IFRS 9 ‘Financial instruments’: Anticipated effects of the standard change at Kesko Group

IFRS 9 Financial instruments presents the classification and measurement, the impairment and the hedge accounting requirements for accounting of financial instruments. The standard was set by the International Accounting Standards Board to replace IAS 39 Financial instruments: Recognition and Measurement on 1 January 2018. Hence, the long-criticized and complexly experienced requirements for accounting of financial instruments will undergo the most significant reform. This thesis addresses anticipated effects of IFRS 9, focusing on the challenges the new classification and measurement requirements bring forth in the case organization Kesko. This thesis was conducted as an action research, in which, a case study method was applied. The thesis was conducted with a twofold manner, which involved general analysis of IFRS 9 and further covered distinct ambitions related to the case organization. For the general part, empirical data was gathered by interviewing two IFRS experts from KPMG and PwC, while the interviews within the case organization constituted for the case study. Further, the literature on the IFRS 9 was such scant that the theoretical examination was merged with the IFRS experts’ quotations that also strived to contribute to the overall objective of reinforcing the body of research related to the subject. This thesis indicates that IFRS 9 will most fundamentally reform the impairment and the hedge accounting requirements of financial instruments. Regard to impairment, the changes are anticipated to increase the amount of loan-loss provisions, whereas the relaxed hedge accounting requirements are expected to encourage more companies to commence the application of hedge accounting. The thesis provides empirical support on that the term business model for managing financial assets, introduced in IFRS 9, is ably hard to comprehend and remains ambiguous. It goes on to argue that the most prominent issue in defining the business model for managing financial assets is the limits set in IFRS 9 for selling financial assets. In consideration of Kesko, this thesis finds that the key effects of IFRS 9 are anticipated to be the reshaping of the organization’s treasury policy and further examination of the possibility to apply hedge accounting for foreign exchange derivatives. What is more, the thesis presumes that complying the requirements of IFRS 9 Kesko will apply the hold to collect and sell model for managing financial assets in future.

Managing and utilizing information flow for new products’ periodic account sales process

The goal was to understand, document and module how information is currently flown internally in the largest dairy organization in Finland. The organization has undergone radical changes in the past years due to economic sanctions between European Union and Russia. Therefore, organization’s ultimate goal would be to continue its growth through managing its sales process more efficiently. The thesis consists of a literature review and an empirical part. The literature review consists of knowledge management and process modeling theories. First, the knowledge management discusses how data, information and knowledge are exchanged in the process. Knowledge management models and processes are describing how knowledge is created, exchanged and can be managed in an organization. Secondly, the process modeling is responsible for visualizing information flow through discussion of modeling approaches and presenting different methods and techniques. Finally, process’ documentation procedure was presented. In the end, a constructive research approach was used in order to identify process’ related problems and bottlenecks. Therefore, possible solutions were presented based on this approach. The empirical part of the study is based on 37 interviews, organization’s internal data sources and theoretical framework. The acquired data and information were used to document and to module the sales process in question with a flowchart diagram. Results are conducted through construction of the flowchart diagram and analysis of the documentation. In fact, answers to research questions are derived from empirical and theoretical parts. In the end, 14 problems and two bottlenecks were identified in the process. The most important problems are related to approach and/or standardization for information sharing, insufficient information technology tool utilization and lack of systematization of documentation. The bottlenecks are caused by the alarming amount of changes to files after their deadlines.

Weathering crises on social media – Theory and practices from social media active organizations operating in Finland

Thesis compiles findings from previous research to produce guidelines on addressing crises on social media. These guidelines extracted from previous research are compared qualitatively with empirical evidence from 12 organizations by examining whether organizations apply practices recommended in previous research. Much of guidelines gain support from practitioners with few exceptions. Findings stemming from theory and practice combine to shed light on how controversies are born on social media, how crises can be prevented on social media and how organizations may manage crisis situations on social media. The majority of the resulting guidelines focus on how to address negative information and communicate during a crisis but other means of crisis management are also presented. Previous research had voiced that the field of public relations was very fractured, crisis management was lacking qualitative research and provided very little information on what organizations should do before a crisis. Thesis collects a comprehensive amount of previous research from various fields of PR in an effort to unite findings and guidelines, gathers and analyzes empirical data in a qualitative manner and includes a pre-crisis paradigm. One of the challenges in the field of crisis management still remains the absence of universally agreed definition of a crisis and the lack of means to quantify and compare the magnitude of crises.

Managerial experiences related to corporate demerger

In the current economic situation very few business operations are static. In some cases, organizations feel that the most rational solution is not expanding but focusing on their core competencies or certain areas of business through corporate restructuring. The focus in this thesis is on corporate demerger, a process that involves a complete separation of units within a company. Despite the vast amount of research considering corporate demergers, there is still a lack of knowledge about how top managers experience these kinds of organizational rearrangements. In this qualitative case study, the aim is to bring forward the thoughts of executives in two companies that emerged from a single company through corporate demerger a few years ago. By conducting dyadic semi-structured interviews with the management group and board members in both the parent company and the demerger company, I pursue to understand the impressions that they had during the demerger process as well as during the change that followed afterwards. Additionally, their retrospective sense-making patterns are briefly examined. The findings suggest that the way operations are managed before plays an important role in the demerger process. In this case the pre-demerger organization was quite distinctly divided into two business areas, which allowed a somewhat natural allocation of resources. In addition, apart from the top management, every employee knew their future company and role, thus decreasing the amount of uncertainty in lower organizational levels. Consequently, the ambiguity and change faced by the top executives was evidently more powerful compared to the operational actors. The fragmented characteristics also enabled certain points of reference in the unfolding demerger process. Along with the information about future management groups, the pre-demerger re-grouping took place. This sparked up the mental division, where both groups started to act separately. On a personal level, the managers involved in the demerger planning have made retrospective sense of the repercussions related to the restructuring process. For them, it was an extremely demanding, ambiguous and burdensome project that provided them with managerial experiences they are likely not to have again.