Levers of organization design: theoretical background, operationalization, and empirical evidence from the consumer goods industry

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This dissertation, submitted for the Doctor rerum politicarum degree at the European Business School, explores the under-researched propositions from Simons’ "Levers of organization design" (2005). The first section reviews the controllability principle, central to Simons’ framework. The second part operationalizes the four organizational spans for survey research. The final section gathers empirical evidence on two key propositions: it tests the relationship between business unit strategy, the configuration of Simons’ spans, and effectiveness using configuration fit measures. The hypothesis suggests that spans should be wider for managers in market-facing units with a product differentiation strategy compared to those under a low-cost strategy. Additionally, it examines whether a positive correlation exists between the proposed configuration of resource balance and business unit effectiveness. Based on a survey of 134 marketing directors in the German-speaking consumer goods sector, results show partial support for the first hypothesis, indicating a significant positive correlation between strategy and spans’ configuration effectiveness for product differentiation units, while results for low-cost units are less clear. Furthermore, effectiveness is notably higher for business units where marketing directors have a surplus of resources, regardless of their strategic orientation.