide variety, but they all have key things in
common. These include creating a clear vision for the change, involving stakeholders in the
process, coming up with a plan for putting the change into action, and keeping an eye on the
results. Although change management is frequently viewed as a difficult and complicated
process, it is vital for ensuring that digital transformation projects are successful.
The role of change management in digital transformation
Digital transformation is a process of organizational change that enables an organization to use
technology to create new value for customers, employees, and other stakeholders. A good
change management strategy is necessary for a successful digital transformation.
Change management is the process of planning, implementing, and monitoring changes in an
organization. It provides organizations in achieving their objectives while reducing risks and
disruptions. For any organisation undergoing a digital transition, change management is crucial.
A properly implemented change management strategy can help an organization to:
♦ Specify the parameters and goals of the digital transformation
♦ Determine which procedures and tools need to be modified.
♦ Make a plan for implementing the improvements.
♦ Involve staff members and parties involved in the transformation process.
♦ Track progress and make required course corrections
A crucial component of any digital transition is change management. Why
it gains more importance in the current times is because organizations
can improve their chances of success by approaching change in a
proactive and organized manner.
5.3.3 Change Management Strategies for Digital Transformation

The five best practices for managing change in small and medium-sized businesses are:

1. Begin at the top: A focused, invested, united leadership that is on the same page
about the company's future is reflected in change that begins at the top. The culture
that will motivate the rest of the organisation to accept change can only be
generated and promoted in this way.
2. Ensure that the change is both necessary and desired: The fact that decision-makers
are unaware of how to properly handle a digital transformation and the effects it will

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have on their firm is one of the main causes of this. If a corporation doesn’t have a
sound strategy in place, introducing too much too fast can frequently become a major
issue down the road.
3. Reduce disruption: Employee perceptions of what is required or desirable change can
differ by department, rank, or performance history. It's crucial to lessen how changes
affect staff. The introduction of new tactics or technologies intended to improve
management and corporate operations causes employee concern about change. It is
possible to reduce workplace disruption by:
a. Getting the word out early and preparing for some interruption.
b. Giving staff members the knowledge and tools, they need to adjust to
change.
c. Creating an environment that encourages transformation or change.
d. Empowering change agents to provide context and clarity for changes, such
as project managers or team leaders.
e. Ensuring that IT department is informed of changes in technology or
infrastructure and is prepared to support them.
4. Encourage communication: Create channels so that workers may contact you with
queries or complaints. Encourage departmental collaboration to propagate ideas and
innovations as new procedures take root. Communication promotes efficiency and
has the power to influence culture, just like your vision. The people who will be
affected the most by these

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5.4 ORGRANISATIONAL FRAMEWORK

The McKinsey 7S Model refers to a tool that analyzes a company’s
“organizational design.” The goal of the model is to depict how
effectiveness can be achieved in an organization through the interactions
of hard and soft elements. The McKinsey 7s Model focuses on how the
"Soft Ss" and "Hard Ss" elements are interrelated, suggesting that
modifying one aspect might have a ripple effect on the other elements in
order to maintain an effective balance.
Hard elements are:
Strategy: What steps does the
company intend to take to address
current and futures challenges?
Structure: How is work divided, how do
different departments work and
collaborate?
Systems: Which formal and informal
processes is the company’s structure
based on?

Soft elements are:

Shared Values: What is the idea the
organization subscribes to? Is this idea
communicated credibly to others?

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 STRATEGY IMPLEMENTATION AND EVALUATION
Staff: This elements refers to employees
development and relevant processes,
performances and feedback programs
etc.
Skill: What is the company’s base of
skills and
competencies?
Style: This depicts the leadership style
and how it influences the strategic
decisions of the organization.

The Hard elements are directly controlled by the management.

♦ Strategy: a blueprint to build on a core competency and achieve competitive
advantage
♦ Structure: depending on the availability of resources and the degree of centralisation
or decentralization that the management desires, it choses from the available
alternatives of organizational structures.
♦ Systems: the development of daily tasks, operations and teams to execute the goals
and objectives.
The Soft elements are difficult to define as they are more governed by the culture.
♦ Shared Values: The core values which get reflected within the organizational culture
or influence the code of ethics of the management.
♦ Style: This depicts the leadership style and how it influences the strategic decisions of
the organisation. It also revolves around people motivation and organizational
delivery of goals.
♦ Staff: The talent pool of the organisation.
♦ Skills: The core competencies or the key skills of the employees play a vital role in
defining the organizational success.
model has its limitations
♦ It ignores the importance of the external environment and depicts only the most
crucial elements within the organization.

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♦ The model does not clearly explain the concept of organizational effectivness or
performance.
♦ The model is considered to be more static and less flexible for deicion making.
♦ It is generally criticized for missing out the reals gaps in conceptualization and
execution of strategy.
5.4.1 Organisation Structure

5.5. STRATEGIC LEADERSHIP

 Strategic leadership sets the direction by developing and communicating vision of future,
 formulate strategies in the light of internal and external environment,
 brings about changes to implement strategies
 inspire the staff to contribute to strategy execution.
 A strategic leader is a change agent to initiates strategic changes in the organisations
 ensure that the changes successfully implemented.

Managers have five leadership roles to play in pushing for good strategy execution:

1. Staying on top of what is happening, closely monitoring progress, solving out issues,
and learning what obstacles lie in the path of good execution.
2. Promoting a culture of esprit de corps that mobilizes and energizes organizational
members to execute strategy in a competent fashion and perform at a high level.
3. Keeping the organization responsive to changing conditions, alert for new
opportunities, bubbling with innovative ideas, and ahead of rivals in developing
competitively valuable competencies and capabilities.
4. Exercising ethical leadership and insisting that the company conduct its affairs like a
model corporate citizen.
5. Pushing corrective actions to improve strategy execution and overall strategic
performance.
Leadership role in implementation:
 The strategic leaders must be able to use the strategic management process

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 guiding the company that result in the formation of strategic intent and strategic
mission,
 providing guidance to the employees for achieving strategic goals.
 facilitating the development and implementation of appropriate strategic plans
 strategic leadership represents a complex form of leadership in companies.
 a manager’s frame of reference is the foundation on which a manager’s mindset is
built.
 The importance of a manager’s frame of reference can be seen if we perceive those
competitive battles are not between companies or products but between mindsets or
managerial frames. This implies that effective strategic leaders must be able to deal
with the diverse and cognitively complex competitive situations that are characteristic of
today’s competitive landscape

 Figure: Strategy Design and Implementation: Interrelationship

of Elements

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Effective Strategic Leadership

Shapes the formulation of

Strategic Intent Strateg ic Mission

Influence

Successful Strategic Action

Formulation of Implementation of
Strategies Strategies

Strategic Competitiveness
Above-Average Returns

Effective Strategic Leadership

A Strategic leader has several responsibilities, including the following:

♦ Making strategic decisions.
♦ Formulating policies and plans to implement strategic decision.
♦ Ensuring effective communication in the organisation.
♦ Managing human capital (perhaps the most critical of the strategic leader’s
skills).
♦ Managing change in the organisation.
♦ Creating and sustaining strong corporate culture.
♦ Sustaining high performance over time.
Unlike strategic leadership, managerial leadership is generally concerned
with the short- term, day-to-day activities.

Two basic approaches to leadership

♦ Transformational leadership style uses charisma and enthusiasm to inspire people for
the good of the organization. It is appropriate in poorly performing organizations
when there is a need for major changes. Transformational leaders offer excitement,
vision, intellectual stimulation and personal satisfaction. They inspire involvement in
a mission, giving followers a ‘dream’ or ‘vision’ of a higher calling so as to elicit

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more dramatic changes in organizational performance. Such a leadership motivates

followers to do more than originally affected to do by stretching their abilities and
increasing their self-confidence, and also promote innovation throughout the
organization.
♦ Transactional leadership style focuses more on designing systems and controlling the
organization’s activities and are more likely to be associated with improving the
current situation. Transactional leaders try to build on the existing culture and
enhance current practices. Transactional leadership style uses the authority of its
office to exchange rewards, such as pay and status.

They prefer a more formalized approach to motivation, setting

clear goals with explicit rewards or penalties for achievement or
non-achievement.
Transactional leadership style may be appropriate in static
environment, in mature industries, and in organizations that are
performing well. The style is better suited in persuading people to
work efficiently and run operations smoothly.

5.6. STRATEGIC CONTROL

book

The process of control has the following elements:

(a) Objectives of the business system to be used as controllable standards.
(b) A mechanism for monitoring and measuring the system performance.
(c) A mechanism (i) for comparing the actual results with the standards (ii) for detecting
deviations from standards and (iii) for learning new insights on standards themselves.
(d) A mechanism for feeding corrective information, for desired changes in the system

Primarily there are three types of organizational control

Operational Control: The thrust of operational control is on individual tasks or transactions

as against total management functions. For example, procuring specific items for inventory is
a matter of operational control, in contrast to inventory management as a whole. tests to
identify operational control areas is that there should be a clear-cut and measurable
relationship between inputs and outputs which can be estimated with least uncertainty.
Some of the examples of operational controls can be stock control (maintaining stocks
between set limits), production control (manufacturing to set programmes), quality control
(keeping product quality between agreed limits), cost control (maintaining expenditure as
per standards), budgetary control (keeping performance to budget).

Management Control: When compared with operational control,

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 STRATEGY IMPLEMENTATION AND EVALUATION
management control is more inclusive and more aggregative, in relation
to integrated activities of a complete department, division or even entire
organisation, instead. The basic purpose of management control is the
achievement of enterprise goals– short range and long range – in a most
effective and efficient manner.

Strategic Control: “Strategic control focuses on the dual questions of

whether: (1) the strategy is being implemented as planned; and (2) the
results produced by the strategy are those intended.” Strategic control is
the process of evaluating strategy as it is formulated and implemented. It
is directed towards identifying problems and changes in premises and
making adjustments. There is a time gap between strategy formulation
and implementation. A strategy might be affected on account of
changes in internal and external environments of organisation. There is a
need for warning systems to track a strategy as it is being implemented.

Types of Strategic Control:

 Premise control: A strategy is formed on the basis of certain assumptions or premises

about the complex and turbulent organizational environment. Over a period of time
these premises may not remain valid. Premise control is a tool for continuous
monitoring of the environment to verify the validity of the premises on which the
strategy has been built.

It primarily involves monitoring two types of factors:

(i) Environmental factors such as economic (inflation, liquidity, interest rates),
technology, social and legal-regulatory.
(ii) Industry factors such as competitors, suppliers, substitutes.
It is neither feasible nor desirable to control all types of premises in the same manner. Different
premises may require different amount of control. Thus, managers are required to select those
premises that are likely to change and would severely impact the functioning of the
organization and its strategy.
 Strategic surveillance: monitors various information to identify unanticipated
information affecting the organizational strategy. It involves casual environmental
browsing. Reading financial and other newspapers, business magazines, attending
meetings, conferences, discussions and so on.
 Special alert control: To cope up with unexpected events that
triggers an immediate review of strategy, the organizations form
crisis management teams to handle those events. (changes in
government, natural calamities, terrorist attacks, unexpected
merger/acquisition by competitors, industrial disasters)
 Implementation control: Implementation control is directed towards assessing the
need for changes in the overall strategy associated with incremental steps and

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actions.
Strategic implementation control is not a replacement to operational
control. Unlike operational control, it continuously monitors the basic
direction of the strategy. The two basic forms of implementation
control are:
(i) Monitoring strategic thrusts: helps managers to determine whether the strategy
is progressing as desired or whether there is need for readjustments.
(ii) Milestone Reviews: All key activities necessary to implement strategy are
segregated in terms of time, events or major resource allocation. It involves
reassessment of the strategy. It also assesses the need to refocus the direction
of an organization.

Strategic

Premise Control

Implementation
Strategy Control
Formulation

Time Time Time

1 2 3
Source: John A Pearce II, Richard B Robinson, Jr. and Amita Mital “Strategic Management-
Formulation, Implementation and Control”.

7. STRATEGIC PERFORMANCE MEASURES

 SPM is a method that increases line executives' understanding of an

organization's strategic goals and offers a continuous system for
tracking progress towards these objectives using clear-cut
performance measurements.
 SPM helps to eliminate silos by establishing a common language
among all divisions of the organisation so they may communicate
openly and productively.
 Strategic performance measures are key indicators that organizations
use to track the effectiveness of their strategies and make informed
decisions about resource allocation.
 Key performance measures and indicators must be created, selected,
combined into reports and acted upon so that strategy

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implementation can have tangible outcomes.
 Firstly, there needs to be a clear cause and effect relationship
between the indicators and strategic outcomes.
 Secondly, KPIs need to be carefully chosen because they will
influence the behaviour of people within the organisation.

Managing the political aspects of implementing a strategy

People involved in the planning process for the implementation of a
strategy may be affected by two sets of forces.
 Rational forces of openness, communication, and self-analysis
 Political forces concerned with preserving empires and fostering
internal rivalry that urge knowledge retention, selective
communication, and caution.
This may result in explicit strategy while the sensitive elements may form
an unspoken plan that contains the implicit strategy.

Types of Strategic Performance Measures

♦ Financial Measures: such as revenue growth,(ROI), and profit margins, provide an
insight into the organization's ability to generate profit and understand the
organization's financial performance.
♦ Customer Satisfaction Measures: such as customer satisfaction, customer retention,
and customer loyalty, provide insight into the organization's ability to meet
customer needs and provide high-quality products and services.
♦ Market Measures: such as market share, customer acquisition, and customer
referrals, provide an insight into the organization's ability to attract and retain
customers and information about the organization's competitiveness in the
marketplace.
♦ Employee Measures: such as employee satisfaction, turnover rate, and employee
engagement, provide insight into the organization's ability to attract and retain
talented employees and create a positive work environment.
♦ Innovation Measures: such as research and development (R&D) spending, patent
applications, and new product launches, provide insight into the organization's
ability to innovate and create new products and services that meet customer needs.
♦ Environmental Measures: Environmental measures, such as energy consumption,
waste reduction, and carbon emissions, provide insight into the organization's impact
on the environment and its efforts to operate in a sustainable manner.

Toward More Holistic Measures of Strategic Performance

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The Importance of Strategic Performance Measures

♦ Goal Alignment: SPM help organizations align their strategies with their goals and
objectives, ensuring that they are on track to achieve their desired outcomes.
♦ Resource Allocation: SPM provide organizations the information to make informed
decisions ,prioritize their efforts about resource allocation, to the areas that will have
the greatest impact on their performance.
♦ Continuous Improvement: Strategic performance measures provide organizations
with a framework for continuous improvement, enabling them to track their
progress and improve performance.
♦ External Accountability: Strategic performance measures help organizations
demonstrate accountability to stakeholders, shareholders, customers, and regulatory
bodies, by providing a clear and transparent picture of their performance

Choosing the Right Strategic Performance Measures : factors

♦ Relevance: The measure should be relevant to the organization's goals and objectives
and provide information that is actionable and meaningful.
♦ Data Availability: The measure should be based on data that is readily available and
can be collected and analyzed in a timely manner.
♦ Data Quality: The measure should be based on high-quality data that is accurate and
reliable.
♦ Data Timeliness: The measure should be based on data that is current and up-to-date,
enabling organizations to make informed decisions in a timely manner.

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