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CHAPTER 9 • STRATEGY REVIEW, EVALUATION, AND CONTROL 287

FIGURE 9-1
A Comprehensive Strategic-Management Model

Chapter 10: Business Ethics, Social Responsibility, and Environmental Sustainability

Perform
External Audit
Chapter 3

Implement
Generate, Implement Strategies—
Develop Vision Establish Evaluate, Strategies— Measure
and Mission Long-Term Marketing, and Evaluate
Statements Objectives and Select Management Finance, Performance
Strategies
Issues
Chapter 2 Chapter 5 Accounting, R&D,
Chapter 6 Chapter 7 and MIS Issues Chapter 9
Chapter 8

Perform
Internal Audit
Chapter 4

Chapter 11: Global/International Issues

Strategy Strategy Strategy
Formulation Implementation Evaluation
Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 3 (June 1988): 40.

Adequate and timely feedback is the cornerstone of effective strategy evaluation.
Strategy evaluation can be no better than the information on which it is based. Too much
pres sure from top managers may result in lower managers contriving numbers they think
will be satisfactory.
Strategy evaluation can be a complex and sensitive undertaking. Too much emphasis
on evaluating strategies may be expensive and counterproductive. No one likes to be eval-
uated too closely! The more managers attempt to evaluate the behavior of others, the less
control they have. Yet too little or no evaluation can create even worse problems. Strategy
evaluation is essential to ensure that stated objectives are being achieved.
In many organizations, strategy evaluation is simply an appraisal of how well an organi-
zation has performed. Have the firm’s assets increased? Has there been an increase in prof-
itability? Have sales increased? Have productivity levels increased? Have profit margin, return
on investment, and earnings-per-share ratios increased? Some firms argue that their strategy
must have been correct if the answers to these types of questions are affirmative. Well, the
strategy or strategies may have been correct, but this type of reasoning can be misleading
because strategy evaluation must have both a long-run and short-run focus. Strategies often do
not affect short-term operating results until it is too late to make needed changes.