Manage your innovation

Abstract: Course BUSN79 Degree Project Authors Rebecca Petersson & Ivar Stiernspetz Advisor Anna Glenngård Examiner Anders Anell Five key words Management control, Simons’ Levers of Control, Ambidexterity, Explorative innovation, Exploitative innovation. Purpose: The study aspires to explore if and how exploitative and explorative units within the same firm require different adaptation of Management Control Systems (MCS). The study further aims to discover how Swedish manufacturing firms apply their MCS in order to steer the innovation processes in line with organisational objectives. Methodology The paper is based upon a single case study with a qualitative approach. Primary data was collected through semi-structured interviews and a questionnaire previously validated by Bedford (2015). Theoretical perspectives: The theoretical framework is developed from existing theory within innovation and management control. More specifically, a view on innovation as exploitation, exploration (March, 1991) and ambidexterity (O’Reilly & Tushman, 2013), and Simons’ (1994) Levers of Control (LOC) together with Adler and Borys’ (1996) enabling and coercive controls. Empirical foundation: The data was collected from four semi-structured interviews complemented by a questionnaire and secondary data from an annual report. Conclusion: The findings of the study show that Swedish ambidextrous manufacturing firms more coercively steer exploitative activities with diagnostic controls and boundaries systems while applying more enabling control mechanisms in an explorative environment through interactive controls influenced by a beliefs system. This study further demonstrates that ambidextrous firms may balance their ambidexterity by separating units that specialise in the different types of innovation.