Vattenfall Nordic Heat: Strategy and control

Résumé du document

Vattenfall is the fourth largest generator of electricity and the largest generator of heat in Europe. The company has more than 32 000 employees and is active in all stages of the electricity value chain: generation, transmission, distribution and sales. Operations are carried out in Sweden, Finland, Denmark, Germany and Poland. The parent company, Vattenfall AB, is owned by the Swedish state. The main objective for companies owned by the state is to create value. Companies exposed to competition, like Vattenfall, shall operate under the same requirement and terms as other market players. We will start with describing Vattenfall's vision, mission and strategic ambitions. The fol-lowing part will focus on how the strategies are implemented in Vattenfall Nordic Heat, a business unit of the organization. We will in the end analyze the implementation and make qualitative conclusions.

Extraits

[...] In order to realise the vision, Vattenfall has formulated five strategic ambitions: 1. To continue the profitable growth Profitable growth is necessary if Vattenfall is to continue to be competitive and create value To become the benchmark for the industry In order to maintain the competitive edge, Vattenfall have to continue to focus on operational efficiency and value creation To become “Number One for the Customer” Vattenfall has to gain markets shares and increase customer satisfaction To become “Number One for the Environment” The goal is to find solutions that reduce carbon dioxide emissions and to have a leading position in renewable electricity and heat generation To be the employer of choice Vattenfall is dependent upon having the right competence and dedicated employees. [...]

[...] Their balanced scorecard is currently only supporting reactive actions, but the transformation map overcomes this partially as the more tangible goals become a venue for more proactive actions. This means that the strategy does not get implemented correctly. Our interpretation is that VNH lack the insights into the concept of a balanced scorecard, and therefore more or less only assumed the name instead of the idea behind it References Anthony, Robert N., and Vijay Govindarajan (2005). Management Control Systems ed. McGraw Hill/Irwin. [...]

[...] They are managed as profit centers. Supporting functions are managed as cost centers. Shared service units provide services that support customer efforts to optimise their business operations Vattenfall Nordic Heat Vattenfall Nordic Heat (VNH) is a business unit in the Nordic business group. It's accountable for owning, operating and developing district and contract supply heating plants in the Nordic region. The business unit is also responsible for sales and marketing of heat. VNH has approximately 600 employees and is managed as a profit centre. [...]

[...] But as stated there are some severe inconsistencies between strategy and implementation at this level. To overcome this discrepancy VNH has created a transformation map that translates the strategic ambitions to tangible goals that are classified in accordance with the different dimension. As there is a final goal in this transformation map, the time aspect is more prominent in this implementation. Each goal or milestone has its place both in a stage of the grander plan and in one of the dimensions. [...]

[...] The parent company, Vattenfall AB, is owned by the Swedish state. The main objective for companies owned by the state is to create value. Companies exposed to competition, like Vattenfall, shall operate under the same requirement and terms as other market players Reading Guide We will start with describing Vattenfall's vision, mission and strategic ambitions. The following part will focus on how the strategies are implemented in Vattenfall Nordic Heat, a business unit of the organization. We will in the end analyse the implementation and make qualitative conclusions Strategy and control 1 Vision, mission and strategy Vattenfall has experienced significant changes in recent years. [...]