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Business strategies and performance measurement systems: empirical evidence
Linköping University, Department of Computer and Information Science, EISLAB - Economic Information Systems. Linköping University, The Institute of Technology.
Linköping University, Department of Computer and Information Science, EISLAB - Economic Information Systems. Linköping University, The Institute of Technology.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

In this article, we discuss the fit between business strategy and the performance-measurement system. The types of business strategy treated in the article are cost leadership and differentiation. The performance-measurement system is studied from a standpoint of design (financial and non-financial measures of performance) and use (interactive and diagnostic). Based on the findings of previous studies, a number of hypothetical relationships between business strategy, the design and use of the performance-measurement system, and financial results are formulated. Data were collected by means of a questionnaire sent to 800 business units in Denmark, Finland, Sweden and Norway, with 224 complete responses. The data was analyzed with the aid of cluster analysis. It could not be shown that financial results were affected by the design and use of the performance-measurement system. Furthermore, the relationships between business strategy and performance measurement were not as straightforward as hypothesized. Nevertheless, two clusters of business units have rather clear tendencies in the design and use of their performance-measurement systems. One of them is cost leaders with relatively undeveloped performance-measurement systems. Neither financial nor non-financial measures seem to be important. Interactive use is also limited. The other cluster is comprised of differentiators with a well-developed and complex system of performance measurement. These business units focus to a substantial extent on both financial and non-financial measures. Also in regard to use, all dimensions were generally emphasized in the questionnaire; in other words, both diagnostic and interactive uses are considered important.

National Category
Computer Science
Identifiers
URN: urn:nbn:se:liu:diva-36406Local ID: 31268ISBN: 91-85295-82-5 (print)OAI: oai:DiVA.org:liu-36406DiVA: diva2:257254
Note

An earlier version of this paper has been presented at The 19th Nordic Conference on Business Studies, Reykjavik, Iceland, August, 2003

Available from: 2009-10-10 Created: 2009-10-10 Last updated: 2013-01-22
In thesis
1. In the borderland between strategy and management control: theoretical framework and empirical evidence
Open this publication in new window or tab >>In the borderland between strategy and management control: theoretical framework and empirical evidence
2004 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Strategy and management control are two fields of research that have become increasingly inter-linked. Research in strategy has shown, for instance, that strategies are of no effect unless they permeate the entire organization, and that they become obsolete if not renewed as the business environment changes. Similarly, research in management control has shown that management control loses its relevance if it does not reflect strategy or is not useful in operations. This dissertation considers a number of theoretical approaches to corporate and business strategies and their connection to management control. The reasoning is also examined in light of empirical data collected from major Swedish firms in various industries. One finding is that some combinations of corporate and business strategies and management control are more congruent than other combinations. An additional question discussed in the dissertation is how different types of business strategy could be changed and combined; these possibilities are studied empirically on the basis of data taken from annual reports of Nordic paper and pulp companies. The results show that the nature of business strategy can be changed over time, but that different kinds of business strategies can seldom be combined within the same business unit. Further, the dissertation treats the relationship between different perspectives on business strategies. Another central element of the dissertation is the design and use of performance measurement. On the basis of extensive empirical material from large Nordic firms in a variety of industries, performance measurement at Nordic firms is described, noting differences between countries and between dissimilar business strategies. According to the findings, the Nordic firms used a broad spectrum of measures, which according to theory should be more closely related to strategy than would financial measures alone.

Place, publisher, year, edition, pages
Linköping: Linköpings universitet, 2004. 36 p.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 910
National Category
Computer Science
Identifiers
urn:nbn:se:liu:diva-33175 (URN)19156 (Local ID)91-85295-82-5 (ISBN)19156 (Archive number)19156 (OAI)
Public defence
2004-12-14, Visionen, IDA, Linköpings Universitet, Linköping, 13:15 (Swedish)
Available from: 2009-10-09 Created: 2009-10-09 Last updated: 2013-11-22

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Kald, MagnusNilsson, Fredrik

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