The use of “Levers of Control” to control strategy and drive strategic change in corporatization

University essay from Lunds universitet/Företagsekonomiska institutionen

Abstract: Purpose: The purpose of this thesis is to contribute to the “Levers of Control” theory through empirical insights on the use of levers of control to control strategy and drive strategic change in a corporatized context. Methodology: A single-case study built on a qualitative research strategy around a revelatory case of corporatization has been chosen to fulfill the purpose of this study. Data collection has been conducted primarily through semi-structured interviews, along with complementary relevant documentation. Data was subsequently analyzed employing a deductive content analysis approach, in which techniques of pattern matching and explanation building were used. Theoretical perspectives: The theoretical foundation of this study consists of Simons’ (1995) “Levers of Control” framework. The framework includes the use of belief systems, boundary systems, diagnostic control systems and interactive control systems in order to control strategy and help drive strategic change. The framework is further complemented by subsequent theoretical developments as well as research pertaining corporatization and public administration. Empirical foundation: The study describes and analyzes how Folktandvården Skåne, which underwent corporatization in 2014, makes use of the levers of control to control strategy and drive the strategic change deemed necessary. The principal empirics presented stem from interviews with the organization’s CEO, one division manager, two clinic managers, two controllers and one HR-partner. Conclusions: The findings show that Folktandvården Skåne balances the use of all levers of control to implement intended strategy and encourage emergent strategy in order to ensure success through both predictable goal achievement and innovation. It was also found that the use of all levers of control was initiated by top management with deliberate differences in both timing and purpose to satisfy urgent demands to achieve the desired strategic change. Furthermore, the study concluded a need to broaden the theoretical framework by separating the components of strategic validity controls and interactive use of controls within interactive control systems, reimagining the concept of belief systems, and including the prospect of widening and adapting boundaries. Lastly, the understanding of how and why formal levers of control are used is enhanced through utilizing a wider set of the control “package” including informal control and a broader definition of formal controls as they interact in a two-way relationship.

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