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APPENDIX A Glossary of Terms The definitions of terms given below are only applicable in this guidebook. The terms and con- cepts may have different meanings in different contexts. Hub airport. A hub airport is an airport that airlines use as a connecting point to transfer pas- sengers to their intended destination. Hub airports allow airlines to increase frequency in small markets by connecting small markets to a central airport, or hub. Generally, large shares of pas- sengers at hub airports connect with other flights. The term "hub airport" is generally used when referring to the hub-and-spoke system used by airlines, in which hubs serve as central transfer points through which to collect passengers from and distribute passengers to cities connected to the hubs through the airlines' route networks. The FAA's categorization of airports included in the National Plan of Integrated Airport Sys- tems (NPIAS) provides a more specific definition of a hub airport. The NPIAS defines a large- hub airport as one that accommodates at least 1.0 percent or more of all enplaned passengers in the United States and its territorial possessions; a medium-hub airport accommodates between 0.25 percent and 0.99 percent of all such passengers; a small hub accommodates between 0.05 per- cent and 0.24 percent of such passengers; and a non-hub accommodates less than 0.05 percent of all enplaned passengers in the United States and its territorial possessions. Airports that do not accommodate an appreciable amount of commercial airline traffic are classified as corporate/ general aviation airports. Mission. An organization's mission is its chartered or silent definition of its reason or justifi- cation for existing. The mission statement generally sets forth the rationale for an organization's existence, its culture, core values and competencies, and, most importantly, its function/purpose. Origin and destination (O&D) airport. An O&D airport mostly accommodates passengers beginning or ending their air travel at that airport rather than using the airport to connect with another flight to reach their destination. Process. A process is a set of activities/actions that must be followed by an individual or a group to achieve the desired result. These activities are generally interrelated and follow a defined sequence. A process generally involves substantial interactions among individuals, groups, and organizations. Risk and uncertainty. A risk is a known uncertainty that can be anticipated and evaluated. Conversely, uncertainties are totally unexpected.1 As noted by Ziegenfuss, "Planning does not remove uncertainties but it does limit the degree of surprise that the organization must handle."2 1Paul Stephen Dempsey, et al., Denver International Airport: Lessons Learned (New York: McGraw Hill, 1997). 2James T. Ziegenfuss, Jr., Strategic Planning, Cases, Concepts, and Lessons, 2d ed. (Lanham, MD: University Press of America/Rowan Littlefield, 2006). 121
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122 Strategic Planning in the Airport Industry Stakeholders. Stakeholders are individuals, groups, and entities that have an interest in or will be affected by an organization's strategic planning or actions. According to Mitroff, "Stake- holders are all those interest groups, parties, actors, claimants, and institutions--both internal and external to the corporation--that exert a hold on it. That is, stakeholders are all those par- ties who either affect or who are affected by a corporation's actions, behavior, and policies."3 Strategic initiatives. Strategic initiatives are actions taken to carry out an organization's strat- egy, generally defined by department leaders, as necessary, to meet the organization's objectives and contribute to the organization's overall success, which is defined by accomplishment of the organization's vision. Strategy. A strategy is an organization's large-scale, future-oriented plan for interacting with its competitive environment in a way that leads to the accomplishment of the organization's objectives and vision. Value. In the context of strategic planning, "value" refers to the summation of all elements that define an organization's culture, philosophy of operation, and beliefs. A value statement sets forth the principles behind which everyone in the organization can rally. Some examples of value statements include corporate social responsibility, respect for the individual, service to the cus- tomer, teamwork, and open communication. Vision. An organization's vision refers to its long-term goals. This term is generally used in the context of a "vision statement," in which an organization explicitly defines the markets and customers it elects to serve and the services it elects to provide in the future. "Vision is the des- tination that must be "seen" if strategy formulation is considered complete."4 3 Mitroff, Ian I., Stakeholders of the Organizational Mind (Hoboken, NJ: Jossey-Bass/Wiley, 1983). 4James T. Ziegenfuss, Jr., Strategic Planning, Cases, Concepts, and Lessons, 2d ed. (Lanham, MD: University Press of America/Rowan Littlefield, 2006).