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.

Financial controlling and management in recovered paper joint ventures

The objective of this Master’s thesis is to examine financial functions, controlling and management in joint ventures of Manufacturing Corporation Oyj Recovered Paper business area. This case study investigated the current situation of financial functions and find out causes that have led the situation. Current situation of financial functions in joint ventures is variable. The most of the companies is outsourced at least some tasks. However, narrow reporting and problems in reliability are the biggest lack of financial controlling and management. The result of study consists of two parts: short-term and long-term improvement. Short-term improvement includes selected solution to outsource all routine financial tasks to new outsourcing partner and improve financial functions. Long-term improvements aim to create better controlling and management system to joint ventures. It is formed corporate governance and performance measurement. In this study it developed new Balanced Scorecard (BSC) for recovered paper joint ventures. Dimensions of BSC are quality, delivery (time), price and financial controlling and management. Earlier researched are showed problems in success of joint venture relationships. Similar results are obtained in this study. In future research, suitable of developed Balanced Scorecard for other industries could be studied

The best practices in the formation phase of Sino-Finnish joint ventures in China: For Finnish software companies

This study discusses the formation phase of Chinese-Finnish joint ventures in China. The purpose of this thesis is to create best practices for Finnish software companies in forming a joint venture with a local Chinese company in China. Therefore, the main research question, in what are the best practices for forming Sino-Finnish joint ventures in China for Finnish software firms, is examined through four different themes within the joint venture formation phase; the motives, the partner se- lection, the choice of a joint venture type and joint venture negotiations. The theoretical background of the study consists of literature relating to the establishment process of Sino-Western joint ventures in China. The empirical research conducted for this study is based on the expert interviews. The empirical data was gathered via nine semi-structured interviews with both Chinese and Finnish experts in software and technology industry, who have experience or knowledge in establishing Sino-Finnish joint ventures in China. Thematic analysis was used to cat- egorize and interpret the interview data. In addition, a thematic network was built to act as a basis of the analysis. According to the main findings, the main motives for Finnish software companies to establish a joint venture in China are lack of skills or experience, little resources to enter on their own, and China’s large market. The main motives for Chinese companies are to gain new technology or man- agerial skills, and expand internationally. The intellectual property rights (IPR) have recently im- proved a lot in China, but the Finnish companies’ knowledge on IPR is inadequate. The Finnish software companies should conduct a market and industry research in order to understand their po- sition in the market and to find a suitable location and potential joint venture partners. It is essential to define partner selection criteria and partner attributes. In addition, it is important to build the joint venture around complementary motives and a win-win situation between the joint venture partners. The Finnish companies should be prepared that the joint venture negotiations will be challenging and they will take a long time. The challenges can be overcome by gaining understanding about the Chinese culture and business environment. The findings of this study enhance understanding of the joint venture formation phase in China. This study provides guidelines for Finnish software companies to establish a joint venture in China. In addition, this study brings new insights to the Sino-Western joint venture literature with its soft- ware industry context. Future research is, however, necessary in order to gain an understanding of the advantages and disadvantages of a joint venture as an entry mode into China for Finnish soft- ware companies

The best practices in the formation phase of Sino-Finnish joint ventures in China: For Finnish software companies

This study discusses the formation phase of Chinese-Finnish joint ventures in China. The purpose of this thesis is to create best practices for Finnish software companies in forming a joint venture with a local Chinese company in China. Therefore, the main research question, in what are the best practices for forming Sino-Finnish joint ventures in China for Finnish software firms, is examined through four different themes within the joint venture formation phase; the motives, the partner se-lection, the choice of a joint venture type and joint venture negotiations. The theoretical background of the study consists of literature relating to the establishment process of Sino-Western joint ventures in China. The empirical research conducted for this study is based on the expert interviews. The empirical data was gathered via nine semi-structured interviews with both Chinese and Finnish experts in software and technology industry, who have experience or knowledge in establishing Sino-Finnish joint ventures in China. Thematic analysis was used to cat-egorize and interpret the interview data. In addition, a thematic network was built to act as a basis of the analysis. According to the main findings, the main motives for Finnish software companies to establish a joint venture in China are lack of skills or experience, little resources to enter on their own, and China’s large market. The main motives for Chinese companies are to gain new technology or man-agerial skills, and expand internationally. The intellectual property rights (IPR) have recently im-proved a lot in China, but the Finnish companies’ knowledge on IPR is inadequate. The Finnish software companies should conduct a market and industry research in order to understand their po-sition in the market and to find a suitable location and potential joint venture partners. It is essential to define partner selection criteria and partner attributes. In addition, it is important to build the joint venture around complementary motives and a win-win situation between the joint venture partners. The Finnish companies should be prepared that the joint venture negotiations will be challenging and they will take a long time. The challenges can be overcome by gaining understanding about the Chinese culture and business environment. The findings of this study enhance understanding of the joint venture formation phase in China. This study provides guidelines for Finnish software companies to establish a joint venture in China. In addition, this study brings new insights to the Sino-Western joint venture literature with its soft-ware industry context. Future research is, however, necessary in order to gain an understanding of the advantages and disadvantages of a joint venture as an entry mode into China for Finnish soft-ware companies.

Foreign Direct Investment and Shareholder Wealth Gains: Evidence from Finnish FDI in China

In Finnish discourse, “The China Effect” refers to the surge of offshoring activities by Western companies to China during the past couple of decades. Inspired by event studies concerning announcements of foreign direct investment, this thesis investigates the market’s reaction to Finnish companies’ announcement of FDI targeting the People’s Republic of China. Standard event study methodology is applied to 135 announcements related to subsidiaries, joint ventures and acquisitions between 1997 and 2014. The data is checked for contamination by unrelated coinciding events and outliers. A positive average abnormal return is found to take place on the date of the announcement. Additionally, the abnormal returns are found to exist only for projects announced before 2008, and only when the investment project is new, as opposed to investments made to extend previously established projects. Ownership arrangement and the novelty of facilities do not influence the market’s reaction towards the investment announcement.

THE ROLE OF DYNAMIC CAPABILITIES IN THE INTERNATIONALIZATION OF MEDIUM SIZED FINNISH MANUFACTURING FIRMS - A case for Sormat Oy

A rapidly changing business environment has necessitated most small and medium sized enterprises with international ambitions to reconsider their sources of competitive advantage. To survive in the face of a changing business environment, firms should utilize their dynamic organizational capabilities as well as their internationalization capabilities. Firms develop a competitive advantage if they can exploit their unique organizational competences in a new or foreign market and also if they can acquire new capabilities as a result of engaging in foreign markets. The acquired capabilities from foreign locations enhance the existing capability portfolio of a firm with a desire to internationalize. The study combined the research streams of SME organizational dynamic capability and internationalization capability to build a complete picture on the existing knowledge. An intensive case study was used for empirically testing the theoretical framework of the study and compared with the literature on various organizational capability factors and internationalization capabilities. Sormay Oy was selected because it is a successful medium sized company operating in Finland in the manufacturing industry which has a high international profile. In addition, it has sufficient rate of growth in sales that warrants it to engage internationally in matters such as, acquisitions, joint ventures and partnerships. The key findings of the study suggests that, medium sized manufacturing firms have a set of core competences arising from their organizational capabilities which were identified to be employee know how and relationship with stakeholders which aid the firm in its quest for attaining competitive advantage, ensuring production flexibility and gaining benefits present in a network. In addition, internationalization capabilities were identified under both the RAT test and CAT test whereby the primary findings suggests that, firms that outperform their competitors produce products that meet specific customer and country requirements, foresee the pitfalls of imitation brought about by the foreign local companies and members of a particular network through joint ventures, acquisitions or partnerships as well as those firms that are capable to acquire new capabilities in the foreign markets and successfully use these acquired capabilities to enhance or renew their capability portfolio for their competitive advantage. Additional significant findings under internationalization capabilities were discovered whereby, Sormay Oy was able to develop a new market space for its products despite the difficult institutional environment present in Russia.