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Strategic Management: Concepts and Cases Arab World Edition Fred R. David Abbas J. Ali Abdulrahman Y. Al-Aali Chapter 11: Strategy Review, Evaluation and Control Ch Copyright © 2011 Pearson Education

Ch 11 -3Copyright © 2011 Pearson Education Source: Adapted from Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 3 (June 1988) 40.

1.Examine the underlying bases of a firm’s strategy. 2.Compare expected to actual results. 3.Identify corrective actions to ensure that performance conforms to plans. Strategy Review, Evaluation, and Control Three Basic Activities Ch 11 -4Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control Obstacles of Strategy Evaluation in Arab World 1.Over-optimistic and overconfidence of CEOs 2.Team responsibilities 3.Lack of familiarity 4.Lack of integrating IT systems 5.Absence of objective data 6.Absence of effective trend monitoring system 7.Lack of effective alert system Ch 11 -5Copyright © 2011 Pearson Education

A Strategy-Evaluation Framework Review of Underlying Bases of Strategy Develop revised EFE Matrix Develop revised IFE Matrix Ch 11 -6Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control Review Effectiveness of Strategy 1.Competitors’ reaction to strategy 2.Competitors’ change in strategy 3.Competitors’ changes in strengths & weaknesses 4.Reasons for competitors’ strategic change Ch 11 -7Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control Review Effectiveness of Strategy (cont’d) 1.Reasons for competitors’ successful strategies 2.Competitors’ present market positions & profitability 3.Potential for competitor retaliation 4.Potential for cooperation with competitors Ch 11 -8Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control Monitor Strengths & Weaknesses; Opportunities & Threats Are strengths still strengths? Have we added additional strengths? Are weaknesses still weaknesses? Have we developed other weaknesses? Ch 11 -9Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control Monitor Strengths & Weaknesses; Opportunities & Threats (cont’d) Are opportunities still opportunities? Other opportunities develop? Are threats still threats? Other threats emerged? Are we vulnerable to hostile takeover? Ch Copyright © 2011 Pearson Education

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Measuring Organizational Performance  Compare expected to actual results  Investigate deviations from plan  Evaluate individual performance  Examine progress toward stated objectives

Strategy Review, Evaluation, and Control Making changes to competitively reposition a firm for the future Keeping organization on track toward achieving stated objectives Ex: structure, individuals, policies, resource allocation, performance to pay. Taking Corrective Actions Ch Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control Balanced Scorecard Ch Copyright © 2011 Pearson Education Evaluate strategies from 4 perspectives: 1.Financial performance 2.Customer knowledge 3.Internal business processes 4.Learning & growth

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Strategy Review, Evaluation, and Control Characteristics of Strategy Evaluation Economical Meaningful Generates useful information Timely information Provides accurate picture of events Action-oriented Ch Copyright © 2011 Pearson Education

Strategy-Evaluation Assessment Matrix Continue courseYesNo Corrective actionsNoYesNo Corrective actionsYes No Corrective actionsNo Yes Corrective actionsYesNoYes Corrective actionsNoYes Corrective actionsYes Corrective actionsNo Result Has the firm progressed satisfactorily toward achieving its stated objectives? Have major changes occurred in the firm’s external strategic position? Have major changes occurred in the firm’s internal strategic position? Ch Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control Ch Copyright © 2011 Pearson Education Contingency Planning: Alternative plans that can be put into effect if certain key events do not occur as expected

Strategy Review, Evaluation, and Control Financial audits determine correspondence between assertions based on strategic plan & established criteria Environmental audits ensure sound and safe practices Auditing: Ch Copyright © 2011 Pearson Education

Strategy Review, Evaluation, and Control 21st Century Challenges in Strategic Management Process is more an “art” than “science” Should strategies be visible or hidden from stakeholders? Should process be more top-down or bottom-up? Ch Copyright © 2011 Pearson Education

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