Glossary

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A
Acceptability is concerned with the expected performance
outcomes of a strategy (p. 361)

Acquisition is where strategies are developed by taking over

ownership of another organisation (p. 349). See key concepts

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B
Backward integration is development into activities concerned
with the inputs into the company's current business (p. 285)

Balanced scorecards combine both qualitative and quantitative

measures, acknowledge the expectations of different stakeholders
and relate an assessment of performance to choice of strategy (p.
418)

Barriers to entry are factors that need to be overcome by new

entrants if they are to compete successfully (p. 81). See key
concepts

Black holes are subsidiaries located in countries that are crucial for
competitive success but with low-level resources or capabilities (p.
327)

The Bower–Burgelman explanation of strategy development is

that strategy develops as the outcome of resource allocation
routines in organisations (p. 580)

Business-level strategy is about how to compete successfully in

particular markets (p. 11)

A business model describes the structure of product, service and

information flows and the roles of the participating parties (p. 462).
See key concepts

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C
A cash cow is a business unit with a high market share in a mature
market (p. 316)
A change agent is the individual or group that effects strategic
change in an organisation (p. 519)

Coercion is the imposition of change or the issuing of edicts about

change (p. 517)

Collaboration or participation in the change process is the

involvement of those who will be affected by strategic change in the
change agenda (p. 515)

Competences are the activities and processes through which an

organisation deploys its resources effectively (p. 119)

Competitive rivals are organisations with similar products and

services aimed at the same customer group (p. 85). See key
concepts

Competitive strategy is concerned with the basis on which a

business unit might achieve competitive advantage in its market (p.
242)

An organisation's configuration consists of the structures,

processes and relationships through which the organisation operates
(p. 396). See key concepts

Consolidation is where organisations protect and strengthen their

position in their current markets with current products (p. 342). See
key concepts

Contributors are subsidiaries with valuable internal resources but

located in countries of lesser strategic significance, which
nonetheless play key roles in a multinational organisation's
competitive success (p. 326)

Convergence is where previously separate industries begin to

overlap in terms of activities, technologies, products and customers
(p. 77). See key concepts

Core competences are the activities and processes through which

resources are deployed in such a way as to achieve competitive
advantage in ways that others cannot imitate or obtain (p. 121).
See key concepts

Core values are the principles that guide an organisation's actions

(p. 207)

Corporate-level strategy is concerned with the overall purpose

and scope of an organisation and how value will be added to the
different parts (business units) of the organisation (p. 11)

Corporate parent refers to the levels of management above that of

the business units and therefore without direct interaction with
buyers and competitors (p. 281)
Corporate social responsibility is concerned with the ways in
which an organisation exceeds the minimum obligations to
stakeholders specified through regulation and corporate governance
(p. 191). See key concepts

Critical success factors (CSFs) are those product features that are
particularly valued by a group of customers and, therefore, where
the organisation must excel to outperform competition (p. 96). See
key concepts

A cultural explanation of strategy development is that it occurs

as the outcome of the taken-for-granted assumptions and
behaviours in organisations (p. 581)

Cultural processes are concerned with organisational culture and

the standardisation of norms (p. 416). See key concepts

The cultural web is a representation of the taken-for-granted

assumptions, or paradigm, of an organisation and the physical
manifestations of organisational culture (p. 201). See key
concepts

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D
Data mining is the process of finding trends, patterns and
connections in data in order to inform and improve competitive
performance (p. 459)

The design lens views strategy development as the deliberate

positioning of the organisation through a rational, analytic,
structured and directive process (p. 41)

Development directions are the strategic options available to an

organisation, in terms of products and market coverage (p. 340).
See key concepts

A development method is the means by which any strategic

direction will be pursued (p. 348). See key concepts

Devolution concerns the extent to which the centre of an

organisation delegates decision making to units and managers lower
down in the hierarchy (p. 421).See key concepts

A differentiation strategy seeks to provide product or service

benefits that are different from those of competitors and that are
widely valued by buyers (p. 246). See key concepts

Diffusion is the extent and pace at which a market is likely to

adopt new products (p. 481). See key concepts

Direct supervision is the direct control of strategic decisions by

one or a few individuals (p. 411). See key concepts

Direction involves the use of personal managerial authority to

establish a clear future strategy and how change will occur (p. 516)

The directional policy matrix positions SBUs according to (a) how

attractive the relevant market is in which they are operating, and
(b) the competitive strength of the SBU in that market (p. 319)

Diversification is a strategy that takes the organisation into both

new markets and products or services (pp. 282, 346). See key
concepts

Dogs are business units with a low share in static or declining

markets (p. 316)

A dominant strategy is one that outperforms all other strategies

whatever rivals choose (p. 266)

A dominated strategy is a competitive strategy that, if pursued by

a competitor, is bound to outperform the company (p. 266)

Dynamic capabilities are an organisation's abilities to develop and

change competences to meet the needs of rapidly changing
environments (p. 132). See key concepts

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E
Education and communication involve the explanation of the
reasons for and means of strategic change (p. 515)

Emergent strategy comes about through everyday routines,

activities and processes in organisations (p. 566). See key
concepts

Enabling success is concerned with the two-way relationship

between overall business strategies and strategies in separate
resource areas such as people, information, finance and technology
(p. 446). See key concepts

In game theory, equilibrium is a situation where each competitor

contrives to get the best possible strategic solution for themselves
given the response from the other (p. 266)

The ethical stance is the extent to which an organisation will

exceed its minimum obligations to stakeholders and society at large
(p. 189). See key concepts

The experience lens views strategy development as the outcome

of individual and collective experience of individuals and their taken-
for-granted assumptions (p. 45)

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F
A failure strategy is one that does not provide perceived value-for-
money in terms of product features, price or both (p. 252). See key
concepts

Feasibility is concerned with whether an organisation has the

resources and competences to deliver a strategy (p. 371)

In financial control the role of the centre is confined to setting

financial targets, allocating resources, appraising performance and
intervening to avert or correct poor performance (p. 424). See key
concepts

The five forces framework helps identify the sources of

competition in an industry or sector (p. 78). See key concepts

A focused differentiation strategy seeks to provide high perceived

product/service benefits justifying a substantial price premium,
usually to a selected market segment (niche) (p. 251). See key
concepts

A forcefield analysis provides a view of change problems that

need to be tackled, by identifying forces for and against change (p.
514). See key concepts

Forward integration is development into activities which are

concerned with a company's outputs (p. 285)

A functional structure is based on the primary activities that have

to be undertaken by an organisation such as production, finance and
accounting, marketing, human resources and research and
development (p. 398)

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G
Game theory is concerned with the interrelationships between the
competitive moves of a set of competitors (p. 264). See key
concepts

Gatekeepers are individuals or groups who gain power from their

control of information (p. 466)

The global–local dilemma relates to the extent to which products

and services may be standardised across national boundaries or
need to be adapted to meet the requirements of specific national
markets (p. 300)

Global sourcing: purchasing services and components from the

most appropriate suppliers around the world regardless of their
location (p. 297)

In a global strategy standardised products exploiting economies of

scale and value-adding activities are typically concentrated in a
limited set of locations (p. 300)

The governance framework describes whom the organisation is

there to serve and how the purposes and priorities of the
organisation should be decided (p. 165). See key concepts

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H
A holding company is an investment company consisting of
shareholdings in a variety of separate business operations (p. 402)

Horizontal integration is development into activities which are

complementary to present activities (p. 285)

A hybrid strategy seeks simultaneously to achieve differentiation

and a price lower than that of competitors (p. 248). See key
concepts

Hypercompetition occurs where the frequency, boldness and

aggressiveness of dynamic moves by competitors accelerate to
create a condition of constant disequilibrium and change (p. 89).
See key concepts

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I
The ideas lens sees strategy as the emergence of order and
innovation from the variety and diversity which exist in and around
organisations (p. 49)

Individual experience is the mental (or cognitive) models people

build over time to help make sense of their situation (p. 46)

An industry is a group of firms producing the same principal

product (p. 77). See key concepts

Intangible resources are non-physical assets such as information,

reputation and knowledge (p. 118)

Intended strategy is an expression of desired strategic direction

deliberately formulated or planned by managers (p. 565). See key
concepts

Internal development is where strategies are developed by

building on and developing an organisation's own capabilities (p.
348). See key concepts

Intervention is the coordination of and authority over processes of

change by a change agent who delegates elements of the change
process (p. 516)

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J
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K
Key drivers of change are forces likely to affect the structure of
an industry, sector or market (p. 69)

Key value and cost drivers are the factors that have most
influence on the cash generation cabability of an organisation (p.
469)

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L
Leadership is the process of influencing an organisation (or group
within an organisation) in its efforts towards achieving an aim or
goal (p. 519). See key concepts

The learning organisation is capable of continual regeneration

from the variety of knowledge, experience and skills of individuals
within a culture which encourages mutual questioning and challenge
around a shared purpose or vision (p. 589). See key concepts

Legitimacy is concerned with meeting the expectations within an

organisational field in terms of assumptions, behaviours and
strategies (p. 199)

Lock-in is where an organisation achieves a proprietary position in

its industry; it becomes an industry standard (p. 256). See key
concepts

Logical incrementalism is the deliberate development of strategy

by experimentation and learning from partial commitments (p. 578).
See key concepts

A low-price strategy seeks to achieve a lower price than

competitors whilst trying to maintain similar perceived product or
service benefits to those offered by competitors (p. 246). See key
concepts

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M
Managing for value is concerned with maximising the long-term
cash-generating capability of an organisation (p. 466). See key
concepts

Market development is where existing products are offered in new

markets (p. 346). See key concepts

Market penetration is where an organisation gains market share

(p. 344). See key concepts

Market processes involve some formalised system of ‘contracting'

for resources (p. 418). See key concepts

A market segment is a group of customers who have similar needs

that are different from customer needs in other parts of the market
(p. 91). See key concepts

A matrix structure is a combination of structures which could take

the form of product and geographical divisions or functional and
divisional structures operating in tandem (p. 402)

A mission statement is a statement of the overriding direction and

purpose of an organisation (p. 209). See key concepts

A multidivisional structure is built up of separate divisions on the

basis of products, services or geographical areas (p. 399)

In a multi-domestic strategy value-adding activities are located in

individual national markets served by the organisation and products
and/or services are adapted to the unique local requirements (p.
300)

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N
A ‘no frills' strategy combines a low price, low perceived
product/service benefits and a focus on a price-sensitive market
segment (p. 245). See key concepts

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O
Objectives are statements of specific outcomes that are to be
achieved (p. 209)

Operational strategies are concerned with how the component

parts of an organisation deliver effectively the corporate- and
business-level strategies in terms of resources, processes and
people (p. 12)

Organisational culture is the ‘basic assumptions and beliefs that

are shared by members of an organisation, that operate
unconsciously and define in a basic taken-for-granted fashion an
organisation's view of itself and its environment' (pp. 47, 196). See
key concepts

An organisational field is a community of organisations that

partake of a common meaning system and whose participants
interact more frequently with one another than with those outside
the field (p. 197). See key concepts

Organisational knowledge is the collective and shared experience

accumulated through systems, routines and activities of sharing
across the organisation (p. 133). See key concepts

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P
A paradigm is the set of assumptions held relatively in common
and taken for granted in an organisation (p. 200). See key
concepts

The parental developer: a corporate parent seeking to employ its

own competences as a parent to add value to its businesses and
build parenting skills that are appropriate for their portfolio of
business units (p. 311). See key concepts

Performance targets relate to the outputs of an organisation (or

part of an organisation), such as product quality, prices or profit (p.
417). See key concepts

The PESTEL framework categorises environmental influences into

six main types: political, economic, social, technological,
environmental and legal (p. 65). See key concepts

Planning processes plan and control the allocation of resources

and monitor their utilisation (p. 412). See key concepts

The political view of strategy development is that strategies

develop as the outcome of processes of bargaining and negotiation
among powerful internal or external interest groups (or
stakeholders) (p. 584)

Porter's Diamond suggests that there are inherent reasons why

some nations are more competitive than others, and why some
industries within nations are more competitive than others (p. 71).
See key concepts

A portfolio manager is a corporate parent acting as an agent on

behalf of financial markets and shareholders (p. 308). See key
concepts

Power is the ability of individuals or groups to persuade, induce or

coerce others into following certain courses of action (p. 185). See
key concepts

Primary activities are directly concerned with the creation or

delivery of a product or service (p. 136)

Product development is where organisations deliver modified or

new products to existing markets (p. 344). See key concepts

Profit pools are the potential profits at different parts of the value
network (p. 141)

A project-based structure is one where teams are created,

undertake the work and are then dissolved (p. 408)

Punctuated equilibrium is the tendency of strategies to develop

incrementally with periodic transformational change (p. 28)

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Q
A question mark (or problem child) is a business unit in a growing
market, but without a high market share (p. 315)

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R
Realised strategy: the strategy actually being followed by an
organisation in practice (p. 566)

A recipe is a set of assumptions held in common within an

organisational field about organisational purposes and a ‘shared
wisdom' on how to manage organisations (p. 199)

Reinforcing cycles are created by the dynamic interaction between

the various factors of environment, configuration and elements of
strategy; they tend to preserve the status quo (p. 433). See key
concepts

Related diversification is strategy development beyond current

products and markets, but within the capabilities or value network
of the organisation (p. 285)
The resource-based view of strategy: the competitive advantage
of an organisation is explained by the distinctiveness of its
capabilities (p. 116)

Returns are the benefits which stakeholders are expected to

receive from a strategy (p. 361)

Risk concerns the probability and consequences of the failure of a

strategy (p. 369)

Routines are the organisationally specific ‘ways we do things

around here' which tend to persist over time and guide people's
behaviour (p. 527)

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S
Scenarios are detailed and plausible views of how the business
environment of an organisation might develop in the future based
on groupings of key environmental influences and drivers of change
about which there is a high level of uncertainty (p. 76). See key
concepts

Processes of self-control achieve the integration of knowledge and

coordination of activities by the direct interaction of individuals
without supervision (p. 413). See key concepts

Staged international expansion: firms initially use entry modes

that allow them to maximise knowledge acquisition whilst
minimising the exposure of their assets (p. 297)

A stage-gate process is a structured review process to assess

progress on meeting product performance characteristics during the
product development process and ensuring that they are matched
with market data (p. 488)

Stakeholder mapping identifies stakeholder expectations and

power and helps in understanding political priorities (p. 181). See
key concepts

Stakeholders are those individuals or groups who depend on the

organisation to fulfil their own goals and on whom, in turn, the
organisation depends (p. 179). See key concepts

A star is a business unit which has a high market share in a growing

market (p. 315)

A strategic alliance is where two or more organisations share

resources and activities to pursue a strategy (p. 353). See key
concepts

A strategic business unit is a part of an organisation for which

there is a distinct external market for goods or services that is
different from another SBU (pp. 11, 241). See key concepts

Strategic capability is the adequacy and suitability of the

resources and competences of an organisation for it to survive and
prosper (p. 117)

Strategic choices involve understanding the underlying bases for

future strategy at both the business unit and corporate levels and
the options for developing strategy in terms of both the directions
and methods of development (p. 18). See key concepts

Strategic control is concerned with shaping the behaviour in

business units and with shaping the context within which managers
are operating (p. 425). See key concepts

The strategic customer is the person(s) at whom the strategy is

primarily addressed because they have the most influence over
which goods or services are purchased (p. 96). See key concepts

Strategic drift is where strategies progressively fail to address the

strategic position of the organisation and performance deteriorates
(pp. 27, 582). See key concepts

A strategic gap is an opportunity in the competitive environment

that is not being fully exploited by competitors (p. 99). See key
concepts

Strategic groups are organisations within an industry with similar

strategic characteristics, following similar strategies or competing on
similar bases (p. 89). See key concepts

Strategic leaders (in the context of international strategy) are

subsidiaries that not only hold valuable resources and capabilities
but are also located in countries that are crucial for competitive
success (p. 326)

Strategic management includes understanding the strategic

position of an organisation, strategic choices for the future and
turning strategy into action (p. 16)

Strategic planning may take the form of systematised, step-by-

step, chronological procedures to develop or coordinate an
organisation's strategy (p. 568). See key concepts

In a strategic planning style of control, the relationship between

the centre and the business units is one of a parent who is the
master planner prescribing detailed roles for departments and
business units (p. 423). See key concepts

The strategic position is concerned with the impact on strategy of

the external environment, an organisation's strategic capability
(resources and competences) and the expectations and influence of
stakeholders (p. 17). See key concepts

Strategy is the direction and scope of an organisation over the long

term, which achieves advantage in a changing environment through
its configuration of resources and competences with the aim of
fulfilling stakeholder expectations (p. 9). See key concepts

Strategy development processes are the ways in which strategy

develops in organisations (p. 19)

Strategy into action is concerned with ensuring that strategies are

working in practice (p. 19). See key concepts

The strategy lenses are three different ways of looking at the

issues of strategy development for an organisation (p. 32). See key
concepts

Substitution reduces demand for a particular ‘class' of products as

customers switch to the alternatives (p. 82). See key concepts

Success criteria are used to assess the likely success of a strategic

option (p. 357). See key concepts

Suitability is concerned with whether a strategy addresses the

circumstances in which an organisation is operating – the strategic
position (p. 358)

Support activities help to improve the effectiveness or efficiency

of primary activities (p. 137)

A SWOT analysis summarises the key issues from the business

environment and the strategic capability of an organisation that are
most likely to impact on strategy development (pp. 102, 148). See
key concepts

Symbols are objects, events, acts or people which express more

than their intrinsic content (p. 528)

Synergy refers to the benefits that might be gained where activities

or processes complement each other such that their combined effect
is greater than the sum of the parts (p. 282). See key concepts

The synergy manager a corporate parent seeking to enhance

value across business units by managing synergies across business
units (p. 310)

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T
Tangible resources are the physical assets of an organisation such
as plant, labour and finance (p. 117)
A team-based structure attempts to combine both horizontal and
vertical coordination through structuring people into cross-functional
teams (p. 406)

A technological path identifies the major factors that are

influencing technological developments (p. 478). See key concepts

Threshold capabilities are those capabilities essential for the

organisation to be able to compete in a given market (p. 119)

A tipping point is where demand for a product or service suddenly

takes off or declines – sometimes dramatically (p. 482). See key
concepts

A transnational structure combines the local responsiveness of

the international subsidiary with the coordination advantages found
in global product companies (p. 404)

In a turnaround strategy the emphasis is on speed of change and

rapid cost reduction and/or revenue generation (p. 523). See key
concepts

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U
Unique resources are those resources that critically underpin
competitive advantage and that others cannot easily imitate or
obtain (p. 121)

Unrelated diversification is the development of products or

services beyond the current capabilities or value network (p. 288)

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V
The value network is the set of inter-organisational links and
relationships that are necessary to create a product or service (p.
140). See key concepts

Vertical integration is backward or forward integration into

adjacent activities in the value network (p. 285)

Virtual organisations are held together not through formal

structure and physical proximity of people, but by partnership,
collaboration and networking (p. 430)

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W
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