Productivity of Business Services - Towards A New Taxonomy

Statistics show that the expanding service sector accounts already for three quarters of GDP in the developed economies. Moreover, there is abundant evidence on high variation in productive performance across the service industries. This suggests divergent technological and institutional trajectories within the tertiary sector. While conceptual knowledge on services and their performance has accumulated substantially, the overall landscape on productivity and competitiveness is still inconclusive. As noted by number of authors the research on service productivity is still in its infancy. The purpose of this paper is to develop further the analytical framework of service productivity. The approach is based on the notion that service definitions, classifications and performance measurement are strongly interdependent. Given the ongoing restructuring of businesses activities with higher information content, it is argued that the dichotomy between manufacturing and services should not be taken too far. Industrial evolution also suggests that the official industry classifications are increasingly outdated and new taxonomies for empirical research are therefore needed. Based on the previous analyses and new insights the paper clarifies the debated concept of service productivity and identifies the critical dimensions by which the service industries cluster. It is also demonstrated that the dimensions enable to construct new service taxonomies which bear essentially on productivity opportunities at the business level. Needles to say the key determinant explaining the development and potential of productivity growth is innovation activity. As an extensive topic of research, however, service innovation is tackled here only in a cursory way. The paper is constructed as follows: the first section focuses on the conceptual issues and evolving nature of service activities. A workable definition of service should capture the diversity of service activities, as well as the aspects of service processes, comprehensively. The distinctions and similarities between services and manufacturing are discussed, too. Section 2 deals with the service productivity, a persistent and controversial issue in academic literature and policy. With the assessments of strengths and weaknesses of the main schools new insights based on value creation will be brought in. Industry classifications and taxonomies are discussed in Section 3. It begins with a short analysis of the official classifications and their evaluation from the perspective of empirical research. Using well-known examples it is shown that the taxonomies on the manufacturing industries have a clear analogy with the business services. As there is a growing interest to regroup services too, the work to date, has been less systematic and inherently qualitative. Based on the earlier contributions threedimensional service taxonomy is constructed which highlight the key dimensions of productive performance. The main findings and implications are summed up in Section 4.

The effects of real time control of welding parameters on weld quality in plasma arc keyhole welding

Joints intended for welding frequently show variations in geometry and position, for which it is unfortunately not possible to apply a single set of operating parameters to ensure constant quality. The cause of this difficulty lies in a number of factors, including inaccurate joint preparation and joint fit up, tack welds, as well as thermal distortion of the workpiece. In plasma arc keyhole welding of butt joints, deviations in the gap width may cause weld defects such as an incomplete weld bead, excessive penetration and burn through. Manual adjustment of welding parameters to compensate for variations in the gap width is very difficult, and unsatisfactory weld quality is often obtained. In this study a control system for plasma arc keyhole welding has been developed and used to study the effects of the real time control of welding parameters on gap tolerance during welding of austenitic stainless steel AISI 304L. The welding tests demonstrated the beneficial effect of real time control on weld quality. Compared with welding using constant parameters, the maximum tolerable gap width with an acceptable weld quality was 47% higher when using the real time controlled parameters for a plate thickness of 5 mm. In addition, burn through occurred with significantly larger gap widths when parameters were controlled in real time. Increased gap tolerance enables joints to be prepared and fit up less accurately, saving time and preparation costs for welding. In addition to the control system, a novel technique for back face monitoring is described in this study. The test results showed that the technique could be successfully applied for penetration monitoring when welding non magnetic materials. The results also imply that it is possible to measure the dimensions of the plasma efflux or weld root, and use this information in a feedback control system and, thus, maintain the required weld quality.

Model-based study of a chemical-looping combustion process

Chemical-looping combustion (CLC) is a novel combustion technology with inherent separation of the greenhouse gas CO2. The technique typically employs a dual fluidized bed system where a metal oxide is used as a solid oxygen carrier that transfers the oxygen from combustion air to the fuel. The oxygen carrier is looping between the air reactor, where it is oxidized by the air, and the fuel reactor, where it is reduced by the fuel. Hence, air is not mixed with the fuel, and outgoing CO2 does not become diluted by the nitrogen, which gives a possibility to collect the CO2 from the flue gases after the water vapor is condensed. CLC is being proposed as a promising and energy efficient carbon capture technology, since it can achieve both an increase in power station efficiency simultaneously with low energy penalty from the carbon capture. The outcome of a comprehensive literature study concerning the current status of CLC development is presented in this thesis. Also, a steady state model of the CLC process, based on the conservation equations of mass and energy, was developed. The model was used to determine the process conditions and to calculate the reactor dimensions of a 100 MWth CLC system with bunsenite (NiO) as oxygen carrier and methane (CH4) as fuel. This study has been made in Oxygen Carriers and Their Industrial Applications research project (2008 – 2011), funded by the Tekes – Functional Material program. I would like to acknowledge Tekes and participating companies for funding and all project partners for good and comfortable cooperation.

Performance Evaluation and Calibration of Machine Vision Measurement

This thesis presents the calibration and comparison of two systems, a machine vision system that uses 3 channel RGB images and a line scanning spectral system. Calibration. is the process of checking and adjusting the accuracy of a measuring instrument by comparing it with standards. For the RGB system self-calibrating methods for finding various parameters of the imaging device were developed. Color calibration was done and the colors produced by the system were compared to the known colors values of the target. Software drivers for the Sony Robot were also developed and a mechanical part to connect a camera to the robot was also designed. For the line scanning spectral system, methods for the calibrating the alignment of the system and the measurement of the dimensions of the line scanned by the system were developed. Color calibration of the spectral system is also presented.

Marketing of Lappeenranta University of Technology energy auditing services

The objective of this study was to find out how LUT Energy should start marketing its energy audit services, what would be the optimal pricing policy for its services and how LUT Energy could manage customer expectations towards quality of its auditing services. In order to answer these questions, a quantitative survey questionnaire was sent by e-mail to 56 companies from the regions of South Karelia and Kymenlaakso. The empirical data of the study was the answers and opinions of the companies, previous researches about energy efficiency and articles and presentations about the current situation in the energy efficiency market. The results of the study were that there is a great potential for energy audit services and also the legislation requires companies to improve their energy efficiency. To start marketing its services, LUT Energy should first clarify its service concept and divide its service offering into two offers. It should also clarify the marketing message it wants to send its customers and then do the marketing with the help of three-way-model. The best pricing policy for the service would be that the price is proportioned to the future savings. In order to ensure the quality of its services, LUT Energy has to make sure that both dimensions of the quality are managed properly and to fade out customer expectations towards the quality the auditing work has to be monitored.

Nursing Ethics Education in Finland from the Perspective of Codes of Ethics

The purpose of this study was to analyze nursing ethics education from the perspective of nurses’ codes of ethics in the basic nursing education programmes in polytechnics in Finland with the following research questions: What is known about nurses’ codes in practice and education, what contents of the codes are taught, what teaching and evaluation methods are used, which demographic variables are associated with the teaching, what is nurse educators’ adequacy of knowledge to teach the codes and nursing students’ knowledge of and ability to apply the codes, and what are participants’ opinions of the need and applicability of the codes, and their importance in nursing ethics education. The aim of the study was to identify strengths and possible problem areas in teaching of the codes and nursing ethics in general. The knowledge gained from this study can be used for developing nursing ethics curricula and teaching of ethics in theory and practice. The data collection was targeted to all polytechnics in Finland providing basic nursing education (i.e. Bachelor of Health Care). The target groups were all nurse educators teaching ethics and all graduating nursing students in the academic year of 2006. A total of 183 educators and 214 students from 24 polytechnics participated. The data was collected using a structured questionnaire with four open-ended questions, designed for this study. The data was analysed by SPSS (14.0) and the open-ended questions by inductive content analysis. Descriptive statistics were used to summarize the data. Inferential statistics were used to estimate the differences between the participant groups. The reliability of the questionnaire was estimated with Cronbach’s coefficient alpha. The literature review revealed that empirical research on the codes was scarce, and minimal in the area of education. Teaching of nurses’ codes themselves and the embedded ethical concepts was extensive, teaching of the functions of the codes and related laws and agreements was moderate, but teaching of the codes of other health care professions was modest. Issues related to the nurse-patient relationship were emphasised. Wider social dimensions of the codes were less emphasized. Educators’ and students’ descriptions of teaching emphasized mainly the same teaching contents, but there were statistically significant differences between the groups in that educators assessed their teaching to be more extensive than what students had perceived it had been. T he use of teaching and evaluation methods was rather narrow and conventional. However, educators’ and students’ descriptions of the used methods differed statistically significantly. Students’ knowledge of the codes and their ability to apply them in practice was assessed as mediocre by educators and by students themselves. Most educators assessed their own knowledge of the codes as adequate to teach the codes, as did most of the students. Educators who regarded their knowledge as adequate taught the codes more extensively than those who assessed their knowledge as less adequate. Also students who assessed their educators’ knowledge as adequate perceived the teaching of the codes to be more extensive. Otherwise educators’ and students’ demographic variables had little association with their descriptions of the teaching. According to the participants, nurses need their own codes, and they are also regarded as applicable in practice. The codes are an important element in nursing ethics education, but their teaching needs development. Further research should focus on the organization of ethics teaching in the curricula, the teaching process, and on the evaluation of the effectiveness of ethics education and on educators’ competence. Also the meaning and functions of the codes at all levels of nursing deserve attention. More versatile use of research methods would be beneficial in gaining new knowledge.

The Influence of Certain Processing Factors on the Durability of Yttrium Stabilized Zirconia Used As Dental Biomaterial

In dentistry, yttrium partially stabilized zirconia (ZrO2) has become one of the most attractive ceramic materials for prosthetic applications. The aim of this series of studies was to evaluate whether certain treatments used in the manufacturing process, such as sintering time, color shading or heat treatment of zirconia affect the material properties. Another aim was to evaluate the load-bearing capacity and marginal fit of manually copy-milled custom-made versus prefabricated commercially available zirconia implant abutments. Mechanical properties such as flexural strength and surface microhardness were determined for green-stage milled and sintered yttrium partially stabilized zirconia after different sintering time, coloring process and heat treatments. Scanning electron microscope (SEM) was used for analyzing the possible changes in surface structure of zirconia material after reduced sintering time, coloring and heat treatments. Possible phase change from the tetragonal to the monoclinic phase was evaluated by X-ray diffraction analysis (XRD). The load-bearing capacity of different implant abutments was measured and the fit between abutment and implant replica was examined with SEM. The results of these studies showed that the shorter sintering time or the thermocycling did not affect the strength or surface microhardness of zirconia. Coloring of zirconia decreased strength compared to un-colored control zirconia, and some of the colored zirconia specimens also showed a decrease in surface microhardness. Coloring also affected the dimensions of zirconia. Significantly decreased shrinkage was found for colored zirconia specimens during sintering. Heat treatment of zirconia did not seem to affect materials’ mechanical properties but when a thin coating of wash and glaze porcelain was fired on the tensile side of the disc the flexural strength decreased significantly. Furthermore, it was found that thermocycling increased the monoclinic phase on the surface of the zirconia. Color shading or heat treatment did not seem to affect phase transformation but small monoclinic peaks were detected on the surface of the heat treated specimens with a thin coating of wash and glaze porcelain on the opposite side. Custom-made zirconia abutments showed comparable load-bearing capacity to the prefabricated commercially available zirconia abutments. However, the fit of the custom-made abutments was less satisfactory than that of the commercially available abutments. These studies suggest that zirconia is a durable material and other treatments than color shading used in the manufacturing process of zirconia bulk material does not affect the material’s strength. The decrease in strength and dimensional changes after color shading needs to be taken into account when fabricating zirconia substructures for fixed dental prostheses. Manually copy-milled custom-made abutments have acceptable load-bearing capacity but the marginal accuracy has to be evaluated carefully.

Consumers’ brand experiences of magazine brands

Tässä kvalitatiivisessa pro gradu -työssä tutkittiin kuluttajien brändikokemuksia aikakauslehtien brändeistä. Päätutkimusongelmana oli kuinka kuluttaja kokee aikakauslehden brändin. Alaongelmia olivat seuraavat: mitä ovat brändikokemukset, mitkä ovat brändikokemuksen ulottuvuudet, mitkä konseptit liittyvät brändikokemukseen, kuka on vastuussa brändikokemusten luomisesta ja miten brändikokemuksia luodaan. Tässä tutkimuksessa on analysoitu yhtä avointa kysymystä: kerro meille kokemuksiasi X lehden brändistä. Vastausten perusteella vastaajista muodostettiin kahdeksan ryhmää: Uloskasvaneet, Internet-sivujen käyttäjät, Toistoon kyllästyneet, Vertaistukijat, Nostalgiset, Uskolliset, Tyytyväiset ja Luottavaiset.

Marketing culture of Finnish research libraries : an analysis of marketing attitude, knowledge and behaviour

The aim of the present dissertation is to investigate the marketing culture of research libraries in Finland and to understand the awareness of the knowledge base of library management concerning modern marketing theories and practices. The study was based onthe notion that a leader in an organisation can have large impact on its culture. Therefore, it was considered important to learn about the market orientation that initiates at the top management and flows throughout the whole organisationthus resulting in a particular kind of library culture. The study attempts to examine the marketing culture of libraries by analysing the marketing attitudes, knowledge (underlying beliefs, values and assumptions), behaviour (market orientation), operational policies and activities, and their service performance (customer satisfaction). The research was based on the assumption that if the top management of libraries has market oriented behaviour, then their marketing attitudes, knowledge, operational policies and activities and service performance should also be in accordance. The dissertation attempts to connect all these theoretical threads of marketing culture. It investigates thirty three academic and special libraries in the south of Finland. The library director and three to ten customers from each library participated as respondents in this study. An integrated methodological approach of qualitative as well as quantitative methods was used to gain knowledge on the pertinent issues lying behind the marketing culture of research libraries. The analysis of the whole dissertation reveals that the concept of marketing has very varied status in the Finnish research libraries. Based on the entire findings, three kinds of marketing cultures were emerged: the strong- the high fliers; the medium- the brisk runners; and the weak- the slow walkers. The high fliers appeared to be modern marketing believers as their marketing approach was customer oriented and found to be closer to the emerging notions of contemporary relational marketing. The brisk runners were found to be traditional marketing advocates as their marketing approach is more `library centred¿than customer defined and thus is in line of `product orientation¿ i.e. traditional marketing. `Let the interested customers come to the library¿ was appeared to be the hallmark of the slow walkers. Application of conscious market orientation is not reflected in the library activities of the slow walkers. Instead their values, ideology and approach to serving the library customers is more in tuneof `usual service oriented Finnish way¿. The implication of the research is that it pays to be market oriented which results in higher customer satisfaction oflibraries. Moreover, it is emphasised that the traditional user based service philosophy of Finnish research libraries should not be abandoned but it needs to be further developed by building a relational based marketing system which will help the libraries to become more efficient and effective from the customers¿ viewpoint. The contribution of the dissertation lies in the framework showing the linkages between the critical components of the marketing culture of a library: antecedents, market orientation, facilitators and consequences. The dissertationdelineates the significant underlying dimensions of market-oriented behaviour of libraries which are namely customer philosophy, inter-functional coordination,strategic orientation, responsiveness, pricing orientation and competition orientation. The dissertation also showed the extent to which marketing attitudes, behaviour, knowledge were related and impact of market orientation on the serviceperformance of libraries. A strong positive association was found to exist between market orientation and marketing attitudes and knowledge. Moreover, it also shows that a higher market orientation is positively connected with the service performance of libraries, the ultimate result being higher customer satisfaction. The analysis shows that a genuine marketing culture represents a synthesis of certain marketing attitudes, knowledge and of selective practices. This finding is particularly significant in the sense that it manifests that marketing culture consists of a certain sets of beliefs and knowledge (which form a specific attitude towards marketing) and implementation of a certain set of activities that actually materialize the attitude of marketing into practice (market orientation) leading to superior service performance of libraries.

Sitouttamisretoriikka yritysviestinnässä

This study focuses on work commitment creation on rhetorical level, that is to say, the rhetorical and linguistic means that are used to construct or elicit worker commitment. The commitment of the worker is one of the most important objectives of all business communication. There is a strong demand for commitment, identification, or adherence to work in various walks of life, although the actual circumstances are often somewhat insecure and shortsighted. The analysis demonstrates that the actual object of commitment may vary from work itself or work organization to one’s career or professional development. The ideal pattern for commitment appears as comprehensive: it contains affective and rational as well as ideological dimensions. This thesis is a rhetorical discourse analysis, or rhetorical analysis with discourse-analytic influences. Primarily it is a rhetorical analysis in which discourses are observed mainly as tools of a rhetorician. The study also draws on various findings of sociology of work and organizational studies. Research material consists of magazines from three and web pages from six different companies. This study explores repeated discourses in commitment rhetoric, mainly through pointing core concepts and recurrent patterns of argumentation. In this analysis section, a semantic and concept-analytic approach is also employed. Companies talk about ideas, values, feelings and attitudes thus constructing a united and unanimous group and an ideal model of commitment. Probably the most important domain of commitment rhetoric is the construction of group and community. Collective identity is constructed through shared meanings, values and goals, and these rhetorical group constructs that can be used and modified in various ways. Every now and then business communication also focuses on the individual, employing different speakers, positions and discourses associated to them. Constructing and using these positions also paints the picture of an ideal worker and ideal work orientation. For example, the so called entrepreneurship model is frequently used here. Commitment talk and the rhetorical situation it constructs are full of tensions and contradictions; the presence of seemingly contradictory values, goals or identities is constant. This study demonstrates tensions like self-fulfilment and individuality versus conformity, and constant change and development versus dependable establishment, and analyses how they are used, processed and dealt with. An important dimension in commitment rhetoric is the way companies define themselves in respect of current social issues, and how they define themselves as responsible social actors, and how they, in this sense, seek to appear as attractive workplaces. This point of view gives rise to problematic questions as companies process the tensions between, for example, rhetoric and action, ethical ideals and business conditions and so on. For its part, the commitment talk also defines the meaning of waged work in human life. Changing society, changing working life, and changing business environments set new claims and standards for workers and contents of work. In this point of view this research contributes to the study of working life and takes part in current public discussion concerning the meaning, role and future of waged work.

Design and Control of Permanent Magnet Synchronous Machine for Hybrid Electric Vehicle

This master’s thesis mainly focuses on the design requirements of an Electric drive for Hybrid car application and its control strategy to achieve a wide speed range. It also emphasises how the control and performance requirements are transformed into its design variables. A parallel hybrid topology is considered where an IC engine and an electric drive share a common crank shaft. A permanent magnet synchronous machine (PMSM) is used as an electric drive machine. Performance requirements are converted into Machine design variables using the vector model of PMSM. Main dimensions of the machine are arrived using analytical approach and Finite Element Analysis (FEA) is used to verify the design and performance. Vector control algorithm was used to control the machine. The control algorithm was tested in a low power PMSM using an embedded controller. A prototype of 10 kW PMSM was built according to the design values. The prototype was tested in the laboratory using a high power converter. Tests were carried out to verify different operating modes. The results were in agreement with the calculations.

Strategic Innovation Management Based on Three Dimensions

This thesis examines innovation development needs of firms in a remote rural region. The perspective of the study is in strategic innovation management and three dimensions of innovation development: innovation environment, value delivery and innovation capability. The framework is studied with a theoretical and methodological approach in the context of the development of a regional innovation system and the defining of innovation development needs. The thesis is based on existing innovation management literature, expanding it by examining the features of the three dimensions. The empirical data of the study comprise 50 purposefully selected firms within the region of Pielinen Karelia located in Eastern Finland. Most of the firms (70%) included in the study represent manufacturing firms, and over 90% are small and medium-sized enterprises. The research data consist of two questionnaires and an interview, which were done during 2011 in the connection of a regional development project. The point of view of the research is in regional development and harnessing the innovation capability of the firms within the region. The principal research approach applies soft systems methodology. The study explores the means to foster the innovativeness of firms from the viewpoints of innovation environment, innovation capability and value delivery. In closer detail, the study examines relations between the innovation capability factors, differences in innovation development needs within the value delivery system, between sectors and between firm size categories. The thesis offers three major contributions. First, the study extends earlier research on strategic innovation management by connecting the frameworks of innovation capability, innovation environment and value delivery process to the defining of innovation development needs at the regional level. The results deepen knowledge especially concerning practice-based innovation, peripheral regions and smaller firms. Second, the empirical work, based on a case study, confirms the existence of a structural connection integrating five factors of innovation capability. Statistical evidence is provided especially for the positive impacts of the improvement of absorption capability, marketing capability and networking capability, which are the main weaknesses of firms according to the study. Third, the research provides a methodological contribution by applying the innovation matrix in the defining of the innovation development needs of firms. The study demonstrates how the matrix improves possibility to target policy instruments and innovation services more efficiently through indicating significant differences between the innovation support needs regarding various time horizons and phases of innovation process.

Essays on auditor independence

Auditor independence is a cornerstone of the auditing profession and the basic principle that underpins the reputation of the auditing profession in the public eye. Indeed, it is the attribute most demanded from auditors by the public. Therefore, the sustainability of the auditing profession depends on how auditors can protect this principle. This dissertation consists of four interrelated essays concerned with auditor independence. Specifically, it examines situations that can threaten and impair auditor independence. In addition, this dissertation also examines several variables that may enhance and protect auditor independence. The first essay aims to examine the impact of social pressures occurring within audit firms on auditors’ judgment in the setting of a society with “high power distance” and “low individualism” cultural dimensions. The social pressures consisted of obedience pressure exerted by an auditor’s superior and conformity pressure exerted by an auditor’s colleague. Moreover, two moderating variables—a multi-dimensional professional commitment and locus of control—were included as moderator variables in the relationship between the social pressures faced by auditors and their judgment. The findings show that obedience and conformity pressures influence auditor judgment. Auditors who face the social pressures will make a judgment that may be even diametrically opposite to the independence principle. The findings also indicate that a multi-dimensional professional commitment and locus of control may potentially influence auditor judgment in a situation with social pressures. The second essay aims to investigate the association of advocacy and familiarity threats caused by auditor fee dependence and auditor tenure on auditor independence based on Finnish data, law, and auditing environment. This essay was motivated by the Green Paper on Audit Policy, published by the European Commission in 2010 that questions whether the maximum fee collected from a client should be regulated and whether consecutive assignments should be limited, among others. Contrary to popular belief, this essay does not find evidence that audit fees and long auditor tenure will jeopardise auditor independence. Therefore, the findings do not support policies to regulate auditor fees or limit auditor tenure in Finland. The third essay aims to examine the effect of client intimidation on auditor independence in an audit-client conflict situation. Intimidation threat is one of five independence threats that are explicitly referenced in the IFAC’s independence framework. Client intimidation was manifested in the client threatening to replace the auditor if the auditor did not adopt the client’s position. In addition, this essay examines the role of auditor’s perceived pressure and multi-dimensions of professional commitment as moderator variables. The findings suggest that auditors who experience client intimidation in an audit conflict situation are more likely to have their independence impaired than those who are in a similar situation but without client intimidation. Moreover, auditors who experience client intimidation perceive higher pressure than those who do not experience intimidation. Finally, auditors’ affective and continuance professional commitment dimensions moderate the relationship between auditors’ perceived pressures and auditor independence. The aim of the fourth essay is twofold. First, it aims to develop a scale for measuring auditors’ reputation awareness. Second, it aims to examine the correlation between the levels of auditor reputation awareness and auditor independence. A seven-item scale was developed as the reputation awareness scale. The findings indicate that the scale consists of one dimension. It also has a level of satisfactory reliability and a high level of validity. The findings show that there is a positive correlation between the level of auditors’ reputation awareness and auditor independence.

Barriers of ESCO Service Business in Finland

The purpose of this study is to determine what are the key barriers hampering ESCO service business success in Finland. Research approach for this study is qualitative. Data was collected using Delphi method with two questionnaire rounds. Internet based tool was applied in carrying out questionnaires. Respondents of the questionnaires were ESCO service experts and researchers, and people working for ESCO service providers. Characteristics of ESCO service and ESCO project implementation are analyzed by using transaction costs theory of service business. In terms of ESCO service in Finland, uncertainty and asset specificity are relevant dimensions of TCE. General uncertainty in world’s economy hinders demand for ESCO service, and asset specificity of ESCO contracts induces slight problems for project financiers. Also bounded rationalism and opportunism are present in Finnish ESCO business. The most significant barriers of success of ESCO service in Finland are problems in legislative and political frameworks, and in customers’ investment processes. ESCO service providers should move more strongly towards service dominant business logic and improve understanding of customer needs. Political barriers are unsuitable procurement processes, unclear and unpredictable laws, and lack of compelling factors in subsidy system. Investment process hurdles are caused by customers’ lack of interest to change course of action. These are things in which ESCOs can have influence in.

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