BusinessManagement

Role of Stakeholders in Strategic Evaluation and Control

Role of  Stakeholders in Strategic Evaluation and Control may be viewed from various point of view:

Role of Board of Directors in Strategic Evaluation and Control

Board of directors of a company is directly answerable to them. Thus, board should be directly involved in strategic evaluation and control. However, since board does not participate in day-to-day management process, it evaluates the performance of the company concerned after certain intervals in its meetings. Therefore, the role of board of directors is limited to evaluating and controlling those aspects of the organizational functioning which have long-term implications. Such aspects are overall financial performance, overall social concern and performance and certain key management practices having significant impact on organization’s long-term survival.

Generally, the evaluation and control information used by the board is concise but comprehensive as compared to control reports used at lower levels.

Role of Chief Executive in Strategic Evaluation and Control

The chief executive of an organization is responsible for overall performance. Therefore, his role is quite crucial in strategic evaluation and control. Though he is not involved in evaluation of routine performance, he focalizes his attention on critical variations between planned and actual. Generally, he applies the principle of management by exception, which is a system of identifica­tion and communication of that signal which is critical and needs the attention of a high-level manager.

Depending on the size of the organization, the chief executive’s role varies in the context of evaluation and control on day-to-day basis. In a smaller organization, the chief executive may be interested in daily production and cost figures but in a large organization, these become unimportant for him from his control point of view. Thus, in a large organization, the chief executive is more involved on controlling through return on investment, value added and other indicators, which measure performance of overall organization.

Role of Other Managers in Strategic Evaluation and Control

Besides board of directors and chief executive, other managers are also involved in strategic evaluation and control. These are finance managers, SBU managers, and middle-level managers. Their role in strategic evaluation and control is as follows:

  1. Finance managers are primarily concerned with finding out deviations between planned and actual performance expressed in monetary terms. These are done through financial analysis, budgeting etc.
  2. SBU managers are responsible for overall evaluation and control of their respective strategic business units. In fact, they are the chief executives of their own SBUs except that they report to the chief executive of the organization from whom they seek directions.
  3. Middle-level managers, mostly functional managers and sub-unit managers are responsible for evaluation and control of their respective functions and sub-units. These managers are more concerned with day-to-day operational control and prepare reports to be used by higher-level managers. For example a production manager is more interested in controlling production volume, production cost, product quality, etc.

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