Artic Timber Case
The setting of the case
• Artic Timber AB  Corporate
• Case  Engineered Wood
• Market Nicher in Wood Panel industry
• Competitive environment and positioning
Commodity price  EoS, Size
Artech
Artech  Evade price competition
OSB
Different capabilities needed
Organizational  product
development  unique desirable
features
Artech  more resistant, nonebending and double length of
warranty
OSB
Artech
The setting of the case continued
• Organizational resistance
• Low aspiration levels
• Country club context
• Bounded rationality  belief of being high-performer
• Heavily invested in cost strategy factories  Path dependent
• Governance inseperability  Inorganic growth limited
1) What more can Bjorn Gustavsson do to move
his division from a commodity to a speciality
business?
2) Please give Gustavsson a recommendation
of what he should do
• Change of management – O’rielly (2004)  Inertia – Status quo
• Non-ambidextrious employees  motivation
• Benefits: Alignment of goals, internal competition
• Change of organization structure  Independent BUs aligned by
management
•  Knowledge-sharing, clearer coordination  reciprocal
interdependence (Sale needs to convince buyers, production needs to
be able to deliver)
2) continued
• Integration problems  Motivation
• Stock-options  Call option which gives employee right to exercise at
a lower stock price  incentives to adopt to new goals
• Changing KPIs to fit differentiation focus strategy
• USA today  network strategy  bridge spanning  reduce division
of knowledge  Learning effects
Extra question: Structural or contextual
ambidexterity
• Is a hybrid possible?
• Exploit and Explore divided  R&D and production’
Standardization and specialization
• Shared Sales department and management
Synergy effects from bargaining power and strategic alignment
Division of knowledge reduced from coordination
• Networking strategy
 Stock options, encourage bridge spanners (transfers, production team)