chapter8chapter8 glossaryglossary exit glossary modern management, 9 th edition click on terms for...

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EXIT Glossary

Modern Management, 9th edition

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Business portfolio analysis

Commitment principle

Cost leadership

Critical question analysis

Demographics

Differentiation

Divestiture

Economics

Environmental analysis

Focus

General environment

Growth

Internal environment

Mission statement

Operating environment

Organizational mission

Retrenchment

Social values

Stability

Strategic business unit

Strategic control

Strategic planning

Strategy

Strategy formulation

Strategy implementation

Strategy management

Suppliers

SWOT analysis

Tactical planning

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Business portfolio analysis is the development of business-related strategy based primarily on the market share of

businesses and the growth of markets in which businesses exist.

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The commitment principle is a management guideline that advises

managers to commit funds for planning only if they can anticipate, in the

foreseeable future, a return on planning expenses as a result of the long-range

planning analysis.

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Cost leadership is a strategy that focuses on making an organization more

competitive by producing products more cheaply than competitors can.

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Critical question analysis is a strategy development tool that consists of

answering basic questions about the present purposes and objectives of the organization, its present direction and

environment, and actions that can be taken to achieve organizational objectives in the

future.

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Demographics are the statistical characteristics of a population.

Organizational strategy should reflect demographics.

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Differentiation is a strategy that focuses on making an organization more

competitive by developing a product or products that customers perceive as being

different from products offered by competitors.

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Divestiture is a strategy adopted to eliminate a strategic business unit that is not generating a satisfactory amount of

business and has little hope of doing so in the future.

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Economics is the science that focuses on understanding how people of a particular community or nation produce, distribute,

and use various goods and services.

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Environmental analysis is the study of the organizational environment to pinpoint

environmental factors that can significantly influence organizational

operations.

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Focus is a strategy that emphasizes making an organization more competitive by

targeting a particular customer.

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The general environment is the level of an organization’s external environment

that contains components normally having broad long-term implications for managing

the organization; its components are economic, social, political, legal, and

technological.

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Growth is a strategy adopted by management to increase the amount of business that a strategic business unit is

currently generating.

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The internal environment is the level of an organization’s environment that exists inside the organization and normally has immediate and specific implications for

managing the organization.

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A mission statement is a written document developed by management,

normally based on input by managers as well as nonmanagers, that describes and

explains the organization’s mission.

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The operating environment is the level of the organization’s external environment

that contains components normally having relatively specific and immediate

implications for managing the organization.

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The organizational mission is the purpose for which, or the reason why, an

organization exists.

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Retrenchment is a strategy adopted by management to strengthen or protect the amount of business a strategic business

unit is currently generating.

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Social values are the relative degrees of worth society places on the manner in

which it exists and functions.

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Stability is a strategy adopted by management to maintain or slightly

improve the amount of business a strategic business unit is generating.

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A strategic business unit (SBU) is, in business portfolio analysis, a significant

organizational segment that is analyzed to develop organizational strategy aimed at generating future business or revenue. SBUs vary in form, but all are a single

business (or collection of businesses), have their own competitors and a manager

accountable for operations, and can be independently planned for.

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Strategic control, the last step of the strategy management process, consists of

monitoring and evaluating the strategy management process as a whole to ensure

that it is operating properly.

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Strategic planning is long-range planning that focuses on the organization as a

whole.

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Strategy is a broad and general plan developed to reach long-term

organizational objectives; it is the end result of strategic planning.

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Strategy formulation is the process of determining appropriate courses of action

for achieving organizational objectives and thereby accomplishing organizational purpose. Strategy development tools

include critical question analysis, SWOT analysis, business portfolio analysis, and

Porter’s Model for Industry Analysis.

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Strategy implementation, the fourth step of the strategy management process, is putting formulated strategy into action.

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Strategy management is the process of ensuring that an organization possesses

and benefits from the use of an appropriate organizational strategy.

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Suppliers are individuals or agencies that provide organizations with the resources they need to produce goods and services.

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SWOT analysis is a strategy development tool that matches internal organizational strengths and weaknesses with external

opportunities and threats.

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Tactical planning is short-range planning that emphasizes the current operations of

various parts of the organization.