BUS 411 Day 14

Agenda Templates available in WebCT Assignment 5 will be at the end of the semester Mid-term exam mailed in WebCT  Chapters 1-9  Due March 21, 9:30 Finish Discussion on Strategy Review, Evaluation, & Control

Schedule for next two weeks Starting Thursday March 24  Group Case Presentation 40 Min  Group Work 40 Min Schedule  March 21 Discussion on how to prepare an oral case study presentation  Case 1 on March 24 Tony  Case 2 on March 28 Dave, Keith, Louise  Case 3 on March 31 Seth, Megan, Corey  Case 4 on April 4 Beth, Jessica, Amy Case Info

Evaluation Framework I.Review Underlying Bases I.IFE an EFE Continue present course II.Measure Firm Performance I.Ratios and stated objectives III. Take Corrective Actions Differences? Yes NO Yes NO

Strategy Evaluation, Review & Control Compare expected to actual results Investigate deviations from plan Evaluate individual performance Progress toward stated objectives Measuring Organizational Performance

Strategy Evaluation, Review & Control Financial Ratios  Compare performance over different periods  Compare performance to competitors  Compare performance to industry averages Quantitative Criteria for Strategy Evaluation

Strategy Evaluation, Review & Control Return on investment (ROI) Return on equity (ROE) Profit margin Market Share Key Financial Ratios

Strategy Evaluation, Review & Control Debt to equity Earnings per share (EPS) Sales growth Asset growth Key Financial Ratios

Strategy Evaluation, Review & Control Internal consistency of strategy Consistency with environment Appropriateness in view of resources Qualitative Evaluation of Strategy

Strategy Evaluation, Review & Control Acceptable degree of risk Appropriate time frame Workability of the strategy Qualitative Evaluation of Strategy

Taking Corrective Action You've got to think about big things while you're doing small things, so that all the small things go in the right direction. Alvin Toffler, Future Shock Alvin Toffler Corrections bring change and change breeds anxiety  Makes the process inclusive

Strategy Evaluation, Review & Control -- Evaluate strategies from 4 perspectives: 1. Financial performance 2. Customer knowledge 3. Internal business processes 4. Learning & growth Balanced Scorecard

Area of ObjectivesMeasure or TargetTime ExpectationPrimary Responsibility Customers 1 2 Managers/Employees 1 2 Operations/Processes 1 2 Community/Social Responsibility 1 2 Business Ethics/Natural Environment 1 2 Financial 1 2

Strategy Evaluation, Review & Control Economical Meaningful Generates useful information Timely information Provides accurate picture of events Characteristics of strategy evaluation

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?

Strategy Evaluation, Review & Control Alternative plans that can be put into effect if certain key events do not occur as expected Contingency Planning

Strategy Evaluation, Review & Control Financial audits determine correspondence between assertions based on strategic plan & established criteria Environmental audits insure sound and safe practices Auditing

Strategy Evaluation, Review & Control Process is more an “art” than “science” Should strategies be visible or hidden from stakeholders Should process be more top-down or bottom up 21 st Century Challenges in Strategic Management