Chap. 5 MGMT

plan

A blueprint specifying the resource allocations,

schedules, and other actions necessary for

attaining goals.

goal

A desired future state that the organization

wants to realize.

strategic goals

A broad statement of where an organization

wants to be in the future; pertains to the

organization as a whole rather than to specific

divisions or departments.

planning

The management function concerned with

defining goals for future performance and how to

attain them.

strategic plans

Action steps by which an organization intends to

attain strategic goals.

tactical goal

The outcome that major divisions and

departments must achieve for an organization to

reach its overall goals

mission statement

A broadly stated definition of an organization’s

basic business scope and operations that

distinguishes it from similar types of

organizations.

tactical plans

Designed to help execute major strategic plans

and to accomplish a specific part of a company’s

strategy.

mission

An organization’s purpose or reason for

existence.

operational goals

A specific, measurable result that is expected

from departments, work groups, and individuals.

Coalitional management

Building an alliance of people who support a

manager’s goals and influencing other people to

accept and work toward those goals

Management by objectives (MBO)

A method whereby managers and employees

define goals for every department, project, and

person and use them to monitor subsequent

performance.

management by means (MBM)

An approach that focuses people on the

methods and processes used to attain results,

rather than on the results themselves.

Key performance indicators (KPIs)

Tools used to assess what is important to an

organization and how well the organization is

progressing toward attaining its strategic goal,

so that managers can establish lower-level

goals that drive performance toward the overall

strategic objective.

Contingency plans

Identifies important factors in the environment

and defines a range of alternative responses to

be taken in the case of emergencies, setbacks,

or unexpected conditions.

Scenario building

An approach where managers look at trends

and discontinuities and imagine possible

alternative futures to build a framework within

which unexpected future events can be

managed.

Strategic management

Refers to the set of decisions and actions used

to formulate and implement strategies that will

provide a competitively superior fit between an

organization and its environment so as to

achieve organizational goals.

strategy

A plan of action that describes resource

allocation and activities for dealing with the

environment, achieving a competitive

advantage, and attaining goals.

Stretch goals

A reasonable yet highly ambitious and

compelling goal that energizes people and

inspires excellence.

core competence

Something that the organization does

particularly well in comparison to others.

synergy

A concept that says that the whole is greater

than the sum of its parts.

Competitive advantage

Refers to what sets the organization apart from

others and provides it with a distinctive edge in

the marketplace.

SWOT analysis

An audit or careful examination of strengths,

weaknesses, opportunities, and threats that

affect organizational performance.

Portfolio strategy

Pertains to the mix of business units and

product lines that fit together in a logical way to

provide synergy and competitive advantage for

the corporation.

BCG matrix

A concept developed by the Boston Consulting

Group (BCG) that evaluates strategic business

units with respect to two dimensions—business

growth rate and market share—and classifies

them as cash cows, stars, question marks, or

dogs.

strategic business units (SBUs)

Has a unique business mission, product line,

competitors, and markets relative to other SBUs

in the corporation.

diversification

The strategy of moving into new lines of

business

cost leadership strategy

A strategy with which managers aggressively

seek efficient facilities, cut costs, and use tight

cost controls to be more efficient than others in

the industry.

merger

When two or more organizations combine to

become one.

related diversification

When a company enters an industry similar to

its current line of business.

differentiation strategy

A strategy with which managers seek to

distinguish the organization’s products and

services from those of others in the industry

focus strategy

A strategy where managers use either a

differentiation or a cost leadership approach, but

they concentrate on a specific regional market

or buyer group.