Corporate Governance: Osakeyhtiön johdon velvollisuudet ja vastuu

Tutkimuksen tarkoituksena on selvittää, millainen Corporate Governance -järjestelmä ja sääntely-ympäristö Suomessa on voimassa. Tutkimuksessa tarkastellaan lisäksi osakeyhtiön johdon fidusiaarisia velvollisuuksia ja johdon velvollisuuksien tehosteena olevaa vastuujärjestelmää. Corporate Governance -järjestelmää analysoidaan perinteisestä oikeustieteellisestä näkökulmasta poiketen oikeustaloustieteen metodein. Tutkimuksen teoriapohja perustuu koti- ja ulkomaiseen oikeustaloustieteelliseen kirjallisuuteen, muutoin tutkimuksessa tukeudutaan suurimmilta osin kotimaiseen oikeuskirjallisuuteen ja virallislähteisiin. Suomalainen Corporate Governance -järjestelmä minimioi tehokkaasti transaktiokustannuksia ja tarjoaa osakkeenomistajille tehokkaan, informaation epäsymmetriaa rajoittavan valvontamekanismin. Jos johto toimii velvollisuuksiensa vastaisesti, osakkeenomistajat erottavat johdon, joka ei nauti sen luottamusta tai johto joutuu vastaamaan toimistaan vahingonkorvausvastuun tai rikosoikeudellisen vastuun kautta.

Stress testing practices in risk management - Empirical evidence from the Finnish banking and insurance sectors

The main purpose of this study was to analyze how stress tests are used in risk management in the Finnish banking and insurance sectors. In order to enhance understanding of the topic, stress testing was explored in the context of corporate governance and regulato-ry implications of Basel II and Solvency II on stress testing were examined. In addition, the effects of the global financial crisis on stress testing were mapped and the differences in stress testing practices between the banking and insurance sector were discussed. The research method was qualitative case study and it was conducted by interviewing risk managers from ten institutions and a representative from FIN-FSA. Findings pointed out that stress testing practices vary significantly between different institutions. Interesting observations were made in terms of stress testing practices in the banking and insurance sectors. The increasing importance and use of stress tests were recognized as a result of the financial crisis. Stress testing was even considered more like art than science given the amount of challenges it involves. In general, improvements in stress tests were suggested, with an emphasis on stress concentration between different types of risks.

Corporate responsibility guaranteed by dialogue? Examining the relationship between nongovernmental organizations and business

The main objective of this doctoral dissertation is to examine the relationship between non-governmental organizations and business in the context of academic discourse, corporate responsibility discourse, and stakeholder dialogue. More specifically, motivated by the increasing emphasis on stakeholder dialogue as a tool for corporate responsibility and accountability, the aim is to critically assess the role of stakeholder dialogue as a self-regulatory mechanism, in particular from the perspective of foreign direct investments. The study comprises two parts; an introductory essay containing the research objectives, theoretical foundations and methodological choices, and four research articles that address one sub-objective: 1) to review the literature on NGO-business relations in business and society, management, and international business journals from 1998–2007; 2) to critically analyze the academic discourse on NGO-business relations; 3) to analyze the problematic aspects of sustainable foreign direct investments as a conceptual construct; and 4) to analyze the problematic aspects of stakeholder dialogue in connection with a foreign direct investment. The ontological and epistemological foundations of this dissertation build on the social constructionist view of reality. The dialogue in this study is viewed as a legitimacy bargaining process that is actively shaped by societal parties in discourse. Similarly, articulations of ‘partnership’ and ‘adversarial’ in NGO-business relations in academic business and society discourse are viewed as competing hegemonic interventions in the field. More specifically, the methods applied in the articles are literature review (Article 1), discourse theory (Article 2), conceptual analysis (Article 3), and case study with document analysis (Article 4). This dissertation has three main arguments and contributions. First, it is argued that the potential of stakeholder dialogue as a tool for corporate responsibility and accountability is inherently limited in both contexts. Second, the study shows the power implications of privileging partnership oriented NGO-business relations over adversarial ones, and of placing business at the centre of governance discourse. The third contribution is methodological: a new way to analyze academic discourse is presented by focusing on the problem setting of an article.

The purpose of consumer co-operation: implications for the management and governance of co-operatives

Extant research on consumer co-operation has acknowledged that the corporate purpose of consumer co-operatives deviates significantly from the purpose of investor-owned firms (IOFs – the dominant form in market economies and in theory development in the field of business economics) and also suggested that the management of consumer co-operatives differs from the management of IOFs. Despite this, there is a scarcity of research focusing on the management of consumer co-operatives in general and the ways this different purpose manifests in their management in particular. In other words, research on consumer cooperatives has only started to discover the importance of identifying the premises of these organizations and generating management and organization theories that take them into account. The overall objective of this study is to map out some of the implications that the purpose of consumer co-operation has for the management and governance of consumer co-operatives. To put it more precisely, by combining interview data gathered from Finnish consumer cooperatives (S Group, OP Bank Group and POP Bank) and extant literature, this study aims to generate or elaborate on definitions and outlines of the features that co-operative purpose poses for the strategic management, governance and managerial competence needed for consumer co-operatives. The study consists of two parts. The first part introduces the research topic, methods and publications, as well as discusses the overall outcomes. The second part consists of four publications that address the research questions from different viewpoints. The analyses of this study indicate that due to the purpose of consumer co-operation, the roles of locality and regionality become emphasized in their management. While locality and regionality are potential sources of competitive advantage for consumer co-operatives, geographic boundness sets significant boundary conditions for the strategic management of these organizations. Further, the purpose of consumer co-operation may pose several challenges to governance and set specific competence demands for the managers of these organizations. Associating the observations from various streams of research on management and governance with the purpose of consumer co-operation and examining these issues further, the thesis contributes to elaboration of theory in the field. While the thesis is by no means comprehensive (but instead reflects a co-operative research project in its early stages), it does shed light on some key ideas of management and governance and offers leads to theory and, thereby, will prove useful to elaborators, disseminators and appliers of knowledge on co-operation.

Lean, Six Sigma ja Total Welding Management hitsaavassa verkostossa

Diplomityössä tarkastellaan hitsaavan verkoston laadunhallintaa ja siinä ilmeneviä erilaisia ongelmakohtia. Tämän lisäksi työssä tarkastellaan kolmen eri laatutyökalun Lean, Six Sigma ja Total Welding Management soveltamista hitsaavan verkoston laadunhallinnassa. Teoriaosassa käsitellään sekä yleisesti että hitsauksen osalta laatua ja laadunhallintaa, sekä edellä mainittuja laatutyökaluja. Tutkimusosaan tietoja hitsaavista verkostoista kerättiin kaikkiaan kolmesta eri verkostosta. Näiden kerättyjen tietojen pohjalta tarkasteltiin valittujen laatutyökalujen soveltuvuutta verkostomaiseen käyttöön. Verkostoitunut toiminta aiheuttaa monia uusia haasteita yritysten laadunhallinnalle verrattuna yksittäisiin hitsaaviin yrityksiin. Suurimpia tutkimuksessa havaittuja ongelmakohtia ovat suunnittelun ja valmistuksen yhteistyön erilaiset puutteet, laatutasoon ja sen varmistukseen liittyvät asiat, sekä verkoston sisälle syntyvä niin sanottu hiljainen tieto ja sen häviäminen. Tutkimuksen tarkastelujen perusteella havaittiin, että kaikkien tutkimukseen valitun kolmen laatutyökalun soveltaminen myös verkostomaisessa toiminnassa on mahdollista, mutta se vaatii huomattavasti suurempaa työpanosta kuin soveltaminen yksittäisessä yrityksessä. Myös näiden kaikkien kolmen työkalun yhtä aikainen käyttö on mahdollista. Juuri oikean työkalun valitseminen kullekin hitsaavalle verkostolle vaatii tarkkaa perehtymistä verkostoon ja sen tilanteeseen.

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

Integrating corporate social responsibility into business in Finnish consumer goods companies

The motives for this study originated from the notion that surprisingly little academic literature is found on actually managing and putting corporate social responsibility (CSR) into practice, in comparison with the definitions and frameworks of the concept itself. Regardless of the author, CSR has been considered consisting of three dimensions: economic, social and environmental. The question behind the three dimensions has always been whether socially and environmentally responsible behavior can lead to increased economic performance and improve the competitiveness of a company. Most of the current CSR development has related to the quantification of environmental and social performance in order to review these along with the established financial key ratios, which are based on the law and the reporting obligation of the companies. However, the previous research has mainly focused on US companies whereas studies with a European viewpoint, let alone Nordic, have been mostly lacking. Furthermore, it has been discovered recently that the integration of corporate responsibility into business is identified as the greatest challenge in CSR management in Finnish large companies. Therefore the integration of CSR into business in Finnish consumer goods companies provided an interesting, topical and somewhat obscure purpose for this study. This was further divided into three research questions concerning the reasons for CSR engagement, the role of the stakeholders and the practice of corporate responsibility. This study did not aim to build a new theory; instead an explorative viewpoint was regarded more appropriate. Accordingly, qualitative research approach and case study design were adopted in the study. Semi-structured theme interviews were used as a primary data collection method and complemented with secondary data such as websites, responsibility reports and another recent CSR study. There were four Finnish managers as interviewees of whom three presented companies and one non-profit organization. The results were somewhat convergent but differences arose as a result of the companies being at different stages as regards corporate responsibility. However, this provided only more insight into the implementation of CSR. The voluntary CSR initiatives, responsibility reporting, stakeholders and CSR management were identified as the most important viewpoints on the practical side of CSR, besides a key requirement for the integration of CSR into business to be credible was found to be a favorable management attitude. Based on the findings of this study it was admitted that giving concrete advice on CSR management is really a challenge and there is no one generally accepted and right manner to integrate corporate responsibility successfully into business.

Competence foresight: linking the identification of HR competences and competence management alignment with business strategy

The objective of this study was to increase understanding of the link between the identification of required HR competences and competence management alignment with business strategy in a Finnish, global company employing over 8,000 people and about 100 HR professionals. This aim was approached by analyzing the data collected in focus group interviews using a grounded theory method and in parallel reviewing the literature of strategic human resource management, competence-based strategic management, strategy and foresight. The literature on competence management in different contexts dismisses in-depth discussions on the foresight process and individuals are often forgotten in strategic frameworks. However, corporate foresight helps in the detection of emerging opportunities for innovations and in the implementation of strategy. The empirical findings indicate a lack of strategic leadership and an alignment with HR and business. Accordingly, the most important HR competence areas identified were the need for increasing business understanding and enabling change. As a result, the study provided a holistic model for competence foresight, which introduces HR professionals as strategic change agents in the role of organizational futurists at the heart of the company: facilitating competence foresight and competence development on individual as well as organizational levels, resulting in an agile organization with increased business understanding, sensitive sensors and adaptive actions to enable change.

The corporate bias and the molding of prescription practices: the case of hypertension

Drug management of hypertension has been a noticeable example of the influence of the pharmaceutical industry on prescription practices. The worldwide leading brands of blood pressure-lowering agents are angiotensin receptor-blocking agents, although they are considered to be simply substitutes of angiotensin-converting enzyme (ACE) inhibitors. Commercial strategies have been based on the results of clinical trials sponsored by drug companies. Most of them presented distortions in their planning, presentation or interpretation that favored the drugs from the sponsor, i.e., corporate bias. Atenolol, an ineffective blood pressure agent in elderly individuals, was the comparator drug in several trials. In a re-analysis of the INSIGHT trial, deaths appeared to have been counted twice. The LIFE trial appears in the title of more than 120 reproductions of the main and flawed trial, as a massive strategy of scientific marketing. Most guidelines have incorporated the corporate bias from the original studies, and the evidence from better designed studies, such as the ALLHAT trial, have been largely ignored. In trials published recently corporate influences have touched on ethical limits. In the ADVANCE trial, elderly patients with type 2 diabetes and cardiovascular disease or risk factors, allocated to placebo, were not allowed to use diuretic and full doses of an ACE inhibitor, despite the sound evidence of benefit demonstrated in previous trials. As a consequence, they had a 14% higher mortality rate than the participants allocated to the active treatment arm. This reality should be modified immediately, and a greater independence of the academy from the pharmaceutical industry is necessary.

Creating Value for Corporate Sustainability: Stakeholder Engagement

The thesis aims to build a coherent view and understanding of stakeholder engagement’s contribution to corporate sustainability value creation. Theory suggests that corporate sustainability relies on sustainable relationships between the firm and its multiple stakeholders. This study is qualitative and evidence is derived from integrative analysis of literature, secondary data and case study analysis. The findings from the interviews analysis supplement the framework developed as the results of the literature review. The results obtained throughout the thesis research imply that stakeholder engagement helps develop more thorough understandings of issues and alternative perspectives, which in turn facilitates the decision-making processes improvement. The improvement is also achieved through ethical analysis, by weighing the impact of firm’s decisions on all relevant groups. Therefore, clear communication and exchange of information also improve the acceptance of sustainability initiatives amongst stakeholders both in terms of building trust and managing expectations. As practical implications, this thesis presents organizational practices that can be employed by companies to support effective engagement with stakeholders. The described practices could enhance processes such as partnership and co-creation resulting in greater sustainable development.

Sustainable Development – the Key to Competitiveness CSR as an added value to Alstom’s corporate performance

Corporate social responsibility or CSR is today a widely recognized concept which is receiving in- creasing popularity extremely rapidly, especially in the business world. The pressure on companies to carry out their business practices in ethical manners, which promote the wellbeing of the environment and society, is coming from all directions and all stakeholders. Alstom, a French multinational conglomerate operating in the rail transport and energy industry, is no exception to this norm. This company, which will be used as the case example in this thesis, is being brought to bay in terms of engaging in CSR practices and practicing business with high ethics. It is surely not a negatively conceived phenomenon that CSR is being put on a pedestal – quite the opposite. Instead of corporations practicing CSR only to meet their stakeholder requirements through practicing window dressing, many corporations actually strive to benefit from the practice of corporate social business. In addition to bringing benefit to externals a corporation such as Alstom itself can benefit from being involved in CSR. The purpose of this thesis is to evaluate the current strategic values and the future perspectives of CSR at Alstom and moreover the added value which the practice of CSR could bring Alstom as a business. A set of perspectives from a futures studies viewpoint is looked at, with critical examination of the company’s current corporate practices as well as the CSR related studies and theories written for corporations. Through this, some solutions and practices will be suggested to Alstom in order for it to fully utilize the potential of corporate social business and the value it can bring in the most probable futures that the company is expected to face. By utilizing the Soft Systems Methodology (SSM), a method mainly used in organizations to solve problematic issues in management and policy contexts, a process is developed to see what improvements could be of help in improving Alstom and its way towards involving CSR in its business practices even more than it currently does. Alstom is already deeply involved in the practicing of CSR and its vision has a strong emphasis on this popular concept of today. In order to stay in the game and to use CSR as a competitive advantage to the company, Alstom ought to embed corporate social practices even deeper in its organizational culture by using them as a tool to reduce risk and costs, increasing employee commitment and customer loyalty and to attract socially responsible investors, just to name a few. CSR as a concept is seen to have great potential in the future, an opportunity Alstom will not miss.

Risk Management in Sustainable Supply Chain

Growing awareness in corporate responsibility and issues related to sustainability is seen to increase innovativeness in a company as well as in its supply chain. The stakeholders’ awareness on sustainability has increased, and they demand the companies to identify sustainability risks and adapt procedures for mitigating them. The purpose of this thesis is to examine how risks are managed in sustainable supply chain. Definition of sustainability risks and risk management procedures construct the framework of the study. It is done through an empirical study conducted on 95 Finnish companies operating in the manufacturing industry. The data is acquired via an online questionnaire. The research has been conducted as a quantitative study utilizing the methods of statistical analysis, such as correlation analysis and factor analysis. The essential results of this thesis are identified risk-procedure connections, and the importance of different risks and procedures in the respondent companies.

Perceptions of corporate social responsibility: A case study of the perceived contents and outcomes

CSR has been subject of broad debate and research over the decades and has gained attention recently. The purpose of this thesis is to find out how companies perceive CSR. In addition this thesis is researching what is CSR in Finnish companies, how do companies measure CSR, what are the effects of CSR and how companies perceive those effects and what actors and factors support CSR. This research is a case study where altogether nine informants from seven companies were interviewed. This research is qualitative case study implemented with theme interviews. The analysis method is content analysis. Several interesting issues emerged from the empirical findings. CSR is playing pivotal role in companies values, vision and mission. CSR was perceived differently in companies but also mutual points emerged. The role of stakeholders is essential in CSR. In addition the communication with stakeholders was seen very important. Companies perceived that they can gain many benefits when acting responsibly for instance in issues related to cost reduction, reputation and personnel. However measuring these effects from CSR point of view was seen challenging. Other CSR related challenges are for example change and lack of resources. When considering empirical findings from a theoretical point of view, three interesting issues emerged. CSR reports play an important role in measuring and developing of CSR. However, this is not the case with all companies and some of them argued that reporting has too much attention nowadays when talking about CSR. The benefits of CSR are mostly related to responsive CSR. However maybe in a long-term follow-up strategic CSR related competitive advantage benefits could be more easily noticed. Many different issues supported CSR. Some issues are driven by outside of companies like NGO`s and media and some inside like the motivation of personnel and management. Vastuullista liiketoimintaa on tutkittu vuosien saatossa laajalti ja se on saanut viime vuosina erityisen paljon huomiota. Tämän pro gradu –tutkielman tavoitteena on selvittää, miten yritykset kokevat vastuullisen liiketoiminnan. Tämän lisäksi tutkimuksessa selvitetään, mitä vastuullinen liiketoiminta suomalaisissa yrityksissä tarkoittaa, miten yritykset mittaavat omaa vastuullisuuttaan, mitkä ovat vastuullisuuden vaikutukset, miten yritykset kokevat vastuullisuuden vaikutukset ja mitkä tekijät tukevat vastuullisen liiketoiminnan syntyä. Tutkimus toteutettiin haastattelemalla yhdeksää suomalaisen yrityksen yritysvastuusta vastaavaa tai sen kanssa työskentelevää henkilöä seitsemästä eri organisaatiosta loppuvuodesta 2014 ja alkuvuodesta 2015. Tutkimus on laadullinen, teemahaastatteluilla toteutettu haastattelututkimus. Aineisto on analysoitu teemoittain. Tutkimusaineiston perusteella vaikuttaa siltä, että vastuullinen liiketoiminta on tärkeässä roolissa yritysten arvoissa, visiossa ja missiossa. Yritysvastuu koettiin yrityksissä erilailla, mutta myös yhtäläisyyksiä on nähtävissä. Sidosryhmien rooli on erittäin tärkeä yritysvastuusta puhuttaessa ja myös kommunikointi sidosryhmien kanssa nousi tärkeäksi aiheeksi. Yritykset kokivat saavuttavansa monia hyötyjä vastuullisesta toiminnasta kuten kustannussäästöihin, maineeseen ja työntekijöihin liittyvissä asioissa. Näiden hyötyjen mittaaminen yritysvastuun näkökulmasta koettiin kuitenkin haasteelliseksi. Muita vastuullisuuteen liittyviä haasteita olivat esimerkiksi siihen liittyvä muutos sekä niukat resurssit. Tutkimuksen johtopäätöksistä nousi esille kolme merkittävää seikkaa. Vastuullisuusraportoinnin koettiin olevan hyödyllinen yritysvastuun mittaamisessa ja kehittämisessä. Kaikki yritykset eivät kuitenkaan olleet tätä mieltä ja osa koki raportoinnin saavan liian paljon huomiota nykypäivänä. Yritysten kokemat hyödyt vastuullisuuteen liittyen syntyivät pääosin reaktiivisesta vastuullisuudesta. Tässä kohdin on kuitenkin huomionarvoista mainita, että strategisen vastuullisuuden hyödyt olisivat saattaneet nousta paremmin esille pidemmän aikavälin tutkimuksessa. Yritysvastuun syntyä tukevia tekijöitä löytyi monia. Osa tekijöistä oli yrityksen ulkopuolisia kuten kansalaisjärjestöt ja media ja jotkut taas kumpusivat yrityksen sisältä esimerkiksi työntekijöiden ja johdon motivaatio.

Reputational Risk Management as a key element for business continuity and value maximization

This thesis reveals the topic of reputational risk management as a key element for business continuity and value maximization. The purpose of the work is to investigate reputational risk from the side of its definition, management (including legal requirements on this risk category) and measurement and to analyse reputational risk’s impact on business continuity and value maximization. To be able to do this, different respective articles, reports of financial institutions are gathered and constructive summaries and analysis are made. In order to deeply investigate the impact of reputational risk on business continuity and value maximization, it was chosen to study it from three aspects: 1) check the impact of stock valuation of 7 companies that experienced reputational catastrophe / risk, 2) analyse a case study on disagreements in management of reputational risk among case companies and impact on their respective performance, and 3) conduct a survey of financial sector companies in Liechtenstein to see how reputational risk management works in practice. The findings of the research showed a significant impact of reputation decadence on company’s value and trading volume, and showed crucial importance of post-crisis management for the company’s financial performance. The results of the qualitative research based on survey proved that companies consider reputational risk management as a one of the key elements for their business continuity and value maximization.

Facilitating corporate entrepreneurial behavior: A study of corporate entrepreneurial behavior in corporate banking

This study discusses the pronounced importance of corporate entrepreneurial behavior, CEB, facilitation and enablement as a key dimension in the rapidly changing business environment within companies. The research target is a large finance company in Finland, where regulations, compliance and processes restrict and refine extensively business approach. The purpose of this study is to foster the understanding of corporate entrepreneurial behavior and requirements and identify the supporters and inhibitors of facilitation of it. Furthermore, this study examines who should be driving the implementation and offer concrete outcome for the company to get the facilitation started and berth it as part of the organizational culture and values. The theoretical background is constructed from literature related to concept of corporate entrepreneurial behavior, factors supporting and hindering the facilitation based on previous studies and innovation management. Furthermore theoretical framework of middle managers entrepreneurial behavior in facilitation process was researched. Additionally top down and bottom up approach of conversational space building within the organization in order to foster innovation and involving mindset and behavior was in the core literature. The empirical research conducted for the study consists three parts; innovation audit questionnaire, semi-structured interviews and secondary data from previously made research within the case company. Questionnaire and interviews were targeted to eight middle managers within the company, the head of branch regions in corporate segment. The secondary data was collected from over 300 employees in the case company by an external company. Research results were analyzed mainly by themes and source division in adaption with the theoretical framework. The study finds that facilitation of CEB should be a strategic choice and requires strong management support and examples. Behavior should be involved with organizational culture, values, structures and processes. The companies´ willingness to take risks and encourage employees at all levels to participate and be involved by taking ownership and responsibility is in the core. CEB is found to be a key dimension in increasing employee satisfaction and engagement, competitive advantages and economic growth of companies. There is increased interest towards CEB in the case company but there is lack in the mutual consensus of it. CEB is not in the strategy although the mindset and support from management is in place. There is no concrete enablement and space for innovation and CEB although the platform would be receptive. Further research is needed to build shared vision of CEB and how to make it a part of the organizational culture and values in addition to building the conversational space.