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Glossary
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A
Acceptability is concerned with the expected performance outcomes of a strategy (p. 361) Acquisition is where strategies are developed by taking over ownership of another organisation (p. 349). See key concepts Back to the top
B
Backward integration is development into activities concerned with the inputs into the company's current business (p. 285) Balanced scorecards combine both qualitative and quantitative measures, acknowledge the expectations of different stakeholders and relate an assessment of performance to choice of strategy (p.
Barriers to entry are factors that need to be overcome by new entrants if they are to compete successfully (p. 81). See key concepts Black holes are subsidiaries located in countries that are crucial for competitive success but with low-level resources or capabilities (p.
The Bower–Burgelman explanation of strategy development is that strategy develops as the outcome of resource allocation routines in organisations (p. 580) Business-level strategy is about how to compete successfully in particular markets (p. 11) A business model describes the structure of product, service and information flows and the roles of the participating parties (p. 462). See key concepts Back to the top
C
A cash cow is a business unit with a high market share in a mature market (p. 316) A change agent is the individual or group that effects strategic
change in an organisation (p. 519) Coercion is the imposition of change or the issuing of edicts about change (p. 517) Collaboration or participation in the change process is the involvement of those who will be affected by strategic change in the change agenda (p. 515) Competences are the activities and processes through which an organisation deploys its resources effectively (p. 119) Competitive rivals are organisations with similar products and services aimed at the same customer group (p. 85). See key concepts Competitive strategy is concerned with the basis on which a business unit might achieve competitive advantage in its market (p.
An organisation's configuration consists of the structures, processes and relationships through which the organisation operates (p. 396). See key concepts Consolidation is where organisations protect and strengthen their position in their current markets with current products (p. 342). See key concepts Contributors are subsidiaries with valuable internal resources but located in countries of lesser strategic significance, which nonetheless play key roles in a multinational organisation's competitive success (p. 326) Convergence is where previously separate industries begin to overlap in terms of activities, technologies, products and customers (p. 77). See key concepts Core competences are the activities and processes through which resources are deployed in such a way as to achieve competitive advantage in ways that others cannot imitate or obtain (p. 121). See key concepts Core values are the principles that guide an organisation's actions (p. 207) Corporate-level strategy is concerned with the overall purpose and scope of an organisation and how value will be added to the different parts (business units) of the organisation (p. 11) Corporate parent refers to the levels of management above that of the business units and therefore without direct interaction with buyers and competitors (p. 281) Corporate social responsibility is concerned with the ways in which an organisation exceeds the minimum obligations to
The directional policy matrix positions SBUs according to (a) how attractive the relevant market is in which they are operating, and (b) the competitive strength of the SBU in that market (p. 319) Diversification is a strategy that takes the organisation into both new markets and products or services (pp. 282, 346). See key concepts Dogs are business units with a low share in static or declining markets (p. 316) A dominant strategy is one that outperforms all other strategies whatever rivals choose (p. 266) A dominated strategy is a competitive strategy that, if pursued by a competitor, is bound to outperform the company (p. 266) Dynamic capabilities are an organisation's abilities to develop and change competences to meet the needs of rapidly changing environments (p. 132). See key concepts Back to the top
E
Education and communication involve the explanation of the reasons for and means of strategic change (p. 515) Emergent strategy comes about through everyday routines, activities and processes in organisations (p. 566). See key concepts Enabling success is concerned with the two-way relationship between overall business strategies and strategies in separate resource areas such as people, information, finance and technology (p. 446). See key concepts In game theory, equilibrium is a situation where each competitor contrives to get the best possible strategic solution for themselves given the response from the other (p. 266) The ethical stance is the extent to which an organisation will exceed its minimum obligations to stakeholders and society at large (p. 189). See key concepts The experience lens views strategy development as the outcome of individual and collective experience of individuals and their taken- for-granted assumptions (p. 45) Back to the top
F
A failure strategy is one that does not provide perceived value-for-
money in terms of product features, price or both (p. 252). See key concepts Feasibility is concerned with whether an organisation has the resources and competences to deliver a strategy (p. 371) In financial control the role of the centre is confined to setting financial targets, allocating resources, appraising performance and intervening to avert or correct poor performance (p. 424). See key concepts The five forces framework helps identify the sources of competition in an industry or sector (p. 78). See key concepts A focused differentiation strategy seeks to provide high perceived product/service benefits justifying a substantial price premium, usually to a selected market segment (niche) (p. 251). See key concepts A forcefield analysis provides a view of change problems that need to be tackled, by identifying forces for and against change (p. 514). See key concepts Forward integration is development into activities which are concerned with a company's outputs (p. 285) A functional structure is based on the primary activities that have to be undertaken by an organisation such as production, finance and accounting, marketing, human resources and research and development (p. 398) Back to the top
G
Game theory is concerned with the interrelationships between the competitive moves of a set of competitors (p. 264). See key concepts Gatekeepers are individuals or groups who gain power from their control of information (p. 466) The global–local dilemma relates to the extent to which products and services may be standardised across national boundaries or need to be adapted to meet the requirements of specific national markets (p. 300) Global sourcing : purchasing services and components from the most appropriate suppliers around the world regardless of their location (p. 297) In a global strategy standardised products exploiting economies of scale and value-adding activities are typically concentrated in a limited set of locations (p. 300)
J
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K
Key drivers of change are forces likely to affect the structure of an industry, sector or market (p. 69) Key value and cost drivers are the factors that have most influence on the cash generation cabability of an organisation (p.
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L
Leadership is the process of influencing an organisation (or group within an organisation) in its efforts towards achieving an aim or goal (p. 519). See key concepts The learning organisation is capable of continual regeneration from the variety of knowledge, experience and skills of individuals within a culture which encourages mutual questioning and challenge around a shared purpose or vision (p. 589). See key concepts Legitimacy is concerned with meeting the expectations within an organisational field in terms of assumptions, behaviours and strategies (p. 199) Lock-in is where an organisation achieves a proprietary position in its industry; it becomes an industry standard (p. 256). See key concepts Logical incrementalism is the deliberate development of strategy by experimentation and learning from partial commitments (p. 578). See key concepts A low-price strategy seeks to achieve a lower price than competitors whilst trying to maintain similar perceived product or service benefits to those offered by competitors (p. 246). See key concepts Back to the top
M
Managing for value is concerned with maximising the long-term cash-generating capability of an organisation (p. 466). See key concepts Market development is where existing products are offered in new markets (p. 346). See key concepts
Market penetration is where an organisation gains market share (p. 344). See key concepts Market processes involve some formalised system of ‘contracting' for resources (p. 418). See key concepts A market segment is a group of customers who have similar needs that are different from customer needs in other parts of the market (p. 91). See key concepts A matrix structure is a combination of structures which could take the form of product and geographical divisions or functional and divisional structures operating in tandem (p. 402) A mission statement is a statement of the overriding direction and purpose of an organisation (p. 209). See key concepts A multidivisional structure is built up of separate divisions on the basis of products, services or geographical areas (p. 399) In a multi-domestic strategy value-adding activities are located in individual national markets served by the organisation and products and/or services are adapted to the unique local requirements (p.
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N
A ‘no frills' strategy combines a low price, low perceived product/service benefits and a focus on a price-sensitive market segment (p. 245). See key concepts Back to the top
O
Objectives are statements of specific outcomes that are to be achieved (p. 209) Operational strategies are concerned with how the component parts of an organisation deliver effectively the corporate- and business-level strategies in terms of resources, processes and people (p. 12) Organisational culture is the ‘basic assumptions and beliefs that are shared by members of an organisation, that operate unconsciously and define in a basic taken-for-granted fashion an organisation's view of itself and its environment' (pp. 47, 196). See key concepts An organisational field is a community of organisations that partake of a common meaning system and whose participants interact more frequently with one another than with those outside
network (p. 141) A project-based structure is one where teams are created, undertake the work and are then dissolved (p. 408) Punctuated equilibrium is the tendency of strategies to develop incrementally with periodic transformational change (p. 28) Back to the top
Q
A question mark (or problem child) is a business unit in a growing market, but without a high market share (p. 315) Back to the top
R
Realised strategy : the strategy actually being followed by an organisation in practice (p. 566) A recipe is a set of assumptions held in common within an organisational field about organisational purposes and a ‘shared wisdom' on how to manage organisations (p. 199) Reinforcing cycles are created by the dynamic interaction between the various factors of environment, configuration and elements of strategy; they tend to preserve the status quo (p. 433). See key concepts Related diversification is strategy development beyond current products and markets, but within the capabilities or value network of the organisation (p. 285) The resource-based view of strategy: the competitive advantage of an organisation is explained by the distinctiveness of its capabilities (p. 116) Returns are the benefits which stakeholders are expected to receive from a strategy (p. 361) Risk concerns the probability and consequences of the failure of a strategy (p. 369) Routines are the organisationally specific ‘ways we do things around here' which tend to persist over time and guide people's behaviour (p. 527) Back to the top
S
Scenarios are detailed and plausible views of how the business
environment of an organisation might develop in the future based on groupings of key environmental influences and drivers of change about which there is a high level of uncertainty (p. 76). See key concepts Processes of self-control achieve the integration of knowledge and coordination of activities by the direct interaction of individuals without supervision (p. 413). See key concepts Staged international expansion : firms initially use entry modes that allow them to maximise knowledge acquisition whilst minimising the exposure of their assets (p. 297) A stage-gate process is a structured review process to assess progress on meeting product performance characteristics during the product development process and ensuring that they are matched with market data (p. 488) Stakeholder mapping identifies stakeholder expectations and power and helps in understanding political priorities (p. 181). See key concepts Stakeholders are those individuals or groups who depend on the organisation to fulfil their own goals and on whom, in turn, the organisation depends (p. 179). See key concepts A star is a business unit which has a high market share in a growing market (p. 315) A strategic alliance is where two or more organisations share resources and activities to pursue a strategy (p. 353). See key concepts A strategic business unit is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU (pp. 11, 241). See key concepts Strategic capability is the adequacy and suitability of the resources and competences of an organisation for it to survive and prosper (p. 117) Strategic choices involve understanding the underlying bases for future strategy at both the business unit and corporate levels and the options for developing strategy in terms of both the directions and methods of development (p. 18). See key concepts Strategic control is concerned with shaping the behaviour in business units and with shaping the context within which managers are operating (p. 425). See key concepts The strategic customer is the person(s) at whom the strategy is primarily addressed because they have the most influence over which goods or services are purchased (p. 96). See key concepts Strategic drift is where strategies progressively fail to address the strategic position of the organisation and performance deteriorates
circumstances in which an organisation is operating – the strategic position (p. 358) Support activities help to improve the effectiveness or efficiency of primary activities (p. 137) A SWOT analysis summarises the key issues from the business environment and the strategic capability of an organisation that are most likely to impact on strategy development (pp. 102, 148). See key concepts Symbols are objects, events, acts or people which express more than their intrinsic content (p. 528) Synergy refers to the benefits that might be gained where activities or processes complement each other such that their combined effect is greater than the sum of the parts (p. 282). See key concepts The synergy manager a corporate parent seeking to enhance value across business units by managing synergies across business units (p. 310) Back to the top
T
Tangible resources are the physical assets of an organisation such as plant, labour and finance (p. 117) A team-based structure attempts to combine both horizontal and vertical coordination through structuring people into cross-functional teams (p. 406) A technological path identifies the major factors that are influencing technological developments (p. 478). See key concepts Threshold capabilities are those capabilities essential for the organisation to be able to compete in a given market (p. 119) A tipping point is where demand for a product or service suddenly takes off or declines – sometimes dramatically (p. 482). See key concepts A transnational structure combines the local responsiveness of the international subsidiary with the coordination advantages found in global product companies (p. 404) In a turnaround strategy the emphasis is on speed of change and rapid cost reduction and/or revenue generation (p. 523). See key concepts Back to the top
U
Unique resources are those resources that critically underpin competitive advantage and that others cannot easily imitate or obtain (p. 121) Unrelated diversification is the development of products or services beyond the current capabilities or value network (p. 288) Back to the top
V
The value network is the set of inter-organisational links and relationships that are necessary to create a product or service (p. 140). See key concepts Vertical integration is backward or forward integration into adjacent activities in the value network (p. 285) Virtual organisations are held together not through formal structure and physical proximity of people, but by partnership, collaboration and networking (p. 430) Back to the top
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