The Influence of Network Competence on Internationalization of SMEs

This study focuses on the relationship between organizational network competence and the internationalization process of small- and medium sized enterprises (SMEs). Over recent decades, the global business environment has become increasingly conducive to internationalization of small firms. A central facilitating factor in the process has been the emergence of networked business relationships between internationalizing firms. Research on SME internationalization has found that certain types of structures and dynamics of business networks allow SMEs access to the resources they need to enter foreign markets. This consequently means that their internationalization often becomes to depend on the networks they are embedded in. However, research so far has mostly ignored the possibility that the organizational ability to develop and manage business network relationships, network competence, may be a major underlying factor in determining how well SMEs can leverage their network relationships to enter foreign markets and consequently may determine in large part how successful their internationalization process turns out to be. This study aims to respond to those gaps, by empirically examining how the development of network competence in internationalizing SMEs influences the internationalization outcomes that they can expect, and how such network competence is conceptualized and developed. Using a mixed methods approach, survey data collected from 298 Finnish SMEs across five industry sectors is first used to examine how levels of network competence are related to internationalization propensity of SMEs and their subsequent international performance, growth and profitability as internationally operating firms. In order to illustrate in more detail the ways in which network competence is conceptualized and how it develops during the internationalization process of an SME, qualitative data from internationally operating Finnish SMEs are used. Longitudinal interview data of an internationalizing Finnish SME is accompanied by data gathered through a series of semistructured interviews of Finnish and Russian managers involved in mutual business relationship dyads. Structurally, this thesis examines the research issue as an article-based dissertation, consisting of five journal and conference publications. Three of these publications are based on the quantitative data, and the remaining two apply the qualitative interview data. The results find several aspects where network competence has a positive influence on the success of internationalizing SMEs, how it develops and what it entails conceptually in this context. Quantitatively, the level of network competence is found to have a positive relationship to various internationalization outcomes, including the propensity of SMEs to enter foreign markets and on their subsequent international performance, their growth and their profitability. Additionally, the positive relationship is divided between the relationship-specific and cross-relational dimension of network competence, in that the influence of the former is relevant for the propensity to internationalize, while the latter is for the growth and profitability of the already internationalized SMEs. Qualitatively, the results suggest, firstly, that the development process of network competence does not necessarily precede the start of the internationalization process, but may occur through a gradual learning process alongside it. And secondly, the results also imply that the conceptualization of network competence by Finnish managers of internationally operating Finnish SMEs is structurally distinct from that of their culturally distinct partner managers in Russia. This study contributes to the literature on SME internationalization in several ways. Firstly, it introduces operationalized organizational competencies to the literature on internationalization of SMEs, which has so far mainly examined the influence of business networking on the internationalization process without having such an organizational viewpoint. Furthermore, this study provides a multi-level analysis of the determinants of successful SME internationalization, by examining various strategic and performance outcomes across the process. These results also contribute to the literature on organizational strategy of internationalizing SMEs, by clarifying how different dimensions of business networking may be optimal in different phases of the internationalization process. Conceptually, the results of this study contribute to the literature on competence development and SME internationalization, by illustrating how the development process of network competence may occur during internationalization process. Thus, they also contribute to the discussion on how SMEs are able to influence the dynamics and structures of their business networks over time. Finally, this study contributes to the literature on the role of culture in the internationalization process, by implying that the cultural background of the manager of the SME may determine whether business networking and network competence is seen as an organizational-level or an individual level capability. The study also includes some additional contributions to the literature on dynamic capabilities in strategic management, and on that of strategic business networks. These include further clarifying the exact nature and tangibility of dynamic capabilities, and being one of the first studies to introduce constructs from both dynamic capabilities and business network literature to the field of international entrepreneurship. And finally, the study also has some contribution on the two streams of literature, in illustrating how both dyadic and network-level capabilities may be relevant, depending on the current strategic goals and market position of the firm. Keywords: network competence, internationalizatio

Design and validation of stateful composite RESTful web services

A web service is a software system that provides a machine-processable interface to the other machines over the network using different Internet protocols. They are being increasingly used in the industry in order to automate different tasks and offer services to a wider audience. The REST architectural style aims at producing scalable and extensible web services using technologies that play well with the existing tools and infrastructure of the web. It provides a uniform set of operation that can be used to invoke a CRUD interface (create, retrieve, update and delete) of a web service. The stateless behavior of the service interface requires that every request to a resource is independent of the previous ones facilitating scalability. Automated systems, e.g., hotel reservation systems, provide advanced scenarios for stateful services that require a certain sequence of requests that must be followed in order to fulfill the service goals. Designing and developing such services for advanced scenarios with REST constraints require rigorous approaches that are capable of creating web services that can be trusted for their behavior. Systems that can be trusted for their behavior can be termed as dependable systems. This thesis presents an integrated design, analysis and validation approach that facilitates the service developer to create dependable and stateful REST web services. The main contribution of this thesis is that we provide a novel model-driven methodology to design behavioral REST web service interfaces and their compositions. The behavioral interfaces provide information on what methods can be invoked on a service and the pre- and post-conditions of these methods. The methodology uses Unified Modeling Language (UML), as the modeling language, which has a wide user base and has mature tools that are continuously evolving. We have used UML class diagram and UML state machine diagram with additional design constraints to provide resource and behavioral models, respectively, for designing REST web service interfaces. These service design models serve as a specification document and the information presented in them have manifold applications. The service design models also contain information about the time and domain requirements of the service that can help in requirement traceability which is an important part of our approach. Requirement traceability helps in capturing faults in the design models and other elements of software development environment by tracing back and forth the unfulfilled requirements of the service. The information about service actors is also included in the design models which is required for authenticating the service requests by authorized actors since not all types of users have access to all the resources. In addition, following our design approach, the service developer can ensure that the designed web service interfaces will be REST compliant. The second contribution of this thesis is consistency analysis of the behavioral REST interfaces. To overcome the inconsistency problem and design errors in our service models, we have used semantic technologies. The REST interfaces are represented in web ontology language, OWL2, that can be part of the semantic web. These interfaces are used with OWL 2 reasoners to check unsatisfiable concepts which result in implementations that fail. This work is fully automated thanks to the implemented translation tool and the existing OWL 2 reasoners. The third contribution of this thesis is the verification and validation of REST web services. We have used model checking techniques with UPPAAL model checker for this purpose. The timed automata of UML based service design models are generated with our transformation tool that are verified for their basic characteristics like deadlock freedom, liveness, reachability and safety. The implementation of a web service is tested using a black-box testing approach. Test cases are generated from the UPPAAL timed automata and using the online testing tool, UPPAAL TRON, the service implementation is validated at runtime against its specifications. Requirement traceability is also addressed in our validation approach with which we can see what service goals are met and trace back the unfulfilled service goals to detect the faults in the design models. A final contribution of the thesis is an implementation of behavioral REST interfaces and service monitors from the service design models. The partial code generation tool creates code skeletons of REST web services with method pre and post-conditions. The preconditions of methods constrain the user to invoke the stateful REST service under the right conditions and the post condition constraint the service developer to implement the right functionality. The details of the methods can be manually inserted by the developer as required. We do not target complete automation because we focus only on the interface aspects of the web service. The applicability of the approach is demonstrated with a pedagogical example of a hotel room booking service and a relatively complex worked example of holiday booking service taken from the industrial context. The former example presents a simple explanation of the approach and the later worked example shows how stateful and timed web services offering complex scenarios and involving other web services can be constructed using our approach.

The role of network competence and international business competence in multinational corporations: Subsidiary perspective

On-going process of globalization makes companies all over the world to go beyond the national markets and internationalize. Organizational form of multinational corporation (MNC) has capabilities for establishing the affiliate companies in several countries. Thus, the relocation of resources occurs and particularly, the cross-border transfer of knowledge which possesses the competitive advantage. However, differences in countries` business environments and cultures may constrain this capability. The research aim of this thesis is to investigate the role of subsidiary’s network competence (ability to build and manage the relationships with other local business units) and international business competence in relation to the benefits that MNC receives from a subsidiary. Additionally, subsidiary’s business adaptation, partnerships and knowledge transfer mechanism with parent company and external partners are investigated. This research, conducted in the Finnish-Russian context, consists of theoretical and empirical parts. The qualitative approach in the form of multiple case studies is employed. The empirical data incorporated primary and secondary data in the form of interviews collected in 2013 and 2015 years. Interviews were collected from four Finnish case companies in Saint-Petersburg and Kaluga region and five Russian partner companies. Results are drawn from two cases from Saint-Petersburg. The abductive research approach for the results analysis is adopted. The results indicate that both competencies lead to the subsidiary’s local embeddedness in the form of mutual business activities with local business partners and product adaptation for the local market needs. In addition to the monetary benefits in form of payments or turnover share, local embeddedness brings the knowledge of the local environment which is utilized by an MNC in the long-term planning. Another found tacit benefit is the access to the national market. This is strategically useful benefit not only for parent MNC but also for the subsidiary’s partners, i.e. international suppliers.

The transforming network of a foreign company operating in Mongolia. Case: A Finnish firm in Mongolia

In the globalising business environment ever fewer market areas remain unknown. Mongolia is yet only considered as an isolated strip between two power states. The purpose of this study is to put Mongolia on the map of academic business research. This is done by describing the transforming network of a foreign company operating in Mongolia. The objective of the study is approached through a case study, which presents the transformation of a Finnish company operating in Mongolia. This study aims at providing understanding on how the foreign case company observes the transformations of its network. The transformation within the case company is reflected to the transformations that occur in the Mongolian business environment. This study was conducted through a qualitative, intrinsic case study approach. The empirical data was gathered by using the method of network pictures. The network pictures were completed with the assistance of themed interviews. In order to be able to analyse the transformation within a network, three different time periods were observed: the past period around 2000, the present around 2014, and the estimated future around 2020. The data was collected from four executives positioned either in Finland, Russia or Mongolia. The respondents have a long experience within the case company, they hold managerial position, and therefore were able to offer valuable data for this study. The analytical framework used to analyse the collected data was built on the industrial network model, the ARA (actors-resources-activities)-model. The study shows that the changing business environment of Mongolia was utilised by the case company. In order to better meet the transforming customer wishes, the case company transformed from being a retailer to being a manufacturer. The case company was able to become a pioneer in the market. Thus, the case company has undergone similar kind of rapid transformation as the economy of Mongolia in entirety. This study shows that the general nature of the ARA-model makes it usable for new research contexts. The initial ARA-model offers a way to identify the dimensions of a network and a mean to understand these dimensions. The ARA-model can be applied to different contexts and to all time dimensions, past, present and future. The managerial recommendations offered in this study are directed towards the managers that plan to start operations in Mongolia. While this study is the first of its kind, it offers a good starting point for the future research on the change of Mongolian business networks. Valuable information could, for example, be obtained from a comparative study between the case company of this study and a multinational mining company operating in Mongolia.

Value co-creation in bio-based chemicals value network

The purpose of this Master’s thesis is to study value co-creation in emerging value network. The main objective is to examine how value is co-created in bio-based chemicals value network. The study provides insights to different actors’ perceived value in the value network and enlightens their motivations to commit to the collaborative partnerships with other actors. Empirical study shows that value co-creation is creation of mutual value for both parties of the relationship by combining their non-competing resources to achieve a common goal. Value co-creation happens in interactions, and trust, commitment and information sharing are essential prerequisites for value co-creation. Value co-creation is not only common value creation, but it is also value that emerges for each actor because of the co-operation with the other actor. Even though the case companies define value mainly in economic terms, the other value elements like value of the partnership, knowledge transfer and innovation are more important for value co-creation.

Dynamic Workload Parallelization and System Calibration on Single-Chip Cloud Computer

Many-core systems are emerging from the need of more computational power and power efficiency. However there are many issues which still revolve around the many-core systems. These systems need specialized software before they can be fully utilized and the hardware itself may differ from the conventional computational systems. To gain efficiency from many-core system, programs need to be parallelized. In many-core systems the cores are small and less powerful than cores used in traditional computing, so running a conventional program is not an efficient option. Also in Network-on-Chip based processors the network might get congested and the cores might work at different speeds. In this thesis is, a dynamic load balancing method is proposed and tested on Intel 48-core Single-Chip Cloud Computer by parallelizing a fault simulator. The maximum speedup is difficult to obtain due to severe bottlenecks in the system. In order to exploit all the available parallelism of the Single-Chip Cloud Computer, a runtime approach capable of dynamically balancing the load during the fault simulation process is used. The proposed dynamic fault simulation approach on the Single-Chip Cloud Computer shows up to 45X speedup compared to a serial fault simulation approach. Many-core systems can draw enormous amounts of power, and if this power is not controlled properly, the system might get damaged. One way to manage power is to set power budget for the system. But if this power is drawn by just few cores of the many, these few cores get extremely hot and might get damaged. Due to increase in power density multiple thermal sensors are deployed on the chip area to provide realtime temperature feedback for thermal management techniques. Thermal sensor accuracy is extremely prone to intra-die process variation and aging phenomena. These factors lead to a situation where thermal sensor values drift from the nominal values. This necessitates efficient calibration techniques to be applied before the sensor values are used. In addition, in modern many-core systems cores have support for dynamic voltage and frequency scaling. Thermal sensors located on cores are sensitive to the core's current voltage level, meaning that dedicated calibration is needed for each voltage level. In this thesis a general-purpose software-based auto-calibration approach is also proposed for thermal sensors to calibrate thermal sensors on different range of voltages.