Chapter 2 Strategic Leadership: Managing the Strategy Process Flashcards
Executives’ use of power and influence to
direct the activities of others when pursuing
an organization’s goals.
Strategic Leadership
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.
upper-echelons theory
A conceptual framework of leader-
ship progression with five distinct, sequential
levels.
Level 5 Leadership Pyramid
Makes productive contributions through
motivation, talent, knowledge, and skills.
Level 1: Highly Capable Individual
Uses high level of individual
capability to work effectively
with others in order to
achieve team objectives.
Level 2: Contributing Team Member
Is efficient and effective in organizing
resources to accomplish stated goals
and objectives. Does things right.
Level 3: Competent Manager
Presents compelling vision and mission to
guide groups toward superior performance.
Does the right things.
Level 4: Effective Leader
Builds enduring greatness through a combination of willpower and humility.
Level 5: Executive
The part of the strate-
gic management process that concerns the
choice of strategy in terms of where and
how to compete.
Strategy Formulation
The part of the strategic management
process that concernsthe organization, coordination, and integration of how work gets done, or strategy execution.
Strategy Implementation
Stand-alone divisions of a larger conglomerate, each with their own profit-and-loss responsibility.
Strategic Business Units (SBU’s)
A statement that captures an organization’s purpose and aspiration. It spells out what the organization ultimately wants to
accomplish.
Vision
A stretch goal that
pervades the entire
organization with a
sense of purpose.
Strategic Intent
defines a business in terms of a good or service provided.
Product Oriented Vision Statements
defines a business in terms of providing solutions to customer needs—for example, “We provide solutions to professional communication needs.”
Customer-Oriented Vision Statements
Description of
what an organization
actually does—the
products and services
it plans to provide, and
the markets in which it
will compete.
Mission
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.
Core Values Statement
Ethical standards and norms that govern the behavior of individuals within a firm or organization.
Organizational Core Values
Method put in place by strategic leaders to formulate and implement a strategy, which can lay the foundation for a sustainable competitive advantage.
Strategic Management Process
A rational, data-driven strategy
process through which
top management
attempts to program
future success.
Top-Down Strategic Management
Strategy planning
activity in which top
management envisions
different what-if
scenarios to anticipate
plausible futures in
order to derive strategic responses.
Scenario Planning
Incidents that describe
highly improbable but
high-impact events.
Black Swan Events
The strategic option that top managers decide most closely matches the current
reality and which is then executed.
dominant strategic plan
Strategy process in which organizational structure and systems allow bottom up strategic initiatives to emerge and be evaluated and coordinated by top management.
Strategy as planned emergence
The outcome of a rational and structured top down strategic plan.
intended strategy
Combination of intended and emergent strategy.
Realized Strategy
Any unplanned strategic initiative bubbling up from the bottom of the organization.
emergent strategy
Any activity a firm pursues to explore and
develop new products and processes, new markets, or new ventures.
Strategic Initiative
Strategic initiatives undertaken by lower-level employees on their
own volition and often in response to unexpected situations.
Autonomous Actions
Any random events, pleasant surprises, and accidental happenstances that can have a profound impact on a firm’s strategic initiatives.
Serendipity
The way a firm allocates its
resources based on predetermined policies, which can be critical in shaping its realized strategy.
Resource Allocation Process (RAP)
Occurs when a firm’s
static fit no longer
matches competitive
realities.
strategic dissonance
A turning point in determining the future of company; the moment when the fundamentals of a business and its industry
are about to change.
Strategic Inflation Points
When individuals face decisions, their rationality is confined by cognitive
limitations and the time
available to make a decision. Thus, individuals tend to “satisfice” rather than
to optimize.
Theory of Bounded rationality
Constraints such as time or the brain’s in-
ability to process large amounts of data that prevent us from appropriately processing and evaluating each piece of information we
encounter.
Cognitive Limitations
A field of study that blends research
findings from psychology with
economics to provide valuable
insights showing when and
why individuals do not act like
rational decision makers,
Behavioral Economics
One of two distinct
modes of thinking used in decision making. It is our default mode because it is automatic, fast, and efficient, requiring little energy or attention.
System 1
One of two distinct modes of thinking used in decision making that applies rationality and relies on analytical and logical reasoning.
System 2
Obstacles in thinking that lead to systematic
errors in our decision making and interfere with our rational thinking.
Cognitive Biases
A cognitive bias that high-
lights people’s tendency
to overestimate their
ability to control events.
Illusion of Control
A cognitive bias in
which an individual or a group faces increasingly negative feedback regarding the
likely outcome from a
decision,
Escalating Commitment
A cognitive bias in which
individuals tend to search for and interpret information in a way that supports their
prior beliefs.
Confirmation Bias
A cognitive bias in which
individuals use simple
analogies to make
sense out of complex
problems.
Reason By Analogy
A cognitive bias in which
conclusions are based
on small samples, or even from one memorable case or anecdote.
Representativeness
A situation in which opinions
coalesce around a leader without individuals critically evaluating and challenging that leader’s opinions and assumptions.
Groupthink
Technique that can help to improve strate-
gic decision making; a key element is that of a separate team or individual carefully scrutinizing a proposed course of action by questioning and critiquing underlying
assumptions and highlighting potential downsides.
Devil’s Advocacy
Technique that can
help to improve strate-
gic decision making;
key element is that two
teams each generate a
detailed but alternate
plan of action (thesis
and anti-thesis). The
goal, if feasible, is to
achieve a synthesis
between the two plans.
dialectic inquiry
