Glosario

GLOSSARY
A
Added value. The difference between the market value of the output and the cost of the inputs to the organisation. Architecture. The network of relationships and contracts both within and around the organisation.

B
Backward integration. The process whereby an organisation acquires the activities of its inputs, e.g. manufacturer into raw material supplier. Benchmarking. Thecomparison of practice in other organisations in order to identify areas for improvement. Note that the comparison does not have to be with another organisation within the same industry, simply one whose practices are better at a particular aspect of the task or function. Bounded rationality. The principle that managers reduce tasks, including implementation, to a series of small steps, even though thismay grossly over-simplify the situation and may not be the optimal way to proceed. Branding. The additional reassurance provided to the customer by the brand name and reputation beyond the intrinsic value of the assets purchased by the customer. Break-even. The point at which the total costs of undertaking a new strategy are equal to the total revenue from the strategy. Bretton Woods Agreement.System of largely fixed currency exchange rates between the leading industrialised nations of the world. In operation from 1944 to 1973. Business ethics. See Ethics. Business process re-engineering. The replacement of people in administrative tasks by technology, often accompanied by delayering and other organisational change.

C
Capability-based resources. Covers the resources across the entirevalue chain and goes beyond key resources and core competencies. Change options matrix. This links the areas of human resource activity with the three main areas of strategic change: work, cultural and political change. Changeability of the environment. The degree to which the environment is likely to change. Competitive advantage. The significant advantages that an organisation has over itscompetitors. Such advantages allow the organisation to add more value than its competitors in the same market. Competitor profiling. Explores one or two leading competitors by analysing their resources, past performance, current products and strategies. Complete competitive formula. The business formula that offers both value for money to customers and competitive advantage against competitors.

1Complementors. The companies whose products add more value to the products of the base organisation than they would derive from their own products by themselves - for example, Microsoft software adds significantly to the value of a Hewlett-Packard Personal Computer. Concentration ratio. The degree to which value added or turnover is concentrated in the hands of a few firms in an industry.Measures the dominance of firms in an industry. Contend. The constructive conflict that some strategists argue is needed by every organisation. Content of corporate strategy. The main actions of the proposed strategy. Context of corporate strategy. The environment within which the strategy operates and is developed. Contingency theory of leadership. Argues that leaders should be promoted or recruitedaccording to the needs of the organisation at a particular point in time. See also Style theory and Trait theory. Controls. Employed to ensure that strategic objectives are achieved and financial, human resource and other guidelines are not breached during the implementation process or the ongoing phase of strategic activity. The process of monitoring the proposed plans as they are implemented andadjusting for any variances where necessary. Co-operation. The links that bring organisations together, thereby enhancing their ability to compete in the market place. See also Complementors. Co-operative game. Has positive pay-off for all participants. Core competencies. The distinctive group of skills and technologies that enable an organisation to provide particular benefits to customers and...