Levers of organization design: theoretical backround, operationalization, and empirical evidence from the customer goods industry

While the concept of diagnostic vs. interactive use of control systems originating from Simons' "Levers of control" (1995) has gained steady attention from management accounting researchers, his propositions introduced in "Levers of organization design" (2005) have not been examined neutrally as of today to my knowledge. The first part of my dissertation gives a literature review on the controllability principle, since the notion of controllability lies at the heart of the levers of organization design framework (Simons, 2007). The second section aims at operationalizing the four organizational spans described in "Levers of organization design" for survey research. The third and final part gathers empirical evidence on the two central propositions introduced in the foregoing section: first, it utilizes two types of configuration fit measures to test contingency hypotheses on the relationship between business unit strategy, the configuration of Simons’ spans, and effectiveness, where the spans should be wider for managers of market-facing units in business units adopting a product differentiation strategy as opposed to managers operating under a low cost strategy; second, the study tests, whether there is a positive correlation between the proposed configuration of balance of resources and business unit effectiveness. Based on a survey of 134 marketing directors of business units listed under consumer goods in the German-speaking area, the results yield partial support for the first set, but to some extent contradict the second set of hypotheses. First, fit between strategy and the spans’ configuration yields a significant positive correlation with effectiveness for product differentiation business units, whereas the results pertaining to low cost units remain indistinct. Second, regardless of strategic orientation, effectiveness levels are significantly higher for business units whose marketing directors are supplied with a surplus, rather than a balance, or lack of resources, respectively.