In business, something (an idea, or plan, usually) set up to be knocked down. It's the dangerous philosophy of presenting one mediocre idea, so that the listener will make the choice of the better idea which follows.
It backfires with some frequency, as the listener (out of sheer perversity) will insist on the straw dog.
a straw dog is a scapegoat group, place, person or idea in which we dump our evilness, so we can blame it and then by attacking, dissing or destorying it, we externalize it outside of us so we feel free of sin.
America often uses an 'out group' as a straw dog, such as Communists, terrorists, labor unions, gays, in order to deflect attention from the bad things we're doing, such as exploiting the environment or third world labor.