Supply chain performance management system

The purpose of the study is to determine general features of the supply chain performance management system, to assess the current state of performance management in the case company mills and to make proposals for improvement – how the future state of performance management system would look like. The study covers four phases which consist of theory and case company parts. Theoretical review gives understanding about performance management and measurement. Current state analysis assesses the current state of performance management in the mills. Results and proposals for improvement are derived from current state analysis and finally the conclusions with answers to research questions are presented. Supply chain performance management system consists of five areas: perfor-mance measurement and metrics, action plans, performance tracking, performance dialogue and rewards, consequences and actions. The result of the study revealed that all mills were quite average level in performance management and there is a room for improvement. Created performance improvement matrix served as a tool in assessing current performance management and could work also as a tool in the future in mapping the current state after transformation process. Limited harmonization was revealed as there were different ways to work and manage performance in the mills. Lots of good ideas existed though actions are needed to make a progress. There is also need to harmonize KPI structure.

Entrepreneurial orientation in small and medium-sized enterprises during economic crisis

The economic importance of small and medium-sized enterprises (SMEs) and entrepreneurship has increased significantly in recent decades and entrepreneurial activity and SMEs are deemed vital to economic progress. Therefore, it is justifiable to study how small firms and entrepreneurs can enhance their performance and emergence in the turbulent economic environment. The concept of entrepreneurial orientation (EO) has recently attracted considerable attention in the field of entrepreneurship research. EO generally refers to a firm’s propensity to be innovative, to be proactive and to take risks. A majority of EO studies so far have found that adopting EO associated entrepreneurial behaviors will help firms to create or sustain a high level of performance. This dissertation explores the main drivers and performance implications of EO for SMEs in time of economic crisis. Hence the first objective of this dissertation is to examine the performance implications of EO and to test the role of EO on how firms are treated by the crisis at operative level. The second objective is to expand the prevailing understanding of determinants of EO by exploring the relationship between owner's work related values, attitudes, demographic characteristics, firm’s financial resources and EO. EO was found to be a significant and positive factor behind a firm’s long run growth. Hence it can be said that EO has positive implications for firm performance. But on the other hand, during a time of economic crisis the different dimensions of EO had both positive and negative effects on performance of SMEs. The performance implications varied across different stages of the crisis and were also dependent on what measure was used for measuring the performance. The main drivers of EO in SMEs were the personal work related values of the entrepreneur and his/her prior experience as an entrepreneur. The intrinsic work values related to interest, responsibility, challenge, self-development or intellectual stimulation and values related to status, power, achievement and recognition had a positive effect on the level of EO. On the other hand, extrinsic values related to high income, material possessions, benefits such as generous holidays, job security, and comfort through good working conditions decreased the level of EO

The Role of a firm’s mindset in international success - case study of Finnish marine industry firms

This thesis investigates the influence of a firm’s mindset on international success in the context of the Finnish marine industry. The study draws theoretical wisdom from organisational behaviour and strategic management literatures. The research aim set for this study was to identify and categorise existing strategic types based on mindsets found in the marine industry SMEs, and to link the influence of mindsets with success by examining the role of mindsets in a firm’s performance. Mindsets of firms were conceptualised as aggregate collections of perceptions that influence how the surrounding environment is discerned by the members of the firm. Mindsets are idiosyncratic to firms and therefore important firm-specific resources which influence decision-making and can be observed through the strategic behaviour of firms. Qualitative case study method was applied which was further supported by quantitative data on the financial performance of the ten case firms. Taxonomy based on the dimension of mindsets and prediction was developed to demonstrate four ideal types of firms identified within the marine industry. It was found that all of the case firms emphasised adaptation in their strategy while planning was emphasised to a varying degree. Moreover, two different methods of adapting were found; proactive and reactive. Firms which plan in the long-term and adapt proactively constantly investigate whether their plans are synchronous with the realities of the market; by having an open mindset, a firm’s perception of the reality of the market is enabling the firm to develop value creating strategies which are superiorly informed.This finding was supported by the financial data and led to the proposition that having an open mindset and placing a high level of emphasis on prediction may have a positive influence on international success. Also, it was proposed that concentrating only on exploiting business opportunities in the present time and not exploring any addition opportunities can have a negative influence on the firm’s performance, even if the mindset of the firm is open.

Improving the Supply Chain Performance Management System in a Finnish paper mill

This Master’s Thesis studies performance management system and its benefits, risks and costs. Objective of the thesis is to describe and evaluate currently used supply chain performance management system (SCPMS) in a Finnish paper mill and its interfaces with its business unit’s SCPMS. As a result, the host company has improvement road map for improving its SCPMS. Used SCPMS in the host company and its interfaces to business unit’s SCPMS are described based on interviews held in the host company and the business unit. Evaluation of the host company’s SCPMS is based on literature study. For improvement road map, three areas in need of improvements are chosen. The study shows the need of high level top management commitment in successful performance management system implementation and usage, especially when the system is deployed to lower levels in the organization.

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

Maintaining supply performance during an ERP system implementation phase : case Cloetta Suomi Oy

Implementing an enterprise resource planning (ERP) system often means a major change to an organization and involves significant risks. It is typical that many of the ERP system implementations fail resulting in tremendous damage to the business. Moreover, running normal business operations during an ERP system implementation is far more complicated than normally. This thesis focuses on how an organization should manage the ERP system implementation process in order to maintain supply performance during the implementation phase. The theoretical framework in this thesis focuses on ERP system implementations with a critical success factor approach. Critical success factors can be divided into strategic and tactical level success factors. By considering these critical success factors, ERP system implementation project’s timeline and best practices of an ERP implementation, a critical success factor based ERP system implementation management framework is presented. The framework can be used as a theoretical framework when the goal is to avoid ERP system implementation phase issues that are driven by the ERP system implementation project and that may decrease organization’s supply performance. This thesis is a case study that was written on an assignment to a confectionary company Cloetta Suomi Oy. In order to collect data, interviews of the case company personnel were conducted. In addition, several other data collection methods were used throughout the research process. These data collection methods include examination of presentations and archival records as well as direct observations in case company meetings and in various work duties. The results of this thesis indicate that there are several factors that may decrease organization’s supply performance during the ERP system implementation. These issues are categorized under external and internal issues and further into six risk drivers that are suppliers, customers, products, staff, information systems and other projects. After the description and categorization of each issue, the thesis focuses on finding solutions on how to avoid or mitigate the impact of these issues on the organization’s supply performance. This examination leads to several operational activities that are also practical to business practitioners. It is also stated that a successful ERP system implementation that also causes minimal disturbance to organization’s supply performance during the ERP system implementation, is achieved by considering three levels of actions.

Analysis of corporate social responsibility (CSR) performance and financial performance of selected mining companies

The global concern about sustainability has been growing and the mining industry is questioned about its environmental and social performance. Corporate social responsibility (CSR) is an important issue for the extractive industries. The main objective of this study was to investigate the relationship between CSR performance and financial performance of selected mining companies. The study was conducted by identifying and comparing a selection of available CSR performance indicators with financial performance indicators. Based on the result of the study, the relationship between CSR performance and financial performance is unclear for the selected group of companies. The result is mixed and no industry specific realistic way to measure CSR performance uniformly is available. The result as a whole is contradictory and varies at company level as well as based on the selected indicators. The result of this study confirms that the relationship between CSR performance and financial performance is complicated and difficult to determine. As an outcome, evaluation of benefits of CSR in the mining sector could better be analyzed based on different attributes.

Antecedents and Performance Outcomes of Entrepreneurial Orientation: a Comparative Cross-Country Study

Development of entrepreneurial orientation (EO) within a company is considered to be significant for firm performance in a contemporary market society with constantly changing environment. Considered as entrepreneurial, the firm is able to innovate, make risky investments and be proactive. The purpose of the thesis is to investigate factors which influence EO, the impact of EO on firm performance, and a mediating role of EO in developed and emerging market contexts. The empirical research is conducted quantitatively in a form of a survey in Russia and Finland. The results of the thesis have shown that the relationship between antecedents, EO and firm performance outcomes is different in developed and emerging contexts and can be explained by cultural differences and institutional development. The empirical research has both theoretical and practical novelty. It contributes to the existing literature on EO by the usage of comparative cross-country approach and a broader three-way interaction model between the variables. A general practical implication of the research is that managers may benefit from developing entrepreneurial strategic posture in particular contexts.

Cooperative strategy in emerging markets - analysis of interfirm r&d cooperation and performance in Russian manufacturing companies

Emerging markets have come to play a significant role in the world, not only due to their strong economic growth but because they have been able to foster an increasing number of innovative high technology oriented firms. However, as the markets continue to change and develop, there remain many companies in emerging markets that struggle with their competitiveness and innovativeness. To improve competitive capabilities, many scholars have come to favor interfirm cooperation, which is perceived to help companies access new knowledge and complementary resources and, by so doing, enables them to catch up quickly with Western competitors. Regardless of numerous attempts by strategic management scholars, the research field remains very fragmented and lacks understanding on how and when interfirm cooperation contributes to firm performance and competiveness in emerging markets. Furthermore, the reasons why interfirm R&D sometimes succeeds but fails at other times frequently remain unidentified. This thesis combines the extant literature on competitive and cooperative strategy, dynamic capabilities, and R&D cooperation while studying interfirm R&D relationships in and between Russian manufacturing companies. Employing primary survey data, the thesis presents numerous novel findings regarding the effect of R&D cooperation and different types of R&D partner on firms’ exploration and exploitation performance. Utilizing a competitive strategy framework enables these effects to be explained in more detail, and especially why interfirm cooperation, regardless of its potential, has had a modest effect on the general competitiveness of emerging market firms. This thesis contributes especially to the strategic management literature and presents a more holistic perspective on the usefulness of cooperative strategy in emerging markets. It provides a framework through which it is possible to assess the potential impacts of different R&D cooperation partners and to clarify the causal relationships between cooperation, performance, and long term competitiveness.

Linking supplier delivery risk to outbound delivery service performance improvement

Customer satisfaction should be the main focus for all of the parts of the business. Usually supply chain behind the business is in a key role when this focus is pursued especially in repair service business. When focusing on the materials that are needed to make repairs to equipment under service contracts, the time aspect of quality is critical. Do late deliveries from supplier have an effect on the service performance of repairs when distribution center of a centralized purchasing unit is acting as a buffer between suppliers and repair service business? And if so, how should the improvement efforts be prioritized? These are the two main questions that this thesis focuses on. Correlation and linear regression was tested between service levels of supplier and distribution center. Percentage of on-time deliveries were compared to outbound delivery service level. It was found that there is statistically significant correlation between inbound and outbound operations success. The other main question of the thesis, improvement prioritization, was answered by creating material availability based supplier classification and additional to that, by developing the decision process for the analysis of most critical suppliers. This was built on a basis of previous supplier and material classification methods.

Bumblebees in a Changing Climate: Evaluating the Effects of Temperature on Queen Performance

Bumblebees are a very essential group of pollinating insects, but their populations have declined drastically during the past decades. We need to understand why their numbers are decreasing and what can be done to reverse this trend. Climate change-related phenomena, such as changes in the overwintering temperatures and spring conditions, are among the most prominent threats to bumblebees. Queens have a special role in the lifecycle of bumblebees because they overwinter and start new colonies the next year. Their successful performance: survival, overwintering ability, longevity, immune competence, and nest establishing capability in spring, is highly important for bumblebee populations. However, the effects of climate change on bumblebee queen performance remain unknown. The main objective of this thesis was to assess how temperature affects the performance of bumblebee queens during and after overwintering. The effects of warm temperature predicted by climate change scenarios on queen survival and stress-tolerance were studied by a four-month artificial diapause of bumblebee queens at two temperatures (9°C and 1.8°C). Bumblebee colonies were also reared in a laboratory and factors affecting colony characteristics were examined. In addition, queen performance during spring was studied in a starvation experiment using two temperatures (15°C as normal; 24°C as warmer than average) and queens collected from nature right after their emergence. My research revealed how temperature affects queen performance, and queen size was found to be an important factor determining the direction of some of these effects. We found a 0.4g weight threshold for bumblebee queens to be able to survive overwintering. In addition, during mild winters, larger queens have a higher chance than smaller ones to survive through winter and also to cope with immunological stresses after overwintering. During cold conditions, which are normal in the current climatic situation, this advantage disappears. In the spring starvation experiment, the starved queens survived approximately eight days longer in 15°C than in 24°C, which means that starvation risk rises significantly with increasing spring temperature, in a situation where food is scarce due to for example frost damage or asynchrony between bumblebees and their important food plants. These results could mean that in the future climate, larger queens are better able to survive the winter, initiate their nests and start rearing their offspring. This may be problematic, because I also detected two alternative strategies of colony development that differ between large and small queens; larger queens start to lay eggs earlier at nest initiation, their colonies mature later, they produce more workers, and they have a more strongly male biased sex allocation compared with smaller queens. If larger queens have a greater change of producing offspring after a mild winter, this could lead to a significant decline in the total production of new queens at a population level. Thus, it seems that queen size could act as one mechanism regulating the population level outcomes in different temperatures. The new information presented in my thesis reinforces that basic research, monitoring, and local species conservation of bumblebees both in Finland and globally must be increased to ensure that this highly important pollinator group survives in the face of climate change.

Green Service Level Agreement under Sustainability Lens in IT Industry

Nowadays, when most of the business are moving forward to sustainability by providing or getting different services from different vendors, Service Level Agreement (SLA) becomes very important for both the business providers/vendors and as well as for users/customers. There are many ways to inform users/customers about various services with its inherent execution functionalities and even non-functional/Quality of Services (QoS) aspects through negotiating, evaluating or monitoring SLAs. However, these traditional SLA actually do not cover eco-efficient green issues or IT ethics issues for sustainability. That is why green SLA (GSLA) should come into play. GSLA is a formal agreement incorporating all the traditional commitments as well as green issues and ethics issues in IT business sectors. GSLA research would survey on different traditional SLA parameters for various services like as network, compute, storage and multimedia in IT business areas. At the same time, this survey could focus on finding the gaps and incorporation of these traditional SLA parameters with green issues for all these mentioned services. This research is mainly points on integration of green parameters in existing SLAs, defining GSLA with new green performance indicators and their measurable units. Finally, a GSLA template could define compiling all the green indicators such as recycling, radio-wave, toxic material usage, obsolescence indication, ICT product life cycles, energy cost etc for sustainable development. Moreover, people’s interaction and IT ethics issues such as security and privacy, user satisfaction, intellectual property right, user reliability, confidentiality etc could also need to add for proposing a new GSLA. However, integration of new and existing performance indicators in the proposed GSLA for sustainable development could be difficult for ICT engineers. Therefore, this research also discovers the management complexity of proposed green SLA through designing a general informational model and analyses of all the relationships, dependencies and effects between various newly identified services under sustainability pillars. However, sustainability could only be achieved through proper implementation of newly proposed GSLA, which largely depends on monitoring the performance of the green indicators. Therefore, this research focuses on monitoring and evaluating phase of GSLA indicators through the interactions with traditional basic SLA indicators, which would help to achieve proper implementation of future GSLA. Finally, this newly proposed GSLA informational model and monitoring aspects could definitely help different service providers/vendors to design their future business strategy in this new transitional sustainable society.

The Forecast Performance of Model-Free Implied Volatility: Evidence from DAX Index Options

Volatility has a central role in various theoretical and practical applications in financial markets. These include the applications related to portfolio theory, derivatives pricing and financial risk management. Both theoretical and practical applications require good estimates and forecasts for the asset return volatility. The goal of this study is to examine the forecast performance of one of the more recent volatility measures, model-free implied volatility. Model-free implied volatility is extracted from the prices in the option markets, and it aims to provide an unbiased estimate for the market’s expectation on the future level of volatility. Since it is extracted from the option prices, model-free implied volatility should contain all the relevant information that the market participants have. Moreover, model-free implied volatility requires less restrictive assumptions than the commonly used Black-Scholes implied volatility, which means that it should be less biased estimate for the market’s expectations. Therefore, it should also be a better forecast for the future volatility. The forecast performance of model-free implied volatility is evaluated by comparing it to the forecast performance of Black-Scholes implied volatility and GARCH(1,1) forecast. Weekly forecasts for six years period were calculated for the forecasted variable, German stock market index DAX. The data consisted of price observations for DAX index options. The forecast performance was measured using econometric methods, which aimed to capture the biasedness, accuracy and the information content of the forecasts. The results of the study suggest that the forecast performance of model-free implied volatility is superior to forecast performance of GARCH(1,1) forecast. However, the results also suggest that the forecast performance of model-free implied volatility is not as good as the forecast performance of Black-Scholes implied volatility, which is against the hypotheses based on theory. The results of this study are consistent with the majority of prior research on the subject.

A performance analysis of conventional and fundamental exchange traded funds: ETFs and their risk-return characteristics in relation to building institutional investor’s passive portfolio

An exchange traded fund (ETF) is a financial instrument that tracks some predetermined index. Since their initial establishment in 1993, ETFs have grown in importance in the field of passive investing. The main reason for the growth of the ETF industry is that ETFs combine benefits of stock investing and mutual fund investing. Although ETFs resemble mutual funds in many ways, also many differences occur. In addition, ETFs not only differ from mutual funds but also differ among each other. ETFs can be divided into two categories, i.e. market capitalisation ETFs and fundamental (or strategic) ETFs, and further into subcategories depending on their fundament basis. ETFs are a useful tool for diversification especially for a long-term investor. Although the economic importance of ETFs has risen drastically during the past 25 years, the differences and risk-return characteristics of fundamental ETFs have yet been rather unstudied area. In effect, no previous research on market capitalisation and fundamental ETFs was found during the research process. For its part, this thesis seeks to fill this research gap. The studied data consist of 50 market capitalisation ETFs and 50 fundamental ETFs. The fundaments, on which the indices that the fundamental ETFs track, were not limited nor segregated into subsections. The two types of ETFs were studied at an aggregate level as two different research groups. The dataset ranges from June 2006 to December 2014 with 103 monthly observations. The data was gathered using Bloomberg Terminal. The analysis was conducted as an econometric performance analysis. In addition to other econometric measures, the methods that were used in the performance analysis included modified Value-at-Risk, modified Sharpe ratio and Treynor ratio. The results supported the hypothesis that passive market capitalisation ETFs outperform active fundamental ETFs in terms of risk-adjusted returns, though the difference is rather small. Nevertheless, when taking into account the higher overall trading costs of the fundamental ETFs, the underperformance gap widens. According to the research results, market capitalisation ETFs are a recommendable diversification instrument for a long-term investor. In addition to better risk-adjusted returns, passive ETFs are more transparent and the bases of their underlying indices are simpler than those of fundamental ETFs. ETFs are still a young financial innovation and hence data is scarcely available. On future research, it would be valuable to research the differences in risk-adjusted returns also between the subsections of fundamental ETFs.

Internationalization of a Finnish accounting firm to Russian markets

Despite the unstable situation at the moment in Russia, the Russian market and St. Petersburg have been a very attractive from the point of view of Finnish companies. The objective of this research was to define how a Finnish accounting firm should perform its market entry to Russian markets as a part of its internationalization process. In addition, the special characteristics that support the internationalization to Russia were examined together with the implications from the behavior of potential customers at the market. The actual market entry mode was developed based on the theories of Uppsala model, transaction cost economics and the network approach. Additional emphasis was given for the service point of view. The primary data in this research was collected through semi-structured interviews with professionals from the Russian market. The results of this research show that there exists potential especially at the accounting markets in Russia. However, the current unstable situation and sanctions in Russia have led to situation where the price-sensitivity among customers is high, and costs savings are searched from multiple processes in organizations. Therefore, the accounting company should perform its market entry in small incremental steps to decrease the risks involved, and to gain specific market knowledge before committing more resources into Russian markets. A simplified process was developed to evaluate the suitable market entry mode. As a result, the level of commitment and market knowledge affect the final entry model of the firm, as well as defined goals for the particular market.