Naar de inhoud
Steven’s StudyHub

Begrippen Strategy

Strategy
The set of commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above-average returns (Hitt et al.).
Competitive advantage
The ability to raise prices or reduce costs compared to competitors.
Core competency
The capability a firm has that allows it to create a competitive advantage.
Paradox
A situation in which two seemingly contradictory demands both appear true or desirable; often only a temporary workable solution is possible.
Dialectical enquiry
Approach that starts from a thesis and antithesis forming a paradox and seeks a synthesis integrating elements of both.
Wicked problem
A complex, tangled problem that is interconnected, complicated, uncertain, ambiguous, conflictual and subject to societal constraints.
Corporate governance
Everyone with control over the organisation, ensuring managers pursue strategies in line with the mission; has a forming, performance and conformance function.
Strategy content
The 'what' of strategy: the combined decisions and choices that lead a company into the future, for the firm and each of its units.
Strategy process
The 'how, who and when' of strategy: the manner in which strategies are analysed, formulated, implemented, changed and controlled.
Strategy context
The 'where' of strategy: the set of circumstances (firm and environment) in which strategy process and content are embedded.
Organizational purpose
The reason for which an organization exists; the impetus (input) for strategy activities and the heart of the corporate mission.
Puzzle
An either/or problem with one optimal solution that can be found through analysis, however difficult.
Trade-off
A both/and problem with many possible solutions, each striking a different balance between two conflicting pressures; the balance is temporary.
Problem-driven approach
Learning approach in which strategic problems are understood first and theories are then selected that fit the problem; the basis of De Wit's issue-based book structure.
Corporate mission
The enduring set of fundamental principles forming the base of a firm's identity and guiding its strategic decision making: purpose, beliefs, values and business definition.
Strategic vision
The desired future state of an organization (also strategic intent or envisioned future), built on envisioned context, envisioned industry, desired position and a time horizon.
Business definition
The mission element stating in which line of business the firm wants to be; it focuses attention but can cause short-sightedness.
Two-tier board
Board structure with a management board of executives and a separate supervisory board of non-executives that monitors and steers it (e.g. Germany, the Netherlands).
One-tier board
Unitary board in which executive and non-executive directors sit together on one board of directors (e.g. UK, US).
Shareholder value perspective
View that firms are instruments of their owners and should maximise shareholder value within the law; stakeholder management is only a means.
Stakeholder values perspective
View that firms are joint ventures of all resource suppliers and should serve the interests of all stakeholders; stakeholder management is an end.
Principal-agent problem
The risk that managers (agents) pursue their own interests instead of those of the shareholders (principals) when ownership and control are separated.
Primary and secondary stakeholders
Primary stakeholders take part directly in economic value creation (employees, suppliers, customers, financiers); secondary stakeholders are affected by the firm (communities, governments, environment, society).
Shared value
Policies and practices that raise a company's competitiveness while advancing the economic and social conditions of its communities (Porter and Kramer); resolves profitability and responsibility.
Triple Bottom Line
Elkington's concept that firms should account for social, environmental and economic performance (people, planet, profit), not only profit.
Cognitive map
A person's view of how the world works, including beliefs about which issues matter and how causes and effects are related.
Bounded rationality
The idea (Simon, 1957) that people try to act rationally but only within the limits of incomplete information and limited cognitive capacity.
Hot and cold cognition
Hot cognition assumes thinking is influenced by emotions; cold cognition assumes information processing is independent of emotions.
Dynamic capabilities
The firm's ability to integrate, build and reconfigure competences to deal with rapidly changing environments (Teece): sensing, seizing and reconfiguring.
Strategic problem
A set of circumstances requiring reconsideration of the current course of action, to profit from opportunities or respond to threats; used in a neutral sense.
Cognition
The human ability to know; strategists engage in cognitive activities to know about their strategic problems.
Cognitive heuristics
Mental rules of thumb that simplify problems by focusing on a few key variables and simple decision rules, used to cope with limited processing and storage capacity (Janis).
Dominant logic
The shared cognitive map of a group, firm, industry or nation (Prahalad and Bettis), also called common paradigm or belief system.
Tacit knowledge
Knowledge gained through experience that is not codified into explicit rules or models; it is the basis of intuition (Polanyi, Nonaka).
Cognitive rigidity
The tendency of cognitive maps to resist change: confirming information is overweighted, disconfirming information underweighted ('believing is seeing').
Paralysis by analysis
Rationality gone rampant: decision making grinds to a halt under the complexity of analyses (Langley).
Extinct by instinct
Langley's warning that relying on biased intuition without analysis can lead to a 'corporate gravestone'.
Routines and habits
Routines are programmed courses of action once deliberately conceived and later internalised; habits are programmed courses of action that developed unconsciously.
System 1 and System 2
Kahneman's dual-process view: System 1 is fast, intuitive and automatic; System 2 is slow, deliberate and controlled.
Analytic reasoning perspective
View that strategizing is predominantly a conscious, logical process resembling science and chess; intuition has only a small role.
Holistic reasoning perspective
View that strategizing is predominantly an unconscious, intuitive judgement process resembling art, because strategic problems are wicked.
Decision style
An individual's natural inclination towards intuitive or deliberate decision making; it depends on situation and domain.
Intuition (Dane and Pratt)
Affectively charged judgements that arise through rapid, non-conscious and holistic associations.
Deliberate strategy
Strategy that is consciously planned and then executed (thinking before doing); offers direction, commitment, coordination, optimisation and programming.
Emergent strategy
Strategy that arises gradually through learning and adaptation while acting (thinking while doing); offers opportunism, flexibility, learning, entrepreneurship and support.
Logical incrementalism
View that strategy develops in small steps through experimenting, learning and adapting, which also builds acceptance and commitment.
Intended strategy
The strategy formulated prior to action: a pattern of decisions or plan of action.
Realized strategy
The strategic behaviour exhibited in practice: a pattern of actions.
Unrealized strategy
Intended strategy that is not put into practice because plans are changed or cancelled.
Strategy formulation
The process by which an intended strategy is created.
Strategy formation
The entire process leading to realized strategic behaviour, encompassing formulation and action, including unplanned actions.
Deliberateness
The quality of acting intentionally: thinking before doing, making a plan and implementing it.
Strategic planning perspective
View that strategies should be deliberately designed and executed ('think before you act'), with formal planning systems.
Strategic incrementalism perspective
View that strategies emerge gradually through small steps, experimentation, learning and political support building.
Knagg's law
The more complex a plan, the larger the chance of failure.
Muddling through
Reactive, ad hoc incremental behaviour, improvised decisions without a proactive pattern; distinguished from logical incrementalism.
Contingency planning
Keeping alternative plans in reserve, often based on scenarios, in case key environmental variables change.
Strategic decision making
Assessing strategic options and arriving at a selected course of action.
Balanced scorecard
Extensive set of varied performance measures (Kaplan and Norton) used in performance control.
Strategic foresight
A planned learning process about the future that helps detect opportunities and threats early under complexity and dynamism (Vecchiato).
Business model
The configuration of resources (input), activities (throughput) and products/services (output); successful with a superior value proposition, effective value chain and resource base.
Blue ocean
New market space without competition where new demand is created; opposite of a red ocean where firms fight over existing demand.
VRIO / VRIN
Criteria for resources that give sustainable advantage: valuable, rare, hard to imitate, and organised to exploit (VRIO) or non-substitutable (VRIN, Barney).
Outside-in vs inside-out
Outside-in starts from market opportunities and customer needs; inside-out starts from the firm's unique resources and competences.
Industry
A group of firms making a similar type of product or employing a similar set of value-adding processes or resources (supply side similarity).
Market
A group of customers with similar needs (demand side similarity).
Business
A set of related product-market combinations; the competitive arena where firms with similar products serving similar needs compete.
Positioning
Focusing the overall business model to serve the needs of a targeted group of buyers in a way that distinguishes the firm from rivals.
Competitive scope
The product-market combinations within a business in which a firm chooses to compete (where to compete), from broad scope to niche.
Value drivers
The factors that create value in the eyes of the customer and on which a value proposition can be based.
Stuck in the middle
Porter's term for firms that try to combine cost leadership and differentiation and fail to achieve either.
Value chain
An integrated set of value creation processes (primary and support activities) leading to the supply of products or services (Porter, 1985).
Resource base
All means at the disposal of the organization for performing value-adding activities: tangible and intangible resources.
Relational resources
Intangible resources derived from the firm's interaction with its environment: relationships and reputation.
Competence
A firm's fitness to perform in a field, based on aligned knowledge, capabilities and attitude.
Capability
The organization's potential for carrying out a specific activity or set of activities, often combining several narrower skills.
Sustainable competitive advantage
An advantage that cannot be copied, substituted or eroded by rivals and is not made redundant by environmental developments.
Core rigidity
A core competence that has become a lock-in, preventing the firm from switching to new competences (Leonard-Barton).
First mover advantage
The advantage gained by being the first to recognise and build the resources needed for a new market opportunity.
Mobility barriers
Barriers that protect market positions from rivals and entrants, such as regulation, licences, customer loyalty and union resistance.
Resource heterogeneity and immobility
The two assumptions of the resource-based view: firms have different resources, and these cannot easily be transferred or copied (Barney).
Diversification
Expanding the firm through new activities (internal growth) or acquisitions (external growth), vertically or horizontally.
Synergy
Businesses combined are worth more than apart (1 + 1 = 3), achieved through resource, product offering or activity relatedness.
Core competence
Key collective skills that give access to various markets, contribute strongly to customer value and are hard to imitate (Prahalad and Hamel).
Business responsiveness
The ability of a business unit to react quickly to changes in its own market; in tension with synergy.
Corporate level strategy
Selecting an optimal set of businesses and determining how they should be integrated into the corporate whole.
Corporate configuration
The combination of corporate composition (which businesses) and corporate management (how to run them).
Corporate scope
The number and range of business areas in which the corporation is active.
Corporate distribution
The relative size or weight of each business component within the corporation.
Horizontal integration
Entering related businesses at the same tier of the industry column, within the firm's own industry.
Multi-business synergy
The added value of having two or more businesses under one corporate umbrella; the whole is worth more than the parts.
M-form
Multidivisional organization structure in which the firm is divided into strategic business units (Williamson).
Strategic business unit (SBU)
A unit responsible for one business area, called strategic because it is driven by its own business level strategy.
Centralization, coordination and standardization
The three integration mechanisms to harmonise business units: bringing activities together, orchestrating across units and making resources, activities and features similar.
Financial control style
Corporate style with highly autonomous SBUs and control through negotiated financial objectives (Goold and Campbell).
Strategic control style
Corporate style with some central services and coordination and control through strategic objectives.
Strategic planning style
Corporate style with little SBU autonomy, many centralised or standardised activities and direct supervision.
Transaction costs
Costs of dealing with outside parties: contracting, search and policing costs; can be avoided through vertical integration (Williamson).
Internalization
Performing activities inside the firm instead of dealing with outside suppliers and buyers; another term for vertical integration of activities.
Portfolio organization perspective
View that a multi-business firm is a portfolio of autonomous units in which the centre, as investor, pursues only financial synergies.
Integrated organization perspective
View that a corporation should be a tightly knit group of units around a common core that creates strong synergies.
Co-insurance effect
Risk balancing by combining revenue streams from different, ideally counter-cyclical, businesses.
Keiretsu
Japanese business groups linked by cross-shareholdings, either horizontal around a bank or vertical along one industry chain.
Chaebol
South Korean family-run conglomerates (e.g. Samsung, LG, Hyundai) active in a wide range of businesses.
Foreign direct investment (FDI)
An ownership stake of more than 10% in a foreign firm, giving substantial influence as co-owner.
Industry cluster
Geographic concentration of related firms and institutions in one sector, stimulating productivity, innovation and spin-offs.
Glocalisation
Using a global concept while adapting the product to local needs.
International variety
The degree to which countries differ, e.g. in consumer behaviour, language, law, infrastructure and culture.
International integration
A situation in which countries are tightly linked, so events in one country strongly affect others; the opposite is international fragmentation.
Globalization (De Wit)
The process of declining international variety and tighter international linkages on a worldwide scale.
Localization
The opposite of globalization: increasing international variety and looser linkages; decreasing scope, similarity and integration.
International configuration
The issue of which countries a firm should be active in (international composition) and how to manage these activities (international management).
Internationalization
Starting up value-adding activities in another country.
Greenfield entry
Establishing a foreign subsidiary from scratch rather than by acquisition.
Cross-border synergies
Value created by aligning positions, integrating activities and leveraging resources across two or more countries.
Cross-subsidization
Using profits from many markets to finance a coordinated attack on a few markets.
Local responsiveness
The ability to respond to the specific demands of each national market in a timely and adequate manner.
Global convergence perspective
View that countries are becoming more similar and integrated, so firms should pursue global synergies and centralised, standardised organizations.
International diversity perspective
View that deep national differences remain, so firms should stay locally responsive and exploit diversity.
Heterarchy
Hedlund's term for an international organization without a single centre, similar to the transnational integrated network.
New International Division of Labour
Paradigm in which labour-intensive production is concentrated in low-wage countries and R&D in countries with high education and infrastructure (Fröbel et al.).
Uppsala model
View of internationalization as an incremental, stepwise process from the domestic market outward (Johanson and Vahlne).
Born Globals
Entrepreneurial firms that operate more or less globally from inception, using global IT infrastructure and strong intangible resources.
Triad
The three main economic blocs (US, Europe, East Asia) where most trade and FDI take place.
Strategic change
Fundamental change to the business model or the organisation, characterised by its magnitude (scope, amplitude) and pace (timing, speed).
Organisational system
Structure, processes and culture: how people work together and how work is organised in support of the business model.
Ambidextrous organisation
An organisation able to combine exploitation and exploration, making both evolutionary and revolutionary changes.
Operational change
Ongoing fine-tuning of procedures, activities and assignments to improve performance within the existing system.
Strategic alignment
The process of constantly enacting strategic changes to keep the firm in harmony with external conditions.
Strategic drift
A growing misfit between the firm and its environment when the firm fails to keep up (Johnson).
Strategic renewal
Strategic change that restores the fit between firm and environment after drift.
Organizational structure
The clustering of tasks and people into smaller groups, balanced by integration mechanisms such as formal authority (the firm's anatomy).
Organizational processes
Arrangements, procedures and routines used to control and coordinate people and units (the firm's physiology).
Organizational culture
The worldview and behavioural patterns shared by members of an organization (the firm's psychology).
Span of control
The number of people or units reporting to one manager; determines the number of management layers.
Magnitude of change
The size of change steps, consisting of scope (broad or narrow) and amplitude (high or low).
Pace of change
The relative speed of change, consisting of timing (intermittent or constant) and speed (high or low).
Revolutionary change
An abrupt, radical change within a short period that overthrows the status quo.
Evolutionary change
A constant stream of moderate changes that gradually accumulate into a large result over a long period.
Competence trap
The vicious circle in which a firm's competence base becomes outdated but the whole business is aligned to it, making gradual change impossible.
Discontinuous alignment perspective
View that real strategic alignment requires radical, comprehensive, abrupt changes; evolution plays a supporting role.
Continuous alignment perspective
View that strategic alignment should grow out of the existing firm through a constant stream of small adjustments and learning.
Punctuated equilibrium
Long periods of relative stability interrupted by short periods of radical change (Eldredge and Gould; Tushman and O'Reilly).
Clan organization
Organic organization based on trust, cooperation, shared beliefs and informal coordination (Ouchi), favouring evolutionary change.
Co-opetition
Simultaneous cooperation and competition between organisations, for example developing a platform together but competing for customers.
Equity vs non-equity partnership
Equity partnerships include a financial ownership component (e.g. joint venture); non-equity partnerships are contractual and partners stay independent.
Coevolution
Continuous joint adaptation of interdependent organisations in a business ecosystem, so change in one triggers change in others.
Network level strategy
A shared strategy of two or more firms that move beyond transactional relationships and work jointly towards a common goal.
Industry and contextual actors
Industry actors perform or consume value-adding activities (suppliers, buyers, insiders, outsiders); contextual actors set the conditions (socio-cultural, economic, political, technological).
Learning and lending
Relational objectives aimed at leveraging resources: exchanging or jointly developing knowledge (learning) and letting others use under-used resources such as licences or leases (lending).
Linking and lumping
Relational objectives aimed at integrating activities: vertical buyer-seller links (linking) and combining similar activities for scale (lumping).
Leaning and lobbying
Relational objectives aimed at aligning positions: joint bargaining power towards industry actors (leaning) and towards contextual actors such as governments (lobbying).
Resource dependence
The degree to which a firm needs resources owned by another; the main source of power in inter-organizational relationships (Pfeffer and Salancik).
Continuous handshake
Gerlach's term for coordination in networks through mutual adaptation, as opposed to the visible hand of hierarchy and invisible hand of the market.
Co-specialization
The process in which activities outsourced by one firm become the specialization of another, catalysed by collaborative arrangements.
Virtual corporation
A tight, durable network of trusting firms that functions as if it were one company while each keeps its identity.
Opportunism
Self-interest seeking with guile, including lying, cheating and distorted disclosure of information (Williamson).
Discrete organization perspective
View that firms should remain independent and competitive, using alliances only as temporary tactical tools; strategic self-sufficiency.
Embedded organization perspective
View that firms should build durable cooperative relationships in networks based on trust and reciprocity, as business is a positive-sum game.
Network effect
The positive impact that the success of one organization has on its partners, typical among producers of complementary goods.
Business ecosystem
A part of the business environment where a variety of firms co-exist and co-evolve through ongoing interaction (Moore).
Strategic centre
The network firm that acts as builder and coordinator of a web of partners (Lorenzoni and Baden-Fuller).
Guanxi
Chinese long-standing informal relationships that form the basis of business networks.
Strategic innovation
Renewing the business model to create sustainable competitive advantage, through new combinations of resources, activities and processes.
Exploitation vs exploration
Exploitation improves existing products and processes (short term); exploration develops entirely new ideas (long term).
Path dependency
The way something developed in the past constrains how it can develop in the future; an inhibitor of innovation and source of industry rigidity.
Disruptive technology
A technology that is initially cheaper, simpler and lower-performing, usually from new firms, but can later replace the dominant technology (Christensen).
Business model renewal
Renewing one or more elements of the business model (product offering, value chain, resource base) through outside-in, inside-out or value chain renewal.
Corporate entrepreneurship
Entrepreneurial behaviour by people in established firms who take ownership of the firm's future without owning it.
Bounded creativity
Creativity constrained by lead time, resources and articulated criteria, as for architects; characteristic of strategic renewal.
Inertia
The tendency of organizations to rely on past patterns of action and become less likely to change course (Hannan and Freeman).
Sustained renewal
Permanently improving products and services to strengthen the competitive position; exploitation.
Disruptive renewal
Challenging current competitive positions by introducing new technologies and business models; exploration.
Strategic improvement perspective
View that strategic innovation should come from ongoing improvement of the existing business model.
Radical rejuvenation perspective
View that real strategic innovation consists of breakthroughs that disrupt the industry and change the rules of the game.
Success trap
Early success of sustained renewal reinforces renewal along the same trajectory (Gupta et al.).
Failure trap
Failure of exploration promotes the search for even newer ideas and more exploration (Gupta et al.).
Creative destruction
Schumpeter's process in which old ways are discarded as new methods and products take their place.
Innovator's paradox
De Wit's name for the paradox of exploitation and exploration, inspired by Christensen's innovator's dilemma.
Ambidextrous organization
An organization that separates exploitative and explorative processes in different units and integrates them at a higher level (Benner and Tushman).
Skunk works
Promising corporate start-ups kept at a distance from the established business so they are not killed by current managers (Peters and Waterman).
Complexity maturity
A leader's ability to engage in paradoxical thinking and connect feedforward and feedback thinkers (Robertson).
DFSS
Design for Six Sigma: define, measure, analyse, design, verify; used to design new processes or products.
Industry rigidity
Resistance of an industry to change due to interdependence, power structures, risk aversion, industry recipes and institutional pressure.
Value innovation
Creating more value for customers at lower cost, combining differentiation and low cost (core of Blue Ocean Strategy).
Industry rules
Demands dictated by the industry context that limit the scope of strategic behaviour and determine what must be done to survive in a business.
Managerial discretion
The degree of freedom strategists have within the industry rules; higher where the rules are looser.
Dominant design
The business model around which an industry converges and to which less successful firms adapt.
Concentration-fragmentation
Dimension of industry development showing whether market share becomes concentrated in a few firms or spread over many.
Industry plasticity
An industry's susceptibility to change; the opposite of industry rigidity.
Industry recipe
The cognitive map shared by incumbents about the rules of the game in their industry.
Institutional pressures
Norms of socially acceptable economic behaviour imposed by governments, associations, unions and others; conformity gives legitimacy but discourages rule breaking.
Environmental determinism
The view that industry developments force firms to adapt or be selected out; linked to the demand for compliance.
Organizational voluntarism
The view that industry developments can result from the wilful actions of individual firms; linked to strategic choice.
Industry dynamics perspective
View that industry development is an uncontrollable evolutionary process to which firms must adapt (also called industry evolution perspective).
Industry leadership perspective
View that firms can shape industry development by changing the rules of the game through vision, new business models and standards.
Survivor's bias
The error of generalising from visible successful rule breakers while the many failures go unreported.
Industry foresight
The ability to anticipate which trends will emerge and how the industry could function in future (Hamel and Prahalad).
Rule breakers and rule takers
Firms that change the industry rules versus firms that follow them (Hamel).
Locus of control
The belief that one controls one's own fate (internal) or that fate is determined by external circumstances (external).
Managed competition
The view (Japan, France, partly Germany) that governments should actively steer industries through industrial policy instead of relying on free markets.