Dictionary of Strategy: Strategic Management A-Z

Encyclopedias

Louise Kelly & Chris Booth

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    • Dedication

      To my parents, Maureen and Joe Kelly, with love and thanks.

      To Rosemarie with love.

      Copyright

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      Preface

      Excellent leaders are excellent strategists. This dictionary is an invitation: an invitation to think strategically, an invitation to learn the words that allow for strategic debate. Some key words from this book that may form your view of strategy are strategy as algorithm, acronym, and aphorism. This is not a comprehensive dictionary; instead it is eclectic, it is cutting edge.

      I hope the dictionary is full of information and provides a nice balance of theory and example. I have tried to handle many of the technical issues such as the Delphi Technique or Game Theory in a definitive way.

      Why did I write the dictionary? When I looked at strategy as a consultant, student, and professor, I realized that this field has a tricky, complex language that is at times difficult to understand. I also wondered if it was a purely masculine world. I discovered that only the persona of strategy is masculine; there is a deep underlying complexity that could be understood as being feminine.

      I believe that the dictionary format of conveying the basics of strategy solved some of the dilemmas of presenting strategic management as a linear, hierarchical process that one encounters in the classic textbooks. In writing in the dictionary format, I discovered you could start anywhere to go somewhere, and get there. I believe this is true of the creative process as well as the strategy process—which is, in its essence, a creative process. Unlike a mechanical decision, such as where you situate a factory (near railroads, major highways), strategy is difficult: It involves an imaginative approach. The basic philosophy of strategic management presented in this book is the idea that one can embark from any point in strategy. It is an existential view: Once one takes a decision, defines a problem, starts the process of strategic action—once a start-up sets up a UPS account, for example—then one bumps up against the constraints of the system or environment. Choices become crystallized, as William Burroughs said, in that frozen moment he called “Naked Lunch” when everyone realizes what is at the end of her fork. It is at this point that the various trade-offs among competing priorities must be resolved on a continual, and imperfect, basis: the sub-optimizing and satisficing concepts that helped Herbert Simon to win the Nobel Prize in 1978. In reading this dictionary, you will be exposed to these historical tidbits as well as being introduced to the chief protagonists who helped to define the field.

      The complexity of strategy as a disciplined way of thought arises because of the nonlinear interaction of different disciplines such as the military, computers, sports, politics, history, psychology, and plain old management thought. When we have covered economic, game theory, and militaristic views of OODA loops, we are left with something metaphysical, intuitive, nonlinear.

      Many strategic management books emphasize the technical aspect of the subject. This dictionary tries to strike a balance between the hard side and soft side, answering the question that Henry Mintzberg famously asked at the Academy of Management in Denver 2002, Whatever happened to the management in strategic management? Strategic management always involves getting things done through people, just on a grander scale than basic management. Strategic management can become so enamored of the complex econometric industry analysis and the linear programming-based implementation schedules that the tricky matter of getting results through people can be ignored. This dictionary happily embraces those tricky soft-side issues.

      Viewpoints that had the most influence on me in writing this dictionary are Henry Mintzberg's emergent view of strategy, Igor Ansoff's linear programming systems thinking, and military inspiration from Sun Tzu's wisdom to Donald Rumsfeld and his existential Zen koan approach to military strategy.

      The kind of question this dictionary invites you to ask yourself is, What is the greatest strategic decision you know of?

      What about GM's decision in 1929 to bring out a new model every year? Ford owned the market with the Model T—the design of which was static, with no changes in model from year to year.

      GM's strategic decision: Build a car for every pocketbook, change the model every year. That decision brought GM ahead of Ford. That later led to the analysis of the decision in the now famous book by Alfred Chandler, Strategy and Structure, that in 1962 officially inaugurated the separate field of strategy.

      Chandler asked the chicken and egg question, Which came first, the strategy or the structure to implement that strategy? The answer, through his analysis of GM and three other American firms, led to his conclusion: A change to a multiproduct strategy, such as GM's, necessitated the administrative innovation of a multidivision or M-form structure that allowed the pushing down of strategic and operational decisions to lower levels in the hierarchy. And so, the Pontiac, Buick, Chevrolet, and Oldsmobile divisions are born. Heady stuff for the students of strategic management. Of course, this dictionary clearly recognizes that one can convincingly argue the opposite: that a change in structure could drive a change in strategy.

      That is what is important. In strategy, one has to get the magnitude right. Strategy requires breadth of mind, perspicacity to in fact deal with it. This dictionary will provide an opening to some of this sweeping view that is necessary for strategic thinking.

      We, my fellow author Chris Booth and myself, will leave you with an acronym for strategy that should capture the eclectic and sometimes whimsical view of strategy that this dictionary presents.

      “Strategy” by Acronym

      Are you into strategy?

      Scenario setting: Mapping the future.

      Tasking: Assigning tasks and defining roles.

      Reconnaissance: Reconnaissance time is time well spent.

      Attack: Attack only when you know you can win.

      Target setting: Target goals to solve the main problem.

      Existentialism: Defining oneself through choices that reflect values.

      Generalship: You have to be a general.

      Y: The why of the actual strategy, the mission.

      This dictionary is an invitation to make up your own acronyms. Go ahead, use some of the words defined here.

      The goal of this dictionary is to move the field forward by codifying in a dictionary format some of the best thinking so far in the field while providing tools to the practicing manager to enter the strategic debate, strategos—the game of the generals—with confidence and a certain élan.

      —Louise Kelly

      Acknowledgments

      Thanks to all the doctoral and MBA students at Alliant International University who inspired and tested these definitions.

      Thanks to Sage editors Al Bruckner and MaryAnn Vail for encouraging support and Kevin Gleason for meticulous editing and patience.

      A special thanks to Aung Z. Lwin for his care and safeguarding of the manuscript as it was written.

    • Bibliography

      Ansoff, Igor. (1965). Concept of corporate strategy. New York: McGraw Hill.
      Barnard, C. (1971). The functions of the executive. Cambridge, MA: Harvard University Press.
      Barney, J. B. (1997). Gaining and sustaining competitive advantage. Reading, MA: Addison-Wesley.
      Brandenburger, A., & Nalebuff, B. (1996). Co-opetition. New York: Doubleday Dell.
      Brown, S., & Eisenhardt, K. (1998). Competing on the edge: Strategy as structured chaos. Boston: Harvard Business School Press.
      Chandler, A. (1962). Strategy and structure: Chapters in the history of the American industrial enterprise. Cambridge: MIT Press.
      Cusumuo, M., & Murkides, C. (2001). Strategic thinking for the next economy. San Francisco: Jossey-Bass.
      Cyert, R., & March, J. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ: Prentice-Hall.
      D'Aveni, R. (1994). Hypercompetition. New York: Free Press.
      Drucker, P. (1993). The practice of management. New York: HarperBusiness Press.
      Drucker, P. (2003). The essential Drucker: The best of sixty years of Peter Drucker's essential writings on management. New York: HarperBusiness Press.
      Hamel, G., & Prahalad, C. K. (1996). Competing for the future. Boston: Harvard Business School Press.
      Kaplan, R., & Norton, D. (2001). The balanced scorecard. Boston: Harvard Business School Press.
      Kotter, J. P. (1996). Leading change. Boston: Harvard Business School Press.
      Mintzberg, H. (1994). Rise and fall of strategic planning. New York: Free Press.
      Mintzberg, H., Alstrand, B., & Lampal, J. (1998). Strategy safari. New York: Simon & Schuster.
      Porter, M. (1990). The competitive advantage of nations. New York: Free Press.
      Porter, M. (1998). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.
      Senge, P. (1990). The fifth discipline: The art and practice of the learning organization. New York: Doubleday/Currency.
      SunTzu. (1996). The art of war. (RalphSawyer, Trans.). Boulder, CO: Westview Press.

      About the Authors

      Louise Kelly is Professor of Strategy at Alliant International University, in San Diego, California. She is coauthor of An Existential Systems Approach to Managing Organizations. Her areas of research and consulting include international entrepreneurship, top management teams, leadership, and social networks, and she has published in the journals Entrepreneurship, Theory and Practice and Journal of World Business. Africa and Mexico have been the main centers for her research. Her doctorate in strategic management is from Concordia University in Montreal.

      Chris Booth is a doctoral student at Alliant International University. His current academic focus is the role of strategic management in government and nonprofits. He holds a Master of Public Administration from the University of Nebraska and a Bachelor of Arts in English from Humboldt State University. Chris's diverse academic background is matched only by his varied personal back-I ground, which includes having firewalked and having paraglided off mountains in northern California. Chris is currently an avid lawn bowler.

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