Aligning corporate and business strategy: managing the balance

Abstract

Purpose

This study aims to expand the knowledge on strategy and alignment by exploring how executives and strategists can manage alignment between corporate and business strategy to leverage synergies, from a corporate strategy perspective, without limiting local responsiveness, from a business strategy perspective.

Design/methodology/approach

The study is characterized by privileged access and richness of data. A case study design was used to explore the results. Data include interviews, observations in workshops, material produced in workshops and personal field notes.

Findings

The study provides insights about how alignment between corporate and business strategy can be managed to balance requirements on both corporate and business strategy. To do so alignment needs be understood and managed based on its contribution to the competitiveness of the firm. In addition, alignment encompasses two dimensions: direction of alignment (which can be vertical and horizontal) and relation of alignment (which can be numerical and non-numerical). This leads to four different types of alignment.

Research limitations/implications

Explorative case studies yield results less generalizable. Future research is thus encouraged to confirm or contradict the results of this study.

Practical implications

When formulating strategy, executives and strategists need to consider what type of alignment is appropriate for what parts and elements of the strategies (e.g. goals and activities) to gain competitive advantage. By using different types of alignment, it is possible to balance the need for both corporate synergies and business responsiveness.

Originality/value

This study fulfils an identified need to study what alignment between strategies on different organizational levels encompasses and the potential risks of alignment.

Citation

Wadström, P. (2019), "Aligning corporate and business strategy: managing the balance", Journal of Business Strategy, Vol. 40 No. 4, pp. 44-52. https://doi.org/10.1108/JBS-06-2018-0099