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This paper explains how a variety of business units within a listed corporation have tried to define their strategic capabilities, as part of a process of developing independent business strategies within the corporation's corporate strategy. This paper describes the processes by which strategic capabilities were identified in each unit, the differences and similarities between the capabilities identified at the business unit level, and their consistency (or otherwise) with an overall corporate strategic positioning.

This paper is based on the author's consulting experience with both the parent corporation and its individual business units over a period of 15 years, and most recently on an intensive relationship with one division of the corporation and its 13 business units began three years ago. An objective of these relationships has been clarifying each business unit's strategy and any basis for sustainable competitive advantage of its strategic capabilities. What emerged from this process is a set of definitions of business unit strategic capabilities which are both similar to, but in some cases different from, the corporate parent's perceptions of the strategic capabilities of its business units.

This paper describes the process by which a first representation of “strategic capabilities” emerged in each business unit. For each unit, the agreed descriptions of strategic capabilities helped guide strategic decision making and implementation and assisted each unit in clarifying its strategic positioning in its markets. However, considerable differences remain in the articulation of each unit's capabilities and in what capabilities are considered to exist in the business units.

This paper is designed to give practitioners and academics a case study through which to consider practicalities involved in articulating and operationalizing strategic capabilities in general and in defining corporate strategies in particular.

This study examines how two important situational factors (corporate diversification and business unit strategy) and two elements of a firm’s administrative system (accounting‐based budgetary controls and associated incentives) affect the presence of slack in business unit budgets in diversified firms. The relationships among these variables are established by building on theories from organizational economics, the information‐processing view of organizations, and organizational behavior. Data are collected from 37 firms and 153 business units within these firms. The main results indicate: that corporate diversification is positively associated with slack in business unit budgets; and that tight budgetary controls and high‐powered incentives effectively curtail such slack. However, diversification does not seem to drive corporate managers to rely more on these systems to reduce higher budgetary slack associated with diversification. This suggests: that diversified firms employ a conscious strategy of slack at the business unit level to reduce information‐processing needs at the top; or that the design of the internal management control system is a function of factors other than corporate diversification. With respect to the latter explanation, the results indicate that business units that pursue a differentiation strategy receive less tight budgetary controls, which leaves them with the necessary slack to effectively pursue the critical success factors on which their strategies are built.

Corporate controls are mechanisms that corporations use to ensure that the processes and/or outcomes of their business units meet corporate expectations. Challenges in measurement of corporate controls have led many researchers to operationalize them as part of the more ambiguous corporate effects construct, instead of addressing them separately. The purpose of this paper is to examine the significance of “fit” between corporate control mechanisms and business unit strategy in performance of business units.

The authors use ordinary least squares regression analysis on data collected between 2010 and 2012 from surveys from managers of 142 Iranian corporations and 1,822 of their subsidiaries. The authors also use financial and market data collected by an IDRO division and accessed through partnership in a joint project.

The authors found that while the fit between business unit strategy and corporate controls has a significant effect on business unit financial performance, it does not have a similar effect on market performance. The findings demonstrate that when business unit managers perceive that they are subject to a balance of strategic and financial controls with a slightly greater emphasis on strategic controls, then business units have higher financial and market performance, although the difference in financial performance is not significant.

The authors find that the misfit between corporate controls and business strategies in such cases could negatively affect the performance of the business unit. However, this research also contributes to a better understanding of the importance of strategic controls to the successful performance of business units. The findings show that while the fit between controls and strategy is most critical for achieving financial performance in business units that pursue product leadership, strategic controls play a more prominent role than financial controls in achieving higher financial or market share performance for all business units.

The findings of the propositions in this research would discourage corporations with tight financial control from engaging in acquisition of businesses considered to be product leaders in their relative product markets.

Past research focusing on the fit between corporate-level factors and business-level factors and their role on business performance are largely limited to conceptual work. The limited empirical studies completed in the past generally reduce control mechanisms to lack or absence of autonomy. This shortcoming has been mainly due to difficulties in measurement of control mechanisms. The empirical study overcomes these barriers and in doing so, reveals surprising findings related to the effectiveness of different control mechanisms.

The purpose of this paper is to propose a practical method to elicit – in a manner grounded in fact – the “as is” supply chain strategy that a business unit currently has in place. It also proposes a framework to represent the supply chain strategy of a business unit in a clear and actionable manner.

A framework to represent the supply chain strategy of a business unit was developed through inductive theory generation. A method to elicit the current, “as is” supply chain strategy of a business unit was developed through collaborative management research projects and validated by several third-party projects.

In different projects – many conducted by third parties – the method was found to be a useful approach to elicit the “as is” supply chain strategy of a business unit. Practitioners found value in representing a supply chain strategy as a conceptual system serving as a logical bridge between the overall strategy and the supply chain operations of the business units.

The proposed framework may have limited scalability beyond a single business unit. The proposed method may be less useful when the supply chain strategy is undergoing a dramatic transformation, or when the participants from the company are either not fully engaged in the exercise or knowledgeable about the strategic rationale behind activities.

The paper provides an innovative approach to tap into the tacit knowledge of the organization to reveal the patterns of decisions underpinning its current supply chain strategy and to characterize the supply chain strategy of a business unit as a conceptual system.

Discusses how interrelationships can be developed for synergy. Also focuses on horizontal strategy as a way to achieve competitive advantage. Organizational context can determine a firm’s motivation and ability to develop interrelationships that result in overall competitive advantage. Corporate strategy must move beyond the idea that the primary way of creating synergy is the combination of related businesses (by buying and selling businesses). Corporate strategy must focus on creating value that is independent of business unit value. This means developing horizontal strategies that have the objective of coordinating activities and developing programs that encourage the sharing of resources and skills. An understanding of the horizontal organization helps to emphasize that organizational structure and processes are significant in developing interrelationships with the potential to reach the goals of synergy and competitive advantage.

The days when corporations could select their portfolios of investments and sit back and wait for results are long gone. To remain competitive, corporations must provide their business units with low‐cost capital, outstanding executives, corporate R&D, centralized marketing where appropriate and other resources in the corporate arsenal. To be successful, they must pursue strategies of vertical integration and a synergistic combining of businesses.

The second major step in the development of the balanced scorecard was the introduction of strategy maps. Although much has been written about the benefits of strategy maps, there have been relatively few empirical studies that explore their use in a real-world setting. Additionally, the studies that have been done do not focus on the perspective of middle managers and employees who execute the strategy on a daily basis. This study addresses these gaps through observing the construction of strategy maps in two main business lines of a commercial bank. The participating managers are then asked if they agree that the resulting strategic performance measurement system assist organizations in the three ways most discussed in the literature: translating and operationalizing strategy, communicating the strategy and measuring the strategy. This study also provides some additional insights regarding the construction and use of strategy maps in organizations. The findings provide evidence to management that strategy maps are beneficial and guidance on how these could be implemented. The purpose of this study is to examine the implementation of strategy maps in a real-world setting. Strategy maps are an extension of the well-known and adopted balanced scorecard, but have received little attention in empirical studies.

The researcher introduced middle managers and operational staff to strategy maps and assisted them in the construction of a map for their business unit. The participants were then interviewed as to whether they agree with the benefits outlined in literature.

Participants agreed with the three main benefits outlined in literature and also provided additional feedback on the use of strategy maps from the perspective of their role as middle managers and those who had not used strategy maps in the past.

This study should be replicated in a larger setting. It would be particularly helpful to involve multiple departments across one organization or replicate the research in different organizations in the industry.

It would be helpful to guide business units through the construction of strategy maps and then survey employees at different levels throughout the business units to obtain their feedback concerning the resulting product.

Because this study involves middle managers and operational level employees, it provides insight on the use of strategy maps, which could be extrapolated to other strategic performance management tools. This is a level of management that has not been involved to a large extent in previous research.

This paper is the first to observe middle managers in their development of a strategy map, which puts it in the unique position to note the opinions of this group on the benefits of the tool.

Once a build, hold, or harvest strategy has been adopted for a business, how does the corporation ensure its implementation? The answers range from decentralizing strategic planning to tying the compensation system to successful plan implementation.

Presents a study which explored a relationship between production process focus and performance at the business unit level using the profit impact of marketing strategies (PIMS) database. The relationship between production process focus and financial performance for business units was partially supported using return‐on‐sales (ROS), and was not supported with return‐on‐assets and return‐on‐income. Indicates that the degree of production process focus is not directly related to a business unit′s performance. The implication is that the degree of production process focus must be recognized as part of a manufacturing strategy that is consistent with an overall business strategy.

Based on an empirical study of 184 Swedish manufacturers. Provides an operationalization of manufacturing strategy. Bases the definition of a manufacturing strategy on the competitive means which the business units emphasize to compete on the market, and the nature of manufacturing objectives. Formulates and tests hypotheses within areas of manufacturing strategy that have been identified as missing themes in the literature. Shows that companies that have a manufacturing strategy are significantly more profitable than those without one. They are also significantly better in competing with dependable deliveries. Argues that companies with a manufacturing strategy, regardless of the direction of the strategy, have identified quality programmes and other preventive actions as being fundamental issues in manufacturing. Thus gives support to the research that suggests that competitive priorities should be sequentially applied in manufacturing.