What Anchors New Strategies? The Role of MCS Hierarchies in Strategic Change Towards Sustainability

Detta är en D-uppsats från Handelshögskolan i Stockholm/Institutionen för finansiell ekonomi; Handelshögskolan i Stockholm/Institutionen för redovisning och finansiering

Sammanfattning: In this paper, we conduct a single case study of the R&D department of TransportCo to explore the role of hierarchies within MCS (Management Control System) packages in reprioritizing R&D efforts to drive strategic change towards sustainability. Through integrating strategic change literature and the notion of anchor practices, we show how MCSs play unequally important parts in implementing strategic change. In our case firm, we find that a new interactive budgeting forum took the role of anchor practice and was crucial in redirecting R&D investments in the early stages of strategic change, through what we refer to as 'strategic anchoring'. However, the budgeting forum was unsuccessful in mitigating 'disharmony' between different interpretations of the core identity (the 'constitutive rule') of the firm. To compensate, management created independent MCS packages within R&D to redirect resources in accordance with the new strategy. Unlike previous research on MCSs in strategic change towards sustainability, our findings highlight the central role of hierarchies in periods of such change. By studying disharmony between different interpretations of the constitutive rule, we also elaborate on the tensions between profitability and sustainability.

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