Alignment of Strategy with Structure Using Management Control Systems

Alignment of Strategy with Structure Using Management Control Systems

Alignment of Strategy with Structure

Executives of multibusiness firms are increasingly using management control systems (MCS) to align corporate strategy with organizational structure to create synergies across business units. Senior managers find that it is no longer practical to expend vast resources to continually restructure their organizations in order to align with changes in strategy and environmental conditions (Luke, Walston and Plummer, 2004). Instead, more organizations are learning a far more effective approach–choose an organizational structure that works without major conflicts, and then design MCS to align that structure with strategy (Kaplan and Norton, 2006).