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Benchmark companies were from different industries with different governance mod- els. All of them had split their corporations into business lines or units that had exe- cutable responsibilities. All benchmark corporations identified very clear roles for the business lines or units. Some SBUs were responsible for delivering growth or ex- panding into new markets, and some were more responsible for profitability. These corporations decentralize responsibilities for profit and loss, decision-making and meeting the local requirements to a couple of business lines or units. There are still differences between the role of corporate management and where decisions were made. All the benchmark companies said that they have quite light corporate offices, but there are some fundamental differences. Company C2 was a pure holding com- pany that guides brands with growth and profitability targets. On the other side of the scale were C1 and C3, which had only one brand and managed businesses as one. Every company struggles with finding a balance between central level decision-mak- ing, for example, scalability of operations, and local knowledge. All companies were budget driven.

“Corporate administration cannot effectively plan everything, so there is a need to

work in many levels.” (C3)

Differences between benchmark companies were in organizational structure. Some corporations were more matrix organizations and some more line organizations. Or- ganizational structure also defined the role for common functions, for example, supply chain, IT, HR, sales, and research & development (R&D). In addition, there were differences in facilitating cross functional collaboration within the corporation; for ex- ample, C1 and C3 had very tight cross functional collaboration starting from strategic planning to monitoring and development. C2 instead was hardly facilitating cross col- laboration. Governance models of benchmark firms are summarized in Table 16.

Table 16 Benchmark companies governance models and strategic fundaments

Benchmark

company Governance model Strategic fundaments C1. Two big business lines, 5 areas,

around 100 countries. Business lines are quite independent and in matrix with areas. Most important in- terface is between BL and area management. Global offering and one brand but meeting the local re- quirements. Centrally doing R&D.

One strategy for whole corporation for 3 years. Strategic decisions are done centrally.

Business line driven, they have the execution responsibility. Longer-term view is turned into yearly plans and budgets. Strategy is continuing pro- cess, discussions, try to be close to lo- cal level.

C2. Light corporation management with couple of business lines. Under business lines there are brands that are independent. Business lines re- port to central management, not much other interaction. Centralized supply chain, sales and product de- velopment. Some interaction with different brands related to areas like digitalization. Group managers drive businesses with numbers (growth and profitability)

Build globally innovative sports brands.

Corporation responsible for brand portfolio strategy and investment based on that. Corporate has growth and profitability brands. Competitive strategic decisions are made at brand level.

Business strategies go to very con- crete level (category strategy and competitive strategy).

C3. Three major business lines that are responsible of profit and loss, mar- ket seizing, developing business and strategic decisions. Corporate management facilitates strategic discussion between the functions and gives strategic direction.

Sustainability is the guiding principle. Cross functional teams formed around the strategic question and they are developing answers to the strategic questions.

C4. Network of 20 independent entities that are geographically distributed. Entities are responsible for profit and losses and planning the offer- ing. Common sourcing, logistics and store facility services. Central strat- egy team is responsible for strategic direction, follows up the strategic program status and gives support to entities.

Delivering value to owner-customers Hierarchical strategy guidelines to lower levels. Guides all entities with strategic programs and projects.

Analysis of Table 16 suggests the more brands, business lines, or units the corpora- tion has, the more it needs to give power to the lower layers. If business lines or brands are different from each other, the corporation needs to give them freedom to make their own competitive/business strategy. Corporate should focus on enabling activities such as supply chain, finance, HR, IT development and data analytics that can be cross functionally utilized based on

In benchmark company strategic fundaments are presented. Every company had a clear strategy process that was facilitated by its corporate strategy team. The strategy team has dialogue and facilitates strategic discussion with business units and func- tions. In the strategy process, long-term views were turned into yearly plans and roadmaps including concrete targets. Concrete targets were seen as an important factor in succeeding in strategic management by all of the benchmark companies.

“You get what you measure.” (C4)

Follow-up and reporting cycle varied, but all the companies report strategic direction to their board of directors yearly. Some had a more detailed strategy process than others, but all companies had similar elements, such as market environment analysis. Some of the companies had noticed that they cannot plan everything at a detailed level, therefore there is a need to be flexible and have rolling plans. Ways of finding strategic priorities and answering important questions varied between corporations. Some had a yearly cycle and some a more continuous process for forming strategy. Different people were engaged in different parts of the strategy process. Companies organized the strategic discussions based on their organizational structure, therefore people formulating the strategy were a bit different in every company. Some had a more inclusive strategy process than others, but then strategy was communicated in more detail to the whole organization. Based on the company complexity and hierar- chy, the strategic message moved differently within the organization.