Implementing business unit strategies: the role of management control systems

This study examines in detail how the toolmakers, Sandvik Bahco have designed and used their management control system to implement their chosen differentiation strategy. Unlike most other studies in this area we have chosen to describe and analyse the control system at the management and the operational levels. The study shows that changes in the learning process at the operational level elicit a need for more, and more comprehensive, information. This means that the borderline between the control systems at the two organisational levels is beginning to dissolve. However, it becomes no less necessary that a control system should be highly adaptable. Rather, it is a question of using a frame of reference that is partially common to the two organisational levels in order to create a meaningful dialogue between them. In this way it is possible to facilitate the choice of strategic orientation as well as its implementation.