SOME TERMS AND DEFINITIONS
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Business policy and strategic management and organizational dynamics courses

By Prof Col Muhammad Wali Khan Durrani
July 26 - Aug 01, 2004
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STRATEGY: A series of goal directed decisions and actions that match an organization's skills and resources with the opportunities and threats in its environment.

STRATEGIC MANAGEMENT: Involves a series of steps in which organizational members analyze the current situation, decide on strategies, put those strategies into action, and evaluate/modify change strategies as needed.

SITUATION ANALYSIS: The first step in the strategic management process in which organizational employees look at the organizational context, the external environment, and the internal organizational aspects.

STRATEGY FORMULATION: Involves the design and choice of appropriate organizational strategies.

FUNCTIONAL STRATEGIES: The goal-directed decisions and actions of the organization's functional units that are designed for the short term.

COMPETITIVE STRATEGIES: Strategies that are concerned with how the organization is going to compete in a specific business or industry.

CORPORATE STRATEGIES: Strategies that are concerned with the broad and more long-term questions of "what business (es) are we in or do we want to be in, and what do we want to do with these business (es)"

STRATEGY IMPLEMENTATION: The process of putting organizational various strategies into action.

STRATEGY EVALUATION: The process of evaluating how the strategy has been implemented as well as the outcomes of the strategy.

COMPETITIVE ADVANTAGE: What sets an organization apart its competitive edge?

Industrial organization (I/O) view: Focuses on the structural forces within an industry, the competitive environment of firms, and how these influence competitive advantage.

RESOURCE-BASED VIEW (RBV): Takes the approach that a firm's resources are more important than industry structure in getting and keeping competitive advantage.

RESOURCES: Includes all of the firm's financial, physical, human, intangible and organizational assets used to develop, manufacture and deliver products or services to its customers.

SERVICES: Activities, benefits, or satisfactions offered by one party to another that are essentially intangible, and do not result in the ownership of anything.

TECHNOLOGY: How employees use equipment, materials, knowledge, and experience to perform tasks in an organization.

INNOVATION: The process of taking a creative idea and turning it into a product or process that can be used or sold.

GLOBALIZATION: The business and competitive situation in which organizations have no national boundaries.

TOTAL QUALITY MANAGEMENT (TQM): A philosophy of management that emphasizes customer needs and expectations and uses any number of employee actions to improve quality.

TOTAL QUALITY CULTURE: The concentration of all employees and resources in a never-ending quest or greater quality and service in every part of the organization.

ISO 9000: A series of quality management standards being embraced by organizations around the world.

PRODUCTIVITY: The output of goods and services divided by the inputs used to produce that output.

STAKEHOLDERS: Individuals or groups who have a stake in or are significantly influenced by an organizations decisions and actions and who, in turn can influence the organization.

ORGANIZATIONAL CHANGE: Any alteration in what an organization does and how it does it.

STRUCTURAL CHANGE: Any change in the way the organization is designed and managed.

ORGANIZATIONAL CULTURE: The beliefs, values, and behavioral norms shared and practiced by organizational .

CHANGE AGENTS: Individuals of groups who strategically manage the formulation, implementation, and evaluation of organizational change efforts.

WORLD-CLASS ORGANIZATION: An organization that continually acquires and utilizes knowledge in its strategic decisions and actions in order to be the best in the world at what it does.

VISION: A broad comprehensive picture of what a leader wants an organization to become.

MISSION: A statement of what the various organizational units do and what they hope to accomplish in alignment with the organizational vision.

 

 

CORPORATE SOCIAL RESPONSIBILITY (CSR): The obligation of organizational decision makers to make decisions and act in ways that recognize the inter-relatedness of business and society.

ETHICS: The rules and principles that define right and wrong decisions and behavior.

ORGANIZATIONAL LEARNING: The intentional and ongoing actions of an organization to continuously transform itself by acquiring in formation and knowledge and incorporating these into organizational decisions and actions.

EXTERNAL ANALYSIS: The process of scanning and evaluating an organization's various external environmental sectors in order to determine positive and negative trends that could influence upon organizational performance.

OPPORTUNITIES: Positive external environmental trends or changes that will help the organization improve its performance.

THREATS: Negative external environmental trends or changes that will hinder the organization's performance.

OPEN SYSTEM: An organization that interacts with and responds to its external environment.

ENVIRONMENTAL UNCERTAINTY

The amount of change and complexity in an organization's environment.

SPECIFIC ENVIRONMENT: Those external environmental sectors that have a direct and immediate impact in the organization's decisions and actions by opening up opportunities and/or threats.

GENERAL ENVIRONMENT: Those external environmental sectors that have an indirect effete on the organization's strategic decisions and actions and over which the organization has no, or very little, control.

INDUSTRY: A group or groups of organizations producing similar or identical products.

EXIT BARRIERS: Economic, strategic and emotional factors that keep companies competing in businesses even though they may be earning low or even negative returns.

STRATEGIC GROUP: A set of firms competing within an industry that have similar strategies and resources.

BARRIERS TO ENTRY: Obstacles to entering an industry.

SWITCHING COSTS: The one-time costs facing a buyer who switches from one supplier's product to anther.

PROACTIVE MANAGER: A manager, who anticipates changes, plans for those changes, and who may, at times, is able to influence various external environmental sectors.

INTERNAL ANALYSIS: A process of identifying and evaluating an organization's specific characteristics including its resources, capabilities, and core competencies.

CAPABILITIES : The organizational routines and processes that determine how efficiently and effectively the organization transforms its inputs (resources) into outputs (products, including physical goods and services).

ORGANIZATIONAL ROUTINES AND PROCESSES: The regular, predictable, and sequential patterns of work activity by organizational members

DISTINCTIVE ORGANIZATIONAL CAPABILITIES: The special and unique capabilities that distinguish the organization from its competitors

CORE COMPETENCIES: The organization's major value-creating skills and capabilities that are shared across multiple product lines or multiple businesses.

STRENGTHS: Resources that the organization possesses and capabilities that the organization has developed, which can be exploited and developed into a sustainable competitive advantage

WEAKNESSES: Resources and capabilities those are lacking or deficient, which prevent the organization from developing a sustainable competitive advantage.

CUSTOMER VALUE: The value that customers get from products, which arises from three broad categories: The product is unique and different; the product is low priced; or the providing organization has the ability to respond to specific or distinctive customer needs quickly.

VALUE CHAIN: A systematic way of examining all of the organization's functional activities and how well they create customer value.

ORGANIZATIONAL GOALS: Statements of desired outcomes.

COMPETITIVE INTELLIGENCE: Gathering information about what and how our competitors are doing.

FUNCTIONAL STRATEGIES: The goal directed decisions and actions of the organization's various functional units that are designed for the short term (less than a year).

PRODUCTION: The process of creating goods and services in which organizational inputs (resources) are transformed into outputs.

INTEGRATED MANUFACTURING: A production/operations philosophy that emphasizes the use of advanced manufacturing technology, total quality management, and just-in-time inventory control in order to create a streamlined flow of materials, people and work activities for transforming inputs into outputs.

MARKETING: A process of assessing and meeting individual's or groups wants and needs by creating, offering, and exchanging products of value.

RELATIONSHIP MARKETING: A process of building long-term, trusting, "win-win" relationships with valued customers.

DATA BASE MARKETING: A marketing strategy, which uses data base technology and sophisticated analytical techniques combined with direct-marketing methods to elicit a desired, measurable response in target groups and individuals.

HIGH PERFORMANCE WORK PRACTICES: Human resource policies and practices that can lead to both high individual and high organizational performance.

WORK FLOW: The way an organization's work activities are organized so that the vision, mission(s), and objectives are effectively and efficiency accomplished.

FINANCIAL STRUCTURE: The mix of all items found on the right-hand side of an organization's balance sheet.

CAPITAL STRUCTURE: The mix of the long-term sources of funds used by the organization.

COMPETITIVE ADVANTAGE: What sets an organization apart; its competitive edge.

HYPER COMPETITION: A situate with very intense and continually increasing levels of competition.

 

 

COMPETITION: Organizations battling or vying for some desired object or outcome typically customers, market share, survey ranking, or needed resources.

STRATEGIC GROUP: A group of firms following essentially the same strategy in a particular market or industry.

COMPETITIVE STRATEGY: A choice of how an organization or business unit is going to compete in its particular industry or market.

PROSPECTIVE COMPETITIVE STRATEGY: A strategy in which an organization continually innovates by finding and exploiting new product and market opportunities.

DEFENDER COMPETITIVE STRATEGY: Strategy characterized by the search for market stability and producing only a limited product line directed at a narrow segment of the total potential market.

ANALYZER COMPETITIVE STRATEGY: A strategy in which organizations compete by analyzing and initating the successes of other organizations.

REACTOR COMPETITIVE STRATEGY: A strategy characterized by the lack of a coherent strategic plan or apparent means of competing.

COST LEADERSHIP STRATEGY : A strategy in which an organization strives to have the lowest costs in its industry and produces products or services for a broad customer base.

DIFFERENTIATION STRATEGY.

A strategy in which the organization competes on the basis of providing unique (different) products or services with features that customer value, perceive as different, and for which they are willing to pay a premium price.

BRAND LOYALTY: A situation in which, customers consistently and repeatedly seek out, purchase, and use a particular brand.

FOCUS STRATEGY: A strategy in which an organization purses either a cost or differentiation advantage but in a limited (narrow) customer group or segment.

STUCK IN THE MIDDLE: The situation in which an organization isn't successfully pursuing either a low cost or a differentiation competitive advantage.

INTEGRATED LOW-COST/DIFFERENTIATION STRATEGY: A strategy in which an organization develops a competitive advantage by simultaneously achieving low costs and high levels of differentiation.