Integrating business strategy, organizational configurations and management accounting systems with business unit effectiveness: a fitness landscape approach

• DOI: 10.1016/j.mar.2004.03.002
• Publication Date: 2004-05-13T11:04:21Z
• Authors: Johnny Jermias; Lindawati Gani
• Keywords: 0502 economics and business; 05 social sciences

Abstract This study adopts a fitness landscape approach to test contingency hypotheses about the relationship between business strategy, organizational configurations, management accounting systems, and business unit effectiveness. Central to this approach is the notion of contingent fit between strategic priorities and its contextual variables. Building on Kauffman’s N-locus, two-state additive fitness model , this study predicts that the degree of contingent fit, defined as the weighted sum of independent fitness contributions of each contextual variables, will have a positive association with business unit effectiveness. Based on a mail survey and personal interviews of 106 business unit managers of publicly held companies listed under consumer goods industry, this study indicates that the degree of contingent fit has a positive association with business unit effectiveness. Further analysis reveals that strategic priorities affect the types of controls and management accounting systems used by the business units.