Exam 1

Level-5 Leadership Pyramid

A conceptual framework of leadership progression with five distinct, sequential levels.

Upper-Echelons Theory

A conceptual framework that views organizational outcomes - strategic choices and performance levels - as reflections of the values of the members of the top management team.

Stakeholder Impact Analysis

A decision tool with which managers can recognize, prioritize, and address the needs of different stakeholders, enabling the firm to achieve competitive advantage while acting as a good corporate citizen.

Corporate Social Responsibility (CSR)

A framework that helps firms recognize and address the economic, legal, social, and philanthropic expectations that society has of the business enterprise at a given point in time.

AFI strategy framework

A model that links three interdependent strategic management tasks - analyze, formulate, and implement - that, together, help managers plan and implement a strategy that can improve performance and result in competitive advantage.

Top-Down Strategic Planning

A rational, data driven strategy process through which top management attempts to program future success.

Strategic Business Unit (SBU)

A standalone division of a larger conglomerate, with its own profit-and-loss responsibility.

Vision

A statement about what an organization ultimately wants to accomplish; it captures the company's aspiration.

Illusion of Control

A tendency by people to overestimate their ability to control events.

Strategic Commitments

Actions to achieve the mission that are costly, long-term oriented, and difficult to reverse.

Stakeholder Strategy

An integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage.

Strategic Management

An integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.

Strategic Initiative

Any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures.

Serendipity

Any random events, pleasant surprises, and accidental happenstances that can have a profound impact on a firm's strategic initiatives.

Emergent Strategy

Any unplanned strategic initiative bubbling up from the bottom of the organization.

Realized Strategy

Combination of intended and emergent strategy.

Mission

Description of what an organization actually does - the products and services it plans to provide, and the markets in which it will compete.

Organizational Core Values

Ethical standards and norms that govern the behavior of individuals within a firm or organization.

Strategic Leadership

Executives' use of power and influence to direct the activities of others when pursuing an organization's goals.

Firm Effects

Firm performance attributed to the actions managers take.

Industry Effects

Firm performance attributed to the structure of the industry in which the firm competes.

Black Swan Events

Incidents that describe highly improbable but high impact events.

Strategic Management Process

Method put in place by strategic leaders to formulate and implement a strategy, which can lay the foundation for a sustainable competitive advantage.

Stakeholders

Organizations, groups, and individuals that can affect or are affected by a firm's actions.

Sustainable Competitive Advantage

Outperforming competitors or the industry average over a prolonged period of time.

Competitive Parity

Performance of two or more firms at the same level.

Core Values Statement

Statement of principles to guide an organization as it works to achieve its vision and fulfill its mission, for both internal conduct and external interactions; it often includes explicit ethical considerations.

Autonomous Actions

Strategic initiatives undertaken by lower-level employees on their own violation and often in response to unexpected situations.

Planned Emergence

Strategy process in which organizational structure and systems allow bottom-up strategic initiatives to emerge and be evaluated and coordinated by top management.

Scenario Planning

Strategy-planning activity in which top management envisions different what-if scenarios to anticipate plausible futures in order to derive strategic responses.

Competitive Advantage

Superior performance relative to other competitors in the same industry or the industry average.

Intended Strategy

The outcome of a rational and structured top-down strategic plan.

Strategy Formulation

The part of the strategic management process that concerns the choice of strategy in terms of where and how to compete.

Strategy Implementation

The part of the strategic management process that concerns the organization, coordination, and integration of how work gets done, or strategy execution.

Strategy

The set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors.

Dominant Strategic Plan

The strategic option that top managers decide most closely matches the current reality and which is then executed.

Resource-Allocation Process (RAP)

The way a firm allocates its resources based on a predetermined policies, which can be critical in shaping its realized strategy.

Competitive Disadvantage

Underperformance relative to other competitors in the same industry or industry average.