The role of alliance capabilities in alliance portfolio management

The question of why some firms perform better in managing their alliances has raised interest among scholars and managers. Whereas inter-firm factors influencing the alliance performance such as strategic fit between partners and the existence of complementarities have been studied extensively, research on firm-level antecedents is rather scarce. Therefore this study investigates the role of firm’s alliance capability in the alliance success equation. Particularly it analyses the specialized mechanisms and processes set up by firm in order to facilitate alliancerelated know-how leverage organization-wise. Evidence from a cross-industry sample of R&D intensive Finnish companies supports the fact that firms which have invested in institutionalizing alliance capabilities outperform their counterparts in alliance portfolio management. Results also suggest that firms need to adjust alliance management tools depending on the alliance portfolio size, prior experience with inter-firm partnerships and the strategic importance of alliances. Furthermore, absorptive capacity is found to be crucial for successful alliance management, its role being complementary to that of alliance capability. Finally, firms that have successful alliances also enjoy higher financial, market and innovation performance.

Sensory and Non-sensory Factors Behind the Liking and Choice of Healthy Food Products

A healthy and balanced diet can reduce health problems, such as overweight and metabolic syndrome. In general, people have a considerably good knowledge of what constitutes a healthy diet and how they could achieve it with their food choices. Besides, people argue that health is among their top five food choice motives. Nevertheless, the prevalence of overweight is increasing and other food choice motives, such as taste, seem to conflict with the health. Liking for food does not necessarily determine acceptance alone, thus several non-sensory factors, such as brand, country of origin and nutrition claim, can also influence. Moreover, consumers are individuals in how they prioritize sensory and nonsensory factors of foods, but e.g. increasing age, female gender and health concern have been connected to a more health-oriented dietary behaviour. To sum up, identifying different factors that can increase the liking and consumption of healthy food is essential in order to develop more attractive healthful food products. Adding vitamins, minerals, fibre or other ingredients to a food product can be used to enrich the nutritional quality of the products. However, this may be difficult in practice as regards the sensory quality and pleasantness of the foods. Generally, consumers are not willing to compromise on taste in food. On the other hand, consumers are very heterogeneous in their likings, and their personal values and attitudes may interact with preferences for specific sensory characteristics. The aims of this study were to investigate the effects of intrinsic product characteristics on sensory properties and hedonic responses; to determine the impact of few non-sensory factors; and to examine the interaction between sensory and non-sensory factors with consumers’ demographics, values and attitudes in liking of healthy model foods. The results showed that product composition influenced sensory quality and had an effect on hedonic responses. Adding flaxseed to bakery products showed a significant improvement in the nutritional quality without negative effects on sensory properties. On the other hand, the fortification of wellness beverages with vitamins and minerals may impart off-flavours. In general, sweetness of yoghurts, freshness of wellness beverages and low intensity of rye bread flavour appealed to consumers. Information about the domestic origin of yoghurts and claiming a specific function for wellness beverages enhanced liking. However, consumers who were more concerned about their health and considered natural content as an important food choice motive, rated sourer and less sweet yoghurts and wellness beverages as more pleasant. In addition, interest in health increased the consumption of rye breads and other whole grain breads among adolescents. The results showed that the optimal product quality in terms of intrinsic and extrinsic factors differs between individual consumers, and personal values and food choice motives can be connected to preferences for specific sensory characteristics of foods. This indicates that each food product needs to be considered in relation to its specific market niche, and to which segment of consumer will respond most positively to its characteristics.

Estimation of existing cable systems in generator-busbar unit and choice the optimal solution for its modernization

The aim of this master’s thesis is to develop an algorithm to calculate the cable network for heat and power station CHGRES. This algorithm includes important aspect which has an influence on the cable network reliability. Moreover, according to developed algorithm, the optimal solution for modernization cable system from economical and technical point of view was obtained. The conditions of existing cable lines show that replacement is necessary. Otherwise, the fault situation would happen. In this case company would loss not only money but also its prestige. As a solution, XLPE single core cables are more profitable than other types of cable considered in this work. Moreover, it is presented the dependence of value of short circuit current on number of 10/110 kV transformers connected in parallel between main grid and considered 10 kV busbar and how it affects on final decision. Furthermore, the losses of company in power (capacity) market due to fault situation are presented. These losses are commensurable with investment to replace existing cable system.

Choice of Business Process Modeling Methodology - Case Northern Dimension Research Centre (NORDI) in Lappeenranta University of Technology

The main outcome of the master thesis is innovative solution, which can support a choice of business process modeling methodology. Potential users of this tool are people with background in business process modeling and possibilities to collect required information about organization’s business processes. Master thesis states the importance of business process modeling in implementation of strategic goals of organization. It is made by revealing the place of the concept in Business Process Management (BPM) and its particular case Business Process Reengineering (BPR). In order to support the theoretical outcomes of the thesis a case study of Northern Dimension Research Centre (NORDI) in Lappeenranta University of Technology was conducted. On its example several solutions are shown: how to apply business process modeling methodologies in practice; in which way business process models can be useful for BPM and BPR initiatives; how to apply proposed innovative solution for a choice of business process modeling methodology.

Management of interdependency in project portfolio

Project management has evolved in recent decades. Project portfolio management, together with multi project management, is an emerging area in the project management field in practice, and correspondingly in academic research and forums. In multi project management, projects cannot be handled isolated from each other, as they often have interdependencies that have to be taken into account. If the interdependencies between projects are evaluated during the selection process, the success rate of the project portfolio is increased. Interdependencies can be human resources, technological, and/or market based. Despite of the fact that interdependency as a phenomenon has roots in the 1960s and is related to famous management theories, it has not been much studied, although in practice most companies use it to great extent. There exists some research on interdependency, but prior publications have not emphasized the phenomenon per se, because a practical orientation practitioner techniques prevails in the literature. This research applies the method triangulation, electronic surveys and multiple case study. The research concentrates on small to large companies in Estonia and Finland, mainly in construction, engineering, ICT, and machinery industries. The literature review reveals that interdependencies are deeply involved in R&D and innovation. Survey analysis shows that companies are aware of interdependency issues in general, but they i have lack of detailed knowledge to use it thoroughly. Empirical evidence also indicates that interdependency techniques influence the success rate and other efficiency aspects to different extents. There are a lot of similarities in interdependency related managerial issues in companies of varying sizes and countries in Northern Europe. Differences found in the study are for instance the fact that smaller companies face more difficulties in implementing and evaluating interdependency procedures. Country differences between Estonia and Finland stem from working solutions to manage interdependencies on a daily basis.historical and cultural reasons, such as the special features of a transition country compared to a mature country. An overview of the dominant problems, best practices, and commonly used techniques associated with interdependency is provided in the study. Empirical findings show that many interdependency techniques are not used in practice. A multiple case study was performed in the study to find out how interdependencies are managed in real life on a daily basis. The results show that interdependencies are mostly managed in an informal manner. A description of managing the interdependencies and implementation procedures is given. Interdependency procedures are hard to implement, especially in smaller companies. Companies have difficulties in implementing interdependency procedures and evaluating them. The study contains detailed results on how companies have implemented working solutions to manage interdependencies on a daily basis

Risk Parity: A Modern Tool for Diversification

The purpose of this study is to examine how well risk parity works in terms of risk, return and diversification relative to more traditional minimum variance, 1/N and 60/40 portfolios. Risk parity portfolios were constituted of five risk sources; three common asset classes and two alternative beta investment strategies. The three common asset classes were equities, bonds and commodities, and the alternative beta investment strategies were carry trade and trend following. Risk parity portfolios were constructed using five different risk measures of which four were tail risk measures. The risk measures were standard deviation, Value-at-Risk, Expected Shortfall, modified Value-at-Risk and modified Expected Shortfall. We studied also how sensitive risk parity is to the choice of risk measure. The hypothesis is that risk parity portfolios provide better return with the same amount of risk and are better diversified than the benchmark portfolios. We used two data sets, monthly and weekly data. The monthly data was from the years 1989-2011 and the weekly data was from the years 2000-2011. Empirical studies showed that risk parity portfolios provide better diversification since the diversification is made at the risk level. Risk based portfolios provided superior return compared to the asset based portfolios. Using tail risk measures in risk parity portfolios do not necessarily provide better hedge from tail events than standard deviation.

Dynamic Ownership in Family Business System – A Portfolio Business Approach

Family businesses are among the longest-lived most prevalent institutions in the world and they are an important source of economic development and growth. Ownership is a key to the business life of the firm and also one main key in family business definition. There is only a little portfolio entrepreneurship or portfolio business research within family business context. The absence of empirical evidence on the long-term relationship between family ownership and portfolio development presents an important gap in the family business literature. This study deals with the family business ownership changes and the development of portfolios in the family business and it is positioned in to the conversation of family business, growth, ownership, management and strategy. This study contributes and expands the existing body of theory on family business and ownership. From the theoretical point of view this study combines insights from the fields of portfolio entrepreneurship, ownership, and family business and integrate them. This crossfertilization produces interesting empirical and theoretical findings that can constitute a basis for solid contributions to the understanding of ownership dynamics and portfolio entrepreneurship in family firms. The research strategy chosen for this study represents longitudinal, qualitative, hermeneutic, and deductive approaches.The empirical part of study is using a case study approach with embedded design, that is, multiple levels of analysis within a single study. The study consists of two cases and it begins with a pilot case which will form a preunderstanding on the phenomenon. Pilot case develops the methodology approach to build in the main case and the main case will deepen the understanding of the phenomenon. This study develops and tests a research method of family business portfolio development focusing on investigating how ownership changes are influencing to the family business structures over time. This study reveals the linkages between dimensions of ownership and how they give rise to portfolio business development within the context of the family business. The empirical results of the study suggest that family business ownership is dynamic and owners are using ownership as a tool for creating business portfolios.

Innovation Project Portfolio Management

Companies today are forced to innovate in order to remain within business. Such innovation projects undertaken by the companies are defined in this study as creative ideas which have been managed through “Stage-Gate” innovation process. This process is used to manage innovation projects as they proceed from being newly created to ready for launching/implementing. This has ensured that the companies manage the innovation project right. However, with so many new creative ideas the companies can come up within limited resources, the companies must rely on Innovation Project Portfolio Management (IPPM) to ensure that they are managing only the right innovation projects. Although, there are many tools and techniques available for use within Project Portfolio Management, there is still no consensus on which are the most effective and no standard framework has been established especially for IPPM. Thus, this study proposes a practical framework for which individual innovative organization can follow as a guideline to manage its innovation project portfolio. The study theoretically first addresses the key differences between project portfolio management of innovation projects and other traditional projects - one of which is the stage nature of innovation projects due to their unclear objectives from the beginning compare to clearly established objectives of traditional projects. Secondly, different tools and techniques which can be used are examined based on the three goals of IPPM: (1) Maximizing the Value of Innovation Project Portfolio: Financial Methods, Decision Trees, Scoring Models and Checklists; (2) Balancing Innovation Project Portfolio: Visual Representations; and (3) Aligning Innovation Project Portfolio with Strategy: Bottom-Up (Scoring Models with Strategic Criteria) and Top-Down (Strategic Buckets). Finally, the two approaches in which IPPM can be integrated with Stage-Gate innovation process are discussed: (1) Gates- Dominated; and (2) Portfolio Reviews-Dominated. Practically, this study investigates IPPM of a case organization, and through analysis of the case study results proposes a practical framework for case organization to improve its current management of innovation project portfolio. This framework is then generalized to propose a final practical framework or guideline for which an innovative organization can follow to manage its innovation project portfolio.

IT Investment Portfolio Management Over Joint Ventures: Case Study in a Multinational Oil & Gas Company

With information technology (IT) playing an increasing important role in driving the business, the value of IT investment is often challenged because not all of those investment decisions are made in a reasonable way or aligned with business strategies. IT investment portfolio management (PfM) is an effective way to prioritize and select the right IT projects to invest in, by taking all the project proposals into consideration as a whole, based on their business value, risks, costs, and interrelationships. There are different decision models to prioritise projects, and the Analytic Hierarchy Process (AHP) is one of the most commonly-used methods and is discussed in this master thesis. At the same time, there are IT projects on different levels for a multinational company, from global to local. For instance, many of them are probably proposed by joint ventures on local level. In the oil & gas industry, joint ventures are often formed especially in the area of the upstream (exploration & production). How to involve those projects into the IT investment PfM approach of the parent company is a challenge, because the parent company cannot make the decisions on its own. It needs to prioritize all projects in an adequate way, communicate with JVs and influence them. Also, different control levels on JVs need to be considered. This paper hence attempts to introduce a tailored approach of IT investment PfM for a multinational oil & gas company to address the issues around JVs.