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Theory E²: Working with Entrepreneurs in Closely Held Enterprises: XII. Assessment in the Enterprise Cycle (Part One)

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Expanded and Maturing Application of Program Evaluation

In recent years, program evaluation has become more common within corporations and nonprofit organizations. In most cases, this growing interest is unrelated to outside funding sources; rather, it emerges in closely held enterprises from a growing concern about quality products and services, and the growing concern about assessing the costs and benefits associated with specific program offerings. Whether one is leading a nonprofit or for profit enterprise that is closely held, the dollars are inevitably scarce and the world in which one’s organization is operating will be complex, unpredictable and turbulent. It is critical under such conditions to attend carefully to the assessment-based processes involved in program evaluation. It is in this domain of information that we find the guidance for review of our organization’s intentions and generation of realistic and effective ideas that translates to appropriate and effective action.

Accompanying this expansion in the size and scope of program evaluation initiatives is the maturation of the field. A clearer understanding of the differing functions played by specific evaluation strategies has been complimented by a clearer sense of those features that are common to all forms of program evaluation. The most important distinction to be draw regarding program evaluation functions concerns the use of evaluation processes to determine the worth of a program and the use of evaluation processes to assist in the improvement of this program. The terms used to identify these two functions are: formative and summative.

Formative and Summative Program Evaluations

Paul Dressel differentiates between summative evaluation that involves “judgment of the worth or impact of a program” and formative evaluation that Dressel defines as “the process whereby that judgment is made.” The evaluator who is usually identified as the author of this distinction, Michael Scriven, offers the following description of these two terms. According to Scriven, formative evaluation:

. . . is typically conducted during the development or improvement of a program or product (or person, and so on) and it is conducted, often more than once, for the in-house staff of the program with the intent to improve. The reports normally remain in-house; but serious formative evaluation may be done by an internal or external evaluator or (preferably) a combination; of course, many program staff are, in an informal sense, constantly doing formative evaluation.

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