The purpose of this study is to use the literature as a framework to answers our two research questions. Because our questions are profound, and therefore hard to measure, an analytical research approach that promotes measurement and a quantitative model is not appropriate for our study. Since the term strategy is an intangible phenomenon, information regarding the subject can only be gathered through deep interviews. For such studies the qualitative research strategy is preferred (Gilljam, Esaiasson et al 2004).
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Our purpose is to describe the strategy applied in our case company by using the literature we have compiled as a framework. Even though there might be some instances of normative conclusions for how a strategic management controls system should be formed, there is no direct empirical research tied to that conclusion in our thesis. Therefore our research approach neither derives from a normative research approach. Our study should rather be classified as a descriptive one. Our main purpose is to describe how a strategy can be defined and how it can be used as a management control instrument. The descriptive study is used to describe a certain phenomenon through previous theories and thereby testing the validity of these theories in practice. The descriptive study leads to a deductive research approach. The deductive approach is used when the research is based on previous theories. The theories used states what type of empirical information that should be gathered, how it should be interpreted and how the results can be related to the theories to describe the empirical material. This research approach consist the base of our thesis.
Since we wanted to identify the strategy of Lema, the best way to gather this information was to interview the staff of the management team. Through our interviews we were able to gather adequate empirical information to interpret and describe Lema’s strategy based on our theoretical framework. Due to our emphasis on interviews we derive our interpretation of reality through an operator’s perspective. This perspective concludes that reality is a social construction (Gilljam, Esaiasson et al 2004) and it is interpreted differently by each individual. Therefore the truth consists of coherency among different individuals’ interpretations of reality. This perspective is consistent with our choice of conducting four interviews to validate the coherency between each individual’s interpretations and thus we attempt to build a reliable empirical data of reality.
By studying and summarizing the works of Michael Porter and Chan Kim & Mauborgne’s Blue Ocean Strategy we have come up with a coherent theoretical work frame for examining how a strategy can be defined in an actual business. Further to this, we have investigated how the strategy can be executed by using Kaplan & Norton’s theories about Strategic Mapping and The Balanced Scorecard as well using Simon’s strategy implementation theory Levels of Control.
According to Robert K. Yin (2006), a case study is that which discusses a contemporary fact in its real context. A case study also supports the use of several theoretical frameworks to describe empirical information. In accordance with this guidance we realized that this was an appropriate method for achieving the purpose of our thesis. Therefore our research method is based on an in depth, single case study in which we examined both the strategy and strategy management control system. Further to this we also wanted to make clear how the different theories could be used as complements to one another and use them together to describe the strategy of a company.
Selection of Case Study Objects
In order to be able to apply the theories that we have chosen for strategy definition and strategy implementation, we thought that a company with a clear market position would be suitable for us. This because an evident market position often mean a distinct value proposition, which facilitates the process of defining a strategy (Porter, 1996, 1998). Since our theoretical framework revolves around many different theories, it was also important that the company was of an appropriate size so that we would to be able to assemble the empirical and theoretical material into one comprehensible context. When searching for interesting companies that could be appropriate for our thesis, we became more and more interested in Lema because they have a unique concept and position. While the vast majority of companies have suffered during the recent financial crisis, Lema has defied this general pattern of decline and prospered. In mid-2009 their growth rate was higher than it had been for almost half a decade, despite the prevailing crisis. The fact that Lema has defied the general condition of the market suggests that they are in some way distinguished from their competitors. This triggered our interest for a more detailed study of the strategy that has contributed to Lema’s success.
After some initial contacts with Lema and receiving their support we decided to build our case study around their company.
In order to find a practical and valid theoretic framework for strategy definition and strategic management control systems, we started our literature search by looking at previous studies within the field of strategic management controls.
This was done by searching the Swedish database “Uppsatster.se” and through Gothenburg University’s own database GUNDA. We used key search words such as “strategy”, “strategic management controls” and “strategy implementation” to find relevant studies within the specified field. After covering a broad number of previous works we found several commonly used articles and books. We later searched for these articles by entering their specific article names within the scientific databases EBSCO, Emerald and Google scholar. The books that we used in our thesis were found in the various Gothenburg University libraries by searching on either the author’s name or the title of the book. We first briefly overviewed the articles and books that we had found in order to evaluate whether they were relevant to our research question or not. The sources that we found relevant were later used to create our theoretic framework. We were also given literature guidance from our supervisor Ingemar Claesson and from a business case competition’s (BI-Marathon) readings recommendations. The coherency among the sources we found through the database searches and those sources we received from our supervisor and reading recommendations from the business competition gives credibility of relevancy to our sources. Since our thesis converge two interconnected discourses; those of strategy literature and those of management control, we consider our literature overview of five models quite broad. This approach enabled us to apply a combination of appropriate theories to be able to answer our research questions in a manner that we saw fit.
Through the literature search and understanding of the previous studies we created a theoretical framework. This theoretic framework guided our collection of empirical data in the case study so that the theoretic framework could later describe and interpret the empirical information.
Selection of Respondents
In the process of selecting respondents we assumed that we needed to interview employees at leading positions within Lema in order to gain information from those with significant insight into the strategic processes. In order to gain a broad perspective of Lema business and activities we chose to interview the CEO, CFO, Purchasing Manager and the Store Manager of the company. By interviewing these respondents we gained insight into the different areas relevant to our study.
Our respondents were:
- Boris Lennerhov, CEO, Lema Ullared (3/5 16.00-18.00)
- Per Andreasson, CFO, Lema Ullared (3/5 10.00-12.00)
- Christian Henriksson, Store Manager, Lema Ullared (4/5 10.00-12.00)
- Carin Kjellgren, Purchasing Manager, Lema Ullared (5/5 10.0-12.00)
We have designed our interview template based on the theories that we have compiled so that the interview would be thematic and thereby congruent with the purpose of our thesis (Gilljam, Esaiasson et al 2004). Our interview questions were designed in a semi-structured way, as an entirely structured interview often leaves too little room for respondents to answer freely (Patel & Davidsson, 1994) A semi-structured interview also enabled each respondent to focus on the questions he/she found more relevant. We used the same general design for all interview templates in order to get a broad perspective of the interview subjects and to cross-reference these answers with one another to ascertain the answers coherency.
Before the interview we met with the respondents to briefly explain to them on the different areas that we would be discussing so that our respondents would be acquainted with the topics of the interview. However we did not send the exact interview template, since we did not want our respondents to give us “automated” answers. None of the respondents requested to be anonymous, which contributed to the credibility of our research (Gilljam, Esaiasson et al, 2004).
To facilitate the data processing and ensure the reliability of data received from our interviews we printed out our interview templates and used them during the interviews. Answers were document by both computer and by hand to ensure reliable answers. Since the interviews were held in Swedish in order to make sure that our respondents felt comfortable and to be able to gather more information, we had to first translate the raw data into English. The interviews were recorded for validity check during the data processing.
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After documenting all answers directly after each interview we put together all four answers and concluded the coherent answers of each performed interview into one final main answer. This process is consistent with our research philosophy of the operator’s perspective that reality is based on coherency among each individual’s interpretations.
Due to our interview structure, which is based on our theoretic framework, we could quite easily relate the answers to our theories. We later analyzed the empirical data with our theoretic framework to answer our two research questions.
Method Critics – Validity and reliability
The validity of research studies is the most difficult and most important problem in empirical social studies. (Gilljam, Esaiasson, 2004) The term validity can be defined in three different ways:
- Congruency between the theoretic definition and the operational indicators
- Free from systematic errors
- The research examines what we intend to research
The first two definitions can be categorized as conceptual validity while the third definition is categorized as result validity. (Gilljam, Esaiasson ,2004)
These two categories are related to each other by the following formula:
Conceptual validity + Reliability = Result validity (Gilljam, Esaiasson et al, 2004)
The greatest validity problem is that of conceptual validity. The problem of social science empirical research is that many theoretic terms are abstract and intangible and therefore makes it difficult to use proper operational indicators that measure the theoretic term. Therefore improper results and wrong conclusions are created by using inconsistent operational indicators to measure the theoretic term.
Further for the proper result to be valid, the reliability of the study must be high. Reliability implies that the thesis is free from unsystematic and random errors. These kinds of errors might occur due to stress, carelessness or sloppy notes, misunderstood interview answers, negligence of certain information during data processing etc. However it is argued that conceptual validity is more important than reliability. (Gilljam, Esaiasson et al, 2004) For example if the operational indicators used in a study does not measure the intended theoretic term the results are flawed, but if the conceptual validity is correct and the reliability is low the results are slightly skewed though the overall result is still accurately measured.
Since the theoretic terms strategy and management control systems are very abstract and interpreted differently among researches and professionals. There are no unanimous operational indicators that properly define these two terms or any unanimous framework in which these two terms can be described. However in this thesis we have implied a theoretic framework that guided us how to describe strategy and through this framework we formed interview questions that could be seen as our operational indicators. Thereby we attempted to achieve as good conceptual validity as possible.
To increase the reliability of our thesis, we taped all our interviews and performed the same interview with our four chosen respondents. We used structured interview templates printed on A4 paper that would provide a clear guide for notes and made it easier for us to refer answers to our literature framework. We transcribed the answers directly after the interviews to make sure that the answers were correctly documented. Still the reliability for this study might be imperfect because our behavior during the interview might have affected the respondents’ answers. However we tried to prevent this so-called interviewer’s effect (Denscombe, 2000) by reacting as neutral as possible to the respondent’s answers. Further, Lema has not worked with any kind of strategy controls therefore some respondents were unfamiliar with our subject. If the respondents had read through our content email and prepared a bit before our interviews, their answers might have been better.
Since we only conducted four interviews with the management team of Lema our empirical finding might include a large amount of their subjective assessments. It would have been better to interview a larger number of respondents within the management team and even conduct the same interviews with external industry experts5 to further validate the answers of our respondents from Lema.
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