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MG402.08 - Business Policy - Loyola University Maryland
Chapter 1
38
Business
Undergraduate 4
01/25/2012

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Term
Strategic Management
Definition
a set of managerial decisions and actions that determines the long-run performance of a corporation. This includes environmental scanning, strategy formulation, strategy implementation, and evaluation and control.
Term
the study of strategic management
Definition
emphasizes the monitoring and evaluating of external opportunities and threats in light of a corporation's strengths and weaknesses.
Term
phases of strategic management
Definition
based-financial planning, forecast-based-planning, externally oriented (strategic) planning, strategic management
Term
benefits of strategic management
Definition
clearer sense of strategic vision for the firm, sharper focus on what is strategically important, and an improved understanding of a rapidly changing environment.
Term
globalization
Definition
the integrated internationalization of markets and corporations. This has changed the way modern corporations do business because job, knowledge, and capital are now able to move across borders with far greater speed and far less friction than was possible before.
Term
Environmental Sustainability
Definition
the use of business practices to reduce a company's impact upon the natural, physical environment.
Term
risks of climate change on industries/companies
Definition
regulatory risk, supply chain risk, product and technology risk, litigation risk, reputational risk, and physical risk. RSPLRP
Term
Population ecology
Definition
A theory of organizational adaptation which thinks once a company is successfully established in a particular environmental niche, it is unable to adapt to change conditions, and is eventually replaced as the success leader.
Term
Institution Theory
Definition
A theory of organizational adaptation which proposes that organizations can and do adapt to changing conditions by imitating other successful organizations.
Term
strategic choice perspective
Definition
A theory of organizational adaptation which proposing not only do organizations adapt to a changing environment, but they also have the opportunity and power to reshape their environment.
Term
organizational learning theory
Definition
A theory of organizational adaptation which says an organization adjusts defensively to a changing environment and uses knowledge offensively to improve the fit between itself and its environment.
Term
Learning organization
Definition
An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights. These organizations are good at solving problems systematically, experiementing with new approaches, learning from their own experiences and past history as well as from the experiences of others, and transferring knowledge quickly and efficiently throughout the organization.
Term
environmental scanning
Definition
the monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the corporation.
Term
strategic factors
Definition
those external and internal elements that will determine the future of the corporation (can be found by performing a SWOT analysis).
Term
internal environment
Definition
the variables of a corporation which are within the organization itself and are not usually within the short-run control of top management.
Term
strategy formulation
Definition
the development of long-range plans for the effective management of environmental opportunities and threats after taking corporate strategic factors into consideration.
Term
mission
Definition
the purpose/reason for an organization's existence.
Term
objectives
Definition
end results of a planned activity. They should be described with action words and be accomplished within the scope of the company's mission statement.
Term
strategy
Definition
a comprehensive master plan that states how the corporation will achieve its mission and objectives, usually through maximizing competitive advantages and minimizing it's competitive disadvantages.
Term
corporate strategy
Definition
a company's overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines. Typically they include plans for stability, growth, and retrenchment.
Term
business strategy
Definition
emphasizes improvement of the competitive position of a corporation's products or services in the specific industry or market segment served by that business unit.
Term
budget
Definition
a statement of a corporation's prgrams in terms of dollars containing the detailed costs of each program for planning purposes.
Term
hurdle rate
Definition
The lowest rate of return management will approve before a budget is accepted.
Term
procedures (a.k.a. Standard Operating Procedures)
Definition
a system of sequential steps or techniques that describe in detail how a particular task or job is to be done.
Term
evaluation and control
Definition
a process in which corporate activities and performance results are monitored so that actual performance can be compared with desired performance.
Term
performance
Definition
the actual outcomes of the strategic management process.
Term
punctuated equilibrium
Definition
a phenomenon/pattern which seems to have developed where corporations evolve through relatively long periods of stability (equilibrium periods) punctuated by relatively short bursts of fundamental change (revolutionary periods).
Term
a triggering event
Definition
something that acts as a stimulus for a change in strategy. (ex. new CEO, external intervention, threat of a change in ownership, performance gap, and/or strategic inflection points.
Term
performance gap
Definition
when performance does not meet expectations.
Term
strategic inflection point
Definition
when a major change takes place in a business do to the introduction of new technologies, a different regulatory environment, a change in customer' values, or a change in what customers prefer.
Term
strategic decisions
Definition
decisions that deal with the long-run future of an entire organization and are rare in nature, consequential because they commit substantial resources and demand a great deal of commitment from people at all levels, and they set precedents for lesser decisions and future actions throughout an organization (i.e. are "directive").
Term
Mintzberg and Quinn's four modes of strategic decision making
Definition
Planning, entrepreneurial, adaptive, logical incrementalism (think PEALi ("peal-ee"))
Term
Mintzberg's entrepreneurial mode for strategic decision making
Definition
strategy made by one powerful individual which focuses on seizing opportunities as being more important than addressing problems.
Term
Mintzberg's adaptive mode for strategic decision making
Definition
taking a reactive approach to strategic decision making versus taking a proactive search for new opportunities.
Term
Mintzberg's planning mode for strategic decision making
Definition
a decision-making mode involving the systematic gathering of appropriate information for situation analysis, the generation of feasible alternative strategies, and the rational selection of the most appropriate strategy. It includes both a proactive search for new opportunities while trying to find reactive solutions to existing problems.
Term
Quinn's logical incrementalism mode for strategic decision making
Definition
When top management is aware and knowledgeable of the company's mission and objectives, but chooses to use an interactive process in which the organization probes the future, experiments and leans from a series of partial commitments rather than through global formulations of total strategies. It can be see as a combination of Mintzberg's three modes for strategic decision making.
Term
The 8 steps in the strategic decision-making process.
Definition
Evaluate current performance results, review corporate governance, scan and assess the external environment, scan and assess the internal corporate environment, analyze strategic (SWOT) factors, generate/evaluate/and select the best alternative strategy, implement selected strategies, and evaluate implemented strategies.
Term
strategic audit
Definition
a checklist of questions, by area or issue, that enables a systematic analysis to be made of various corporate functions and activities.
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