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.