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The role of management control systems in strategic business units
Linköping University, Department of Computer and Information Science, EISLAB - Economic Information Systems. Linköping University, The Institute of Technology.
2000 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Business firms are confronted with strategic considerations at both the corporate and business-unit level. In this regard, the management-control system is of major importance. For example, the management-control system is used both to obtain information for strategic planning and to follow up on the implementation of strategic plans. The overall purpose of this dissertation is to describe and explain from a strategic perspective how management control is designed and used in strategic business units. This overall purpose can be subdivided into the three research questions addressed in the three articles which comprise the dissertation.

The first research question concerns the influence of the relationship between corporate and business strategy on the management-control system. The findings of Paper I, an empirical study of 31 Swedish corporate groups with 47 business units, show among other things that environmentally driven business development is encouraged by an activity-sharing strategy at the corporate level, a differentiation strategy at the business-unit level, and integration of management control between the two levels. A more general implication of this finding is that this kind of combination of corporate and business strategy is one with a good fit.

The second research question relates to the effect of different variables of business strategy on the design and use of management control. The variables studied are strategic pattern, strategic mission, and strategic position. The findings of Paper II, a theoretical study with well-known international studies as the starting point, indicate that these variables reflect different dimensions of business-unit strategy and that together they affect the design and use of management control.

The third research question is about the design and use of a particular aspect of management control - performance measurement - at large firms in the Nordic countries, which are often portrayed as forerunners in linking strategy and control. The findings of Paper III, an empirical study of 236 Nordic business units, suggest among other things that there is a good balance between monetary and nonmonetary measures at the firms studied. However, performance measurement appears to be primarily a tool for top management, since it is not very well established at lower organizational levels.

Place, publisher, year, edition, pages
Linköping: Linköpings universitet , 2000. , 22 p.
Series
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 842
National Category
Computer Science
Identifiers
URN: urn:nbn:se:liu:diva-42681Local ID: 68039ISBN: 91-7219-802-8 (print)OAI: oai:DiVA.org:liu-42681DiVA: diva2:263538
Available from: 2009-10-10 Created: 2009-10-10 Last updated: 2013-11-22
List of papers
1. On creating an environmentally driven mode of business development: empirical evidence
Open this publication in new window or tab >>On creating an environmentally driven mode of business development: empirical evidence
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This article presents the findings of an empirical study of 31 large Swedish corporate groups listed on the stock exchange. The purpose of the study was to investigate how strategies, management control systems, and management attitudes influence the possibilities for creating an environmentally driven mode of business development. According to the study, the chances of establishing an environmentally driven mode of business development are substantially better at corporate groups where corporate strategy emphasizes activity sharing and business-unit strategy emphasizes differentiation. The outlook also improves considerably if control is well integrated in the sense that the overall corporate management control system includes information from the environmental management system at the business-unit level. Such integration is easier if the management control system and the environmental management system are similarly designed and used. More, if the mode of business development is to be environmentally drive, corporate and business-unit management should have a favorable attitude toward systematic involvement in environment-related activities.

National Category
Computer Science
Identifiers
urn:nbn:se:liu:diva-36405 (URN)31267 (Local ID)91-85295-82-5 (ISBN)31267 (Archive number)31267 (OAI)
Note

An earlier version of this paper has been presented at The 23rd Annual Conference of the European Accounting Association, Munich, Germany, 29-31 March, 2000

Available from: 2009-10-10 Created: 2009-10-10 Last updated: 2013-11-22
2. On strategy and management control: the importance of classifying the strategy of the business
Open this publication in new window or tab >>On strategy and management control: the importance of classifying the strategy of the business
2000 (English)In: British Journal of Management, ISSN 1045-3172, E-ISSN 1467-8551, Vol. 11, no 3, 197-212 p.Article in journal (Refereed) Published
Abstract [en]

The point of departure for this paper is a number of contingency-theory studies on the relationship between business strategy and the design and use of management control. In these studies strategy has been operationalized in different ways – a major reason why the findings are ambiguous and difficult to integrate. Thus there is a strong need for a common frame of reference for classifying business strategy. In view of the multifaceted nature of the concept of strategy, however, it is neither desirable nor possible to arrive at a single method of classification that would be appropriate in all situations. Rather, the task is to integrate different strategic variables such as strategic pattern, strategic position and strategic mission. In this paper we show how these three variables may be assumed to influence, and be influenced by, what characterizes changes in strategy and how business units manage their product offerings. Unlike most previous studies in the field, this paper discusses how the strategic variables taken together may be assumed to influence the classification of strategy and thus the design and use of the management-control system. Our deductive analysis, and the hypotheses used in connection with it, show that studies which consider only one strategic variable may lead to erroneous conclusions about the relationship between strategy and management control.

National Category
Computer Science
Identifiers
urn:nbn:se:liu:diva-36536 (URN)10.1111/1467-8551.00161 (DOI)31529 (Local ID)31529 (Archive number)31529 (OAI)
Available from: 2009-10-10 Created: 2009-10-10 Last updated: 2013-11-22
3. Performance measurement at Nordic companies
Open this publication in new window or tab >>Performance measurement at Nordic companies
2000 (English)In: European Management Journal, ISSN 0263-2373, E-ISSN 1873-5681, Vol. 18, no 1, 113-127 p.Article in journal (Refereed) Published
Abstract [en]

During the past decade there have been considerable changes in methods of management control. To a considerable degree, these changes are due to growing globalization and stiffening competition. In the face of these new challenges, there has been serious dissatisfaction with traditional methods of management control. In the Nordic countries there has been a particular interest in ways to improve performance measurement, especially the Balanced Scorecard. At present, however, our knowledge about how Nordic companies design and use systems of performance measurement is limited. In view of this situation, a questionnaire-based study was conducted. Performance measurement was examined in the following dimensions: (1) structure; (2) processes; (3) use; and (4) benefits and shortcomings. The use of three well-known models of performance measurement was also studied. Responses to the questionnaire were submitted by 236 business units, which belong to major corporate groups in the Nordic countries. The findings show that performance measurement is relatively well developed in the Nordic countries, and that the benefits are perceived as outweighing the shortcomings.

National Category
Economics and Business
Identifiers
urn:nbn:se:liu:diva-87744 (URN)10.1016/S0263-2373(99)00074-2 (DOI)
Available from: 2013-01-22 Created: 2013-01-22 Last updated: 2017-12-06

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