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Jurnal

Jurnal Ekonomi & Bisnis Indonesia

Keyword

strategy implementation, decentralization, participation, attitude, system of fit.

Pengarang

Bambang Riyanto

Subject

  1. ECONOMIC
  2. BUSINESS

    [Abstrak]

        The
    performance of a business unit, to a large extent, is determined by the quality
    of its strategy and how well the strategy is implemented. This study examines
    the effect of strategy implementation on performance. In particular, it
    investigates the extent to which the fit between two crucial strategic supporting
    systems, namely decentralization and budget system ,  and managers ‘ attitude with the strategy of SBU on performance. It is
    argued that the more consistent the level of decentralization, degree of
    participation in the budget system and managers’ attitude with the SBU
    strategies, the higher the performance will be, and vice versa. Unlike most
    prior studies, the hypothesis was tested by adopting the system of fit
    approach. Responses from 75 divisional managers of 75 diversified companies are
    analyzed. The results show that managers pursuing a strategy of differentiation
    (cost leadership) report high performance when they worked in highly (less)
    decentralized structures, are given more (less) opportunity to participate in
    the budget process, and had strongly positive attitude toward their jobs and
    their firms. These findings are consistent with the basic premise of strategy
    implementation that different strategies should be supported with different
    configuration of organizational structure and process to achieve optimal
    results.


     

    Periode

    Vol 25, Nomor 03, Tahun 2010

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