What is the purpose of strategy evaluation in the strategic management process?

The purpose of strategy evaluation in the strategic management process is primarily to compare actual performance against strategic goals and make necessary adjustments. This process involves regularly reviewing both the internal and external environments of an organization to ensure that the strategies in place are effective and aligned with the organization’s objectives. By conducting this evaluation, management can identify areas where performance is lacking or where strategies may need to be modified in response to changes in the marketplace or internal dynamics.

Through strategy evaluation, an organization can assess whether its strategies are yielding the desired outcomes and achieving the established goals. If discrepancies are found between actual performance and what was intended, managers can determine what adjustments or changes need to be made to improve overall performance. This critical feedback loop helps organizations remain agile and responsive to evolving conditions and can drive continuous improvement in both strategy execution and organizational effectiveness.

In contrast, while aspects such as financial management, corporate governance practices, and employee relations are important for overall management, they are not the primary focus of strategy evaluation within the context of strategic management. Strategy evaluation specifically hones in on the effectiveness and alignment of strategies with organizational aims.