2014 Ukraine crisis – Implications for corporate crisis management

In the late year 2013 events started to unfold in Ukraine’s capital city Kiev that would change the political and economic environment of the EU and Russia. The tension had been building for years between the two parties with Ukraine in the middle and during 2014 the tension blew up and events started to escalate into a crisis, which we now know as the 2014 Ukraine crisis. The crisis would include political, economic, and even military actions by all the parties involved with Ukraine slipping close to civil war. Both political and economic hardships followed for others as well with both the EU and Russia placing heavy political and economic sanctions on each other. Most notably in terms of this paper, the Russian federation placed total import embargo sanctions on food imports from the EU and some other countries. This meant that a Finnish dairy company, Valio, had to engage in corporate crisis management as almost a fifth of its total revenue was cut in a heartbeat. Valio had been prepared for some kind of complications with their Russian market as events started to unfold in Ukraine in the beginning of 2014 but never did they suspect that a complete shutdown of the Russian market would follow. The company is still recovering after more than a year after the sanctions were posed and have not been able to supplement the lost revenue streams. This research is a qualitative research aiming to find answers to the main questions: 1) What is the 2014 Ukraine crisis and what kind of special implications does it have and 2) How did the crisis affect Valio and how did Valio fare in its crisis management efforts. The data has been collected both from secondary document sources and primary sources. The main findings of this research are that the political and economic environment of the EU and Russia has gone through a profound change during the years 2013-2015. The companies and governments should re-evaluate what kind of environment they are now facing and what kinds of risks the new situation poses. This also calls for a deep academic analysis from the academic community. In corporate crisis management of Valio the main findings are that the former literature has looked into crisis management as one-time occurrence but the new crises and global events would call for a more on-going crisis analysis and active crisis management. Thus, corporate crisis management should be viewed as a cycle. Valio specifically handled the situation surprisingly well, considering that their revenue was indeed cut by a fifth. The main aspects of crisis management, which Valio did not handle as well, concern the learning curve of crisis management. They could be doing more in order to prepare for future crises better by learning from this experience. The situation is then still on-going in the autumn 2015 both in Ukraine and within Valio.

A Project Portfolio Tool for Forecasting Small Projects Profitability

The case company in this study is a large industrial engineering company whose business is largely based on delivering a wide-range of engineering projects. The aim of this study is to create and develop a fairly simple Excel-based tool for the sales department. The tool’s main function is to estimate and visualize the profitability of various small projects. The study also aims to find out other possible and more long-term solutions for tackling the problem in the future. The study is highly constructive and descriptive as it focuses on the development task and in the creation of a new operating model. The developed tool focuses on estimating the profitability of the small orders of the selected project portfolio currently on the bidding-phase (prospects) and will help the case company in the monthly reporting of sales figures. The tool will analyse the profitability of a certain project by calculating its fixed and variable costs, then further the gross margin and operating profit. The bidding phase of small project is a phase that has not been covered fully by the existing tools within the case company. The project portfolio tool can be taken into use immediately within the case company and it will provide fairly accurate estimate of the profitability figures of the recently sold small projects.

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.

Bank Income Diversification and its Impact on Profitability and Risk: Evidence from Nordic Markets

Financial industry has recently encountered many changes in the business environment. Increased regulation together with growing competition is forcing commercial banks to rethink their business models. In order to maintain profitability in the new environment, banks are focusing more into activities that yield noninterest income. This is a shift away from the traditional intermediation function of banks. This study aims to answer the question if the shift from traditional income yielding activities to more innovative noninterest activities is logical in terms of profitability and risk in Nordics. This study also aims to answer the question if diversification within the noninterest income categories has impact on profitability and risk and if there are certain categories of noninterest income that are better than others in terms of profitability and risk in Nordics. Results show that diversification between interest and noninterest activities and increase in the share of noninterest income have a negative impact on the risk adjusted returns and risk profile. Results also show that further diversification within the noninterest income categories has negative impact on risk adjusted profitability and risk while an increase of the share of commission and fee income category of total noninterest income has a positive impact on risk adjusted profitability and risk. Results are logical and in line with previous research (De Young & Roland, 2001; Stiroh, 2004). Results provide useful information to banks and help them better evaluate outcomes of different income diversification strategies.

Competitive Effects of Non-Controlling Minority Acquisitions – Sufficient to merit further EU merger regulation?

Partial ownership interests are a widespread phenomenon in modern corporate environment. Unless minority shareholding affords the target to exercise control over the target, they do currently not have to be notified to the European Commission under EU merger regime. However, economic research has long suggested that when linking competing or non-horizontally positioned undertakings particularly in industries with few competitors, minority shareholdings even far below the majority of shares or voting rights could lead to higher prices or lower output volumes to the detriment of consumers. The Commission has recognized this issue and proceeded to suggest an extension of the merger regime to catch also certain non-controlling minority acquisitions. Horizontal non-controlling minority shareholdings create a positive correlation between the sales revenues of the partial acquirer and target. Through the equity interest the acquirer will internalise a fraction, proportional to the financial rights attached to the shareholding, of the profit of the target. This will incentivise the acquirer to contribute to increasing the target’s business profits by increasing its own sales price (horizontal unilateral effects). When a minority stake is held in a vertically related or a conglomerate company, the minority acquirer could be allowed to hamper or eliminate the target’s rivals’ access either to inputs (input foreclosure) or customers (customer foreclosure), depending on which level of the supply chain the parties are (vertical unilateral effects). Under certain circumstances minority share acquisitions could also lessen competition because they facilitate collusion between companies active in the market (coordinated effects). Economic theory confirms that non-controlling minority shareholdings may under certain circumstances create anti-competitive effects that are unlikely to be remedies by pro-competitive effects. However, they are likely to be of less significant nature than anticompetitive effects created by full mergers. This derives fore mostly from the fact that a minority share acquirer carries all the costs associated with its unilateral action but will internalise only a fraction of the lost profits. This is likely to limit the acquirer’s incentive to raise price and the profitability of such behavior. Having in mind that the number of potentially problematic cases is expected to be next to negligible, the limited potential competitive effects of non-controlling minority share acquisitions cannot be seen to clearly merit extension of the scope of the EUMR. The system suggested by the Commission is particularly ill-fitted for such purpose given the clear lack of legal certainty and considerable administrative burden associated with it.

Corporate social responsibility in online retail – Perceptions from online discussions on Amazon

Online retail has experienced substantial growth due to the increased utilization of digital technologies. The growth in the industry has created numerous multinational corporations, which serve customers all around the world. As a result, the online retailers’ efforts in sustainability have been more often in publicity. Corporate Social Responsibility (CSR), the efforts going beyond the company’s interest in order to bring social good, have been discussed in the academic community for decades. While the various effects of CSR in retail and business generally have been realized, the research aims to make a contribution by examining the concept from the viewpoint of online retail by focusing on interaction at online discussion forums. The main research question asks: What is the role of online retailer CSR in the online discussion forum context? In order to answer this question, additional three sub-research questions are suggested: 1) What elements of CSR are relevant in the online retailer context? 2) How are discussion forums used in communication regarding CSR and online retail by different discusser types? 3) What kind of company perceptions and consumer behavior appear in online discussions of Amazon’s CSR? The study is qualitative of nature, using the content analysis research method to examine posts found from four different public online discussion forums. A qualitative, interpretative analysis was used, although quantitative measures regarding discussion posts were also presented. The analysis contains a coding process, where attributes are attached to discussion posts. As a result of the process, specific patterns can be indicated in order to categorize the posts. As the research uses Amazon as the case company, the case study method is also adopted. In the online retail context, ethics regarding the online retailer’s tax and labor policies are found as most relevant elements. Customers, using discussion forums to share their experiences and opinions regarding online retailer CSR efforts, are realized as the most prominent stakeholder. The research also highlights the role of online retailer employees providing details on internal business practices. However, the not realize the possibility to participate in discussions. Most discussion posts refer either to a positive, negative or mixed reaction towards CSR efforts, it is suggested that the concept is relevant also in online retail. Although online retailer CSR efforts are somewhat linked to company perceptions, the concept has a minimal role in consumer behavior. In online retail, CSR efforts can reduce the risk of being involved in discussions related to controversies. In addition, online retailer CSR efforts should communicate how the retailer contributes locally.

Static waves in corporate space : characterizing oscillating trading patterns in New York stock exchange

Various researches in the field of econophysics has shown that fluid flow have analogous phenomena in financial market behavior, the typical parallelism being delivered between energy in fluids and information on markets. However, the geometry of the manifold on which market dynamics act out their dynamics (corporate space) is not yet known. In this thesis, utilizing a Seven year time series of prices of stocks used to compute S&P500 index on the New York Stock Exchange, we have created local chart to the corporate space with the goal of finding standing waves and other soliton like patterns in the behavior of stock price deviations from the S&P500 index. By first calculating the correlation matrix of normalized stock price deviations from the S&P500 index, we have performed a local singular value decomposition over a set of four different time windows as guides to the nature of patterns that may emerge. I turns out that in almost all cases, each singular vector is essentially determined by relatively small set of companies with big positive or negative weights on that singular vector. Over particular time windows, sometimes these weights are strongly correlated with at least one industrial sector and certain sectors are more prone to fast dynamics whereas others have longer standing waves.

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.

Corporate social responsibility in online retail – Perceptions from online discussions on Amazon

Online retail has experienced substantial growth due to the increased utilization of digital technologies. The growth in the industry has created numerous multinational corporations, which serve customers all around the world. As a result, the online retailers’ efforts in sustainability have been more often in publicity. Corporate Social Responsibility (CSR), the efforts going beyond the company’s interest in order to bring social good, have been discussed in the academic community for decades. While the various effects of CSR in retail and business generally have been realized, the research aims to make a contribution by examining the concept from the viewpoint of online retail by focusing on interaction at online discussion forums. The main research question asks: What is the role of online retailer CSR in the online discussion forum context? In order to answer this question, additional three sub-research questions are suggested: 1) What elements of CSR are relevant in the online retailer context? 2) How are discussion forums used in communication regarding CSR and online retail by different discusser types? 3) What kind of company perceptions and consumer behavior appear in online discussions of Amazon’s CSR? The study is qualitative of nature, using the content analysis research method to examine posts found from four different public online discussion forums. A qualitative, interpretative analysis was used, although quantitative measures regarding discussion posts were also presented. The analysis contains a coding process, where attributes are attached to discussion posts. As a result of the process, specific patterns can be indicated in order to categorize the posts. As the research uses Amazon as the case company, the case study method is also adopted. In the online retail context, ethics regarding the online retailer’s tax and labor policies are found as most relevant elements. Customers, using discussion forums to share their experiences and opinions regarding online retailer CSR efforts, are realized as the most prominent stakeholder. The research also highlights the role of online retailer employees providing details on internal business practices. However, the not realize the possibility to participate in discussions. Most discussion posts refer either to a positive, negative or mixed reaction towards CSR efforts, it is suggested that the concept is relevant also in online retail. Although online retailer CSR efforts are somewhat linked to company perceptions, the concept has a minimal role in consumer behavior. In online retail, CSR efforts can reduce the risk of being involved in discussions related to controversies. In addition, online retailer CSR efforts should communicate how the retailer contributes locally.

Increased profitability and efficiency by improving the Meetings & Events Category S2P-process – Case Company

The purpose of this research was to examine the most optimal way to arrange meetings and events management and source to pay –process in a global company. The research is a qualitative multi-method case study and is a commission from a global company. The theoretical framework of this research structures around two approaches. First approach focus on a purchasing strategy and management that shows the current role of procure-ment and introduce different ways to organize purchasing functions. Second approach focus on purchasing process management and improvement methods. Annual spend analyze, external and internal interviews and internal survey were done to gain compre-hensive knowledge about the current state of operations and possible solutions. Gathered data were then combined to theoretical framework in order to create optimal solution for the case company. Based on the research a source to pay –process and global policy for meeting and event category was created. The solution includes all relevant matters that are needed in order to secure efficient and profitable operations. The results show that optimal way to arrange meetings and events structures around standardized source to pay –processes, central-ized procurement, preferred supplier and clearly defined roles and responsibilities be-tween different stakeholders.

2014 Ukraine crisis – Implications for corporate crisis management

In the late year 2013 events started to unfold in Ukraine’s capital city Kiev that would change the political and economic environment of the EU and Russia. The tension had been building for years between the two parties with Ukraine in the middle and during 2014 the tension blew up and events started to escalate into a crisis, which we now know as the 2014 Ukraine crisis. The crisis would include political, economic, and even military actions by all the parties involved with Ukraine slipping close to civil war. Both political and economic hardships followed for others as well with both the EU and Russia placing heavy political and economic sanctions on each other. Most notably in terms of this paper, the Russian federation placed total import embargo sanctions on food imports from the EU and some other countries. This meant that a Finnish dairy company, Valio, had to engage in corporate crisis management as almost a fifth of its total revenue was cut in a heartbeat. Valio had been prepared for some kind of complications with their Russian market as events started to unfold in Ukraine in the beginning of 2014 but never did they suspect that a complete shutdown of the Russian market would follow. The company is still recovering after more than a year after the sanctions were posed and have not been able to supplement the lost revenue streams. This research is a qualitative research aiming to find answers to the main questions: 1) What is the 2014 Ukraine crisis and what kind of special implications does it have and 2) How did the crisis affect Valio and how did Valio fare in its crisis management efforts. The data has been collected both from secondary document sources and primary sources. The main findings of this research are that the political and economic environment of the EU and Russia has gone through a profound change during the years 2013-2015. The companies and governments should re-evaluate what kind of environment they are now facing and what kinds of risks the new situation poses. This also calls for a deep academic analysis from the academic community. In corporate crisis management of Valio the main findings are that the former literature has looked into crisis management as one-time occurrence but the new crises and global events would call for a more on-going crisis analysis and active crisis management. Thus, corporate crisis management should be viewed as a cycle. Valio specifically handled the situation surprisingly well, considering that their revenue was indeed cut by a fifth. The main aspects of crisis management, which Valio did not handle as well, concern the learning curve of crisis management. They could be doing more in order to prepare for future crises better by learning from this experience. The situation is then still on-going in the autumn 2015 both in Ukraine and within Valio.