Final answer:
Strategy evaluation is important due to the ever-changing internal and external factors that can affect business success. It ensures that strategies remain effective and that resources are allocated efficiently. This process also builds legitimacy and investor confidence in the company's business plans.
Step-by-step explanation:
Strategy evaluation is necessary because internal and external factors are constantly changing. The dynamic nature of business means that the success of strategies cannot be taken for granted; instead, they must be regularly assessed to ensure that they continue to be effective in the face of new challenges and opportunities. Factors such as program complexity, length, and cost also influence the scope and nature of the evaluation. A robust evaluation process aids in decision-making regarding investment strategies and the allocation of financial assets, ensuring that limited resources are utilized in the most efficient way possible.
Evaluation efforts need to match the scale of the program in question. Simpler programs require simpler evaluations, whereas more complex and longer-term investments necessitate more detailed scrutiny. It is crucial that program managers understand the evaluation process; it needs to be do-able and provide data that will help improve the program's strength and effectiveness. As firms grow more established, their strategic planning gains credibility, allowing them to attract investment even from those who do not have an intimate knowledge of the company's management.
Engaging in strategy evaluation also helps establish the legitimacy of the company's programs for both internal and external stakeholders. This transparency can increase confidence among potential investors, who rely on the availability of information about the company's products, revenues, costs, and profits to make informed decisions about providing financial capital to the firm.