In the borderland between strategy and management control : theoretical framework and empirical evidence

University dissertation from Linköping : Linköpings universitet

Abstract: Strategy andmanagement control are two fields of research that have becomeincreasingly inter-linked. Research in strategy has shown, forinstance, that strategies are of no effect unless they permeate theentire organization, and that they become obsolete if not renewedas the business environment changes. Similarly, research inmanagement control has shown that management control loses itsrelevance if it does not reflect strategy or is not useful inoperations. This dissertation considers a number of theoreticalapproaches to corporate and business strategies and theirconnection to management control. The reasoning is also examined inlight of empirical data collected from major Swedish firms invarious industries. One finding is that some combinations ofcorporate and business strategies and management control are morecongruent than other combinations. An additional question discussedin the dissertation is how different types of business strategycould be changed and combined; these possibilities are studiedempirically on the basis of data taken from annual reports ofNordic paper and pulp companies. The results show that the natureof business strategy can be changed over time, but that differentkinds of business strategies can seldom be combined within the samebusiness unit. Further, the dissertation treats the relationshipbetween different perspectives on business strategies. Anothercentral element of the dissertation is the design and use ofperformance measurement. On the basis of extensive empiricalmaterial from large Nordic firms in a variety of industries,performance measurement at Nordic firms is described, notingdifferences between countries and between dissimilar businessstrategies. According to the findings, the Nordic firms used abroad spectrum of measures, which according to theory should bemore closely related to strategy than would financial measuresalone.