Organizing (with) Thirdness. A Dialogic Understanding of Bicultural Interactions in Organizations

This conceptual paper examines bicultural interactions in organizations as they are experienced by the involved individuals. Notions from Bakhtinian dialogism are used in order to conceptualize the sensemaking opportunities provided by the encounter with a cultural otherness. It is argued that in such bicultural situations, because of the lack of intimate understanding of the other culture, the third element in the dialogic relation - ‘thirdness’, i.e. the relation itself, without which there would be no sensemaking potential - may be lacking as a result of the distorting combination of projected similarity and stereotyping, added to certain counterproductive organizational dynamics. Therefore, it is suggested that, to make the bicultural work interaction the rewarding relation it could be, thirdness should be coordinated by management in a way that can transcend the spontaneous negative dynamics of the confrontational situation. If management was to fail to organize (with) thirdness appropriately, bringing in a third party could be a possible alternative in order to initiate the necessary mutual understanding that should eventually lead to a fruitful work interaction.

Finnish-French Fundamental Cultural Antagonisms in Organising

Seeking to challenge the belief that within-West cultural differences should be seen as insignificant in organisations, this paper seeks to demonstrate how two given Western European ‘organising cultures’ (i.e. Finnish culture and French culture, as they are expressed in the process of organising) can contrast, if not conflict, with each other. Further, it aims to help the reader realise what kinds of fundamental ‘cultural antagonisms’ these contrasting organising behaviours may come from, to help her/him understand ‘the other culture’ better, and thus allow for a first step towards an improvement of Finnish-French intercultural interactions in organisational contexts. After shortly introducing what should be understood here as ‘cultural antagonisms’, the paper addresses four fundamental Finnish-French antagonisms, regarding the vision of the organisation (‘functionalist vs. personalist’), the relative importance of ‘consensus vs. dissensus’, the typical trade-off between reliability and flexibility, and the striking differences in communication, respectively. These four fundamental antagonisms are found to be closely interrelated and integrated, serving as explanation, justification and legitimisation for each other. That does not mean, however, that differences, however striking they may be, should merely be a threat to co-operation: some implications introduced at the end of the paper suggest that, provided people are aware of them, cultural antagonisms can also be seen as opportunities for a more fruitful work interaction.

Determinants and Consequences of Information Sharing with Key Suppliers

As companies become more efficient with respect to their internal processes, they begin to shift the focus beyond their corporate boundaries. Thus, the recent years have witnessed an increased interest by practitioners and researchers in interorganizational collaboration, which promises better firm performance through more effective supply chain management. It is no coincidence that this interest comes in parallel with the recent advancements in Information and Communication Technologies, which offer many new collaboration possibilities for companies. However, collaboration, or any other type of supply chain integration effort, relies heavily on information sharing. Hence, this study focuses on information sharing, in particular on the factors that determine it and on its value. The empirical evidence from Finnish and Swedish companies suggests that uncertainty (both demand and environmental) and dependency in terms of switching costs and asset specific investments are significant determinants of information sharing. Results also indicate that information sharing improves company performance regarding resource usage, output, and flexibility. However, companies share information more intensely at the operational rather than the strategic level. The use of supply chain practices and technologies is substantial but varies across the two countries. This study sheds light on a common trend in supply chains today. Whereas the results confirm the value of information sharing, the contingent factors help to explain why the intensity of information shared across companies differ. In the future, competitive pressures and uncertainty are likely to intensify. Therefore, companies may want to continue with their integration efforts by focusing on the determinants discussed in this study. However, at the same time, the possibility of opportunistic behavior by the exchange partner cannot be disregarded.

Somali State Failure: Players, Incentives and Institutions

In Somalia the central government collapsed in 1991 and since then state failure became a widespread phenomenon and one of the greatest political and humanitarian problems facing the world in this century. Thus, the main objective of this research is to answer the following question: What went wrong? Most of the existing literature on the political economy of conflict starts from the assumption that state in Africa is predatory by nature. Unlike these studies, the present research, although it uses predation theory, starts from the social contract approach of state definition. Therefore, rather than contemplating actions and policies of the rulers alone, this approach allows us to deliberately bring the role of the society – as citizens – and other players into the analyses. In Chapter 1, after introducing the study, a simple principal-agent model will be developed to check the logical consistence of the argument and to make the identification of causal mechanism easier. I also identify three main actors in the process of state failure in Somalia: the Somali state, Somali society and the superpowers. In Chapter 2, so as to understand the incentives, preferences and constraints of each player in the state failure game, I in some depth analyse the evolution and structure of three central informal institutions: identity based patronage system of leadership, political tribalism, and the Cold War. These three institutions are considered as the rules of the game in the Somali state failure. Chapter 3 summarises the successive civilian governments’ achievements and failures (1960-69) concerning the main national goals, national unification and socio-economic development. Chapter 4 shows that the military regime, although it assumed power through extralegal means, served to some extent the developmental interest of the citizens in the first five years of its rule. Chapter 5 shows the process, and the factors involved, of the military regime’s self-transformation from being an agent for the developmental interests of the society to a predatory state that not only undermines the interests of the society but that also destroys the state itself. Chapter 6 addresses the process of disintegration of the post-colonial state of Somalia. The chapter shows how the regime’s merciless reactions to political ventures by power-seeking opposition leaders shattered the entire country and wrecked the state institutions. Chapter 7 concludes the study by summarising the main findings: due to the incentive structures generated by the informal institutions, the formal state institutions fell apart.

Essays on Stock Market Reactions to New Information

A functioning stock market is an essential component of a competitive economy, since it provides a mechanism for allocating the economy’s capital stock. In an ideal situation, the stock market will steer capital in a manner that maximizes the total utility of the economy. As prices of traded stocks depend on and vary with information available to investors, it is apparent that information plays a crucial role in a functioning stock market. However, even though information indisputably matters, several issues regarding how stock markets process and react to new information still remain unanswered. The purpose of this thesis is to explore the link between new information and stock market reactions. The first essay utilizes new methodological tools in order to investigate the average reaction of investors to new financial statement information. The second essay explores the behavior of different types of investors when new financial statement information is disclosed to the market. The third essay looks into the interrelation between investor size, behavior and overconfidence. The fourth essay approaches the puzzle of negative skewness in stock returns from an altogether different angle than previous studies. The first essay presents evidence of the second derivatives of some financial statement signals containing more information than the first derivatives. Further, empirical evidence also indicates that some of the investigated signals proxy risk while others contain information priced with a delay. The second essay documents different categories of investors demonstrating systematical differences in their behavior when new financial statement information arrives to the market. In addition, a theoretical model building on differences in investor overconfidence is put forward in order to explain the observed behavior. The third essay shows that investor size describes investor behavior very well. This finding is predicted by the model proposed in the second essay, and hence strengthens the model. The behavioral differences between investors of different size furthermore have significant economic implications. Finally, the fourth essay finds strong evidence of management news disclosure practices causing negative skewness in stock returns.

Essays on Stock Options, Incentives, and Managerial Action

Executive compensation and managerial behavior have received an increasing amount of attention in the financial economics literature since the mid 1970s. The purpose of this thesis is to extend our understanding of managerial compensation, especially how stock option compensation is linked to the actions undertaken by the management. Furthermore, managerial compensation is continuously and heatedly debated in the media and an emerging consensus from this discussion seems to be that there still exists gaps in our knowledge of optimal contracting. In Finland, the first executive stock options were introduced in the 1980s and throughout the last 15 years it has become increasingly popular for Finnish listed firms to use this type of managerial compensation. The empirical work in the thesis is conducted using data from Finland, in contrast to most previous studies that predominantly use U.S. data. Using Finnish data provides insight of how market conditions affect compensation and managerial action and provides an opportunity to explore what parts of the U.S. evidence can be generalized to other markets. The thesis consists of four essays. The first essay investigates the exercise policy of the executive stock option holders in Finland. In summary, Essay 1 contributes to our understanding of the exercise policies by examining both the determinants of the exercise decision and the markets reaction to the actual exercises. The second essay analyzes the factors driving stock option grants using data for Finnish publicly listed firms. Several agency theory based variables are found to have have explanatory power on the likelihood of a stock option grant. Essay 2 also contributes to our understanding of behavioral factors, such as prior stock return, as determinants of stock option compensation. The third essay investigates the tax and stock option motives for share repurchases and dividend distributions. We document strong support for the tax motive for share repurchases. Furthermore, we also analyze the dividend distribution decision in companies with stock options and find a significant difference between companies with and without dividend protected options. We thus document that the cutting of dividends found in previous U.S. studies can be avoided by dividend protection. In the fourth essay we approach the puzzle of negative skewness in stock returns from an altogether different angle than in previous studies. We suggest that negative skewness in stock returns is generated by management disclosure practices and find proof for this. More specifically, we find that negative skewness in daily returns is induced by returns for days when non-scheduled firm specific news is disclosed.

Essays on Corporate Governance and the Quality of Disclosed Earnings: Across Transitional Europe

A growing body of empirical research examines the structure and effectiveness of corporate governance systems around the world. An important insight from this literature is that corporate governance mechanisms address the excessive use of managerial discretionary powers to get private benefits by expropriating the value of shareholders. One possible way of expropriation is to reduce the quality of disclosed earnings by manipulating the financial statements. This lower quality of earnings should then be reflected by the stock price of firm according to value relevance theorem. Hence, instead of testing the direct effect of corporate governance on the firm’s market value, it is important to understand the causes of the lower quality of accounting earnings. This thesis contributes to the literature by increasing knowledge about the extent of the earnings management – measured as the extent of discretionary accruals in total disclosed earnings - and its determinants across the Transitional European countries. The thesis comprises of three essays of empirical analysis of which first two utilize the data of Russian listed firms whereas the third essay uses data from 10 European economies. More specifically, the first essay adds to existing research connecting earnings management to corporate governance. It testifies the impact of the Russian corporate governance reforms of 2002 on the quality of disclosed earnings in all publicly listed firms. This essay provides empirical evidence of the fact that the desired impact of reforms is not fully substantiated in Russia without proper enforcement. Instead, firm-level factors such as long-term capital investments and compliance with International financial reporting standards (IFRS) determine the quality of the earnings. The result presented in the essay support the notion proposed by Leuz et al. (2003) that the reforms aimed to bring transparency do not correspond to desired results in economies where investor protection is lower and legal enforcement is weak. The second essay focuses on the relationship between the internal-control mechanism such as the types and levels of ownership and the quality of disclosed earnings in Russia. The empirical analysis shows that the controlling shareholders in Russia use their powers to manipulate the reported performance in order to get private benefits of control. Comparatively, firms owned by the State have significantly better quality of disclosed earnings than other controllers such as oligarchs and foreign corporations. Interestingly, market performance of firms controlled by either State or oligarchs is better than widely held firms. The third essay provides useful evidence on the fact that both ownership structures and economic characteristics are important factors in determining the quality of disclosed earnings in three groups of countries in Europe. Evidence suggests that ownership structure is a more important determinant in developed and transparent countries, while economic determinants are important determinants in developing and transitional countries.

When sharing becomes a liability: An intellectual capital approach to describing the dichotomy of knowledge protection versus sharing in intra- and interorganizational relationships

The tension created when companies are collaborating with competitors – sometimes termed co-opetition - has been subject of research within the network approach. As companies are collaborating with competitors, they need to simultaneously share and protect knowledge. The opportunistic behavior and learning intent of the partner may be underestimated, and collaboration may involve significant risks of loss of competitive edge. Contrastingly, the central tenet within the Intellectual Capital approach is that knowledge grows as it flows. The person sharing does not lose the knowledge and therefore knowledge has doubled from a company’s point of view. Value is created through the interplay of knowledge flows between and within three forms of intellectual capital: human, structural and relational capital. These are the points of departure for the research conducted in this thesis. The thesis investigates the tension between collaboration and competition through an Intellectual Capital lens, by identifying the actions taken to share and protect knowledge in interorganizational collaborative relationships. More specifically, it explores the tension in knowledge flows aimed at protecting and sharing knowledge, and their effect on the value creation of a company. It is assumed, that as two companies work closely together, the collaborative relationship becomes intertwined between the two partners and the intellectual capital flows of both companies are affected. The research finds that companies commonly protect knowledge also in close and long-term collaborative relationships. The knowledge flows identified are both collaborative and protective, with the result that they sometimes are counteracting and neutralize each other. The thesis contributes to the intellectual capital approach by expanding the understanding of knowledge protection in interorganizational relationships in three ways. First, departing from the research on co-opetition it shifts the focus from the internal view of the company as a repository of intellectual capital onto the collaborative relationships between competing companies. Second, instead of the traditional collaborative and sharing point of departure, it takes a competitive and protective perspective. Third, it identifies the intellectual capital flows as assets or liabilities depending on their effect on the value creation of the company. The actions taken to protect knowledge in an interorganizational relationship may decrease the value created in the company, which would make them liabilities.

From Creative Ideas to New Emerging Ventures: Entrepreneurial Processes among Finnish Design Entrepreneurs

This study focuses on self-employed industrial designers and how they emerge new venture ideas. More specifically, this study strives to determine what design entrepreneurs do when they create new venture ideas, how venture ideas are nurtured into being, and how the processes are organized to bring such ideas to the market in the given industrial context. In contemporary times when the concern for the creative class is peaking, the research and business communities need more insight of the kind that this study provides, namely how professionals may contribute to their entrepreneurial processes and other agents’ business processes. On the one hand, the interviews underlying this study suggest that design entrepreneurs may act as reactive service providers who are appointed by producers or marketing parties to generate product-related ideas on their behalf. On the other hand, the interviews suggest that proactive behaviour that aims on generating own venture ideas, may force design entrepreneurs to take considerable responsibility in organizing their entrepreneurial processes. Another option is that they strive to bring venture ideas to the market in collaboration, or by passing these to other agents’ product development processes. Design entrepreneurs’ venture ideas typically emerge from design related starting points and observations. Product developers are mainly engaged with creating their own ideas, whereas service providers refer mainly to the development of other agents’ venture ideas. In contrast with design entrepreneurs, external actors commonly emphasize customer demand as their primary source for new venture ideas, as well as development of these in close interaction with available means of production and marketing. Consequently, design entrepreneurs need to address market demand since without sales their venture ideas may as well be classified as art. In case, they want to experiment with creative ideas, then there should be another source of income to support this typically uncertain and extensive process. Currently, it appears like a lot of good venture ideas and resources are being wasted, when venture ideas do not suite available production or business procedures. Sufficient communication between design entrepreneurs and other agents would assist all parties in developing production efficient and distributable venture ideas. Overall, the findings suggest that design entrepreneurs are often involved simultaneously in several processes that aim at emerging new product related ventures. Consequently, design entrepreneurship is conceptualized in this study as a dual process. This implies that design entrepreneurs can simultaneously be in charge of their entrepreneurial processes, as they operate as resources in other agents’ business processes. The interconnection between activities and agents suggests that these kinds of processes tend to be both complex and multifaceted to their nature.

Angel Investing in Finland: An Analysis Based on Agency Theory and the Incomplete Contracting Theory

Wealthy individuals - business angels who invest a share of their net worth in entrepreneurial ventures - form an essential part of an informal venture capital market that can secure funding for entrepreneurial ventures. In Finland, business angels represent an untapped pool of capital that can contribute to fostering entrepreneurial development. In addition, business angels can bridge knowledge gaps in new business ventures by means of making their human capital available. This study has two objectives. The first is to gain an understanding of the characteristics and investment behaviour of Finnish business angels. The strongest focus here is on the due diligence procedures and their involvement post investment. The second objective is to assess whether agency theory and the incomplete contacting theory are useful theoretical lenses in the arena of business angels. To achieve the second objective, this study investigates i) how risk is mitigated in the investment process, ii) how uncertainty influences the comprehensiveness of due diligence as well as iii) how control is allocated post investment. Research hypotheses are derived from assumptions underlying agency theory and the incomplete contacting theory. The data for this study comprise interviews with 53 business angels. In terms of sample size this is the largest on Finnish business angels. The research hypotheses in this study are tested using regression analysis. This study suggests that the Finnish informal venture capital market appears to be comprised of a limited number of business angels whose style of investing much resembles their formal counterparts’. Much focus is placed on managing risks prior to making the investment by strong selectiveness and by a relatively comprehensive due diligence. The involvement is rarely on a day-to-day basis and many business angels seem to see board membership as a more suitable alternative than involvement in the operations of an entrepreneurial venture. The uncertainty involved does not seem to drive an increase in due diligence. On the contrary, it would appear that due diligence is more rigorous in safer later stage investments and when the business angels have considerable previous experience as investors. Finnish business angels’ involvement post investment is best explained by their degree of ownership in the entrepreneurial venture. It seems that when investors feel they are sufficiently rewarded, in terms of an adequate equity stake, they are willing to involve themselves actively in their investments. The lack of support for a relationship between increased uncertainty and the comprehensiveness of due diligence may partly be explained by an increasing trend towards portfolio diversification. This is triggered by a taxation system that favours investments through investment companies rather than direct investments. Many business angels appear to have substituted a specialization strategy that builds on reducing uncertainty for a diversification strategy that builds on reducing firm specific (idiosyncratic) risk by holding shares in ventures whose returns are not expected to exhibit a strong positive correlation.

IT-Innovationer i svenska bygg- och fastighetssektorn

Utvecklingen inom informationsteknologin (IT) har under de senaste decennierna bidragit till stora förändringar i vårt samhälle och i våra industrier. Tillgången till bland annat persondatorer, mobiltelefoner och Internet har förändrat vårt sätt att hantera information och att kommunicera. Att IT också ökat företags och industriers produktivitet och effektivitet har kunnat mätas. Detta har utgjort bakgrunden till avhandlingens frågeställning, nämligen hur IT har påverkat bygg- och fastighetssektorn. Syftet har varit att undersöka hur och i vilken utsträckning IT används inom sektorn, samt varför användningen inom sektorn sker på det sättet och i den utsträckningen. Fem datainsamlingar har utförts för att uppfylla forskningens syfte. Tre har utförts kvantitativt genom enkätundersökningar och två kvalitativt genom intervjustudier. Den kvantitativa delen inleddes med att skapa enkätverktyget, vilket sedan använts tre gånger. Datainsamlingarna har skett under perioden 1998 till 2009 och de skapar därmed, förutom ögonblicksbilder, ett longitudinellt perspektiv på utvecklingen. Tre fokusområden har identifierats som särskilt intressanta ur ett sektorsperspektiv: elektroniska affärer (EDI), elektronisk dokumenthantering (EDM) samt byggnadsinformationsmodeller (BIM). Dessa har studerats både kvantitativt och kvalitativt. Undersökningarna visar att tillgången till IT-infrastruktur inom sektorn är god, men att IT huvudsakligen används för att effektivisera befintliga arbetssätt och processer med fokus på administration. IT har också bidragit starkt till bättre kommunikationer. Dock används IT i liten omfattning för att skapa nya produkter, processer eller affärsmodeller. Entreprenörerna är de som använder IT i lägst utsträckning. Bygg- och fastighetssektorns starkt projektbaserade organisation medför svårigheter för innovationsspridning, särskilt när innovationerna kräver engagemang från flera aktörer. Tre sådana innovationer, EDM, EDI och BIM har under de senaste åren börjat spridas inom sektorn där EDM hittills nått högst användning och BIM lägst. Olika modeller för införande och implementering av IT i företagen inom sektorn har använts för att studera vilka faktorer som påverkar beslut på olika nivåer. Den praktiska nyttan eller det förväntade resultatet av varje innovation är en starkt pådrivande faktor för beslut. Initiala beslut för införande har visat sig ske på olika nivåer. För EDM sker detta i projekt, för EDI i de enskilda företagen och för BIM hos individer. EDM har tydligast fullföljt implementeringsmodellens steg, följt av EDI och därefter BIM. Fokusområdet BIM har störst potential att skapa positiva effekter samt påverkar processer och metoder i störst utsträckning. Tidiga tillämpare bland företagen har börjat tillsätta resurser för dessa förändringar, men det har ännu inte skett i samma omfattning som för de två andra områdena.

On the Benefits and Problems of the Object-Oriented Paradigm including a Finnish Study

Several researchers are of the opinion that there are many benefits in using the object-oriented paradigm in information systems development. If the object-oriented paradigm is used, the development of information systems may, for example, be faster and more efficient. On the other hand, there are also several problems with the paradigm. For example, it is often considered complex, it is often difficult to make use of the reuse concept and it is still immature in some areas. Although there are several interesting features in the object-oriented paradigm, there is still little comprehensive knowledge of the benefits and problems associated with it. The objective of the following study was to investigate and to gain more understanding of the benefits and problems of the object-oriented paradigm. A review of previous studies was made and twelve benefits and twelve problems were established. These benefits and problems were then analysed, studied and discussed. Further a survey and some case studies were made in order to get some knowledge on what benefits and problems with the object-oriented paradigm Finnish software companies had experienced. One hundred and four companies answered the survey that was sent to all Finnish software companies with five or more employees. The case studies were made with six large Finnish software companies. The major finding was that Finnish software companies were exceptionally positive towards the object-oriented information systems development and had experienced very few of the proposed problems. Finally two models for further research were developed. The first model presents connections between benefits and the second between problems.

A Story about a Message that was a Story: Message Form and its Implications to Knowledge Flow

Knowledge Flow, my dear friend! I would like to introduce you to a close relative of yours: Organizational Communication. You might want to take a moment to hear what your newfound kin has to say. As bright as you are dear Flow, you're missing a piece of the puzzle - for one cannot study any aspect of an organization relating to communication without acknowledging the message. Without a message, communication does not exist. Organizational Communication has always appreciated this. Perhaps the time has come for you to join rank and do so too? The main point of this work is to prove that the form of a message considerably affects communication, interpretation - and knowledge flow. As stories are at the heart of this thesis; and entertaining, reader-friendly communication its main argument, the entire manuscript is written in story form and is intentionally breaking academic writing tradition as far as writing style goes. Each chapter reads as a story of sorts and put together they create a grand narrative of my journey as a PhD student, the research I have conducted and the outcomes of this work. Thus if a reader hopes to make any sense of this title, she must read it in the same way one would read a novel, from beginning to end. This is a thesis with three aspirations. First, it sets out to prove that knowledge flow cannot be studied without a message. Second, it moves on to give the reader a once-over of a much used message form: storytelling. After these two goals are tackled the path is clear to research if message form indeed is as essential as claimed. I do so through both a qualitative and a quantitative study. The former acted as both a stepping stone into the research area and as an inspirational pilot, from which the research design for the larger quantitative study was drawn. Together, these two studies answered my research question - and allowed me to fulfill the third, final and foremost aspiration of this study - bridging the gap between two separate fields of knowledge management: knowledge flow and storytelling.

The Impact of Cultural Factors on Post-Acquisition Integration: Domestic and Foreign Acquisitions of Finnish Companies in 1993-2004

Acquisitions are a central component of corporate strategy. They contribute to competitive advantage by offering possibilities for both cost reductions and for revenue enhancements. However, many acquisition benefits cannot be realized without a successful integration of the acquiring and the acquired firms. Previous research shows that national and organizational culture can play a major role in determining the integration outcomes. Therefore, the overall aim of the thesis is to map out and illustrate the impact mechanisms of cultural factors in post-acquisition integration in order to explain the cultural aspects of acquisitions. This study has three main contributions. First, the study shows that international and domestic acquisitions differ concerning both strategic and cultural fit. Second, the findings highlight the importance of acculturation and cultural integration in determining post-acquisition outcomes. Finally, the study uncovers several impact mechanisms that shed light to the contradictory results related to cultural differences in previous research.

Becoming to Know: Essays on Extended Epistemology of Knowledge Creation

This qualitative, explorative study, which comprises four essays, focuses on knowledge management (KM). It seeks to answer the question: How can the knowledge creation theory of KM benefit from social learning theories? While studying the five development phases of knowledge creation theory of KM through 1995-2008 and applying some social learning theories in essays, the concepts of knowing, learning and becoming have emerged. Drawing on these three concepts and on becoming ontology and extended epistemology as research philosophies the study suggests the ‘becoming epistemology’ concept and develops the ‘becoming to know’ framework. The framework proposes becoming as phronesis of dialectic interactions between learning and knowing. It shows how becoming to know evolves as an interplay between concrete experience and logical thinking in the present and in a living context. The proposed framework could be considered a contribution to the current development phase of the knowledge creation theory of KM because it illustrates how ontological and epistemological knowledge spirals come together, which is the essence of the knowledge creation theory of KM.