Intellectual capital, knowledge management practices and firm performance

Researchers have widely recognised and accepted that firm performance is increasingly related to knowledge-based issues. Two separately developed literature streams, intellectual capital (IC) and knowledge management (KM), have been established as the key discussions related to knowledge-based competitive advantage of the firm. Intellectual capital has provided evidence on the strategic key intangible resources of the firm, which could be deployed to create competitive advantage. Knowledge management, in turn, has focused on the managerial processes and practices which can be used to leverage IC to create competitive advantage. Despite extensive literature on both issues, some notable research gaps remain to be closed. In effect, one major gap within the knowledge management research is the lack of understanding related to its influence on firm performance, while IC researchers have articulated a need to utilise more finegrained conceptual models to better understand the key strategic value-creating resources of the firm. In this dissertation, IC is regarded as the entire intellectual capacity, knowledge and competences of the firm that can be leveraged to achieve sustained competitive advantage. KM practices are defined as organisational and managerial activities that enable the firm to leverage its IC to create value. The objective of this dissertation is to answer the research question: “What is the relationship between intellectual capital, knowledge management practices and firm performance?” Five publications have addressed the research question using different approaches. The first two publications were systematic literature reviews of the extant empirical IC and KM research, which established the current state of understanding regarding the relationship between IC, KM practices and firm performance. Publications III and IV were empirical research articles that assessed the developed conceptual model related to IC, KM practices and firm performance. Finally, Publication V was among the first research papers to merge IC and KM disciplines in order to find out which configurations could yield organisational benefits in terms of innovation and market performance outcomes.

The Role of HR Management in the Corporate Matrix System

The successful performance of company in the market relates to the quality management of human capital aiming to improve the company's internal performance and external implementation of the core business strategy. Companies with matrix structure focusing on realization and development of innovation and technologies for the uncertain market need to select thoroughly the approach to HR management system. Human resource management has a significant impact on the organization and use a variety of instruments such as corporate information systems to fulfill their functions and objectives. There are three approaches to strategic control management depending on major impact on the major interference in employee decision-making, development of skills and his integration into the business strategy. The mainstream research has focus only on the framework of strategic planning of HR and general productivity of firm, but not on features of organizational structure and corporate software capabilities for human capital. This study tackles the before mentioned challenges, typical for matrix organization, by using the HR control management tools and corporate information system. The detailed analysis of industry producing and selling electromotor and heating equipment in this master thesis provides the opportunity to improve system for HR control and displays its application in the ERP software. The results emphasize the sustainable role of matrix HR input control for creating of independent project teams for matrix structure who are able to respond to various uncertainties of the market and use their skills for improving performance. Corporate information systems can be integrated into input control system by means of output monitoring to regulate and evaluate the processes of teams, using key performance indicators and reporting systems.

Strategic divide management in pharmaceutical alliances: A partner’s strategic evolution as a reason for strategic divide

Strategic alliances are widely used in the pharmaceutical industry and, ideally, they are long-lasting structures that bring many benefits and value to the alliance partners. However, organizations continuously encounter pressures to enhance performance, while the environment in which they operate evolves. Therefore, an alliance partner might be forced to change its strategy, which can lead to the partners’ misaligned priorities and strategic divide. The academic literature acknowledges the impact a partner’s strategic change can have on the value of the alliance, but the phenomenon is not studied further, which is why the purpose of this study is to understand the role that a partner’s strategic evolution plays in strategic alliances within the pharmaceutical industry. The main purpose is further divided into three sub-objectives: 1) Describe reasons behind the strategic direction change of a partner firm, 2) Understand the consequences of partners’ misaligned priorities, and 3) Describe proactive and reactive ways to manage strategic divide between alliance partners. Since the phenomenon is not studied much, the empirical part of the study was conducted as a qualitative analysis using expert interviews to better understand, how the partner’s strategic evolution affects the alliance. The empirical data was organized into themes, according to the researcher’s interpretations on the interviews. The research findings demonstrated, how the partners change their strategies if the external or organizational environments change. The strategic changes, again, cause strategic divides between the alliance partners that are likely to have an impact on the alliance value. The findings revealed that the interviewees consider anticipation of the partner’s strategic change to be really difficult, but, at the same time, it was noted that a proactive strategic divide management could help to prevent and detect some divides. Additionally, the results showed that, after the detection, a reactive approach in a controlled manner was seen to be the most beneficial for the alliance’s future performance. This study proved that a partner’s strategic evolution affects the partners’ priority alignment and alliance value, which is why the strategic divide management is important in organizations that are involved with strategic alliances. In order to understand the role of a partner’s strategic evolution and provide managers with a tool to manage alliances and strategic divides, the study combined the alliance lifecycle as well as the proactive and reactive approaches to strategic divide, and presented a framework for strategic divide management.

The role of knowledge management and renewal in building innovation performance

Tämän työn tavoitteena oli selvittää tietojohtamisen eri käytäntöjen vaikutusta oppimiseen, uudistumiseen sekä yrityksen innovaatiokyvykkyyteen. Työssä on keskitytty erityisesti sellaisiin tietojohtamisen käytäntöihin, jotka edistävät oppimista ja uusiutumista yrityksissä. Työssä on käytetty tilastollisia menetelmiä, muun muassa faktorianalyysia, korrelaatioanalyysia sekä regressiota, analysoitaessa 259 suomalaisesta yrityksestä kerättyä kyselydataa niiden tietojohtamisen käytöntöihin ja aineettomaan pääomaan liittyen. Analyysi osoittaa, että useat tietojohtamisen käytännöt vaikuttavat positiivisesti yrityksen uudistumiseen ja sitä kautta innovaatiokyvykkyyteen. Henkilöstön kouluttaminen sekä parhaiden käytäntöjen kerääminen ja soveltaminen yrityksessä ovat positiivisesti yhteydessä innovaatiokyvykkyyteen. Henkilöstön kouluttamisella on merkittävin suora vaikutus innovaatiokyvykkyyteen ja tässä työssä on esitetty, että koulutuksen tarjoamisen suurin vaikutus on oppimismyönteisen kulttuurin kehittyminen yrityksiin sen sijaan, että koulutuksella pyrittäisiin vain parantamaan tehtäväkenttään liittyviä taitoja ja tietoja. Henkilöstön kouluttaminen, parhaat käytännöt sekä sosialisaatiossa tapahtuva tiedon vaihto ja suhteiden solmiminen vaikuttavat positiivisesti uudistumispääomaan. Työn tulosten perusteella uudistumispääomalla on merkittävä rooli innovaatioiden syntymisessä yrityksissä. Uudistumispääoma medioi koulutuksen, parhaiden käytäntöjen ja mahdollisesti myös sosialisaation vaikutusta innovaatiokyvykkyyteen ja on näin merkittävä osa innovaatioiden syntyä yrityksissä. Innovaatiokyvykkyyden osatekijöiden ymmärtäminen voi auttaa johtajia ja esimiehiä keskittämään huomionsa tiettyihin tietojohtamisen käytäntöihin edistääkseen innovaatioiden syntymistä yrityksessä sen sijaan, että he pyrkisivät vain vaikuttamaan innovaatioprosessiin.

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.