Attaining Alignment Across Autonomous Profit Centres
Date
2011-03-18
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Abstract
Many large companies are creating decentralised business models where
strategic business units are autonomous and empowered. For related-diversified
firms to succeed, a certain amount of alignment is necessary to obtain synergy
and create shareholder value.
Interventions and processes are required to facilitate alignment and collaboration
between Strategic Business Units (SBUs), without undermining the benefits
sought by decentralisation. This study aims to identify and evaluate the methods
used.
The research method used was a qualitative case study conducted in the
interpretive paradigm. The case site, FirstRand Bank, provides an opportunity to
examine a contemporary phenomenon in a real-life business context.
The study found that cultural interventions were more effective in enabling and
inducing alignment across business units than structural or other methods. The
research also revealed that the methods used are most successful where the
SBUs are independent. Where interdependence between units exists, methods to
achieve alignment need to change.
The study may be useful to other organisations with similar challenges. In
addition, as the study provides insight into the FirstRand Bank Group, it will be
useful to FirstRand stakeholders seeking to understand the company.
Description
MBA - WBS