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.
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
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.
all of the firm's financial, physical, human, intangible and
organizational assets used to develop, manufacture and deliver products
or services to its customers.
Activities, benefits, or
satisfactions offered by one party to another that are essentially
intangible, and do not result in the ownership of anything.
employees use equipment, materials, knowledge, and experience to perform
tasks in an organization.
process of taking a creative idea and turning it into a product or
process that can be used or sold.
business and competitive situation in which organizations have no
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.
output of goods and services divided by the inputs used to produce that
or groups who have a stake in or are significantly influenced by an
organizations decisions and actions and who, in turn can influence the
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
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.
broad comprehensive picture of what a leader wants an organization to
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.
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.
external environmental trends or changes that will help the organization
improve its performance.
Negative external environmental trends or changes that will hinder the
OPEN SYSTEM: An
organization that interacts with and responds to its external
The amount of change and complexity in an
SPECIFIC ENVIRONMENT: Those
external environmental sectors that have a direct and immediate impact
in the organization's decisions and actions by opening up opportunities
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.
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
BARRIERS TO ENTRY: Obstacles
to entering an industry.
SWITCHING COSTS: The
one-time costs facing a buyer who switches from one supplier's product
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
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
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.
that the organization possesses and capabilities that the organization
has developed, which can be exploited and developed into a sustainable
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
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.
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
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
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
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
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
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.