Title: Exploring the Congruence between Reward Systems and Strategy – A Competetive Perspective
Purpose: With this thesis our aim is, with both a theoretical and empirical perspective, to investigate the relationship between companies’ formal reward system and how they position themselves amongst their competitors.
Method: Theories are used to design the test model, and are applied using a deductive approach. When modifying the test model, an inductive approach is applied.
Conclusion: We have not found a relationship between reward systems and strategy within the Swedish clothing industry. Rather, the relationship is between how the participating companies reward and the business that they are in.
Contents
1. INTRODUCTION TO THE STUDY
1.1 INTRODUCING REWARD SYSTEM AND BUSINESS STRATEGY
1.2 DISCUSSING THE CONNECTION BETWEEN REWARDS, MANAGEMENT CONTROL AND STRATEGY
1.3 PURPOSE
2. THEORIES RELATING TO THE TEST MODEL
2.1 INTRODUCING STRATEGY
2.2 PORTER’S GENERIC STRATEGIES
2.2.1 Introducing Porter’s Generic Strategies
2.2.2 Cost Leadership
2.2.3 Differentiation
2.2.4 Focus
2.3 INTRODUCING REWARD SYSTEMS
2.4 CLASSIFICATION OF A REWARD SYSTEM
2.4.1 Bonus
2.4.2 Benefits
2.5 DIMENSIONS OF A REWARD SYSTEM
2.5.1 Short-term Perspective – Long-term Perspective
2.5.2 Quantitative Measures – Qualitative Measures
2.5.3 Collective Performance – Individual Performance
2.5.4 Social Rewards – Financial Rewards
2.6 THE TEST MODEL
3. METHOD TO CONDUCT THE STUDY
3.1 THE JIGSAW PUZZLE
3.2 CHOICE OF METHOD FOR COLLECTING DATA
3.2.1 Choice of Industry
3.3 COLLECTING DATA FOR THE STUDY
3.3.1 Survey
3.3.2 Selection of Companies
3.4 FROM THEORY TO SURVEY
3.4.1 Criterions for a Cost Leading Company
3.4.2 Criterions for a Differentiated Company
3.4.3 Criterions for a Focused Company
3.4.4 Caught in the Middle
3.4.5 Realised Strategies
3.5 CONSIDERATIONS CONCERNING THE STUDY
4. THE RESULTS OF THE SURVEY
4.1 INTRODUCTION OF THE COMPANIES IN THE STUDY
4.2 THE COMPANIES’ REWARD SYSTEMS
4.3 THE COMPANIES’ MARKET POSITION
4.4 CLASSIFICATION OF COMPANIES
4.5 REWARD SYSTEMS WITHIN THE DIFFERENT BUSINESS STRATEGIES
4.6 DIMENSIONS OF REWARD SYSTEMS WITHIN THE DIFFERENT BUSINESS STRATEGIES
4.6.1 Dimensions – Cost Leadership
4.6.2 Dimensions – Differentiation
4.6.3 Dimensions – Focus Differentiation
4.6.4 Dimensions – Caught in the Middle
4.7 THE RESULTS OF THE MODEL
5. ANALYSIS
5.1 SIMONS’ LEVERS OF CONTROL
5.1.1 Reward Systems as Levers of Control?
5.2 DIFFERENT PERSPECTIVES OF THE BUSINESS
5.3 CONTROL TYPES AND THEIR IMPACT ON REWARDS
5.3.1 Behaviour and Outcome Based Rewards
5.3.2 Tradition and Cost – Affecting the Choice of Reward System?
5.4 ARE COMPANIES CAUGHT IN THE MIDDLE IN A BAD STRATEGIC POSITION?
5.5 THE LACK OF REWARD SYSTEMS – DOES IT MATTER?
6. CONCLUSION
7. LITERATURE LIST
7.1 LITERATURE
7.2 ARTICLES
7.3 ELECTRONIC REFERENCES
8. APPENDIXES
8.1 APPENDIX A – SURVEY
8.2 APPENDIX B – EMPIRICAL DATA
8.3 APPENDIX C – CLASSIFICATION OF THE COMPANIES
8.3.1 Cost Leadership Strategy
8.3.2 Differentiation Strategy
8.3.3 Focus Differentiation Strategy
8.3.4 Caught in the Middle
8.4 APPENDIX D – CRIB SHEET FOR THE SURVEY
Author: Limberg Maria, Helena Olofsson, Madeleine Persson
Source: Blekinge Institute of Technology
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