Strategy Evaluation allows an Organization to take a Proactive Stance towards Shaping its own Future

In this modern era of 21st Century, it is really hard to imagine any result-orientated or business-orientated organizations to remain in static-quo. Usually those organizations are easily prompted to influences or changes from external environment elements. Based on PESTEL analysis, those external environment elements shall include political environment; economical environment; social environment; technological environment; environmental environment & legal environment. However, the impacts of each environment elements differ from time to time and in order to ensure the sustainability of an organization, it is important for an organization to constantly review their objectives and goals from time to time.

Organization constitutes of a group of structured and organized people and with a specific purpose or goal to achieve in mind for the entity. Due to that, strategy plays a very important part in determine the success or failure of an organization. Carl Von Clausewitz once said, “Tactic is the art of using troops in the battle; Strategy is the art of using battles to win wars”. It shows how important of a strategy plays in a bigger picture in anonymous circumstances where “battles” can be won or lost, strategies govern and lead to the end result of the campaign.

Subhash C Jain on the other hand, have a more direct explanation on strategy by saying “Strategy in a firm is a pattern of major objectives, purposes or goals…and essential policies and plans for achieving those goals…, stated in such a way as to define…what business the company is in or is to be in and the kind of company it is or is to be.” It is interesting to see that C Jain has exactly underlined what strategy is, how it suppose to work and what it does to a firm or company, it also implicitly explain that strategy needs to be managed in various phases throughout its process. Generally, the strategic management process consists of three stages:

  1. Strategy Formulation (Strategy Planning): Strategy formulation means a strategy formulate to execute the business activities its activities includes developing: Vision and Mission (The target of the business); Strength and weakness (Strong points of business and also weaknesses); Opportunities and threats (These are related with external environment for the business). Strategy formulation is also concerned with setting long term goals and objectives, generating alternative strategies to achieve that long term goals and choosing particular strategy to pursue.
  2. Strategy Implementations: Strategy implementation requires a firm to establish annual objectives, devise policies, motivating employees and allocate resources so that formulated strategies can be executed. Strategy implementation is often called the action stage of strategic management. Implementing means mobilizing employees and managers in order to put formulated strategies into action.
  3. Strategy Evaluation: Strategy evaluation is the final stage in the strategic management process. Management desperately needs to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information. All strategies are subject to future modification because external and internal forces are constantly changing.

The strategic-management process does not end when the firm decides what strategy or strategies to pursue. There must be a translation of strategic thought into strategic action. The strategic management process is dynamic and continuous. A change in any one of the major components in the model can necessitate a change in any or all of the other components. For instance, a shift in the economy could represent a major opportunity and require a change in long-term objectives and strategies; a failure to accomplish annual objectives could require a change in policy; or a major competitor’s change in strategy could require a change in the firm’s mission. Therefore, strategy formulation, implementation, and evaluation activities should be performed on a continual basis, not just at the end of the year or semiannually. The strategic management process never really ends.

Therefore, it is clear to say that if a firm or a company or organization has went through Strategy Formulation and Strategy Implementations stage, we can only classify that they have established a proper structured framework or road-map for their organization but the process does not and should not end there. The organization shall continue and persistently carried out Strategy Evaluation in order to ensure sustainability of the organization and shaping it own future as the kind of company it is or is to be.

Effective strategy evaluation allows an organization to capitalize on internal strengths as they develop, to exploit external opportunities as they emerge, to recognize and defend against threats, and to mitigate internal weaknesses before they become detrimental. Strategists in successful organizations take the time to formulate, implement, and then evaluate strategies deliberately and systematically. Good strategists move their organization forward with purpose and direction, continually evaluating and improving the firm’s external and internal strategic position. Strategy evaluation allows an organization to shape its own future rather than allowing it to be constantly shaped by remote forces that have little or no vested interest in the well-being of the enterprise.

Although not a guarantee for success, strategic management allows organizations to make effective long term decisions, to execute those decisions efficiently, and to take corrective actions as needed and come out with contingency plans for the very worst cases in order to ensure success of the organization. Strategists in successful organizations realize that strategic management is first and foremost a people process. It is an excellent vehicle for fostering organizational communication. People are what make the difference in organizations. The real key to effective strategic management is to accept the premise that the planning process is more important than the written plan, that the manager is continuously planning and does not stop planning when the written plan is finished. The written plan is only a snapshot as of the moment it is approved. If the manager is not planning on a continuous basis–planning, measuring, and revising–the written plan can become obsolete the day it is finished. This obsolescence becomes more of a certainty as the increasingly rapid rate of change makes the business environment more uncertain.

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