CHPT 1 Strategic Management: Creating Competitive Advantages

Strategic Management

The analyses, decisions, and actions an organization undertakes to create and sustain competitive advantages.

Romantic View of Leadership

Situations in which the leader is viewed as the key force determining an organization's success or failure.

External Control View of Leadership

Situations in which external forces beyond the leader's control determine the organization's success.

Competitive Advantage

A firm's resources and capabilities that enable it to overcome the competitive forces in its industry.

Operational Effectiveness

Performing similar activities better than rivals.

Stakeholders

Individuals, groups, and organizations that have a stake in the success of the organization.

Effectiveness

Tailoring actions to the needs of an organization rather than wasting effort, or doing the right thing.

Efficiency

Performing actions at a low cost relative to a benchmark, or doing things right.

Ambidexterity

The challenge managers face of aligning resources for existing markets while proactively exploring new opportunities.

Intended Strategy

Strategy in which organizational decisions are determined only by analysis.

Realized Strategy

Strategy determined by both analysis and unforeseen environmental developments, constraints, or preference changes.

Strategy Analysis

The study of firms' external and internal environments and their fit with organizational vision and goals.

Strategy Formulation

Decisions made by firms regarding investments, commitments, and operations that create and sustain competitive advantage.

Strategy Implementation

Actions made by firms that carry out formulated strategy, including strategic controls, design, and leadership.

Corporate Governance

The relationship among shareholders, management, and the board of directors in determining corporate direction and performance.

Board of Directors (BOD)

Elected representatives of shareholders charged with ensuring management's interests align with owners.

Stakeholder Management

A firm's strategy for recognizing and responding to the interests of all its salient stakeholders.

Stakeholder Symbiosis

Recognition that stakeholders are mutually dependent upon each other for success and well-being.

Social Responsibility

The expectation that businesses or individuals will strive to improve the overall welfare of society.

Triple Bottom Line

An assessment of a firm's financial, social, and environmental performance.

ESG Funds

Investment funds that satisfy environmental, social, and governance responsible investment objectives.

Hierarchy of Goals

Organizational goals ranging from broad, less specific visions to specific, measurable strategic objectives.

Vision

An organizational goal that is massively inspiring, overarching, long-term, and evokes powerful mental images.

Mission Statement

A set of organizational goals identifying company purpose, basis of competition, and competitive advantage.

Innovation Paradox

The tension between existing products and new ones, stability and change.

Globalization Paradox

The tension between global connectedness and local needs.

Obligation Paradox

The tension between maximizing short-term shareholder gains and benefiting a wide range of stakeholders.

Theater One (CSR)

Corporate social responsibility focused on philanthropy, such as financial contributions to charities.

Theater Two (CSR)

CSR initiatives focused on improving operational effectiveness within existing business models.

Theater Three (CSR)

CSR initiatives that transform the business model based on social and environmental challenges.