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.

The role of organization-level factors on informal learning process

This study discusses the nature of informal learning process in business organizations, and the importance of different organization-level factors in this process. The purpose of this study is to understand the role of organization-level factors on informal learning process with three subquestions: how informal learning process takes place in business organizations, what organization-level factors affects informal learning process, and how informal learning process is affected by organizational-level factors. The theoretical background of this study includes literatures on the concept of informal learning, its process, and organization-level factors that can affect informal learning process. The empirical research has been conducted in this study by face-to-face interviews. The interviews were conducted between June and August 2015 in Dhaka, Bangladesh. Thirteen interviews were made with the employees from different hierarchical levels from four freight forwarding MNCs in Bangladesh. Constant comparative analysis has been used to process the collected data until reaching a level of saturation. The empirical research found that all the phases in an informal learning process are not linear and sequential, and the role of organization-level factors on each phase varies with the degree and nature of each factor. In addition, the results also revealed that all the organization-level factors do not interact with each other while playing their role on informal learning process. The findings of this study considerably extend our understanding of the important role of HRD, manager, colleague, culture, and work structure on informal learning process in the workplace. However, future research in different organizational contexts is required to generalize the findings of this study.

Development and Effect Analysis of the Asteri Consultative Auditing Process - Safety and Security Management in Educational Institutions

The Finnish legislation requires for a safe and secure learning environment. However, the comprehensive, risk based safety and security management (SSM) and the management commitment in the implementation and development of the SSM are not mentioned in the legislation. Multiple institutions, operators and researchers have studied and developed safety and security in educational institutions over the past decade. Typically the approach has been fragmented and without bringing up the importance of the comprehensive SSM. The development needs of the safety and security operations in universities have been studied. However, in universities of applied sciences (UASs) and in elementary schools (ESs), the performance level, strengths and weaknesses of the comprehensive SSM have not been studied. The objective of this study was to develop the comprehensive, risk based SSM of educational institutions by developing the new Asteri consultative auditing process and study its effects on auditees. Furthermore, the performance level in the comprehensive SSM in UASs and ESs were studied using Asteri and the TUTOR model developed by the Keski-Uusimaa Department for Rescue Services. In addition, strengths, development needs and differences were identified. In total, 76 educational institutions were audited between the years 2011 and 2014. The study is based on logical empiricism, and an observational applied research design was used. Auditing, observation and an electronic survey were used for data collection. Statistical analysis was used to analyze the collected information. In addition, thematic analysis was used to analyze the development areas of the organizations mentioned by the respondents in the survey. As one of the main contributions, this research presents the new Asteri consultative auditing process. Organizations with low performance levels on the audited subject benefit the most from the Asteri consultative auditing process. Asteri may be usable in many different types of audits, not only in SSM audits. As a new result, this study provides new knowledge on attitudes related to auditing. According to the research findings, auditing may generate negative attitudes and the auditor should take them into account when planning and preparing for audits. Negative attitudes can be compensated by producing added value, objectivity and positivity for the audit and, thus, improve the positive effects of auditing on knowledge and skills. Moreover, as the results of this study shows, auditing safety and security issues do not increase feelings of insecurity, but rather increase feelings of safety and security when using the new Asteri consultative auditing process with the TUTOR model. The results showed that the SSM in the audited UASs was statistically significantly more advanced than that in the audited ESs. However, there is still room for improvement in the ESs and the UASs as the approach to the SSM was fragmented. It can be assumed that the majority of Finnish UASs and ESs do not likely meet the basic level of the comprehensive, risk based the SSM.

The role of organization-level factors on informal learning process

This study discusses the nature of informal learning process in business organizations, and the importance of different organization-level factors in this process. The purpose of this study is to understand the role of organization-level factors on informal learning process with three subquestions: how informal learning process takes place in business organizations, what organizationlevel factors affects informal learning process, and how informal learning process is affected by organizational-level factors. The theoretical background of this study includes literatures on the concept of informal learning, its process, and organization-level factors that can affect informal learning process. The empirical research has been conducted in this study by face-to-face interviews. The interviews were conducted between June and August 2015 in Dhaka, Bangladesh. Thirteen interviews were made with the employees from different hierarchical levels from four freight forwarding MNCs in Bangladesh. Constant comparative analysis has been used to process the collected data until reaching a level of saturation. The empirical research found that all the phases in an informal learning process are not linear and sequential, and the role of organization-level factors on each phase varies with the degree and nature of each factor. In addition, the results also revealed that all the organization-level factors do not interact with each other while playing their role on informal learning process. The findings of this study considerably extend our understanding of the important role of HRD, manager, colleague, culture, and work structure on informal learning process in the workplace. However, future research in different organizational contexts is required to generalize the findings of this study.

Managing Finnish-Russian Business Relationships and Networks During Conflicts

This thesis examines management of business relationships during conflicts. The context of this study is the international political conflict which started in 2013 and is still affecting international trade relations in 2016. More specifically, this study researches the effects of the conflict in Finnish-Russian trade. The research aim is to identify the implications of a political conflict in the Finnish-Russian business relationships and networks. Furthermore, the study will explore how does a company adapt or overcome the challenges and barriers posed by the international business environment. This research combines relevant theories in management of business relationships and networks in order to review the research data through a critical research frame. The theoretical frameworks are different structures of business relationship development processes, various stages of interaction, and characteristics and functions of business relationships. Moreover, this study will examine the effect of interdependency, commitment and trust in trade relations. Also, what are the important exchange processes and how do these processes affect business relationship and overall performance of joint business operations. Qualitative single case study method was used in this research. Case company was a Finnish multinational company. To understand the changes, the data was collected and analysed through process research approach by pattern-matching and drawing temporal bracketing over two different periods of time, first period in years 2011-2013 and second period in years 2014-2016. Empirical data was collected through a semi-structured interview and additional data was collected from internal and external secondary data sources. The findings of the study confirmed the relationship between trade and conflict. However, the effects are not significant for a company in grocery retail industry which has had earlier experience in Russia and has managed its business relationships and operations effectively. Macroeconomic factors affect companies operating in foreign dynamic markets and in order to sustain changes and to adapt, companies should invest in their business relationships. Trust-based relationships and a higher level of commitment allow companies to have more efficient and beneficial outcomes before and during uncertainty. Furthermore, well-maintained and coordinated business relationships provide the ability to adapt and overcome challenges during uncertainty. Such relationships have information, financial and social exchange processes which allow the partnering firms to have successful business relationship management in dynamic market environments.

Internal communication during an organizational change: An ethnographic case study

This study discusses the importance of internal communication during organizational change of a case study company X. The purpose of this study is to find out how to use internal communication effectively during organizational change. This study is an ethnographic cade study where a unique case of an organizational change was chosen as the research object. The theoretical background of this study consists of literature relating to the concepts of communication, organizational communication, organizational change, change management and communication of change. The empirical research conducted for this study is based on an ethnographic research method where data was collected through participant observation, informal interviews and field records in the form of a research diary. The research data was collected between September and December 2015. During this period the researcher was working within the case study organization while observing the internal communication during the organizational change process. Triangulation was used to analyze the research data in order to build a united and theoretical picture of the topic. The study finds that without clear internal communication strategy the effectiveness of communication is ought to be poor, which may lead to resistance of change, lack of trust and lower level of overall job satisfaction. Moreover the study findings highlight the importance of managerial presence during an organizational change process and consistency in using formal and informal communication and utilizing multiple communication channels. Based on the findings of this research the study suggests that during an organizational change process a clear internal communication strategy should be carefully planned and executed. The goals of internal communication should be clearly stated and communicated to the company’s employees. The findings of this study enhance importance of managers promoting sense of belonging, developing awareness of the overall change process and contributing to the manager employee relationships and trust. In addition this study points out the key factors that should be included in the internal change communication strategy which are how to ensure that the communications, both vertical and horizontal, are constant. Future research is however necessary in order to gain a more comprehensive view of the research and wider perspective of the case study. Nevertheless, this study deepens the understanding of how to use internal communication effectively during organizational change.

Development of management accounting practices in energy operations in a forest industry Company

The aim of this master’s thesis was to map the management accounting processes and reporting of an internal service unit. The research was conducted in energy services in a forest industry company. Research questions and the results of the study are highly specific for the case unit although some generalizable features of management accounting in internal service units under shared services were searched. The research was carried out as a qualitative action research and a single case study. Internal benchmarking was used to find best practices from other units and to get a comprehensive understanding of the financial processes of the case company. Empirical data for the study was collected with participant observation, interviews of experts and by exploring internal company documents. A literature review was conducted to outline the subject and to support the study. Although the management accounting processes of the case unit were found to be on a good level, some improvement ideas were presented. Results of the research show that the needs of the customers are in the key role in the processes of an internal service unit. Management accounting and reporting need to support the company strategy and management decision-making. To evaluate the performance of the service unit both financial and non-financial measures are needed.

Green supply chain management practices and firm performance: evidence from Finland

In order to address the increasing stakeholder requirements for environmentally sustainable products and processes, firms often need the participation of their supply chain partners. Green supply chain management has emerged as a set of managerial practices that integrate environmental issues into supply chain management. If implemented successfully, green supply chain management can be a way to achieve competitive advantage while enhancing the environmental sustainability of the firm. The overall purpose of this dissertation is to contribute to the discussion on green supply chain management practices from the perspective of their drivers and performance implications. The theoretical background arises from the literature on competitive strategy, firm performance and green supply chain management. The research questions are addressed by analysing firm-level data from manufacturing, trading and logistics firms operating in Finland. The empirical data comes from two consecutive Finland State of Logistics surveys in 2012 and 2014, combined with financial reporting data from external databases. The data is analysed with multiple statistical methods. First, the thesis contributes to the discussion of the drivers of GSCM practices. To enhance the understanding of the relationship between competitive strategy and GSCM practices, a conceptual tool to describe generic competitive strategy approaches was developed. The findings suggest that firms pursuing marketing differentiation are more likely to be able to compete by having only small environmental effects and by adopting a more advanced form of external green supply chain management, such as a combination of strong environmental collaboration and the increased environmental monitoring of suppliers. Furthermore, customer requirements for environmental sustainability are found to be an important driver in the implementation of internal GSCM practices. Firms can respond to this customer pressure by passing environmental requirements on to their suppliers, either through environmental collaboration or environmental monitoring. Second, this thesis adds value to the existing literature on the effects of green supply chain management practices on firm performance. The thesis provides support for the idea that there is a positive relationship between GSCM practices and firm performance and enhances the understanding of how different types of GSCM practices are related to 1) financial, 2) operational and 3) environmental performance in manufacturing and logistics. The empirical results suggest that while internal GSCM practices have the strongest effect on environmentalperformance, environmental collaboration with customers seems to be the most effective way to improve financial performance. In terms of operational performance, the findings were more mixed, suggesting that the operational performance of firms is more likely to be affected by firm characteristics than by the choices they make regarding their environmental collaboration. This thesis is also one of the first attempts to empirically analyse the relationship between GSCM practices and performance among logistics service providers. The findings also have managerial relevance. Management, especially in manufacturing and logistics industries, may benefit by gaining knowledge about which types of GSCM practice could provide the largest benefits in terms of different performance dimensions. This thesis also has implications for policy-makers and regulators regarding how to promote environmentally friendly activities among 1) manufacturing; 2) trading; and 3) logistics firms.