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Management for Professionals Erik Jannesson Fredrik Nilsson Birger Rapp Editors Strategy, Control and Competitive Advantage Case Study Evidence Management for Professionals Forfurther volumes: http://www.springer.com/series/10101 ThiSisaFMBlankPage Erik Jannesson (cid:129) Fredrik Nilsson (cid:129) Birger Rapp Editors Strategy, Control and Competitive Advantage Case Study Evidence Editors ErikJannesson FredrikNilsson DepartmentofManagementandEngineering DepartmentofBusinessStudies Linko¨pingUniversity UppsalaUniversity Linko¨ping Uppsala Sweden Sweden BirgerRapp InstituteforManagementofInnovation andTechnology,Gothenburg Ljustero¨ Sweden ISSN2192-8096 ISSN2192-810X(electronic) ISBN978-3-642-39133-0 ISBN978-3-642-39134-7(eBook) DOI10.1007/978-3-642-39134-7 SpringerHeidelbergNewYorkDordrechtLondon LibraryofCongressControlNumber:2013950053 #Springer-VerlagBerlinHeidelberg2014 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodologynowknownorhereafterdeveloped.Exemptedfromthislegalreservationarebriefexcerpts inconnectionwithreviewsorscholarlyanalysisormaterialsuppliedspecificallyforthepurposeofbeing enteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthework.Duplication ofthispublicationorpartsthereofispermittedonlyundertheprovisionsoftheCopyrightLawofthe Publisher’s location, in its current version, and permission for use must always be obtained from Springer.PermissionsforusemaybeobtainedthroughRightsLinkattheCopyrightClearanceCenter. 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Printedonacid-freepaper SpringerispartofSpringerScienceþBusinessMedia(www.springer.com) Preface Forquitesometime,theareaknownasstrategyandmanagementcontrolhasbeen ofconsiderableinteresttoresearchersandpractitioners.Somewhatsimplified,this subjectconcernshowthecontrolsystemsoffirmsshouldbedesignedandusedin order to formulate and implement strategies that contribute to competitive advantage and sustained high performance. Since each firm is unique, strategies and controlsystemsmustalsobeunique.Firmsthatsucceedinestablishingcontroland formulating strategies that are internally consistent, while also appropriate to the environmentinwhichthefirmoperates,aremorecompetitivethanthosewherethis isnotthecase. Substantial research resources have long been devoted to identifying interrela- tionships in this area. Many articles, book chapters and entire books replete with valuableknowledgeonthesubjecthavebeenpublished.However,thereisalsoan abundanceofambiguousandcontradictoryfindings,notleastbecausemanystudies explore these relationships at a single point in time. It is also common for the researchdesigntocoveronlyonestrategiclevel(corporate,businessorfunctional level). In addition, almost all studies focus on a limited part of a control system, despite the existence of several control systems which should be interrelated and thusaffecteachother.Thereisthusagreatneedforresearchwithaholisticpointof departure, that is, research on the relationship between strategy, control and com- petitiveadvantageoverextendedperiodsandatseveralstrategiclevels,whilealso takingintoaccounttheexistenceofseveralcontrolsystemsinasinglefirm. This book reports on research with precisely this orientation. With one excep- tion,thestudiespresentedinthebookarebasedonresearchconductedindoctoral thesisprojects.Withoutadoubt,thesestudiesareuniqueinbothextentandfocus, andtheyprovidehighlyvaluablecontributionstotheresearchareaofstrategyand management control. They represent a considerable effort in regard to resources andinvolvementoveranextendedperiod.Moreover,allthefirmsandorganizations presentedareinterestingandexciting,eachwithafascinatinghistory.Thereaderis givenanin-depthlookintohowchangesintheenvironmentleadtoadjustmentsin strategiesandcontrolsystems.Itisalsoclearhowdifficultandchallengingitisto implement these changes and why such efforts are not always successful. But perhapsmostimportantly,thebookconveysin-depthknowledgeandunderstanding of how strategies and control systems affect competitive advantage and performance. v vi Preface This book is a consolidation of the research mentioned above, but it is not an ending.Wewillcontinuewithresearchonstrategies,controlsystemsandcompeti- tiveadvantage.Wearethereforeinterestedinyourfeedbackonthecontentofthe bookandnaturallyonanypointsthatareunclearandonanyomissions.Information onhowtoreachuscanbefoundintheIntroductiontothebook. Finally, we wish to thank the authors of the respective chapters for fruitful collaboration. In addition, we are deeply grateful to Associate Professor Adri de Ridder, who prepared the financial data presented in the Appendix. We wish to thank the Jan Wallander and Tom Hedelius Foundation, as well as the Tore Browaldh foundation, for providing part of the financing for this book project. Financial support was also received from the Institute for Management of InnovationandTechnology(IMIT)andtheSwedishResearchSchoolofManage- ment and Information Technology (MIT). Our thanks go to Dick Wathen and Donald MacQueen (Chap. 9) for their assistance in editing the language of the manuscript. Linko¨ping ErikJannesson Uppsala FredrikNilsson Ljustero¨ BirgerRapp May2013 Contents 1 IntroductiontotheCases:Theories,ConceptsandModels . . . . . . . 1 ErikJannesson,FredrikNilsson,andBirgerRapp 2 DrivingStrategicChangeatSaabAB:TheUseofNewControl Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ErikJannesson 3 HowManagementControlAffectstheImplementation ofStrategiesinaDecentralizedOrganization:Focuson FormalandInformalControlintheCaseofAtlasCopco . . . . . . . . 59 KlasSundberg 4 SuccessThroughConsistentStrategy:HowDoesScania’s ManagementControlMatter? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Nils-Go¨ranOlve 5 ChangingStrategiesandControlSystemsataGermanInsurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 SusannaPoth 6 Strategy,ManagementControlandOrganizationalDesign: EmpiricalIllustrationsfromSCAPackaging . . . . . . . . . . . . . . . . . . 139 KatarzynaCieslak 7 LinkingStrategyandInter-organizationalRelationships: TheCaseofVolvoandScania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 ZitaAmbrutyte˙ 8 TheRoleofITSystemsintheStrategyProcess: TheCaseofElectrolux . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 FredrikNilssonandJanLindvall 9 Funding,StrategiesandManagementControlSystems: EmpiricalEvidencefromTwoChamberOrchestras . . . . . . . . . . . . 213 FredrikNilssonandAnna-KarinStockenstrand vii viii Contents 10 ConclusionsandImplications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 ErikJannesson,FredrikNilsson,andBirgerRapp Appendix:ChoicesofMethod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 About the Authors Zita Ambrutyte˙ is currently a management consultant in the Mergers and Acquisitions sector as well as on investment-related Lithuanian governmental projects.SheisalsoaVisitingLecturerinManagementControlandothersubjects at the International BusinessSchool of Vilnius Universityand with the Executive ProgrammeoftheInternationalSchoolofManagementinVilnius,Lithuania. Katarzyna Cieslak is Acting Assistant Professor in the Department of Business Studies at Uppsala University. Her PhD thesis was on the role of controllers in organizations and the impact of organizational context on this role. Her research concerns the interplay between management control and IT in organizations, as wellasissuesofcorporategovernance,withafocusonexecutivecompensation. Erik Jannesson is Assistant Professor in Economic Information Systems at Linko¨ping University. His research is focused on strategic management control, in particular the relationship between strategy and management control on and betweendifferentlevelsinlargeorganizations.Asaresearcherandconsultant,heis alsointerestedinquestionsregardingmanagementcontrolandvaluecreationfrom asustainabilityperspective. Jan Lindvall is Associate Professor in the Department of Business Studies at Uppsala University, where he conducts research and teaches management control relatedtoIT.Heisespeciallyinterestedinhownewtechnology,suchasEnterprise Resource Planning (ERP) systems and Business Intelligence, can influence trans- parency,accountabilityandmotivationinglobalcompanies. FredrikNilssonwasappointedProfessorofBusinessStudies,especiallyaccounting, atUppsalaUniversityin2010.Previously,hewasProfessorofEconomicInforma- tion Systems at Linko¨ping University and Institute of Technology. His research focuses on how information systems (e.g. management control systems, financial accounting systems and production control systems) are designed and used to formulateandimplementstrategies. Nils-Go¨ranOlveisAdjunctProfessoratLinko¨pingUniversityandGuestProfessor at Uppsala University. He is also a consultant and author of numerous books on managementcontrolandcontrollers–inparticularhowtheyandnewformsofIT ix