Strategic Leadership & Strategic Management Process

This set of vocabulary flashcards covers the key terms and concepts presented in the lecture on strategic leadership, the strategic management process, strategy formation approaches, stakeholder theory, and corporate social responsibility.

Strategic Leadership

Successful use of power and influence to direct others toward organizational goals and create competitive advantage.

Upper Echelons Theory

Idea that organizational outcomes reflect the values, experiences, and personalities of the top management team.

Level-5 Leadership Pyramid

Jim Collins’s hierarchy describing the progression from highly capable individual to executive who builds enduring greatness through humility and professional will.

Strategic Management Process

Methodical approach firms use to formulate, implement, and evaluate strategy to achieve competitive advantage.

Strategic Planning

Formal, top-down, data-driven process where executives program future success through analyses and five-year plans.

Scenario Planning

Top-down process that asks ‘what-if’ questions to craft strategic responses to multiple future environments.

Strategy as Planned Emergence

Hybrid approach combining top-down intent with bottom-up initiatives that evolve into realized strategy.

Top-Down Strategic Planning

Rational process in which upper management sets objectives and allocates resources with one-way information flow.

Black Swan Event

Highly improbable, high-impact occurrence that surprises decision makers (e.g., Enron scandal, 2008 crisis).

Intended Strategy

Outcome of a rational, structured top-down plan conceived by leadership.

Emergent Strategy

Unplanned strategic initiatives that bubble up from lower levels and may influence the firm’s course.

Realized Strategy

The actual strategy a firm follows, combining intended and emergent elements while subtracting unrealized ones.

Strategic Initiative

Any activity undertaken to explore or develop new products, markets, or ventures within a firm.

Autonomous Action

Independent strategic move by lower-level employees without prior authorization.

Serendipity

Random events or pleasant surprises that can create strategic opportunities (e.g., Starbucks Frappuccino).

Resource Allocation Process (RAP)

Procedures through which a firm decides where to commit resources, often shaping emergent strategy.

Stakeholder

Individual or group that can affect or is affected by a firm’s actions and performance.

Internal Stakeholders

Parties inside the firm, such as employees, executives, board members, and stockholders.

External Stakeholders

Parties outside the firm, including customers, suppliers, creditors, unions, communities, media, and governments.

Stakeholder Strategy

Integrative approach to manage diverse stakeholders to gain and sustain competitive advantage.

Corporate Social Responsibility (CSR)

Framework recognizing a firm’s economic, legal, ethical, and philanthropic duties to society.

Carroll’s Pyramid of CSR

Model portraying CSR as a hierarchy of economic, legal, ethical, and philanthropic responsibilities.

Competitive Advantage

Superior performance relative to competitors that a firm aims to achieve and sustain through strategy.

Management Capital

Top executives’ time, attention, and skill set that shape firm performance (per Bandiera, Prat, Sadun study).

Planned Emergence

Process where initial strategic plans adapt through bottom-up ideas and environmental feedback.

Five-Year Plan

Long-term projection of objectives, budgets, and resource allocations typical of top-down planning.

Time Use of CEOs

Empirical measure of how leaders allocate hours to activities, influencing strategic outcomes.

Sustained Competitive Advantage

Ability of a firm to maintain superior performance over an extended period (as seen in ‘great’ companies).

Stock Market Outperformance

Return nearly seven times the general market achieved by ‘good-to-great’ firms identified by Jim Collins.

Leadership Humility

Trait of Level-5 executives who combine modesty with fierce resolve to achieve company success.

Strategic Failure

Costly outcome when poor strategy leads to loss of value, reputational damage, or firm collapse.

Exchange Relationship

Two-way flow of benefits and obligations between a firm and its stakeholders.

Business Transaction Cost

Expenses of negotiating, monitoring, and enforcing agreements; lowered by effective stakeholder management.

Adaptability

Organizational capacity to adjust to environmental changes, enhanced by inclusive stakeholder strategies.

Frappuccino Case

Example where a store manager’s bottom-up initiative became a major revenue driver for Starbucks.