Diffusion of Administrative Innovation: TQM Implementation and Effectiveness in a Global

The main objective of this dissertation is to create new knowledge on an administrative innovation, its adoption, diffusion and finally its effectiveness. In this dissertation the administrative innovation is approached through a widely utilized management philosophy, namely the total quality management (TQM) strategy. TQM operationalizes a self-assessment procedure, which is based on continual improvement principles and measuring the improvements. This dissertation also captures the theme of change management as it analyzes the adoption and diffusion of the administrative innovation. It identifies innovation characteristics as well as organisational and individual factors explaining the adoption and implementation. As a special feature, this study also explores the effectiveness of the innovation based on objective data. For studying the administrative innovation (TQM model), a multinational Case Company provides a versatile ground for a deep, longitudinal analysis. The Case Company started the adoption systematically in the mid 1980s in some of its units. As part of their strategic planning today, the procedure is in use throughout the entire global company. The empirical story begins from the innovation adoption decision that was made in the Case Company over 22 years ago. In order to be able to capture the right atmosphere and backgrounds leading to the adoption decision, key informants from that time were interviewed, since the main target was to clarify the dynamics of how an administrative innovation develops. In addition, archival material was collected and studied, available memos and data relating to the innovation, innovation adoption and later to the implementation contained altogether 20500 pages of documents. A survey was furthermore conducted at the end of 2006 focusing on questions related to the innovation, organization and leadership characteristics and the response rate totalled up to 54%. For measuring the effectiveness of the innovation implementation, the needed longitudinal objective performance data was collected. This data included the profit unit level experience of TQM, the development of the self assessment scores per profit unit and performance data per profit unit measured with profitability, productivity and customer satisfaction. The data covered the years 1995-2006. As a result, the prerequisites for the successful adoption of an administrative innovation were defined, such as the top management involvement, support of the change agents and effective tools for implementation and measurement. The factors with the greatest effect on the depth of the implementation were the timing of the adoption and formalization. The results also indicated that the TQM model does have an effect on the company performance measured with profitability, productivity and customer satisfaction. Consequently this thesis contributes to the present literature (i) by taking into its scope an administrative innovation and focusing on the whole innovation implementation process, from the adoption, through diffusion until its consequences, (ii) because the studied factors with an effect on the innovation adoption and diffusion are multifaceted and grouped into individual, organizational and environmental factors, and a strong emphasis is put on the role of the individual change agents and (iii) by measuring the depth and consistency of the administrative innovation. This deep analysis was possible due to the availability of longitudinal data with triangulation possibilities.

Factors of customer project profitability in an engineering industrial enterprise

The purpose of the study is to find factors affecting projects' profitability in project business. The issue is approached from customer profitability and project management point of view. The study has been made for a big Finnish company acting in a global market place. The research method is quantitative. Research hypotheses are based on the literature. The used database is originated from the company's ERP- (enterprise resource planning) and project financial follow-up —system. The findings of the study supported the hypotheses weakly. Obviously profitability fluctuated depending on a customer and a project manager. The reasons could not be justified with the variables used in the research.

Creating Global Competitive Advantage by Global Product Technology Transfers

Globalization is the trend which is realized in all areas in today’s business world. Pressure for cost reduction, changes in market situation and available scale economies have changed business environment more global than ever. To respond to new situation, companies are establishing global strategies. In this thesis, available global competitive advantages in electrical machine industry are studied in context of gaining them by global technology transfers. In theory part, establishing global strategy and competitive advantage is considered with connection to global sourcing and supply chain management. Additionally, market development in 21st century and its impact on global strategies is studied. In practice, global manufacturing is enabled by technology transfer projects. Smooth and fast project implementation enables faster and more flexible production ramp up. By starting the production available competitive advantages can be realized. In this thesis the present situation of technology transfer projects and the risks and advantages related to global manufacturing are analyzed. The analysis of implemented technology transfer projects indicates that project implementation is in good level. For further development of project execution 10 minor suggestions could be presented with two major ones: higher level standardization and development of product information model to support better global manufacturing.

Production planning development in global manufacturing company

Larox Corporation is a provider of full service filtration in solid and liquid separation. Larox develops, designs, manufactures and supplies industrial filters. By Larox’s continuous development principle, a project for more efficient production was started. At the same time production planning was taken under review. Aim for this Master’s thesis was to find software designed for production planning purposes replacement for old Microsoft Excel based method. In this Master’s thesis current way of production planning was thoroughly analyzed and improvement targets were specified and also requirements for new software were assigned. Primary requirements for new software were possibility to production scheduling, planning, follow-up and also for long-time capacity planning and tracking. Also one demand was that new software should have data link to Larox’s current ERP-system. Result of this Master’s thesis was to start using Larox’s ERP-system also for production planning purposes. New mode of operation fulfils all requirements which were placed to new system. By using new method of production planning, production planners can get more easier and reliable data than from current system.

Working capital management in the small and medium-sized enterprises Case: Project-based business environment in Flowrox Oy

This Master´s thesis illustrates how growing a business ties up the company´s working capital and what the cost of committed capital. In order to manage a company´s working capital in rapid business growth phase, the thesis suggests that by monitoring and managing the operating and cash conversion cycles of customers´ projects, a company can find ways to secure the required amount of capital. The research method of this thesis was based on literature reviews and case study research. The theoretical review presents the concepts of working capital and provides the background for understanding how to improve working capital management. The company in subject is a global small and medium-sized enterprise that manufactures pumps and valves for demanding process conditions. The company is expanding, which creates lots of challenges. This thesis concentrates to the company´s working capital management and its efficiency through the supply chain and value chain perspective. The main elements of working capital management are inventory management, accounts receivable management and accounts payable management. Prepayments also play a significant role, particularly in project-based businesses. Developing companies´ working capital management requires knowledge from different kind of key operations´ in the company, like purchasing, production, sales, logistics and financing. The perspective to develop and describe working capital management is an operational. After literature reviews the thesis present pilot projects that formed the basis of a model to monitor working capital in the case company. Based on analysis and pilot projects, the thesis introduces a rough model for monitoring capital commitments in short time period. With the model the company can more efficiently monitor and manage their customer projects.

Roles of leadership in complex environments : Enhancing Knowledge Flows in Organisational Constellations through Practice-Based Innovation Processes

Global challenges, complexity and continuous uncertainty demand development of leadership approaches, employees and multi-organisation constellations. Current leadership theories do not sufficiently address the needs of complex business environments. First of all, before successful leadership models can be applied in practice, leadership needs to shift from the industrial age to the knowledge era. Many leadership models still view leadership solely through the perspective of linear process thinking. In addition, there is not enough knowledge or experience in applying these newer models in practice. Leadership theories continue to be based on the assumption that leaders possess or have access to all the relevant knowledge and capabilities to decide future directions without external advice. In many companies, however, the workforce consists of skilled professionals whose work and related interfaces are so challenging that the leaders cannot grasp all the linked viewpoints and cross-impacts alone. One of the main objectives of this study is to understand how to support participants in organisations and their stakeholders to, through practice-based innovation processes, confront various environments. Another aim is to find effective ways of recognising and reacting to diverse contexts, so companies and other stakeholders are better able to link to knowledge flows and shared value creation processes in advancing joint value to their customers. The main research question of this dissertation is, then, to seek understanding of how to enhance leadership in complex environments. The dissertation can, on the whole, be characterised as a qualitative multiple-case study. The research questions and objectives were investigated through six studies published in international scientific journals. The main methods applied were interviews, action research and a survey. The empirical focus was on Finnish companies, and the research questions were examined in various organisations at the top levels (leaders and managers) and bottom levels (employees) in the context of collaboration between organisations and cooperation between case companies and their client organisations. However, the emphasis of the analysis is the internal and external aspects of organisations, which are conducted in practice-based innovation processes. The results of this study suggest that the Cynefin framework, complexity leadership theory and transformational leadership represent theoretical models applicable to developing leadership through practice-based innovation. In and of themselves, they all support confronting contemporary challenges, but an implementable method for organisations may be constructed by assimilating them into practice-based innovation processes. Recognition of diverse environments, their various contexts and roles in the activities and collaboration of organisations and their interest groups is ever-more important to achieving better interaction in which a strategic or formal status may be bypassed. In innovation processes, it is not necessarily the leader who is in possession of the essential knowledge; thus, it is the role of leadership to offer methods and arenas where different actors may generate advances. Enabling and supporting continuous interaction and integrated knowledge flows is of crucial importance, to achieve emergence of innovations in the activities of organisations and various forms of collaboration. The main contribution of this dissertation relates to applying these new conceptual models in practice. Empirical evidence on the relevance of different leadership roles in practice-based innovation processes in Finnish companies is another valuable contribution. Finally, the dissertation sheds light on the significance of combining complexity science with leadership and innovation theories in research.

Representations of cultural encounters in the global business press – The importance of cross-cultural competence

This qualitative study has started from the interest to examine how the reality of crosscultural encounters is presented in the global business press. The research paper emphasizes different ways to classify culture and cross-cultural competency, both from the point of view of individuals and organizations. The analysis consists of public discourses, where cross-cultural realities are created through different persons, stories and contexts For data collection, a comprehensive database search was performed and 10 articles from the widely known worldwide business magazine The Financial Times were chosen as the data for the study paper. For the functions of addressing the research study questions, Thematic Content Analysis (TCA) and also Discourse Analysis (DA) are utilized, added with the continuous comparison method of grounded theory in the formation of the data.The academic references consist of literary works and articles presenting relevant concepts, creating a cross-cultural framework, and it is designed to assist the reader in the navigation through the topics of culture and cross-cultural competency. The repertoires were formed from the data and following, the first repertoire is contrast difference between home and target culture that the individual was able to discern. As a consequence of the first repertoire, the companies then offer cultural training to their employees to prepare them to situations of increasing levels of cultural variation. The third repertoire is increased awareness of other cultures, which is conveyed as a result of cultural training and contextual work experience. The fourth repertoire is globalization as an international business environment, where the people in the articles perform their job functions. It is stated in the conclusions that the representations emphasize Western values and personal traits in leadership.

Value creation in project business relationships: Supplier and customer's perspectives

The purpose of this study is to analyze supplier’s value creation ability in project business in order to enhance customer’s business. In addition, the aim is to identify the role of business relationships in value creation and analyze the applicability of key account management in project business. The study considers value from the customer’s point of view. The concepts of value and value creation are widely discussed in marketing literature. Theory emphasizes the importance of value creation and business relationships in business markets. The empirical part of the study is conducted as a case study research. The empirical evidence is collected by interviewing one supplier organization and their three customer organizations. These companies operate in Finnish and global industrial markets. Data is collected through semi-structured interviews and analyzed by using qualitative content analysis. The study identifies several customer value drivers influencing on the value creation, which can be divided into product, service and relationship elements. One of the recognized value drivers is customer-supplier relationship. The findings show that a closer relationship enhances value creation possibilities and the key account management program allows effective managing of business relationships. As managerial implications, suppliers should seek to create continuous and conversational relationships with the key account customers.

Development Of Interpersonal Relationships in Global Virtual Teams

This study investigates the development of relationships in same global virtual team working on different projects. The purpose is to explore how do interpersonal relationships develop in terms of characteristics of virtuality and if there is any influence of project lifespan on the development of these relationships. Since relationships are dynamic in nature and are influenced by multiple levels of variables including individual, group and organizational level, therefore characteristics of virtuality have been considered from all these aspects so as to study their influence on development of relationships. In this study, relationships have been studied at two different levels. At first, dyadic relationships between two members of a GVT have been analyzed and thereafter, focus has been on the development of relationships among the team, based on these dyads. Characteristics having influence on development of relationships include trust, physical distance, time zone difference, cultural and language differences, level of formalization in the organization and means of communication used by team members. Level of formalization and means of communication are two characteristics which emerged after empirical study and are found to have direct influence on development of relationships. Remaining characteristics have been identified through literature review. In order to conduct the study, qualitative methodology has been applied. Empirical data has been collected based on a single case study while using semi-structured interviews as data gathering technique. Data analysis has been performed by applying thematic analysis along with the utilization of company documents such as work sheets, minutes of meetings and recordings of conferences. Findings of the study indicate that development of relationships, both at dyadic level and team level, is influenced by different events taking place among different members of GVT. These events have either positive or negative influence on the characteristics of virtuality, which leads to development of the relationships. It has been found that, trust, among all factors plays a greater role in development of these relations. Contrary to the belief that most conflicts arise among members of different cultures, they are equally likely to happen among the members from same culture in GVT environment. Study suggests that relationship development is not a smooth process but it fluctuates based on different events in teams. For further research, teams within large firms shall be studied along these lines. This study is an early attempt towards bringing different characteristics of virtuality together which previously, have been studied individually. It is therefore plausible to conduct similar studies so as to generalize the findings of this study which has provided a starting point.