Term
| Romantic View of Leadership |
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Definition
| Situation in which the leader is the key focre determining the organization's success--or lack thereof. |
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| External Control View of Leadership |
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Definition
| Situations in which external forces--where the leader has limited influence--determine the organization's success. |
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Term
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Definition
The analyses, decisions, and actions an organization undertakes in order to create and ssutain competitive advantages.
Analysis: Internal (value chain analysis) and external (five forces model, general business environment)
Formulation
Implementation |
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Definition
| The ideas, decisions, and actions that enable a firm to succeed. |
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Definition
| A firm's resources and capabilities that enable it to overcome the competitive forces in it's industry(ies). |
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Term
| Operational Effectiveness |
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Definition
| Performing similar activities better than rivals. |
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Term
| Four Key Attributes of Strategic Management |
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Definition
1. Directed toward overall organizational goals and objectives
2. includes multiple stakeholders in decision making
3. Requires incorporating both short- and long-term perspectives
4. Involves the recognition of trade-offs between effectiveness and efficiency |
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Definition
| Tailoring actions to the needs of an organization rather than wasting effort, or "doing the right thing." |
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Definition
| Performing actions at a low cost relative to a benchmark, or "doing things right." |
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Definition
| The challenge managers face of both aligning resources to take advantage of existing product markets as well as proactively exploring new opportunities. |
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Term
| Strategic Management Process |
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Definition
| Stragegy analysis, strategy formulation, and stragegy implementation. |
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Definition
| Strategy in which organizational decisions are determined only by analysis. |
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Definition
| Strategy in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial processes. |
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Definition
| Study of firms' external and internal environments, and their fit with organizational visiona nd goals. |
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Definition
The relationship among various participants in determining the direction and performance of corporations.
Internal (shareholders and management)
External (auditors, banks, analysts, etc.) |
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Definition
A firm's strategy for recognizing and responding toathe interests of all its salient stakeholders.
Key Stakeholders: owners, customers, suppliers, employees, and society at large |
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Term
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Definition
| Practice wherein the internet is used to tap a broad range of individuals and groups to generate ideas and solve problems. |
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Definition
| The expectation that businesses or individuals will strive to improve the overall welfare of society. |
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Definition
| Policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in which it operates. |
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Definition
Assessment of a firm's financial, social, and environmental performance.
(BP) |
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Term
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Definition
| Organizational goal(s) that evoke(s) powerful and compelling mental images; represents a destination. |
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Definition
| A set of organizational goals that include both the purpose of the organization, its scope of operations, and the basis of its competitie advantage. |
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Term
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Definition
| A set of organizational goals that are used to operationalize the mission statement and that are specific and cover a well-defined time frame. |
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Definition
| Surveillance of a firm's external environment to predict environmental changes and detect changes already under way. |
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Definition
| A firm's activities of collecting and interpreting data on competitors, defining and understanding the industry, and identifying competitors' strengths and weaknesses. |
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Term
| General Business Environment |
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Definition
| Factors external to an industry, and usually beyond a firm's control, that affect a firm's strategy. |
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Term
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Definition
Demographic Segment: observable characteristics
Sociocultural Segment: values, beliefs, lifestyles
Political/Legal Segment: how a society creates/exercises power
Technological Segment: innovation and state of knowledge
Economic Segment: characteristics of the economy
Global Segment: influences from foreign countries |
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Definition
| A group of firms that produce similar goods or services. |
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Term
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Definition
| Factors that pertain to an industry and affect a firm's strategies. |
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Term
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Definition
1. Threat of new entrants
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Threat of substitute products/services
5. Intensity of rivalry among competitors in an industry |
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Definition
| A strategic analysis of an organization that uses value-creating activities. |
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Term
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Definition
Refer to the physical creation of the product or service.
-Inbound Logistics
-Operations
-Outbound Logistics
-Marketing Sales
-Service |
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Definition
Add value by themselves or through important relationships.
-Procurement
-Technology
-Development
-Human Resource Management
-General Administration |
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Definition
| Receiving, storing, and distributing inputs of a product. |
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Definition
| All activities associated with transforming inputs into the final product form. |
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Definition
| Collecting, storing, and distributing the product or service to buyers. |
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Term
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Definition
Perspective that firms' competitive advantages are due to their endowment of strategic resources that are:
Valuable
Rare
Costly to imitate
Costly to substitute. |
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Term
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Definition
Tangible
Intangible
Organizational Capabilities |
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Term
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Definition
| A characteristic of resources that is developed and/or accumulated through a unique series of events. |
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Term
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Definition
| A characteristic of a firm's resources that is costly to imitate because a competitor cannot determine what hte resources is and/or how it can be re-created. |
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Term
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Definition
| A characteristic of a firm's resources that is costly to imitiate because the social engineering required is beyond the capability of competitors, including interpersonal relations among managers, organizational culture, and reputation with suppliers and customers. |
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Term
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Definition
A method of evaluating a firm's performance measures based on the following perspectives:
customers
internal business
innovation and learning
financial |
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Definition
| An economy where wealth is created through the effective management of knowledge workers instead of by the efficient control of physical and financial assets. |
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Term
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Definition
| The difference between the market value of the firm and the book value of the firm |
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Term
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Definition
| The individual capabilities, knowledge, skills, and experience of a company's employees and managers. |
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Term
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Definition
| The network of friendships and working relationships between talented people both inside and outside the organization. |
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Definition
| Knowledge that is confided, documented, easily reproduced, and widely distributed. |
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Definition
| Knowledge that is in the minds of employees and is based on their experiences and backgrounds. |
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Definition
| Analysis of the pattern of social interactions among individuals. |
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Definition
| The degree to which all members of a social network have relationships with other group members. |
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Definition
| Relationships in a social network that connect otherwise disconnected people. |
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Definition
| Social gaps between groups in a social network where there are few relationships bridging the groups. |
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Definition
| A tendency in an organization for individuals not to question shared beliefs because of social norms. |
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Definition
A strategy designed for a firm or a division of a firm that competes within a single business.
Competition takes place at the business unit level.
Examples: cost leadership, differentiation, and focus |
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Term
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Definition
| An analysis of business strategy into basic types based on breadth of target market and types of competitive advantage. |
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Term
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Definition
| The decline in unit costs of production as cumulative output increases. |
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Definition
| A firm's achievement of similarity, or being "on par," with competitors with respect to low cost, differentiation, or other strategic product characteristics. |
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Definition
| A firm's generic strategy based on appeal to a narrow market segment. |
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Term
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Definition
| Firms' integrations of various strategies to provide multiple types of value to customers. |
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Term
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Definition
| The total profits in an industry at all points along the industry's value chain. |
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Term
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Definition
| Introduction, Growth, Maturity, Decline |
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Term
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Definition
| A break in industry tendency to continuously augment products by offering products with fewer product attributes and lower prices. |
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Term
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Definition
| A break in industry tendency to incrementally improve products along specific dimensions by offering products that are still in the industry but that are perceived by customers as being different. |
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Term
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Definition
| A strategy of wringing as much profit as possible out of a business in the short to medium terms by reducing costs. |
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Term
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Definition
| A strategy that reverses a firm's decline in performance and returns it to growth and profitability. |
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Term
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Definition
| A strategy that focuses on gaining long-term revenue, profits, and market value through managing operations in multiple businesses. |
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Term
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Definition
Entering new businesses.
Related: a firm entering a different business in which it can benefit from leveraging core competencies, sharing activities, or building market power; synergies come from horizontal relationships between business units. Economies of Scope from leveraging core competencies and sharing activities, and market power attainment from pooled negotiating power.
Unrelated: a firm entering a different business that has little horizontal interaction with other businesses of a firm. Little opportunity to leverage core competencies or share activities across business units. |
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Term
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Definition
| Cost savings from leveraging core competencies or sharing related activities among businesses in a corporation. |
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Term
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Definition
| A firm's strategic resources that reflect the collective learning in the organization. |
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Term
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Definition
| Having activities of two or more businesses' value chains done by one of the businesses. |
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Term
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Definition
| The improvement in bargaining position relative to suppliers and customers. |
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Term
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Definition
When a firm becomes it's own supplier or distributor;
integrating preceding or successive production processes. |
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Term
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Definition
Asset Restructuring
Capital Restructuring
Management Restructuring |
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Term
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Definition
| Incorporation of one firm into another through purchase. |
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Term
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Definition
| Combining two or more firms into one new legal entity. |
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Definition
| The exit of a business from a firm's portfolio. |
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Term
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Definition
| A cooperative relationship between two or more firms. |
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Term
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Definition
| New entities formed within a strategic alliance in which two or more firms, the parents, contribute equity to form the new legal entity. |
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Term
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Definition
| Managers' actions to shape their firms' strategies to serve their selfish interests rather than to maximize long-term shareholder value. |
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Term
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Definition
| A payment by a firm to a hostile party for the firm's stock at a premium, made when the firm's management feels that the hostile party is about to make a tender offer. |
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Term
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Definition
| A prearranged contract with managers specifying that, in the event of a hostile takeover, the target firm's managers will be paid a significant severance package. |
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Term
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Definition
| Used by a company to give shareholders certain rights in the event of takeover by another firm. |
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Term
| Key Attributes of Strategic Management |
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Definition
Directed at overall organizational goals
Includes multiple stakeholders
Incorporates both short- and long-term perspectives
Incorporates trade-offs between efficiency and effectiveness |
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Term
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Definition
Static perspective
Potential to overemphasize a single dimension of a firm's strategy
Likelihood that a firm's strengths do not help the firm create value or competitive advantages. |
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Term
| Improving a Firm's Performance |
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Definition
| Employee satisfaction leads to higher levels of customer satisfaction, which leads to better financial performance. |
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Term
| Value-Adding Activities formed by the Internet |
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Definition
Search
Evaluation
Problem Solving
Transactions |
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Term
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Definition
| Strategic analysis, strategic development and strategy implementation are interrelated and are developed together. |
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Term
| Primary Participants of Corporate Governance |
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Definition
Shareholders
Management (led by CEO)
Board of Directors |
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Term
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Definition
Having the lowest cost of operation in the industry; The cost leadership is often driven by company efficiency, size, scale, scope and cumulative experience (learning curve). A cost leadership strategy aims to exploit scale of production, well defined scope and other economies (e.g. a good purchasing approach), producing highly standardized products, using high technology.
Aggressive construction of efficient-scale facilities
Vigorous pursuit of cost reductions from experience
Tight costs and overhead control
Avoidance of marginal customer accounts |
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Term
| Product Differentiation & Strategy |
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Definition
The degree that a product has strong brand loyalty or customer loyalty.
A firm's generic strategy based on creating differences in the firm's product or service offering by creating something that is perceived industrywide as unique and valued by customers. |
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Term
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Definition
| Clusters of firms that share similar strategies. Rivalry is increased among like firms (luxury cars form a strategic group, noncompetitive with compact cars) |
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Term
| Attracting/Developing Human Capital |
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Definition
| Selecting the right employees through interviews, training employees at all levels, encouraging involvement, monitoring progress and tracking development, and evaluating human capital; high company reputation. |
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Term
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Definition
| Ensure employees identify with an organization's missions/values, provide challenging work and a stimulating environment, and financial/non-financial rewards and incentives |
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Term
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Definition
| Firms' abilities to profit through restricting or controlling supply to a market or coordinating with other firms to reduce investment. |
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Term
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Definition
| The positive contributions of the corporate office to a new business as a result of expertise and support provided and not as a result of substantial changes in assets, capital structure, or management. |
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Term
| Industry Growth Rate/Market Share Analogies of SBUs |
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Definition
Stars: high growth, high market share
Question Marks: high growth, low market share
Cash Cows: low growth, high market share
Dogs: low growth, low market share |
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Term
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Definition
| What businesses to compete in and how to run the businesses to allow them to work together (synergy). |
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Term
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Definition
Environmental Scanning
Environmental Monitoring
Competitive Intelligence |
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Term
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Definition
| Moving closer to the raw materials; securing the raw materials. |
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Term
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Definition
| Includes control of the direct distribution of their own products (building retail stores). |
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Term
| Methods of Product Market Diversification |
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Definition
Mergers and Acquisitions (quick, but can be expensive)
Joint Ventures/Strategic Alliances (reducing risk by sharing and combining resources, but provide less control)
Internal Development (able to capture all of the value from its initiatives, but can be time-consuming) |
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