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Book part
Publication date: 2 April 2008

Graham Hubbard

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…

Abstract

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.

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Competence Building and Leveraging in Interorganizational Relations
Type: Book
ISBN: 978-1-84950-521-5

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Article
Publication date: 1 February 1991

Balaji S. Chakravarthy and Peter Lorange

If strategic planning systems have failed it is because managershave failed to adapt them to the changed contexts of their businesses.Four distinct contexts are…

Abstract

If strategic planning systems have failed it is because managers have failed to adapt them to the changed contexts of their businesses. Four distinct contexts are identified: Pioneer, Expand, Reorient, and Dominate. These labels are chosen to indicate the primary challenge for the business unit in each of these contexts. The contexts vary in their risk and in the adaptation and/or integration orientation that they demand of the strategic planning system. Four key elements of the strategic planning system: direction of goal setting, time‐spending patterns in planning, the relative importance of the strategic budget, and the linkage between the financial plan and the budgets, are identified. Each can be manipulated to adapt the system to suit the firm′s business context.

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Journal of Organizational Change Management, vol. 4 no. 2
Type: Research Article
ISSN: 0953-4814

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Article
Publication date: 16 May 2019

Pouya Seifzadeh and W. Glenn Rowe

Corporate controls are mechanisms that corporations use to ensure that the processes and/or outcomes of their business units meet corporate expectations. Challenges in…

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Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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.

Originality/value

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.

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Journal of Strategy and Management, vol. 12 no. 3
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 13 July 2012

Matthias Kruehler, Ulrich Pidun and Harald Rubner

The major purpose of this paper is the development of a theoretical framework that can be used by corporate practitioners to understand the implicit parenting strategy of

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4543

Abstract

Purpose

The major purpose of this paper is the development of a theoretical framework that can be used by corporate practitioners to understand the implicit parenting strategy of their company, assess its performance, and adjust it for improving the net corporate value creation.

Design/methodology/approach

In this paper, a three‐dimensional framework is developed that accounts for corporate‐to‐business and business‐to‐business interactions, value‐adding and value‐destroying activities, and strategic and operational levers. The framework is operationalized by assigning a broad set of individual activities to these levers.

Findings

The paper delivers a robust, systematic, and operational framework to assess the net benefits to a given business of being part of a corporate portfolio, and to identify and evaluate implicit parenting strategies in corporate practice. While previous studies mainly focused on broad parenting approaches with low granularity this framework now allows earlier observations to be substantiated, finer distinctions between the applied strategies to be drawn, and the core of superior value added approaches to be investigated.

Practical implications

The introduced framework can be used to analyze the origin and underlying drivers of conglomerate discounts and premia and thus enhance understanding of capital market valuation of multi‐business companies. The developed framework can also be the basis for the derivation of a typology of corporate parenting strategies. In this way, it can support practitioners in portfolio management – which was also the explicit motivation for the development of the original parenting advantage concept.

Originality/value

The outlined framework will facilitate the investigation of structural, strategic, and organizational roots of superior parenting strategies in corporate practice. It may be used to analyze performance differences of multi‐business companies that go beyond the degree of diversification and may finally contribute to solving the puzzle of the conglomerate discount.

Details

Journal of Business Strategy, vol. 33 no. 4
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 13 June 2016

Stuart Crispin, Phil Hancock, Sally Amanda Male, Caroline Baillie, Cara MacNish, Jeremy Leggoe, Dev Ranmuthugala and Firoz Alam

The purpose of this paper is to explore: student perceptions of threshold concepts and capabilities in postgraduate business education, and the potential impacts of…

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17050

Abstract

Purpose

The purpose of this paper is to explore: student perceptions of threshold concepts and capabilities in postgraduate business education, and the potential impacts of intensive modes of teaching on student understanding of threshold concepts and development of threshold capabilities.

Design/methodology/approach

The student experience of learning was studied in two business units: strategic management, and accounting. The method involved two phases. In the first, students and unit coordinators identified and justified potential threshold concepts and capabilities. In the second, themes were rationalized.

Findings

Significantly more so in intensive mode, the opportunity to ask questions was reported by student participants to support their development of the nominated threshold capabilities. This and other factors reported by students to support their learning in intensive mode are consistent with supporting students to traverse the liminal space within the limited time available in intensive mode.

Research limitations/implications

Respondents from future cohorts will address the small participant numbers. Studies in only two units are reported. Studies in other disciplines are presented elsewhere.

Practical implications

The findings will be important to educators using intensive mode teaching in business, and researchers working within the framework.

Originality/value

This is the first study to explore the potential impacts of intensive modes of teaching on student understanding of threshold concepts and development of threshold capabilities.

Details

Education + Training, vol. 58 no. 5
Type: Research Article
ISSN: 0040-0912

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Article
Publication date: 1 January 1984

Anil K. Gupta and V. Govindarajan

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

Abstract

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.

Details

Journal of Business Strategy, vol. 4 no. 3
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 12 August 2014

Adrian Caldart, Roberto S. Vassolo and Luciana Silvestri

The purpose of this paper is to revise Burgelman’s idea (1991, 1994) that induced strategic processes is necessarily variation-reducing. In doing so, the authors explore…

Abstract

Purpose

The purpose of this paper is to revise Burgelman’s idea (1991, 1994) that induced strategic processes is necessarily variation-reducing. In doing so, the authors explore whether major change in a firm’s administrative system can be managed in an evolutionary fashion via induced variation-increasing mechanisms. In particular, the authors focus on a multi-business multinational firm in which different administrative systems were experimented simultaneously as a way to determine which of these systems provided the most conducive context for innovation and capability development.

Design/methodology/approach

The authors adopted an inductive perspective and developed a single case research project aimed at documenting the process of experimentation and subsequent selection and adoption of a new administrative system by a large multi-business multinational firm.

Findings

The paper’s main contribution is the concept of “induced variation”, understood as intra-organizational variation-increasing mechanisms deliberately created at the top level of the organization to trigger an intra-organizational evolutionary process of management innovation. This finding extends and modifies Burgelman’s discussion of induced and autonomous strategic behavior by showing that induced processes need not necessarily be variation-reducing, but may actually be variation-increasing. Additionally, the authors explain how an evolutionary process aimed at learning about the relative merits of alternative administrative systems through in vivo “reflection in action” (Schön, 1983) unfolds in a complex global organization.

Research limitations/implications

While the work provides several insights on the development of an evolutionary process leading to management innovation, its inductive nature limits its external validity and requires the development of further work for such purpose.

Practical implications

The authors explore the roles of regional organizations in creating new corporate capabilities for the MNC.

Social implications

The authors show how management capabilities developed in the Latin American context were rolled out to other locations.

Originality/value

The authors' findings confirm that major drastic reorganization initiatives can actually be approached using an evolutionary approach.

Details

Management Research: The Journal of the Iberoamerican Academy of Management, vol. 12 no. 2
Type: Research Article
ISSN: 1536-5433

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Article
Publication date: 3 May 2011

Jaakko Aspara, Juha‐Antti Lamberg, Arjo Laukia and Henrikki Tikkanen

This paper aims to offer a conceptualization of how and why corporate level strategic change may build on historical differentiation at business unit level.

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21236

Abstract

Purpose

This paper aims to offer a conceptualization of how and why corporate level strategic change may build on historical differentiation at business unit level.

Design/methodology/approach

Methodologically, an historical case study of Nokia Corporation's drastic business model transformation between the years 1987 and 1995 is reported.

Findings

The conceptual and historical work results in a process model of business model change, demonstrating how central business units feed strategic alternatives and capabilities to the corporate‐level transformation process.

Practical implications

The results highlight the importance of corporate level “market mechanisms' that allow promising strategic alternatives to emerge and select out inferior options. In this process, a key mechanism is the exchange of executives and cognitive mindsets between business units and corporate headquarters (CHQ).

Originality/value

The reported research offers an original contribution by showing the dynamic interplay of cognitive and organizational change processes, and highlighting the importance of building on existing capabilities and competencies despite the pressure to demonstrate strong turnaround activities.

Details

Management Decision, vol. 49 no. 4
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 1 April 2002

C.M. Ambe and K. Sartorius

Historically, South Africa’s apartheid policies had a negative effect on the financial performance of the South African beverage industry. This effect was characterised by…

Abstract

Historically, South Africa’s apartheid policies had a negative effect on the financial performance of the South African beverage industry. This effect was characterised by the non‐participation of South African companies in the global market and the presence of foreign enterprises in the domestic market. From 1994, South African industries have been increasingly exposed to new opportunities and forces. Globalisation, deregulation, changing manufacturing systems and the entry of foreign competitors in the 1990s exposed the local industry to competitive challenges in the domestic and the global market. This study examined the impact of changing levels of competition on the performance of strategic business units and the mediating role of management accounting in the South African beverage industry. The methodology employed to investigate this relationship comprised both a survey and a case study. The results indicate a positive correlation between the level of competition and the performance of business units. The results furthermore indicate that enterprises can utilise a management accounting system (MAS) as a strategic response to competition. The increased use of MAS will, in turn, improve the performance of an enterprise. Enterprises that do not respond positively to competition will not survive.

Details

Meditari Accountancy Research, vol. 10 no. 1
Type: Research Article
ISSN: 1022-2529

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Article
Publication date: 11 April 2021

Hezun Li, Na An and Junyong Liu

This paper aims to explore the relationship between the components of the management control system (MCS) based on the reform process of the management system of China…

Abstract

Purpose

This paper aims to explore the relationship between the components of the management control system (MCS) based on the reform process of the management system of China Resources Group and the influence of these components on the implementation effect of MCS.

Design/methodology/approach

This study uses an exploratory research method and an open-ended grounded theory approach to conduct six formal investigations and several in-depth interviews with employees and senior management in China Resources Group. This paper supplements these data by performing a documentary analysis of the internal documents of China Resources Group such as the statistical yearbook, business plan and meeting records.

Findings

This study puts forward four propositions. The formal strategic planning process creates an application environment for the strategy map and balanced scorecard (BSC), making it easier for an enterprise to adopt these tools. The combination of the strategy map and formal strategic planning helps to build the logical relationship between strategic goals and budget goals and strengthens the correlation between budget and strategy. In diversified organizations applying MCS, the strategy map and BSC facilitate the implementation of the strategy for specialized business units, while the financial measure system facilitates the implementation of the strategy for diversified business units. Strategic boundaries based on financial measures in the MCS help organizations determine the scope of strategic choices before implementing strategies.

Research limitations/implications

Because of the chosen research approach, the research results may lack generalizability and the influence of the strategic planning process on budget participation, budget slack and other budget behaviors has not been fully discussed. Therefore, future studies are expected to provide more evidence regarding strategic planning and budget behaviors.

Practical implications

Before establishing a strategy map and BSC, the enterprise should consider the application environment to ensure their feasibility and legitimacy and construct the BSC system under appropriate conditions. A formal strategic planning process should be formed within the enterprise; that is, a set of detailed management methods should be adopted and clear rules should be used to support the enterprise management control process. The enterprise should add strategic boundaries to the MCS to determine the scope of strategic choices and the budgeting bottom line.

Originality/value

This paper sheds light on the impact of the formal strategic planning process on the organization and contributes new evidence on the key success factors for implementing the strategy map and BSC, enriching the researchers’ understanding of the applicability of the BSC.

Details

Nankai Business Review International, vol. 12 no. 3
Type: Research Article
ISSN: 2040-8749

Keywords

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