Strategy Execution: An Integrative Perspective and Method for the Knowledge-Based Economy

Abstract

Within the field of business administration, in research and in the practice of business, the issue of strategy execution lacks a generally accepted paradigm. Strategy execution so far has not received the attention it should be given in view of its critical role in the performance of the firm, especially with the growth of complexity in organizations. The attention that is usually given to strategy execution in the strategy literature and especially in popular management books is, with a few exceptions, not linked to the system of management control being the function responsible for the system of strategy execution, especially through the resource allocation process. Vice versa, within the function of management control also divergent schools exists on strategy execution, and the field of management control under influence of the capital market has drifted too much away into management accounting. The paper aims to build bridges between various schools in strategy, and practice, on strategy execution. The motivation for this is that the organization of information in today’s intangible capital based firms is of more importance, as is the traditional Weberian hierarchical structure. Especially a redesigned resource allocation process with additional planning dimensions to organize information, turns out to solve the problem of integration across divisions, business units and resource departments thus solving the problems with matrix organizations, project portfolio management, end-to-end processes, etc. The paper presents a solution to the limitations of Bower’s bottom-up resource allocation process, using the system of Kaplan & Norton, but modifying their system for the need of organized complexity. This integration is achieved by taking the complexity of the modern firm as an integrative viewpoint.

Keywords: Strategy Execution, Bower's bottom-up resource allocation process, Kaplan & Norton's management system, resource allocation, management control, intangible assets, human capital, new theory of the firm

JEL Classification: G31, M10, M41