Strategy Evaluation Encourages an Organization

Strategy Evaluation encourages an organization to take a proactive stance towards shaping its own future because the evaluation process represents a continual analysis of the organization's goals, objectives and policies.

The evaluation process helps to identify potential problems before they manifest, allowing the organization to eliminate them. Several of the key steps in strategy evaluation take a proactive approach. For example, evaluation typically begins with an analysis of the factors that originally went into the decision. It is determined if those factors remain, and if they have changed in what way does this affect the strategy. Identifying these changes allows an organization to alter strategy mid-stream, rather than waiting for it to run its course and fail.

In this way, the comment is valid. Strategy evaluation takes into account both the internal and external factors prior to strategy formulation. Strategy is formulated, which is the organization choosing its own course in the marketplace. Proper strategy evaluation requires in-depth knowledge of the firm's operating environment. Without strategy evaluation, the decisions the organization makes may not be based on this knowledge, but rather on reactions to external events.

The analysis aspect of strategy evaluation gives the firm the ability to anticipate future events, evaluate the likelihood of their occurrence, and form contingency plans. This approach is proactive, because should the event occur, the organization has already formulated a response based on in-depth knowledge. Without the strategy evaluation, the response would be reactive rather than proactive, and may not address the issue as effectively.

It may be considered that because the strategy evaluation takes place after implementation that it cannot be proactive. However, strategy should not be considered to be static. Strategy continually evolves in response to changes in the business environment and within the organization itself. Strategy evaluation serves the dual purpose of closing the door on the old strategy and beginning the formulation process anew. This is how strategy evaluation becomes proactive, by kick starting the next round of formulation and implementation. By conducting strategy evaluation, the organization takes the onus upon itself to start the cycle, which is proactive.

Another reason to question the validity of this comment is that strategy evaluation is not the only tool by which an organization can take a proactive stance. The evaluation process itself, for example, does not imply action. A company may have the raw information needed to conduct proactive decision-making, but there must be an action step included in the methodology. Moreover, a company can be proactive without evaluating its strategy. It can make smaller decisions based on smaller analyses that anticipate changes in the environment but do not include a total evaluation.