Building the group without busting the businesses
Time: Thu 2020-11-05 10.00
Location: https://kth-se.zoom.us/webinar/register/WN_7NHwFqzfT6m6gS7TUCkobA, Lindstedtsvägen 26, F3, Stockholm (English)
Subject area: Industrial Economics and Management
Doctoral student: Pontus Wadström , Management & Teknologi
Opponent: Professor Tobias Fredberg, Chalmers University of Technology
Supervisor: Professor Matti A. Kaulio, Industriell ekonomi och organisation, Industriell ekonomi och organisation (Inst.); Docent Jannis Angelis, Industriell ekonomi och organisation (Inst.); Svante Schriber, Stockholm Business School, Stockholm University
Purpose. This thesis contributes to the strategy literature by investigating how multi-business firm strategizing aligns with corporate and business strategy. To fulfill this purpose, the following research question is posed: how is corporate and business strategy alignment balanced in multi-business firm strategizing? The thesis expands the literature of corporate strategy, strategizing, and strategy as process and practice (SaPP) by providing insights into a real life challenge encountered in a global dominant player in the engineering, construction and real-estate industry (E&C). This challenge was voiced as: “how can we align the group of businesses to leverage on our group’s size and diversity without limiting the individual businesses’ responsiveness?”
Design. I describe my approach design as immersed participatory insider research with retrospective reflection and theorizing. The approach contains elements of action research. It was phenomenon driven rather than driven by a gap in theory. As data and theory were explored, gaps in the literature were identified, and questions were formulated and answered. A single case study design was used to explore the extensive and fine-grained data obtained through the privileged access granted me by my employment in the firm studied. I collected data in real time over the course of a three-year strategy initiative. The data included strategy documents, interviews, work material from strategy workshops and meetings, calendars, meeting minutes as well as field notes. Data was analyzed using qualitative methods.
Findings. Corporate and business strategy alignment could be seen as balanced. This balance aimed at enabling corporate synergies by utilizing the size and diversity of a multi-business firm without limiting the responsiveness of the incorporated businesses. In strategizing, this balance had to be continuously managed. Participation in strategizing influenced the balance and afforded ownership of strategies to the businesses, facilitating learning and subsequently firm-specific knowledge, which could then generate synergies. Employing strategy tools in corporate strategizing facilitated a common language as the tools chosen prescribed the outcome format by defining critical concepts used in strategizing. Tools also facilitated comparison and learning from the group perspective. The strategy professionals managing and facilitating of the strategizing process and practices resulted in synergies through common ways of strategizing while still allowing business managers their own strategy agendas.
Aligning corporate and business strategy in terms of process and practices resulted in cost and growth synergies for the corporation without significantly limiting the businesses’ responsiveness while content alignment primarily results in cost synergies and limited business responsiveness.
Conclusion. The findings of this study contribute to the corporate strategy literature, strategizing theory and the strategy as process and practice research stream by explaining how multi-business firms strategize and how different of firms’ approaches to strategizing manages the balance of corporate and business strategy alignment in a variety of ways. By highlighting and combining the process and practice perspectives with corporate strategy, understanding of the domains, both collectively and individually, is increased.
Managerial implications. The findings of the study provide insights into how multi-business firms can enable corporate synergies without limiting the incorporated businesses’ responsiveness. However, organizations may have different levels of ambition regarding synergies, and consequently have different approaches regarding how to manage the balance of corporate and business strategy alignment. Recommendations as to how participation, strategy tools, and strategy professionals can be used in the organizations’ strategizing are offered.
Limitations and future research. Case studies are suitable for probing ‘how’ questions and providing ‘thick’ descriptions. While empirically rich, the findings of this thesis are limited by the context of the single case. Future research is therefore warranted to confirm, contradict or refine the findings and conclusions of this study.