Tactical sourcing, fast lane for medium value purchases

Medium value purchases make up a vast portion of organisations’ purchases. Medium value purchases differ from large purchases that the purchases value is smaller and quantity higher. They are not managed efficiently if they are managed as large purchases. However, they should not be managed as small purchases as they have savings possibilities that are not obtained with a process that is designed for small purchases. This study offers a solution for medium value spend management. The solution is tactical sourcing. The tactical sourcing is designed for Tieto Corporation’s need and it was influenced by Six Sigma methods and tools.

Reporting of Green Supply Chain Management and Industrial Symbiosis

The purpose of this thesis is to examine how the reporting of operations related to green supply chain management and industrial symbiosis has evolved in UPM, Fortum and Kemira within the last ten years. The focus is on the improved operations, which are studied based on annual reports of these companies. The study provides a deeper understanding of the nature of green supply chain management and industrial symbiosis as well as the possibilites that their combination offers. The research is part of the DemaNET research project The study indicates that the environmental regulations and reporting standards have forced the studied companies to report their operations related to green supply chain management and industrial symbiosis more in detail during the last ten years. The operations related to green supply chain management in the studied companies are more common compared to operations related to industrial symbiosis. Often these two operations were also partially integrated, indicating a hybrid model. Even though firms often used hybrid models they still focused mainly on greening the internal operations rather than finding alternative ways for symbiosis outside the organization. The integration of green supply chain management and industrial symbiosis is most likely to occur when mutually beneficial relationships align the interests of all parties, thus resulting in the co-creation of value. The findings suggest that identifying mutual benefits and the flow of by-products are the ones that companies should give more attention to.

Value creation through sponsorship in electronic sports

The objective of this thesis was to study value creation through sponsor-ship in a new emerging electronic sports environment. Sub-questions were formulated which helped in finding answers to the main research question. Theory of traditional sports and practice of electronic sports were compared with each other in order to find out how theories of tradi-tional sports fare in the new environment. B2B-relationship model of Actors, resources and activities is used in this thesis to help in clarifying the different variables used in electronic sports sponsorship environment. The empirical research was conducted via interviews with the managers working in electronic sports environment. One of the main conclusions is that relationship management is really important.. Actors in electronic sports need to find and create win-win-win situations. This means that they need to benefit the actors in sponsoring relationship and also the community.

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.

Finnish perceptions on management accounting systems: towards an upgraded sophistication model

This study is based on a large survey study of over 1500 Finnish companies’ usage, needs and implementation difficulties of management accounting systems. The study uses quantitative, qualitative and mixed methods to answer the research questions. The empirical data used in the study was gathered through structured interviews with randomly selected companies of varying sizes and industries. The study answers the three research questions by analyzing the characteristics and behaviors of companies working in Finland. The study found five distinctive groups of companies according to the characteristics of their cost information and management accounting system use. The study also showed that the state of cost information and management accounting systems depends on the industry and size of the companies. It was found that over 50% of the companies either did not know how their systems could be updated or saw systems as inadequate. The qualitative side also highlighted the needs for tailored and integrated management accounting systems for creating more value to the managers of companies. The major inhibitors of new system implementation were the lack of both monetary and human resources. Through the use of mixed methods and design science a new and improved sophistication model is created based on previous research results combined with the information gathered from previous literature. The sophistication model shows the different stages of management accounting systems in use and what companies can achieve with the implementation and upgrading of their systems.

Value creation in project business relationships: Supplier and customer's perspectives

The purpose of this study is to analyze supplier’s value creation ability in project business in order to enhance customer’s business. In addition, the aim is to identify the role of business relationships in value creation and analyze the applicability of key account management in project business. The study considers value from the customer’s point of view. The concepts of value and value creation are widely discussed in marketing literature. Theory emphasizes the importance of value creation and business relationships in business markets. The empirical part of the study is conducted as a case study research. The empirical evidence is collected by interviewing one supplier organization and their three customer organizations. These companies operate in Finnish and global industrial markets. Data is collected through semi-structured interviews and analyzed by using qualitative content analysis. The study identifies several customer value drivers influencing on the value creation, which can be divided into product, service and relationship elements. One of the recognized value drivers is customer-supplier relationship. The findings show that a closer relationship enhances value creation possibilities and the key account management program allows effective managing of business relationships. As managerial implications, suppliers should seek to create continuous and conversational relationships with the key account customers.

Modelling the simultaneous effects of intellectual capital and knowledge management on the organisational performance of Finnish companies

The aim of this study was to contribute to the current knowledge-based theory by focusing on a research gap that exists in the empirically proven determination of the simultaneous but differentiable effects of intellectual capital (IC) assets and knowledge management (KM) practices on organisational performance (OP). The analysis was built on the past research and theoreticised interactions between the latent constructs specified using the survey-based items that were measured from a sample of Finnish companies for IC and KM and the dependent construct for OP determined using information available from financial databases. Two widely used and commonly recommended measures in the literature on management science, i.e. the return on total assets (ROA) and the return on equity (ROE), were calculated for OP. Thus the investigation of the relationship between IC and KM impacting OP in relation to the hypotheses founded was possible to conduct using objectively derived performance indicators. Using financial OP measures also strengthened the dynamic features of data needed in analysing simultaneous and causal dependences between the modelled constructs specified using structural path models. The estimates were obtained for the parameters of structural path models using a partial least squares-based regression estimator. Results showed that the path dependencies between IC and OP or KM and OP were always insignificant when analysed separate to any other interactions or indirect effects caused by simultaneous modelling and regardless of the OP measure used that was either ROA or ROE. The dependency between the constructs for KM and IC appeared to be very strong and was always significant when modelled simultaneously with other possible interactions between the constructs and using either ROA or ROE to define OP. This study, however, did not find statistically unambiguous evidence for proving the hypothesised causal mediation effects suggesting, for instance, that the effects of KM practices on OP are mediated by the IC assets. Due to the fact that some indication about the fluctuations of causal effects was assessed, it was concluded that further studies are needed for verifying the fundamental and likely hidden causal effects between the constructs of interest. Therefore, it was also recommended that complementary modelling and data processing measures be conducted for elucidating whether the mediation effects occur between IC, KM and OP, the verification of which requires further investigations of measured items and can be build on the findings of this study.

Foreign exchange exposure management in a fuel procurement company operating in the commodity markets

Fluctuating commodity prices, foreign exchange rates and interest rates are causing changes in cash flows, market value and the companies’ profit. Most of the commodities are quoted in US dollar. Companies with non-dollar accounting face a double risk in the form of the commodity price risk and foreign exchange risk. The objective of this Master’s thesis is to find out how companies under commodity should manage foreign exchange exposure. The theoretical literature is based on foreign exchange risk, commodity risk and foreign exchange exposure management. The empirical research is done by using constructive modelling of a case company in the oil industry. The exposure is model with foreign exchange net cash flow and net working capital. First, the factors affecting foreign exchange exposure in case company are analyzed, then a model of foreign exchange exposure is created. Finally, the models are compared and the most suitable method is defined. According to the literature, foreign exchange exposure is the foreign exchange net cash flow. However, the results of the study show that foreign exchange risk can be managed also with net working capital. When the purchases, sales and storage are under foreign exchange risk, the best way to manage foreign exchange exposure is with combined net cash flow and net working capital method. The foreign exchange risk policy of the company defines the appropriate way to manage foreign exchange risk.

Development and Effect Analysis of the Asteri Consultative Auditing Process - Safety and Security Management in Educational Institutions

The Finnish legislation requires for a safe and secure learning environment. However, the comprehensive, risk based safety and security management (SSM) and the management commitment in the implementation and development of the SSM are not mentioned in the legislation. Multiple institutions, operators and researchers have studied and developed safety and security in educational institutions over the past decade. Typically the approach has been fragmented and without bringing up the importance of the comprehensive SSM. The development needs of the safety and security operations in universities have been studied. However, in universities of applied sciences (UASs) and in elementary schools (ESs), the performance level, strengths and weaknesses of the comprehensive SSM have not been studied. The objective of this study was to develop the comprehensive, risk based SSM of educational institutions by developing the new Asteri consultative auditing process and study its effects on auditees. Furthermore, the performance level in the comprehensive SSM in UASs and ESs were studied using Asteri and the TUTOR model developed by the Keski-Uusimaa Department for Rescue Services. In addition, strengths, development needs and differences were identified. In total, 76 educational institutions were audited between the years 2011 and 2014. The study is based on logical empiricism, and an observational applied research design was used. Auditing, observation and an electronic survey were used for data collection. Statistical analysis was used to analyze the collected information. In addition, thematic analysis was used to analyze the development areas of the organizations mentioned by the respondents in the survey. As one of the main contributions, this research presents the new Asteri consultative auditing process. Organizations with low performance levels on the audited subject benefit the most from the Asteri consultative auditing process. Asteri may be usable in many different types of audits, not only in SSM audits. As a new result, this study provides new knowledge on attitudes related to auditing. According to the research findings, auditing may generate negative attitudes and the auditor should take them into account when planning and preparing for audits. Negative attitudes can be compensated by producing added value, objectivity and positivity for the audit and, thus, improve the positive effects of auditing on knowledge and skills. Moreover, as the results of this study shows, auditing safety and security issues do not increase feelings of insecurity, but rather increase feelings of safety and security when using the new Asteri consultative auditing process with the TUTOR model. The results showed that the SSM in the audited UASs was statistically significantly more advanced than that in the audited ESs. However, there is still room for improvement in the ESs and the UASs as the approach to the SSM was fragmented. It can be assumed that the majority of Finnish UASs and ESs do not likely meet the basic level of the comprehensive, risk based the SSM.

Public-private partnership investments in dry ports – Russian logistics markets and risks

The investments have always been considered as an essential backbone and so-called ‘locomotive’ for the competitive economies. However, in various countries, the state has been put under tight budget constraints for the investments in capital intensive projects. In response to this situation, the cooperation between public and private sector has grown based on public-private mechanism. The promotion of favorable arrangement for collaboration between public and private sectors for the provision of policies, services, and infrastructure in Russia can help to address the problems of dry ports development that neither municipalities nor the private sector can solve alone. Especially, the stimulation of public-private collaboration is significant under the exposure to externalities that affect the magnitude of the risks during all phases of project realization. In these circumstances, the risk in the projects also is becoming increasingly a part of joint research and risk management practice, which is viewed as a key approach, aiming to take active actions on existing global and specific factors of uncertainties. Meanwhile, a relatively little progress has been made on the inclusion of the resilience aspects into the planning process of a dry ports construction that would instruct the capacity planner, on how to mitigate the occurrence of disruptions that may lead to million dollars of losses due to the deviation of the future cash flows from the expected financial flows on the project. The current experience shows that the existing methodological base is developed fragmentary within separate steps of supply chain risk management (SCRM) processes: risk identification, risk evaluation, risk mitigation, risk monitoring and control phases. The lack of the systematic approach hinders the solution of the problem of risk management processes of dry port implementation. Therefore, management of various risks during the investments phases of dry port projects still presents a considerable challenge from the practical and theoretical points of view. In this regard, the given research became a logical continuation of fundamental research, existing in the financial models and theories (e.g., capital asset pricing model and real option theory), as well as provided a complementation for the portfolio theory. The goal of the current study is in the design of methods and models for the facilitation of dry port implementation through the mechanism of public-private partnership on the national market that implies the necessity to mitigate, first and foremost, the shortage of the investments and consequences of risks. The problem of the research was formulated on the ground of the identified contradictions. They rose as a continuation of the trade-off between the opportunities that the investors can gain from the development of terminal business in Russia (i.e. dry port implementation) and risks. As a rule, the higher the investment risk, the greater should be their expected return. However, investors have a different tolerance for the risks. That is why it would be advisable to find an optimum investment. In the given study, the optimum relates to the search for the efficient portfolio, which can provide satisfaction to the investor, depending on its degree of risk aversion. There are many theories and methods in finance, concerning investment choices. Nevertheless, the appropriateness and effectiveness of particular methods should be considered with the allowance of the specifics of the investment projects. For example, the investments in dry ports imply not only the lump sum of financial inflows, but also the long-term payback periods. As a result, capital intensity and longevity of their construction determine the necessity from investors to ensure the return on investment (profitability), along with the rapid return on investment (liquidity), without precluding the fact that the stochastic nature of the project environment is hardly described by the formula-based approach. The current theoretical base for the economic appraisals of the dry port projects more often perceives net present value (NPV) as a technique superior to other decision-making criteria. For example, the portfolio theory, which considers different risk preference of an investor and structures of utility, defines net present value as a better criterion of project appraisal than discounted payback period (DPP). Meanwhile, in business practice, the DPP is more popular. Knowing that the NPV is based on the assumptions of certainty of project life, it cannot be an accurate appraisal approach alone to determine whether or not the project should be accepted for the approval in the environment that is not without of uncertainties. In order to reflect the period or the project’s useful life that is exposed to risks due to changes in political, operational, and financial factors, the second capital budgeting criterion – discounted payback period is profoundly important, particularly for the Russian environment. Those statements represent contradictions that exist in the theory and practice of the applied science. Therefore, it would be desirable to relax the assumptions of portfolio theory and regard DPP as not fewer relevant appraisal approach for the assessment of the investment and risk measure. At the same time, the rationality of the use of both project performance criteria depends on the methods and models, with the help of which these appraisal approaches are calculated in feasibility studies. The deterministic methods cannot ensure the required precision of the results, while the stochastic models guarantee the sufficient level of the accuracy and reliability of the obtained results, providing that the risks are properly identified, evaluated, and mitigated. Otherwise, the project performance indicators may not be confirmed during the phase of project realization. For instance, the economic and political instability can result in the undoing of hard-earned gains, leading to the need for the attraction of the additional finances for the project. The sources of the alternative investments, as well as supportive mitigation strategies, can be studied during the initial phases of project development. During this period, the effectiveness of the investments undertakings can also be improved by the inclusion of the various investors, e.g. Russian Railways’ enterprises and other private companies in the dry port projects. However, the evaluation of the effectiveness of the participation of different investors in the project lack the methods and models that would permit doing the particular feasibility study, foreseeing the quantitative characteristics of risks and their mitigation strategies, which can meet the tolerance of the investors to the risks. For this reason, the research proposes a combination of Monte Carlo method, discounted cash flow technique, the theory of real options, and portfolio theory via a system dynamics simulation approach. The use of this methodology allows for comprehensive risk management process of dry port development to cover all aspects of risk identification, risk evaluation, risk mitigation, risk monitoring, and control phases. A designed system dynamics model can be recommended for the decision-makers on the dry port projects that are financed via a public-private partnership. It permits investors to make a decision appraisal based on random variables of net present value and discounted payback period, depending on different risks factors, e.g. revenue risks, land acquisition risks, traffic volume risks, construction hazards, and political risks. In this case, the statistical mean is used for the explication of the expected value of the DPP and NPV; the standard deviation is proposed as a characteristic of risks, while the elasticity coefficient is applied for rating of risks. Additionally, the risk of failure of project investments and guaranteed recoupment of capital investment can be considered with the help of the model. On the whole, the application of these modern methods of simulation creates preconditions for the controlling of the process of dry port development, i.e. making managerial changes and identifying the most stable parameters that contribute to the optimal alternative scenarios of the project realization in the uncertain environment. System dynamics model allows analyzing the interactions in the most complex mechanism of risk management process of the dry ports development and making proposals for the improvement of the effectiveness of the investments via an estimation of different risk management strategies. For the comparison and ranking of these alternatives in their order of preference to the investor, the proposed indicators of the efficiency of the investments, concerning the NPV, DPP, and coefficient of variation, can be used. Thus, rational investors, who averse to taking increased risks unless they are compensated by the commensurate increase in the expected utility of a risky prospect of dry port development, can be guided by the deduced marginal utility of investments. It is computed on the ground of the results from the system dynamics model. In conclusion, the outlined theoretical and practical implications for the management of risks, which are the key characteristics of public-private partnerships, can help analysts and planning managers in budget decision-making, substantially alleviating the effect from various risks and avoiding unnecessary cost overruns in dry port projects.

Information management in aircraft maintenance

Well managed information promotes competitive advantage and economic value for the company. The challenge is to use information effectively in complex networks. Decision making in network is complicated due to many independent sources of information. The aim of the present study was to identify and map the internal information flows and used information resourced by functions and roles, to make proposals to the case organization to improve the information management and to improve the situational awareness and process flows. In the present study, an inductive approach was applied, with the aim to find out gaps and bottlenecks of information flow of an aircraft maintenance organization and its network. The empirical part was conducted with observing the processes and with questionnaires. Theoretical part of this study consists on reviewing relevant literature on maintenance management in aviation and information management in aviation. Together with empirical evidence and the literature used in the study the gaps were found and suggestions for improvements were done. The outcome of this study contributes the organization in its bigger goal to improve the productivity. The information management of the network is one actor in the field and will pave the way to smoother operation and situational awareness. The lack of rules and requirements for information management and spreading is a challenge in information management. The excessive data overburden may cause problem in the actors’ situation-awareness due to non-availability of the right information.

Catching up with competitiveness in emerging markets – An analysis of the role of the firm’s technology management strategies

Emerging markets have experienced rapid economic growth, and manufacturing firms have had to face the effects of globalisation. Some of the major emerging economies have been able to create a supportive business environment that fosters innovation, and China is a good example of a country that has been able to increase value-added investments. Conversely, when we look at Russia, another big emerging market, we witness a situation in which domestic firms struggle more with global competitiveness. Innovation has proven to be one of the most essential ingredients for firms aiming to grow and become more competitive. In emerging markets, the business environment sets many constraints for innovation. However, open strategic choices in new product development enable companies in emerging markets to expand their resource base and capability building. Networking and close inter-firm cooperation are essential in this regard. In this dissertation, I argue that technology transfer is one of the key tools for these companies to become internationally networked and to improve their competitiveness. It forces companies to reach outside the company and national borders, which in many cases, is a major challenge for firms in emerging markets. This dissertation focuses on how companies can catch up with competitiveness in emerging markets. The empirical studies included in the dissertation are based on analyses of survey data mainly of firms and their strategies in the Russian manufacturing industry. The dissertation contributes to the current strategic management literature by further investigating technology management strategies in manufacturing firms in emerging markets and the benefits of more open approaches to new product development and innovation.

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 roles and tasks of salespeople in Software-as-a-Service company's value-based sales process

Recent research in relationships marketing and sales and sales management emphasizes companies’ ability to create customer value as a core of all business-to-business relationships. The role of individual salespeople in business relation-ships is commonly acknowledged, but has been largely neglected in extant literature. This study offers especially more detailed perspective on salespeople’s roles and tasks in business-to-business value-based sales process. It focuses especially on Software-as-a-Service business environment. The objective of the study is to find out how salespeople can create value in Software-as-a-Service value-based sales process. It determines value-based sales process, salespeople’s roles and tasks in it, and combines value assessment in to process. The results indicate that salespeople have to adapt different selling roles and tasks in Software-as-a-Service value-based sales process to be able to support the customer’s value-in-use experience. The process itself is highly complex, consisting of multiple facets and selling behaviors, and involves relevant actors from both parties of relationship. The study concludes with a discussion of possibilities that provide interesting aspects for future research.