Key terms Strategic Management
Chapter 1
Above-average performance – performance that is above the market’s or industry’s
average
Above-average returns – returns that are beyond the investors’ expectations
Cognitive school – strategy formation as a mental process by analyzing how people
perceive patterns and process information
Competitive advantage – the ability of a firm to outperform its competitors
Competitive disadvantage – a deficit in a firm’s ability to outperform its competitors
Competitive parity – a rather similar overall performance of firm to that of its
competitors
Cultural school – strategy formation as a collective and cooperative process rooted in
a firm’s culture
Deliberate strategy – parts of an intended (or formulated) strategy that are put into
action
Descriptive schools of strategy formation – a group of perspectives that describe
how strategies are actually formed
Design school – strategy formation as a process of designing a fit between a firm’s
internal strengths and weaknesses and external threats and opportunities
Emergent strategy – a strategy that arises from unplanned initiatives and actions
within a firm
Entrepreneurial school – strategy formation as a visionary process of the founder or
chief executive
Environmental school – strategy formation as a reactive process by responding to
challenges in the external environment
Formulated strategy – an intended strategy that is articulated explicitly
Government organizations – sovereign entities with authoritative power over other
organizations
Industrial organization (I/O) model of above-average returns – a logic where the
external environment exerts a dominant influence on a firm’s strategic actions
Intended strategy – a strategy that a firm hopes to execute
Learning school – strategy formation as an emergent process that occurs via small
steps as a firm learns
Non profit organizations – organizations geared to benefit the public good
Not-for-profit organizations – organizations aimed to serve the collective goals of
their members
Planning school – strategy formation as a formal process characterized by detailed
planning
Positioning school – strategy formation as an analytical process to look at how a firm
can improve its strategic position in an industry
, Power school – strategy formation as a process of negotiation
Prescriptive schools of strategy formation – a group of perspectives that prescribe
how strategies ought to be
Realized strategy – the strategy that a firm actually follows
Resource-based model of above-average returns – a logic where the uniqueness of a
firm’s resources and capabilities form the basis of its strategic actions
Schools of strategy formation – various perspectives on the strategy formation
process
Strategic management – the formulation and implementation of strategy
Strategy – an orchestrated, unified, integrated, and purposeful set of choices,
commitments, and activities directed at achieving and sustaining above-average
performance
Unrealized strategy – abandoned parts of an intended (or formulated) strategy
Chapter 2
Corporate purpose – the environmental and social goals a company has set for itself
Dual-mode approach – the company’s core activities pursue economic goals, while
non-economic goals are pursued through peripheral activities
Full-convergence approach – the company’s core activities seek to pursue economic
as well as non-economic goals
Mission – definition of the business domain of the company, which delineates its
product(s), technology, and market scope
Partial convergence approach – company in which only a part of its core activities are
focused on pursuing both economic and non-economic goals
Purpose journey – the path a company can follow in transitioning from one purpose
type to another on the purpose map
Strategic objectives – specific (financial and non-financial) targets that a firm strives
to achieve
Values – the ideals that guide strategic management of the company
Vision – aspirations and desires concerning the future state of the company
Chapter 3
Activism – efforts by a company’s stakeholders to push for change that is expected to
promote environmental and societal well-being
Board of directors – an internal mechanism of corporate governance to monitor and
advise the executive function
Corporate governance – the system of checks and balances to ensure alignment
between the interests of the principals of a company (i.e., its owners and
stakeholders) and their agents (i.e., senior executives)
Executive compensation – a corporate governance mechanism that focuses on the
executive compensation package to align principal-agent interests
Chapter 1
Above-average performance – performance that is above the market’s or industry’s
average
Above-average returns – returns that are beyond the investors’ expectations
Cognitive school – strategy formation as a mental process by analyzing how people
perceive patterns and process information
Competitive advantage – the ability of a firm to outperform its competitors
Competitive disadvantage – a deficit in a firm’s ability to outperform its competitors
Competitive parity – a rather similar overall performance of firm to that of its
competitors
Cultural school – strategy formation as a collective and cooperative process rooted in
a firm’s culture
Deliberate strategy – parts of an intended (or formulated) strategy that are put into
action
Descriptive schools of strategy formation – a group of perspectives that describe
how strategies are actually formed
Design school – strategy formation as a process of designing a fit between a firm’s
internal strengths and weaknesses and external threats and opportunities
Emergent strategy – a strategy that arises from unplanned initiatives and actions
within a firm
Entrepreneurial school – strategy formation as a visionary process of the founder or
chief executive
Environmental school – strategy formation as a reactive process by responding to
challenges in the external environment
Formulated strategy – an intended strategy that is articulated explicitly
Government organizations – sovereign entities with authoritative power over other
organizations
Industrial organization (I/O) model of above-average returns – a logic where the
external environment exerts a dominant influence on a firm’s strategic actions
Intended strategy – a strategy that a firm hopes to execute
Learning school – strategy formation as an emergent process that occurs via small
steps as a firm learns
Non profit organizations – organizations geared to benefit the public good
Not-for-profit organizations – organizations aimed to serve the collective goals of
their members
Planning school – strategy formation as a formal process characterized by detailed
planning
Positioning school – strategy formation as an analytical process to look at how a firm
can improve its strategic position in an industry
, Power school – strategy formation as a process of negotiation
Prescriptive schools of strategy formation – a group of perspectives that prescribe
how strategies ought to be
Realized strategy – the strategy that a firm actually follows
Resource-based model of above-average returns – a logic where the uniqueness of a
firm’s resources and capabilities form the basis of its strategic actions
Schools of strategy formation – various perspectives on the strategy formation
process
Strategic management – the formulation and implementation of strategy
Strategy – an orchestrated, unified, integrated, and purposeful set of choices,
commitments, and activities directed at achieving and sustaining above-average
performance
Unrealized strategy – abandoned parts of an intended (or formulated) strategy
Chapter 2
Corporate purpose – the environmental and social goals a company has set for itself
Dual-mode approach – the company’s core activities pursue economic goals, while
non-economic goals are pursued through peripheral activities
Full-convergence approach – the company’s core activities seek to pursue economic
as well as non-economic goals
Mission – definition of the business domain of the company, which delineates its
product(s), technology, and market scope
Partial convergence approach – company in which only a part of its core activities are
focused on pursuing both economic and non-economic goals
Purpose journey – the path a company can follow in transitioning from one purpose
type to another on the purpose map
Strategic objectives – specific (financial and non-financial) targets that a firm strives
to achieve
Values – the ideals that guide strategic management of the company
Vision – aspirations and desires concerning the future state of the company
Chapter 3
Activism – efforts by a company’s stakeholders to push for change that is expected to
promote environmental and societal well-being
Board of directors – an internal mechanism of corporate governance to monitor and
advise the executive function
Corporate governance – the system of checks and balances to ensure alignment
between the interests of the principals of a company (i.e., its owners and
stakeholders) and their agents (i.e., senior executives)
Executive compensation – a corporate governance mechanism that focuses on the
executive compensation package to align principal-agent interests
