APUNTES EXAMEN 6TA UNIDAD EVALUACIN DE LA ESTRATEGIA PDF

# APUNTES 6TA UNIDAD: EVALUACIÓN DE LA ESTRATEGIA ## Características de un sistema de evaluación eficaz * The evaluation of strategies must meet certain basic requirements in order to be effective: * **Economical:** too much information can be as bad as too little, and too many controls can som...

# APUNTES 6TA UNIDAD: EVALUACIÓN DE LA ESTRATEGIA ## Características de un sistema de evaluación eficaz * The evaluation of strategies must meet certain basic requirements in order to be effective: * **Economical:** too much information can be as bad as too little, and too many controls can sometimes do more harm than good. * **Significant:** They should relate specifically to the objectives of a company. They should provide managers with useful information about the tasks over which they have control and influence. * **Timely:** In some cases and areas, managers need daily information. For example, when a company is diversified by acquiring another company, evaluation information is needed very frequently. However, in an R&D department, daily or even weekly evaluation information could be dysfunctional. Approximate information that is timely is generally more desirable than exact information that is not relevant to the present. Frequent measurement and rapid reporting can frustrate rather than provide better control. * **Accurate:** The timing of the control should coincide with the duration of the event being measured. * **Action-Oriented:** The evaluation of strategies should be designed to present a true picture of what is happening. For example, in a severe economic downturn, productivity and profitability indicators may fall dramatically, even though employees and managers may be working harder than ever. The evaluation of strategies must accurately portray these types of situations. * The information derived from the strategy evaluation process should facilitate action and should be directed at those individuals in the organization who are to implement actions based on that information. Generally, managers ignore evaluative reports that are given solely for informational purposes; not all managers need to receive all reports. Controls must be action-oriented rather than information oriented. The strategy evaluation process should not dominate decisions; it should foster mutual understanding, trust and common sense. All departments should cooperate with each other in the evaluation of strategies. The evaluations should be simple, not too cumbersome or too restrictive. Complex evaluation systems often confuse people and accomplish little. The test of an effective evaluation system is its usefulness, not its complexity. * Large organizations require a more elaborate and detailed system of strategy evaluation. It is more difficult to coordinate efforts among different divisions and functional areas. Managers of small companies often communicate daily with each other and their employees and do not need extensive information evaluation systems. Familiarity with local environments makes the tasks of gathering and evaluating information much easier in small organizations than in large businesses. However, in some cases, the key to an effective strategy evaluation system is the ability to convince participants that failing to achieve certain objectives within a prescribed time does not necessarily constitute a criticism of their performance. * There is no ideal strategy evaluation and control system. The unique characteristics of each organization, including its size, management style, mission, problems and strengths, can determine the final design of the strategy evaluation and control system. Robert Waterman made the following observation about the evaluation and control systems of successful organizations: Successful companies treat facts as friends and controls as liberators. Morgan Guaranty and Wells Fargo not only survive, but also thrive in the turbulent waters of banking deregulation, because their strategy evaluation and control systems are solid, and their risk is contained; moreover, they know themselves well and the competitive situation. * Successful companies have a voracious appetite for facts. They see information where others only see data. They love comparisons, rankings, anything that takes decision-making out of the realm of mere opinion. * Successful companies maintain rigorous and accurate financial controls. Their people do not consider controls to be an imposition of autocracy, but as favorable systems of checks and balances that allow them to be creative and free ## Auditorías * A tool frequently used in strategy evaluation is the audit. The American Accounting Association defines an audit as “a systematic process for objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users.” * After the Enron, Worldcom and Johnson & Johnson scandals, audits have received more emphasis and care in companies. Independent auditors are certified public accountants who offer their services to organizations in exchange for fees; they examine the financial statements of the organization to determine if they comply with generally accepted accounting principles (GAAP) and if they fairly represent the company’s activities The independent auditors use a system of standards called generally accepted auditing standards (GAAS). Public accounting firms often have a consulting division that offers strategy evaluation services. * Effective strategy evaluation allows an organization to capitalize on its internal strengths as they develop, exploit external opportunities as they arise, recognize and fend off threats, and mitigate internal weaknesses before they become detrimental. Successful organizational strategists deliberately and systematically formulate, implement, and then evaluate strategies. Good strategists move their organization with purpose and direction, continuously evaluating and improving the internal and external strategic positions. * Strategy evaluation allows an organization to define its future, rather than letting this constant definition take place due to remote forces that have little or no interest in the well-being of the company. * Although it is not a guarantee of success, strategic management allows organizations to make effective long-term decisions, put them into practice efficiently, and take corrective actions as needed to ensure success. Computer networks and the Internet help coordinate strategic management activities and ensure that decisions are based on good information. Checkmate strategic planning software is especially recommended in this regard. A key to effective strategic evaluation and successful strategic management is an integration of intuition and analysis. ## Strategy and Business Management Process (Porter) * **How is it conceived?** The company's theory about how it can gain a competitive advantage. * **Why is it a theory?** It is based on what the company thinks about how competitors, consumers and other players will respond. * **What is a good strategy?** One that actually generates competitive advantages. ## Internal Consistency **(Tests of Consistency)** * Are the goals mutually achievable? * Are the operating policies focused on the goals? * Do the operating policies reinforce each other? ## Environmental Suitability * Are industry opportunities exploited with goals and policies? * Are industry risks addressed through goals and policies? * Do goals and policies reflect the ability of the environment to accommodate actions? * Are goals and policies sensitive to general social problems? ## Resource Suitability * Do goals and policies match the resources the company has compared to its competitors? * Do goals and policies reflect the organization’s capacity for change? ## Communication and Implementation * Do top executives understand their goals? * Is there enough congruence between goals and policies to ensure good implementation? * Is there enough managerial capacity to ensure good implementation? # Rumelt: How to tell if you have a good strategy? * The outputs from a business strategy evaluation are derived from the answers to these questions: * Are business objectives appropriate? * Are major policies and plans appropriate? * Do the results obtained to date confirm or refute the critical assumptions on which the strategy is based? ## Principles of Strategy Evaluation (Rumelt) * **Operational Definition of Strategy** * For our purposes, a strategy “is a set of goals, policies, and plans that, taken together, define the scope of the company, its survival and success.” * Alternatively, we could say that the specific policies, plans, and goals of a company express its strategy for coping with a complex competitive environment. * **The Analogy Between Theory and Strategy** A fundamental principle of science is that a theory can never be conclusively proved to be true. * On the other hand, a theory can be proved definitively false if it fails to hold up to tests. * Likewise, it is impossible to conclusively prove that a particular strategy is optimal or guarantee that one will work. You can, however, test it for critical defects. * **Criteria for Testing a Strategy** * Out of the many tests that could reasonably be applied to a strategy, most fall under one of these general criteria, which are presented in the table below: * **Criteria for Testing a Strategy** * **Consistency**: Should not present inconsistent objectives and policies. * **Advantage**: Should provide for the creation and/or maintenance of a competitive advantage in the selected area of the activity. * **Consonance**: Should represent an adaptive response to the external environment and the critical changes that occur within it. * **Viability**: Should not overload available resources or create sub-problems without a solution. ## **Bad Strategies** * **Not Facing the Problem** * A strategy is a path through a difficulty, an approach to overcoming an obstacle, a response to a challenge. If the challenge is not defined, it is difficult or impossible to evaluate the quality of the strategy. And, if you can't evaluate, you can't reject a bad strategy or improve a good one. * In short, if you can't identify and analyze the obstacles, you don't have a strategy. Instead, what you have is an expanded goal, a budget, or a list of things you want to happen. * **Confusing Objectives for Strategy (fuzzy)** * One form of this problem can occur as a jumbled mess of things to be done. A long list of things to do often incorrectly labeled as strategies or objectives is NOT a strategy. * A second type of strategic objective weakness is the "blue sky" - typically a simple restatement of the desired state of affairs or the challenge. The annoying fact that no one has the slightest idea how to get there is omitted. ## C. Fluff * A defining mark of mediocrity and bad strategy is superficial abstraction - a flurry of fluff - designed to camouflage the absence of thought. Fluff is a restatement of the obvious, mixed with a handful of buzzwords that masquerade as experience. ## D. Inability To Choose * Strategy implies focus and, therefore, choice. And choice means leaving some objectives behind in favor of others. When this hard work isn’t done, the result is a weak strategy. ## E. Template Strategy * **What does it look like?** Jack Welch's quote about “achieving what seems to be impossible” is the typical motivational cliché found in literally hundreds of motivational speakers, books, calendars, notepads and websites. This fascination with positive thinking has helped inspire ideas about charismatic leadership and the power of shared vision, reducing them to a sort of formula: the transformational leader (1) develops or has a vision, (2) inspires people to make sacrifices (change) for the good of the organization, and (3) empowers people to carry out the vision. * **When did it start?** Beginning in the early 2000s, the juxtaposition of leadership and vision-driven strategy created a template-style (cliché) planning system. (Type "mission vision strategy" into an Internet search engine and you will find thousands of examples of this type of template for sale and in use.) * **What does it consist of?** This type of template looks like this: * **Vision**: Write your vision of what the school/business/nation will look like in the future. Currently popular visions are to be the best, the leader, or the best known. * **Mission**: Fill out a politically correct, high-sounding statement of the purpose of the school/business/nation. Innovation, human progress, and sustainable solutions are popular components of a mission statement. * **Values**: Fill out a statement describing the company’s values. Make sure they are not controversial. Key words are “integrity,” “respect,” and “excellence.” * **Strategies**: Fill out some aspirations/goals, but call them strategies. For example, “invest in a portfolio of businesses that create value for our shareholders and growth for our customers.” * **What is the danger?** This type of “template style” planning has been enthusiastically adopted by corporations, school boards, university presidents, and government agencies. Scan through such documents and you will find pious statements of the obvious presented as if they were decisive ideas. The biggest problem with all of this is that someone who actually wants to conceive and implement an effective strategy is surrounded by empty rhetoric and bad examples. ## Objectives That Are Clear and Precise * **Do all efforts focus on general objectives that are clearly understood and decisive and feasible? ** Specific goals for subordinate units can be transformed in the heat of campaigns or competition; however, the central goals of the strategy for all units should always be precise enough to provide continuity, cohesion, and guidance in choosing tactics throughout the timeframe of the strategy. ## **Conserve the Initiative** * Does the strategy preserve its freedom of action and encourage commitment? Does it set the pace and determine the course of events, rather than react to them? A prolonged reactive stance breeds fatigue, lowers morale, cedes the advantage of time and intangibles to the opponent. ## Concentration * Does the strategy concentrate superior power in the right place and at the right time? Does the strategy precise define what the company should be the most powerful, or what it should be better at in critical dimensions relative to its competitor? A diversified competition allows greater success with fewer resources, which constitutes the basis for achieving greater profits (or profits) than competitors. ## Flexibility * Does the strategy particularly emphasize reserves of resources and dimensions necessary for flexibility and maneuverability? Strengthening skills, a planned range of action, and renewed positioning allow for keeping opponents at a disadvantage, with minimal resources. ## Coordinated and Committed Leadership * Does the strategy create responsible and committed leadership for each of its major goals? Leaders should be selected and motivated, in such a way, that their own interests and values coincide with the role assigned. Successful strategies require commitment, not just acceptance. ## Surprise * Have you used or leveraged speed, silence, and intelligence to attack opponents, at unexpected moments, unprepared and undefended? Along with correct synchronization, the surprise can achieve a success out of proportion to the energy used and can change strategically decisive positions. ## Security * Does the strategy ensure the basis of resources and other essential operational fundamentals of the company? Does it develop an effective intelligence system enough to preclude surprises on the part of opponents? Does it develop the logistics necessary to sustain each of its main impulses? Does it use coalition effectively to extend in the company, the base of resources and areas of amicable acceptance?