Strategic Management: Strategic Goal Setting and Stakeholders

Practice flashcards covering key concepts from Strategic Management Session 2, including strategic intent, goal-setting frameworks, and stakeholder management.

Strategic Intent

A concept by Gary Hamel and C.K. Prahalad that involves 'Stretch', or the ambition to go beyond existing resources by creating a significant gap between resources and ambitions.

Resource Fit

The traditional strategy approach that limits organizational planning to current available capabilities.

Mission

A focus on the present that defines the business an organization is in and the customers it serves; it answers the question, 'What is our business?'

Vision

A focus on the future that describes what a company strives to achieve or who they want to become; a picture of future success.

Lived Values

Values integrated into hiring, evaluation, and reward processes that serve as behavioral 'guardrails' for making decisions.

Corporate Fluff

Declared values that are unenforced and not lived by within the daily reality of a company, such as Enron's official values before its collapse.

Golden Circle

Simon Sinek's concept comprised of three levels: 'What' (the product), 'How' (the process), and 'Why' (the purpose, goal, or belief).

Shareholder Theory

The view attributed to Milton Friedman that the only social responsibility of business is to use its resources to increase its profits.

Stakeholder Theory

The view attributed to Edward Freeman that business must create value for all stakeholders, including customers, employees, suppliers, and society, not just shareholders.

Stakeholders

Any individuals or groups that can influence the achievement of organizational goals or are influenced by the organization's activities.

Mendelow Matrix

A tool used for analyzing and prioritizing stakeholders based on their sources of power, such as control over resources, formal authority, or knowledge.

Benefit Corporation

A legal designation (like Patagonia) where a company is legally obliged to consider the interests of shareholders, society, and nature.

Creating Shared Value

A concept by Michael Porter and Mark Kramer defined as creating economic value in a way that also creates value for society, expanding the overall pool of value rather than just redistribution.

MBO (Management by Objectives)

A system created in 1954 by Peter Drucker focused on aligning individual goals with company goals via the process of jointly defining goals and criteria.

SMART

A classic tool for checking goal-setting quality: Specific, Measurable, Achievable, Relevant, and Time-bound.

Balanced Scorecard (BSC)

A 1992 system by Kaplan and Norton that uses four perspectives: Finance, Customers, Internal processes, and Learning and growth to link leading and lagging indicators.

Goodhart's Law

The principle that 'When a measure becomes a target, it ceases to be a good measure' because people optimize the metric rather than the system it reflects.

OKR (Objectives and Key Results)

A system created at Intel and popularized by Google in 1999 that combines qualitative, ambitious 'Objectives' with 2–5 quantitative 'Key Results'.

KPI (Key Performance Indicator)

Metrics used for operations ('Run') to measure the health and effectiveness of existing processes and improve what already works.

FAST

A 2020s goal system adapted for the AI era where goals are Frequent, Ambitious, Specific, and Transparent.

Strategic Fit

Also known as strategic alignment, it is the internal consistency of all elements of a company's strategy where decisions and actions work in unison.