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

Value added logistics in supply and demand chains. Smile. Part 1. eBusiness between global company and itslocal sme supplier network

VALOSADE (Value Added Logistics in Supply and Demand Chains) is the research project of Anita Lukka's VALORE (Value Added Logistics Research) research team inLappeenranta University of Technology. VALOSADE is included in ELO (Ebusiness logistics) technology program of Tekes (Finnish Technology Agency). SMILE (SME-sector, Internet applications and Logistical Efficiency) is one of four subprojects of VALOSADE. SMILE research focuses on case network that is composed of small and medium sized mechanical maintenance service providers and global wood processing customers. Basic principle of SMILE study is communication and ebusiness insupply and demand network. This first phase of research concentrates on creating backgrounds for SMILE study and for ebusiness solutions of maintenance case network. The focus is on general trends of ebusiness in supply chains and networksof different industries; total ebusiness system architecture of company networks; ebusiness strategy of company network; information value chain; different factors, which influence on ebusiness solution of company network; and the correlation between ebusiness and competitive advantage. Literature, interviews and benchmarking were used as research methods in this qualitative case study. Networks and end-to-end supply chains are the organizational structures, which can add value for end customer. Information is one of the key factors in these decentralized structures. Because of decentralization of business, information is produced and used in different companies and in different information systems. Information refinement services are needed to manage information flows in company networksbetween different systems. Furthermore, some new solutions like network information systems are utilised in optimising network performance and in standardizingnetwork common processes. Some cases have however indicated, that utilization of ebusiness in decentralized business model is not always a necessity, but value-add of ICT must be defined case-specifically. In the theory part of report, different ebusiness and architecture models are introduced. These models are compared to empirical case data in research results. The biggest difference between theory and empirical data is that models are mainly developed for large-scale companies - not for SMEs. This is due to that implemented network ebusiness solutions are mainly large company centered. Genuine SME network centred ebusiness models are quite rare, and the study in that area has been few in number. Business relationships between customer and their SME suppliers are nowadays concentrated more on collaborative tactical and strategic initiatives besides transaction based operational initiatives. However, ebusiness systems are further mainly based on exchange of operational transactional data. Collaborative ebusiness solutions are in planning or pilot phase in most case companies. Furthermore, many ebusiness solutions are nowadays between two participants, but network and end-to-end supply chain transparency and information systems are quite rare. Transaction volumes, data formats, the types of exchanged information, information criticality,type and duration of business relationship, internal information systems of partners, processes and operation models (e.g. different ordering models) differ among network companies, and furthermore companies are at different stages on networking and ebusiness readiness. Because of former factors, different customer-supplier combinations in network must utilise totally different ebusiness architectures, technologies, systems and standards.

Russian Enterprise Restructuring - the Effect of Privatisation and Market Liberalisation on the Performance of Large Enterprises

The fundamental question in the transitional economies of the former Eastern Europe and Soviet Union has been whether privatisation and market liberalisation have had an effect on the performance of former state-owned enterprises. This study examines the effect of privatisation, capital market discipline, price liberalisation and international price exposure on the restructuring of large Russian enterprises. The performance indicators are sales, profitability, labour productivity and stock market valuations. The results do not show performance differences between state-owned and privatised enterprises. On the other hand, the expansion of the de novo private sector has been strong. New enterprises have significantly higher sales growth, profitability and labour productivity. However, the results indicate a diminishing effect of ownership. The international stock market listing has a significant positive effect on profitability, while the effect of domestic stock market listing is insignificant. The international price exposure has a significant positive increasing effect on profitability and labour productivity. International enterprises have higher profitability only when operating on price liberalised markets, however. The main results of the study are strong evidence on the positive effects of international linkages on the enterprise restructuring and the higher than expected role of new enterprises in the Russian economy.

Frequency converter protection against supply network phenomena

This master’s thesis is focused on power supply network disturbances and their effects on the frequency converter – one of the components of modern process crane electrical system. The most critical disturbance types, their causes and the effect they bring to crane electrical system was determined in this work. Variety of protective devices used for mitigation of disturbances is investigated. Device protection solutions for the frequency converter used in crane applications are presented. Analyses of the power supply requirements for frequency converter and various components of crane electrical system were carried out and as a result the crane power supply requirements list that guarantees normal crane operation was built. This list is to be included in crane projects for troubleshooting purposes in order to determine potentially dangerous network.

Influence of mixed fuels combustion on boiler operation

The aim of this work is to study the effect of different fuel mixtures on the operation of circulating fluidized bed (CFB) boiler. The applicability of heat balance modeling software IPSEpro to simulate CFB boiler operation is also investigated. The work discusses various types of boilers and methods of boiler operation. The fuel properties and the possible fuel influence on the boiler efficiency are described. Various biofuel types that are possible to use in combination with other fuels are presented. Some examples of the fuel mixtures use are given. A CFB boiler model has been constructed using IPSEpro and applied to analyze boiler operation outside design conditions. In the simulations, the effect of different load levels and moisture contents for the fuel mixture has been studied.

Phase voltage control and filtering in a converter-fed single-phase customer-end system of the LVDC distribution network

In recent years, the network vulnerability to natural hazards has been noticed. Moreover, operating on the limits of the network transmission capabilities have resulted in major outages during the past decade. One of the reasons for operating on these limits is that the network has become outdated. Therefore, new technical solutions are studied that could provide more reliable and more energy efficient power distributionand also a better profitability for the network owner. It is the development and price of power electronics that have made the DC distribution an attractive alternative again. In this doctoral thesis, one type of a low-voltage DC distribution system is investigated. Morespecifically, it is studied which current technological solutions, used at the customer-end, could provide better power quality for the customer when compared with the current system. To study the effect of a DC network on the customer-end power quality, a bipolar DC network model is derived. The model can also be used to identify the supply parameters when the V/kW ratio is approximately known. Although the model provides knowledge of the average behavior, it is shown that the instantaneous DC voltage ripple should be limited. The guidelines to choose an appropriate capacitance value for the capacitor located at the input DC terminals of the customer-end are given. Also the structure of the customer-end is considered. A comparison between the most common solutions is made based on their cost, energy efficiency, and reliability. In the comparison, special attention is paid to the passive filtering solutions since the filter is considered a crucial element when the lifetime expenses are determined. It is found out that the filter topology most commonly used today, namely the LC filter, does not provide economical advantage over the hybrid filter structure. Finally, some of the typical control system solutions are introduced and their shortcomings are presented. As a solution to the customer-end voltage regulation problem, an observer-based control scheme is proposed. It is shown how different control system structures affect the performance. The performance meeting the requirements is achieved by using only one output measurement, when operating in a rigid network. Similar performance can be achieved in a weak grid by DC voltage measurement. An additional improvement can be achieved when an adaptive gain scheduling-based control is introduced. As a conclusion, the final power quality is determined by a sum of various factors, and the thesis provides the guidelines for designing the system that improves the power quality experienced by the customer.

Berry polyphenol absorption and the effect of northern berries on metabolism, ectopic fat accumulation, and associated diseases

The prevalence of obesity and type 2 diabetes has increased at an alarming rate in developed countries. It seems in the light of current knowledge that metabolic syndrome may not develop at all without NAFLD, and NAFLD is estimated to be as common as metabolic syndrome in western population (23 % occurrence). Fat in the liver is called ectopic fat, which is triacylglycerols within the cells of non-adipose tissue. Serum alanine aminotransferase (ALT) values correlate positively with liver fat proportions, and increased activity of ALT predicts type 2 diabetes independently from obesity. Berries, high in natural bioactive compounds, have indicated the potential to reduce the risk of obesity-related diseases. Ectopic fat induces common endocrine excretion of adipose tissue resulting in the overproduction of inflammatory markers, which further induce insulin resistance by multiple mechanisms. Insulin resistance inducing hyperinsulinemia and lipolysis in adipocytes increases the concentration of free fatty acids and consequently causes further fat accumulation in hepatocytes. Polyphenolic fractions of berries have been shown to reverse inflammatory reaction cascades in in vitro and animal studies, and moreover to decrease ectopic fat accumulation. The aim of this thesis was to explore the role of northern berries in obesity-related diseases. The absorption and metabolism of selected berry polyphenols, flavonol glycosides and anthocyanins, was investigated in humans, and metabolites of the studied compounds were identified in plasma and urine samples (I, II). Further, the effects of berries on the risk factors of metabolic syndrome were studied in clinical intervention trials (III, IV), and the different fractions of sea buckthorn berry were tested for their ability to reduce postprandial glycemia and insulinemia after high-glucose meal in a postprandial study with humans (V). The marked impact of mixed berries on plasma ALT values (III), as well as indications of the positive effects of sea buckthorn, its fractions and bilberry on omental adiposity and adhesion molecules (IV) were observed. In study V, sea buckthorn and its polyphenol fractions had a promising effect on potprandial metabolism after high-glucose meal. In the literature review, the possible mechanisms behind the observed effects have been discussed with a special emphasis on ectopic fat accumulation. The literature review indicated that especially tannins and flavonoids have shown potential in suppressing diverse reaction cascades related to systemic inflammation, ectopic fat accumulation and insulin resistance development.

Effect of hydrodynamics on modelling, monitoring and control of crystallization

Crystallization is a purification method used to obtain crystalline product of a certain crystal size. It is one of the oldest industrial unit processes and commonly used in modern industry due to its good purification capability from rather impure solutions with reasonably low energy consumption. However, the process is extremely challenging to model and control because it involves inhomogeneous mixing and many simultaneous phenomena such as nucleation, crystal growth and agglomeration. All these phenomena are dependent on supersaturation, i.e. the difference between actual liquid phase concentration and solubility. Homogeneous mass and heat transfer in the crystallizer would greatly simplify modelling and control of crystallization processes, such conditions are, however, not the reality, especially in industrial scale processes. Consequently, the hydrodynamics of crystallizers, i.e. the combination of mixing, feed and product removal flows, and recycling of the suspension, needs to be thoroughly investigated. Understanding of hydrodynamics is important in crystallization, especially inlargerscale equipment where uniform flow conditions are difficult to attain. It is also important to understand different size scales of mixing; micro-, meso- and macromixing. Fast processes, like nucleation and chemical reactions, are typically highly dependent on micro- and mesomixing but macromixing, which equalizes the concentrations of all the species within the entire crystallizer, cannot be disregarded. This study investigates the influence of hydrodynamics on crystallization processes. Modelling of crystallizers with the mixed suspension mixed product removal (MSMPR) theory (ideal mixing), computational fluid dynamics (CFD), and a compartmental multiblock model is compared. The importance of proper verification of CFD and multiblock models is demonstrated. In addition, the influence of different hydrodynamic conditions on reactive crystallization process control is studied. Finally, the effect of extreme local supersaturation is studied using power ultrasound to initiate nucleation. The present work shows that mixing and chemical feeding conditions clearly affect induction time and cluster formation, nucleation, growth kinetics, and agglomeration. Consequently, the properties of crystalline end products, e.g. crystal size and crystal habit, can be influenced by management of mixing and feeding conditions. Impurities may have varying impacts on crystallization processes. As an example, manganese ions were shown to replace magnesium ions in the crystal lattice of magnesium sulphate heptahydrate, increasing the crystal growth rate significantly, whereas sodium ions showed no interaction at all. Modelling of continuous crystallization based on MSMPR theory showed that the model is feasible in a small laboratoryscale crystallizer, whereas in larger pilot- and industrial-scale crystallizers hydrodynamic effects should be taken into account. For that reason, CFD and multiblock modelling are shown to be effective tools for modelling crystallization with inhomogeneous mixing. The present work shows also that selection of the measurement point, or points in the case of multiprobe systems, is crucial when process analytical technology (PAT) is used to control larger scale crystallization. The thesis concludes by describing how control of local supersaturation by highly localized ultrasound was successfully applied to induce nucleation and to control polymorphism in reactive crystallization of L-glutamic acid.

Development of porous glass-fiber reinforced composite for bone implants. Evaluation of antimicrobial effect and implant fixation

Cranial bone reconstructions are necessary for correcting large skull bone defects due to trauma, tumors, infections and craniotomies. Traditional synthetic implant materials include solid or mesh titanium, various plastics and ceramics. Recently, biostable glass-fiber reinforced composites (FRC), which are based on bifunctional methacrylate resin, were introduced as novel implant solution. FRCs were originally developed and clinically used in dental applications. As a result of further in vitro and in vivo testing, these composites were also approved for clinical use in cranial surgery. To date, reconstructions of large bone defects were performed in 35 patients. This thesis is dedicated to the development of a novel FRC-based implant for cranial reconstructions. The proposed multi-component implant consists of three main parts: (i) porous FRC structure; (ii) bioactive glass granules embedded between FRC layers and (iii) a silver-polysaccharide nanocomposite coating. The porosity of the FRC structure should allow bone ingrowth. Bioactive glass as an osteopromotive material is expected to stimulate the formation of new bone. The polysaccharide coating is expected to prevent bacterial colonization of the implant. The FRC implants developed in this study are based on the porous network of randomly-oriented E-glass fibers bound together by non-resorbable photopolymerizable methacrylate resin. These structures had a total porosity of 10–70 volume %, of which > 70% were open pores. The pore sizes > 100 μm were in the biologically-relevant range (50-400 μm), which is essential for vascularization and bone ingrowth. Bone ingrowth into these structures was simulated by imbedding of porous FRC specimens in gypsum. Results of push-out tests indicated the increase in the shear strength and fracture toughness of the interface with the increase in the total porosity of FRC specimens. The osteopromotive effect of bioactive glass is based on its dissolution in the physiological environment. Here, calcium and phosphate ions, released from the glass, precipitated on the glass surface and its proximity (the FRC) and formed bone-like apatite. The biomineralization of the FRC structure, due to the bioactive glass reactions, was studied in Simulated Body Fluid (SBF) in static and dynamic conditions. An antimicrobial, non-cytotoxic polysaccharide coating, containing silver nanoparticles, was obtained through strong electrostatic interactions with the surface of FRC. In in vitro conditions the lactose-modified chitosan (chitlac) coating showed no signs of degradation within seven days of exposure to lysozyme or one day to hydrogen peroxide (H2O2). The antimicrobial efficacy of the coating was tested against Staphylococcus aureus and Pseudomonas aeruginosa. The contact-active coating had an excellent short time antimicrobial effect. The coating neither affected the initial adhesion of microorganisms to the implant surface nor the biofilm formation after 24 h and 72 h of incubation. Silver ions released to the aqueous environment led to a reduction of bacterial growth in the culture medium.

Performance measurement and management in a collaborative network

This study concerns performance measurement and management in a collaborative network. Collaboration between companies has been increased in recent years due to the turbulent operating environment. The literature shows that there is a need for more comprehensive research on performance measurement in networks and the use of measurement information in their management. This study examines the development process and uses of a performance measurement system supporting performance management in a collaborative network. There are two main research questions: how to design a performance measurement system for a collaborative network and how to manage performance in a collaborative network. The work can be characterised as a qualitative single case study. The empirical data was collected in a Finnish collaborative network, which consists of a leading company and a reseller network. The work is based on five research articles applying various research methods. The research questions are examined at the network level and at the single network partner level. The study contributes to the earlier literature by producing new and deeper understanding of network-level performance measurement and management. A three-step process model is presented to support the performance measurement system design process. The process model has been tested in another collaborative network. The study also examines the factors affecting the process of designing the measurement system. The results show that a participatory development style, network culture, and outside facilitators have a positive effect on the design process. The study increases understanding of how to manage performance in a collaborative network and what kind of uses of performance information can be identified in a collaborative network. The results show that the performance measurement system is an applicable tool to manage the performance of a network. The results reveal that trust and openness increased during the utilisation of the performance measurement system, and operations became more transparent. The study also presents a management model that evaluates the maturity of performance management in a collaborative network. The model is a practical tool that helps to analyse the current stage of the performance management of a collaborative network and to develop it further.

The obstacles for cross-border transmission network investments in the Nordic electricity market: Case South-West link

The Nordic electricity market is often seen as an example of how to create a working, developed and integrated electricity market. Nevertheless, this thesis studies the obstacles of transmission network investments and the market integration challenges in the Nordic electricity market. The main focus is in the Nordic Transmission system operators (TSOs), which have a key role in grid development. This study introduces a case study of cancellation of South-West link, Western part, which was seen as essential grid investment in order to improve the Nordic electricity market functioning but ended up with cancellation in 2013. This study includes semi-structured theme interviews of the experts among Nordic electricity industry stakeholders. Despite the political will to create more equal prices for electricity in the Nordic market, the differing national regulation, mixed incentives created by bottleneck income and the focus moving from Nordic integration to European integration may create challenges to the Nordic electricity market integration in the future.

Effect of Material Recycling on the Feasibility of Solid Recovered Fuel Fired Power Plant

This master’s thesis examines the effects of increased material recycling on different waste-to-energy concepts. With background study and a developed techno-economic computational method the feasibility of chosen scenarios with different combinations of mechanical treatment and waste firing technologies can be evaluated. The background study covers the waste scene of Finland, and potential market areas Poland and France. Calculated cases concentrate on municipal solid waste treatment in the Finnish operational environment. The chosen methodology to approach the objectives is techno-economic feasibility assessment. It combines calculation methods of literature and practical engineering to define the material and energy balances in chosen scenarios. The calculation results together with other operational and financial data can be concluded to net present values compared between the scenarios. For the comparison, four scenarios, most vital and alternative between each other, are established. The baseline scenario is grate firing of source separated mixed municipal solid waste. Second scenario is fluidized bed combustion of solid recovered fuel produced in mechanical treatment process with metal separation. Third scenario combines a biomaterial separation process to the solid recovered fuels preparation and in the last scenario plastics are separated in addition to the previous operations. The results indicated that the mechanical treatment scenarios still need to overcome some problems to become feasible. Problems are related to profitability, residue disposal and technical reliability. Many uncertainties are also related to the data gathered over waste characteristics, technical performance and markets. With legislative support and development of further processing technologies and markets of the recycled materials the scenarios with biomaterial and plastic separation may operate feasibly in the future.