The Strategy Pathfinder, 3rd Edition

Glossary of Core Strategic Management Concepts

80/20 rule

Sometimes called the Pareto distribution, the notion that to be strategic organisations should focus on the 20% of the business/customers/suppliers/stakeholders that make 80% of the difference to the business. The potential weakness of using this logic is that it may not adequately reflect dynamic situations.

Abductive logic

Advocates positing that something might or could be and then reaching out to understand and develop it as a way of spurring substantive innovations. Often used in design thinking in contrast to the conventional inductive or deductive logic.

Absolute advantage

Adam Smith’s theory that nations should specialise in production of goods where they have a natural or acquired advantage.

Accelerators

Accelerators seek to help start-ups move quickly to establish their ideas in the market (like Y Combinator, Techstars and the Brandery).

Acquisition

The “A” in M&A. This is where one organisation buys a majority stake in another company for control. For the target company shareholders to sell their shares generally requires the payment of a premium. Acquisitions take place when the acquired organisation has assets/resources/capabilities that are valuable to the acquirer and are not generally available through other means such as contracting.Affordances Aspects of an environment that allow and constrain the actions and activities of people; for instance how a building is configured.

Agency problem

When managers ...