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2014 | Book

Introduction to the Cases: Theories, Concepts and Models Read chapter Read first chapter

Strategy, Control and Competitive Advantage

Case Study Evidence

Editors: Erik Jannesson, Fredrik Nilsson, Birger Rapp

Publisher: Springer Berlin Heidelberg

Book Series : Management for Professionals

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

How should firms’ control systems be designed and used to formulate and implement strategies that will contribute to competitive advantage and sustained high performance? This book offers some thought-provoking suggestions.

It contains empirical studies of such diverse manufacturing enterprises as Atlas Copco, Electrolux, Saab, Scania, SCA Packing and Volvo, as well as an insurance company and two chamber orchestras. All firms and organizations presented offer interesting and exciting insights, each in a specific way and each with a fascinating history.

The book presents research on the relationship between strategy, control and competitive advantage over extended periods and at several strategic levels, while also taking into account the existence of multiple control systems in a single firm or other organization. Readers are offered an in-depth look into how changes in the environment lead to adjustments in strategies and control systems. It is shown, in addition, how difficult and challenging it can be to implement these changes, and why such efforts are not always successful. But perhaps most importantly, the book conveys an in-depth understanding of how strategies and control systems affect competitive advantage and performance.

In both its coverage and focus, the book is unique. Not only does it provide valuable contributions to the research field of strategy and management control; it also represents a substantial commitment in terms of resources and involvement over an extended period.

The book is highly recommended to researchers, practitioners, graduate students and all others interested in this area.

Table of Contents

Frontmatter
1. Introduction to the Cases: Theories, Concepts and Models
Abstract
In 2005 the book titled Understanding competitive advantage: The importance of strategic congruence and integrated control, by Fredrik Nilsson and Birger Rapp, was published. In the introduction to the book, the authors (p. 3) present the principal elements of their starting point and their overall contribution as follows:
Erik Jannesson, Fredrik Nilsson, Birger Rapp
2. Driving Strategic Change at Saab AB: The Use of New Control Practices
Abstract
There has long been a demand for research showing the significance of relationships between strategies and control for the competitive advantage of complex corporate groups (see for example Bhimani and Langfield-Smith 2007; Langfield-Smith 1997; Otley 1980). Moreover, a number of such studies have been conducted, but they have not adopted the holistic approach highlighted by Nilsson and Rapp (2005), where strategies and control are treated at the corporate, business and functional levels to obtain a true understanding of their importance. More specifically, the authors maintain that it is essential to establish strategic congruence (mutually coherent corporate, business and functional strategies) and integrated control (control systems with a flow of consistent information within and between the principal mechanisms of control) in order to be competitive.
Erik Jannesson
3. How Management Control Affects the Implementation of Strategies in a Decentralized Organization: Focus on Formal and Informal Control in the Case of Atlas Copco
Abstract
This chapter studies how the control systems of Atlas Copco, a Swedish industrial company, have changed and how different systems interact to implement strategies and achieve financial targets. More specifically, the chapter treats how formal management control is supplemented by informal control in order to implement strategies and achieve success.
Klas Sundberg
4. Success Through Consistent Strategy: How Does Scania’s Management Control Matter?
Abstract
For a long time, Scania has remained remarkably consistent in its competitive positioning. Its origins date back to the early 1900s, and since 1924 it has produced trucks and busses in Södertälje, a town close to Stockholm. From 1969 until 1995 it formed part of Saab-Scania, which at that time was a major industrial group also producing passenger cars and aircraft, but Scania retained its strong identity. Business units within the group deployed very different management control practices. Hence, Saab-Scania was acting as a conglomerate, in spite of operating in industries where synergies would seem possible. Throughout this period, Scania was the most profitable part of the group. After more than a quarter-century it again became a separate company in 1995.
Nils-Göran Olve
5. Changing Strategies and Control Systems at a German Insurance Company
Abstract
In this chapter an excerpt from a case study of a German insurance company is presented. The study covered the development of the insurance company between 1995 and 2010. As the insurance industry in Germany was de-regulated in 1994, the chosen time frame made it possible to study how the insurance company reacted on the market, which was changing from a protected to an open and more competitive one. Although the market was de-regulated in 1994, it has only very slowly become more competitive. The case study shows that even if a semi-protected, slowly changing environment gives management some more time for reflection, a company still needs to react to changing conditions. If management hesitates too long, there is a high risk that a company will lose its competitive advantage.
Susanna Poth
6. Strategy, Management Control and Organizational Design: Empirical Illustrations from SCA Packaging
Abstract
As pointed out in the introductory chapter, how to create competitive advantage and improve organizational performance is a central question in the strategy field, and numerous perspectives have been applied in order to understand competitive advantage. This book proposes one explanation based on a contingent fit between strategies and management control systems (Nilsson and Rapp 2005), and the current chapter outlines organizational issues linked to the fit between a management control system and strategy at SCA Packaging (SCAP), a strong competitor on a paper-packaging market in Europe. At the time this chapter is being written, SCAP belongs to the SCA group, which was founded in Sweden in 1929. SCAP is ‘a leading European company in customer-specific packaging, with a focus on state-of-the art packaging design and local service close to customer facilities’ (www.​scapackaging.​com). SCAP emphasizes its innovation focus, and the company has received numerous awards in recognition of the innovative design of its products. While trying to foster innovative design in its products, SCAP also pays attention to production costs and to ensuring the sustainability of its operations. The company has been granted numerous sustainability and business ethics awards.
Katarzyna Cieslak
7. Linking Strategy and Inter-organizational Relationships: The Case of Volvo and Scania
Abstract
Strategic congruence and integrated control to improve strategy continuously are seen as one of the ways towards creating competitive advantage and is the central theme of this book (Nilsson et al. 2011; Nilsson and Rapp 2005). This chapter extends the discussion in Chap. 4 in this volume, presenting Scania as an example of how strategic awareness and priorities are conveyed by the integrated management controls of the organization. The example of Scania is further explored in a discussion on how different strategies adopted by two companies result in different control systems for managing inter-organizational supplier relationships. Scania’s truck manufacturing is compared to Volvo’s truck business, which has also demonstrated sustainable management control systems and a strong culture of strategic planning and performance controls leading to goal achievement.
Zita Ambrutytė
8. The Role of IT Systems in the Strategy Process: The Case of Electrolux
Abstract
Globalization has sweeping consequences for the competitive situation of firms. Markets are integrated, customers are more demanding, new competitors appear, etc. These developments change the conditions for control in companies (Rom and Rhode 2007; Sutton 2006). Consequently, the subject of strategy has acquired greater importance and attracted the interest of many scholars in the field of management control (see for example Bhimani and Langfield-Smith 2007). For a long time research focused on studying how the design and use of management control affect implementation of strategies. In recent years, there has also been a growing interest in examining the role of management control in formulating strategies (Langfield-Smith 2007). This is a welcome expansion of the focus of research in the field, since the primary purpose of the strategy process is to channel attention and distribute it to the areas of special importance for making the firm a strong competitor (cf. Ocasio 1997; Ocasio and Joseph 2008).
Fredrik Nilsson, Jan Lindvall
9. Funding, Strategies and Management Control Systems: Empirical Evidence from Two Chamber Orchestras
Abstract
In recent years a great deal of interest has been focused on studying the relationship between strategy and management control systems (MCS). However, it is well known that the results from these studies are somewhat ambiguous and contradictory. In an attempt to explain these types of conflicting results, as well as increase our understanding of the relationship between strategy and MCS, two different, but interrelated, areas of research directions have evolved.
Fredrik Nilsson, Anna-Karin Stockenstrand
10. Conclusions and Implications
Abstract
In this final chapter we discuss the book’s principal conclusions based on its empirical, theoretical and practical contributions. This is done in six subsections, each focusing on a specific issue. In the first section, we discuss the significance of strategic congruence and integrated control; in the second, the importance of the environment for internal changes and competitive advantage, as well as performance. We devote the third section to the control mix, the fourth to the role of IT systems in creating strategic congruence and integrated control. Then, in the fifth section, we treat questions of methodology before going on to the sixth subsection, where we conclude with a discussion on central issues where further research is needed. We would advise the reader that as the sections are clearly interlinked, certain discussions recur in several places in the chapter.
Erik Jannesson, Fredrik Nilsson, Birger Rapp
Backmatter
Metadata
Title
Strategy, Control and Competitive Advantage
Editors
Erik Jannesson
Fredrik Nilsson
Birger Rapp
Copyright Year
2014
Publisher
Springer Berlin Heidelberg
Electronic ISBN
978-3-642-39134-7
Print ISBN
978-3-642-39133-0
DOI
https://doi.org/10.1007/978-3-642-39134-7