Corporate Control and the speed of SBU decision making

Item Type Journal paper

Decision speed has long been recognized as a critical determinant of firm performance, particularly in dynamic environments. Extending prior studies, which have largely focused on firm-level decision speed in small- and medium-sized organizations, this study explores how control mechanisms set by corporate headquarters in multibusiness firms influence decision speed at the strategic business unit (SBU) level. Using a multimethod approach, we first inductively derive six types of corporate control, before deductively examining their effects on SBU-level decision speed in five international multibusiness organizations. Our results suggest that three corporate control types enhance decision speed (goal setting, extrinsic incentives, and decision process control); two have no effect (negative incentives and conflict resolution); and one has a negative effect (strategy imposition). By integrating results from our qualitative and quantitative analyses, we are also able to identify transparency/alignment, outcome orientation, participation, trust, and timely feedback as the key mechanisms accounting for these effects.

Authors Kownatzki, M.; Walter, Jorge; Floyd, Steven & Lechner, Christoph
Projects Lechner, Christoph & Kreutzer, Markus (2007) Control Modes in Strategic Initiatives: Balancing Formal and Informal Control [fundamental research project]
Journal or Publication Title Academy of Management Journal
Language English
Subjects business studies
HSG Classification contribution to scientific community
HSG Profile Area SoM - Responsible Corporate Competitiveness (RoCC)
Refereed Yes
Date October 2013
Publisher Academy of Management
Place of Publication New York
Volume 56
Number 5
Page Range 1295-1324
Number of Pages 30
ISSN 0001-4273
Publisher DOI 10.5465/amj.2011.0804
Depositing User Prof. Dr. Christoph Lechner
Date Deposited 03 Dec 2013 18:37
Last Modified 23 Aug 2016 11:17


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Kownatzki, M.; Walter, Jorge; Floyd, Steven & Lechner, Christoph (2013) Corporate Control and the speed of SBU decision making. Academy of Management Journal, 56 (5). 1295-1324. ISSN 0001-4273

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