STRATEGIC AUDIT PROCESS IN A CORPORATE

BY SURESH.V. MENON-CHIEF CONSULTANT & BUSINESS ADVISORY ON SIX SIGMA, ISO-SOC 2 AUDITING, PROCESS EXCELLENCE

Research reveals that organizations that engage in strategic management generally outperform those that do not. The attainment of an appropriate match or “fit” between organizations environment and strategy, structure and processes have positive effects on the organization’s performance. Strategic audit is conducted on a periodic basis in an organization to assess the overall performance of the organization it can be amalgamated with ISO auditing as per the needs of the organization. 

The strategic audit is carried out in an organization on parameters discussed below, the answers given by the corporation has to be evaluated by the strategic auditor who later presents his report to the key members of the organization and then rectify the flaws in strategy based on the actions taken by the management: – 

Current Situation 

1. Current performance 

How did the corporation perform in the past year overall in terms of return on investment, market share and profitability? 

2. Strategic Posture What are the corporation’s current mission, objectives, strategies and policies? 

Corporate Governance  

Board of Directors 

1. Who is on board? How many internal (Employees) or external members? 

2. Which board members own significant shares of stock? What percentage? 

3. Is the stock privately held or publicly traded? Are the different classes of stock with different voting rights? 

4. What do the board members contribute to the cooperation in terms of knowledge, skills, background and connections? 

5. How long have the board members served on the board? 

6. What is their level of involvement in strategic management? 

Top Management 

1. What person or group constitutes top management? 

2. Has top management been responsible for the corporation’s performance over the past few years? How many managers have been in their current position for less than three years? 

3. Are strategic decisions made in an environmentally sustainable manner? 

4. Do top executives own significant amount of stock in the corporation? 

External Environment: Opportunities and threats (SWOT) 

1. Natural Physical environment: Sustainability issues 

1. What forces from the natural physical environment are currently affecting the corporation and industries in which it competes? How could you categorize current or future threats? Opportunities? 

2. Climate including global temperatures, sea level and fresh water availability, pandemic related threats 

2. Societal Environment 

1. What general environment forces are currently affecting both the corporation and the industries in which it competes? Which present current or future threats? 

IV Internal Environment: SWOT 

1. Corporate Structure 

1. How is the corporation structure at present 

2. Is the decision-making authority centralized around on group or decentralized to many units? 

3. Is the structure clearly understood by everyone in the corporation? 

2. Corporate resources 

Marketing 

1. What are the corporation’s current marketing objectives, strategies, policies and programs? 

2. How well is the corporation performing in terms of analysis of market positions and marketing mix in both domestic and international markets? How dependent is the corporation on a few customers? How big is its market? Where is it gaining or losing market share? 

3. Are marketing managers using accepted marketing concepts and techniques to evaluate and improve product performance? 

4. What is the role of marketing manager in strategic management process? 

Finance 

1. What are the corporations’ current financial objectives, strategic policies and programs? 

2. How well is the corporation performing in terms of financial analysis? 

3. How well does the corporation’s financial performance compared with that of similar organizations? 

4. Are financial managers using accepted financial concepts and techniques? 

5. How does finance adjust to the conditions in each country in which the company operates? 

6. How is budget forecasting done? 

7. How does finance cope with global financial issues like for example recession? 

8. What is the role of financial manager in strategic management process? 

Information Technology 

1. What are the corporation’s current IT Objectives, strategies, policies and programs? 

2. Are the IT Managers Competencies evaluated in terms of maintaining Information Security, Data privacy overseed by the management? 

3. What is the role of IT manager in the strategic management process? 

HR, Admin and Logistics Should also be rigorously involved in the audit. 

The answers to the questionnaire can give rise to a better recommended strategy plan by the strategic auditor which has to implemented by the management and later monitored and controlled continuously.