Strategic management of value networks: how to create value in cross-sector collaboration and partnerships

Cross-sector collaboration and partnerships have become an emerging and desired strategy in addressing huge social and environmental challenges. Despite its popularity, cross-sector collaboration management has proven to be very challenging. Even though cross-sector collaboration and partnership management have been widely studied and discussed in recent years, their effectiveness as well as their ability to create value with respect to the problems they address has remained very challenging. There is little or no evidence of their ability to create value. Regarding all these challenges, this study aims to explore how to manage cross-sector collaborations and partnerships to be able to improve their effectiveness and to create more value for all partners involved in collaboration as well as for customers. The thesis is divided into two parts. The first part comprises an overview of relevant literature (including strategic management, value networks and value creation theories), followed by presenting the results of the whole thesis and the contribution made by the study. The second part consists of six research publications, including both quantitative and qualitative studies. The chosen research strategy is triangulation, as the study includes four types of triangulation: (1) theoretical triangulation, (2) methodological triangulation, (3) data triangulation and (4) researcher triangulation. Two publications represent conceptual development, which are based on secondary data research. One publication is a quantitative study, carried out through a survey. The other three publications represent qualitative studies, based on case studies, where data was collected through interviews and workshops, with participation of managers from all three sectors: public, private and the third (nonprofit). The study consolidates the field of “strategic management of value networks,” which is proposed to be applied in the context of cross-sector collaboration and partnerships, with the aim of increasing their effectiveness and the process of value creation. Furthermore, the study proposes a first definition for the strategic management of value networks. The study also proposes and develops two strategy tools that are recommended to be used for the strategic management of value networks in cross-sector collaboration and partnerships. Taking a step forward, the study implements the strategy tools in practice, aiming to show and to demonstrate how new value can be created by using the developed strategy tools for the strategic management of value networks. This study makes four main contributions. (1) First, it brings a theoretical contribution by providing new insights and consolidating the field of strategic management of value networks, also proposing a first definition for the strategic management of value networks. (2) Second, the study makes a methodical contribution by proposing and developing two strategy tools for value networks of cross-sector collaboration: (a) value network mapping, a method that allows us to assess the current and the potential value network and (b) the Value Network Scorecard, a method of performance measurement and performance prediction in cross-sector collaboration. (3) Third, the study has managerial implications, offering new solutions and empirical evidence on how to increase the effectiveness of cross-sector collaboration and also allow managers to understand how new value can be created in cross-sector partnerships and how to get the full potential of collaboration. (4) And fourth, the study also has practical implications, allowing managers to understand how to use in practice the strategy tools developed in this study, providing discussions on the limitations regarding the proposed tools as well as general limitations involved in the study.

Enhancing business-to-business relationship through value co-creation in traditional business sector: A case of building services engineering

This study discusses the significance of having service as a business logic, and more specifically, how value co-creation can be seen as an enhancing phenomenon to business-to-business relationships in traditional business sector. The purpose of this study is to investigate how value cocreation can enhance a business-to-business relationship in the heating, ventilation and airconditioning (HVAC) industry of building services engineering, through three sub-objectives: to identify what is value in the industry, how value is co-created in the industry, and what is value in a business-to-business relationship in the industry. The theoretical part this study consists of academic knowledge and literature related to the concepts of value, value co-creation and business-to-business relationships. In order to research value co-creation and business-to-business relationships in HVAC industry of building services engineering both, metaphorical and conceptual thinking of service dominant (S-D) logic and more managerial approach of service logic (SL), contributed to the theoretical part of the study. The empirical research conducted for this study is based on seven semi-structured interviews, which constituted the holistic, qualitative single case study method chosen for the research. The data was collected in September 2014 from CEOs, managers and owners representing six building services engineering firms. The interviews were analysed with the help of transcriptions, role-ordered matrices and thematic networks. The findings of this study indicate that value in HVAC industry consists of client expertise and supplier expertise. The result of applying client expertise and supplier expertise to the business-to- business relationship is characterized as value-in-reputation, when continuity, interaction, learning and rapport of the business relationship are ensured. As a result, value co-creation in the industry consists of mutual and separate elements, which the client and the supplier apply in the process, in addition to proactive interaction. The findings of this study, together with the final framework, enhance the understanding of the connection existing between value co-creation and business-to-business relationship. The findings suggest that value in the HVAC industry is characterized by both value-in-use and value-inreputation. Value-in-reputation enhances the formation of value-in-use, and consequently, value cocreation enhances the business-to-business relationship. This study thus contributes to the existing knowledge on the concepts of value and value co-creation in business-to-business relationships.

The Determinants of Financial Leverage of Large Publicly Listed Companies - Evidence from Nordic Telecom Sector

This thesis examines the determinants of financial leverage ratio of large publicly listed companies within Nordic Telecom sector. The study is done as a case study and it covers 5 case companies headquartered in Nordic countries during period of 2002 - 2014 and by using restated values of quarterly observations from each case company’s interim reports. The chosen hypotheses are tested with multiple linear regressions firm by firm. The Findings of the study showed that uniqueness of Telecom sector and the region of our sample could not provide us unequivocal determinants of leverage ratio within the sector. However, e.g. Pecking order theory’s statement of Liquidity was widely confirmed by 3 out of 5 case companies which is worth to be taken into account in the big picture. The findings also showed that theories and earlier empirical evidence are confirmed by our case companies individually and non-systematically. Though Telecom sector is considered as quite unique industry and we did not discover absolute common relationships that would have held through all the Nordic case companies, we got unique and valuable evidence to conduct the research of this sector in future.

Potential applications of nanotechnology in the agro-food sector

Nanoscience and nanotechnology are new frontiers of this century. Their application to the agriculture and food sectors is relatively recent compared with their use in drug delivery and pharmaceuticals. Smart delivery of nutrients, bioseparation of proteins, rapid sampling of biological and chemical contaminants, and nanoencapsulation of nutraceuticals are some of the emerging topics of nanotechnology for food and agriculture. In this review, some applications of nanotechnology in agro-food sector are discussed.

Profile of establishments in the supermarket sector with respect to good practices in the city of Santa Maria (RS), Brazil

The objective of this study was to verify the compliance of the supermarket sector with respect to the Good Practice Program standards of the city of Santa Maria (RS), Brazil. Sixty nine establishments were verified using a checklist of good practices for the supermarket sector in Santa Maria, RS (Brazil), from April to July 2011. The data were collected by a food safety and quality professional using this checklist. The results showed that the overall adequacy of the establishments surveyed was 29.07%. The highest percentage of compliance was found for storage at ambient temperature (64.13%). The lowest compliance percentage was also found in different sections and areas in the supermarkets such as bakery and confectionery (14.93%), water supply (18.30%), food handling (21.01%), sausage and cold meat (or deli meat) (36.38%), and documentation-related items (4.97%). None of the supermarkets evaluated had the necessary documentation for the implementation of good practices. The results of this study show the importance of effectively implementing a good practice program and quality systems by raising awareness among technicians and professionals of the importance of quality programs used in food companies and the need for more thorough inspection delivered by competent authorities to ensure food safety for consumers.

Critical success factors for improving societal effectiveness of transport sector's R&D

This study investigates societal effectiveness of transport sector’s Research & Development (R&D) operations. In this study effectiveness refers to organization’s capability to produce the intended and desired impacts through its operations. The aim of this study is to identify the motives for evaluating societal effectiveness and recognize the critical success factors for improving effectiveness. The theoretical framework focuses first in the policy context of effectiveness evaluation in public sector and secondly the framework introduces the concept and process of effectiveness evaluation. The empirical part is carried out as a case study, which investigates societal effectiveness of Finnish Transport Agency’s (FTA’s) R&D. The aim is to recognize FTA’s critical success factors for improving R&D operations’ societal effectiveness. Based on these factors, the organization is able to define indicators for measuring effectiveness in the future operations. In this study societal effectiveness is investigated from R&D purchasers’ and R&D end- users’ points of views according to Purchaser-Provider-model. The results indicate that societal effectiveness evaluation is important part of R&D operations, but the implementation of the evaluation as part of daily operations is challenging. Because of limited resources, the organization is forced to strong priorization and therefore R&D tasks are secondary after the operational tasks. Based on the results the critical success factors can be recognized as resources and priorization, clear strategy and objectives, internal communications, cooperation between public and private sector and R&D implementation and dissemination.

Liquidity levels of Finnish SME’s from 2007 to 2013 and a closer analysis of the IC sector

TAVOITTEET: Tämän tutkielman tarkoitus on tarkastella eri toimialojen likviditeettitasoja vuosien 2007 ja 2013 välillä. Se tarkastelee myös kassanhallinnan ja likviditeetin kirjallisuutta, erilaisia likviditeettiä kuvaavia tunnuslukuja sekä asioita, joilla on vaikutusta likviditeettiin. Tämän lisäksi se tutkii informaatio ja kommunikaatio sektoria tarkemmin. DATA: Data on kerätty Orbis tietokannasta. Toimialakohtaiset keskiarvot on laskettu joko kappaleen 2 esittämillä kaavoilla tai noudettu suoraan tietokannasta. Hajonta kuvaajat on tehty Excelillä ja korrelaatio matriisi ja regressioanalyysit SAS EG:llä. TULOKSET: Tämä tutkimus esittää toimialakohtaiset keskiarvot liquidity ratiosta, solvency ratiosta sekä gearingista, kuten monista muista likviditeettiä kuvaavista tai siihen vaikuttavista tunnusluvuista. Tutkimus osoittaa, että keskimäärin likviditeetti ja maksuvalmius ovat säilyneet melko samana, mutta toimialakohtaiset muutokset ovat voimakkaita. IC sektorilla likviditeettiin vaikuttaa katetuotto, työntekijöiden määrä, liikevaihto, taseen määrä sekä maksuaika.

POLITICAL RISK IN FOREIGN DIRECT INVESTMENT IN THE RUSSIAN ELECTRIC POWER SECTOR

Russia approved ambitious reform plan for the electricity sector in 2001 including privatisation of the country’s huge thermal generation assets. So far the sector had suffered from power shortages, aging infrastructure, substantial electricity losses, and weak productivity and profitability numbers. There was obvious need for foreign investments and technologies. The reform was rather successful; the generation assets were privatised in auctions in 2007-2008 and three European energy companies, E.On, Enel and Fortum, invested in and obtained together over 10% of the Russian production assets. The novelty of these foreign investments serves unique object for the study. The political risk is involved in the FDI due to the industry’s social and economic importance. The research’s objective was to identify and analyse the political risk that foreign investors face in the Russian electricity sector. The research had qualitative study method and the empirical data was collected by interviewing. The research’s theoretical framework was based on the existing political risk theories and it focused to understand the Russian government in relation to the country’s stability and define both macro-level and micro-level sources of political risk for the foreign direct investments in the sector. The research concludes that the centralised and obscure political decision-making, economic constriction, high level of governmental control in economy and corruption form the country’s internal macro-level risk sources for the foreign investors in the sector. Additionally the retribution due to the companies’ home country actions, possible violent confrontations at the Russian borders and the currency instability are externally originated risk sources. In the electricity industry there is risk of tightened governmental control and increased regulation and taxation. Similarly the company-level risk sources link to the unreformed heating sector, bargaining with the authorities, diplomatic stress between host and home countries and to companies and government’s divergent perspective for the profit-making. The research stresses the foreign companies’ ability to cope with the characteristics of Russian political environment. In addition to frequent political and market risk assessment, the companies need to focus on currency protection against rouble’s rate fluctuation and actively build good company-citizenship in the country. Good relationship is needed with the Russian political authorities. The political risk identification and the research’s conclusive framework also enable political risk study assessments for other industries in Russia

EXPLOITING SCENARIO PLANNING FOR STRATEGIC ASSESSMENT OF THE EXTERNAL BUSINESS ENVIRONMENT Future insights of the European pet food sector

The purpose of this study is to explore how scenarios can be exploited in strategic assessment of the external business environment. One of the key challenges for managers worldwide is to adapt their businesses to the ever-changing business environment. As the companies’ external business environment is constantly presenting new opportunities and threats, it is extremely important that companies continuously monitor the possible changes happening around it. As the speed of change rises, assessing the future has become more and more vital. The study was conducted as an exploratory research and the research strategy was influenced by scenario planning and case study strategy. The study examined the European pet food sector from the future point of view. Qualitative study was chosen as research approach and empirical data was collected primarily by seven expert interviews. The secondary data about the sector was applied as complementary empirical data. In the theoretical part of the research it was discovered that nowadays, traditional analysis frameworks are ill-suited for strategic assessment of the external business environment. This is why a self-created combination framework for analysis was employed both as study’s theoretical framework and analysis technique. Furthermore, the framework formed the base for interview questions. Both in theoretical and the empirical part of the study it was found that today, in strategic assessment of the external business environment, besides setting focus on the current situation, it is important to concentrate also on the future. The traditional analysis frameworks offer a good starting point for collecting relevant data but they do not encourage conducting a deeper analysis. By adding characteristics from scenario planning to these more traditional tools, a new analysis framework was created, which ensured the more comprehensive analysis. By understanding the interconnections between discovered phenomena and changes, and by recognizing uncertainties, the user is helped to reflect the environment more profoundly. The contributions of the study are both theoretical and managerial. A new analysis framework strives to answer to the current needs for strategic assessment of external business environment and the framework was tested in the context of European pet food sector. When it comes to managerial contributions, the importance lies in understanding the future. Managers must take future into account and understand that future includes various possibilities which all must be reflected

Barriers to Service-sector SME Internationalization in the EU Business Environment

The service sector in the global world is constantly growing: in Europe, they account currently approximately for 70 per cent of the total economy. Yet service internationalization is rather a new phenomenon: services have been traditionally seen as local entities, which also explains why research on service internationalization has properly begun only few decades ago. Even though the Single European Market allows free service movement between Member States, services do not move as actively as desired: approximately only one fifth of services are involved in cross-border trade. Therefore, the main purpose of this thesis is to analyze the barriers to service-sector SME internationalization in the EU business environment. To address the research purpose, the internationalization of service-sector SMEs in the EU area is first described and thereafter, the barriers to service-sector SME internationalization in the European context are mapped and analyzed from intra- and extra-firm perspectives. In order to understand the topic area and the phenomenon, a short glance is first taken into Europe as a business environment for service industries: the market characteristics and benefits of the common free trade area for service industries are described. Also earlier literature on service internationalization and barriers to international service trade are discussed. Due to low previous research activity on barriers specifically to international service trade, the discussion is improved by presenting general findings of barriers to SME internationalization. This research is conducted with qualitative methods: there is only a limited amount of previous research and qualitative methods provide a way of gathering in-depth information and reaching understanding from respondents’ perspectives. The evidence presented in the study was collected through six semi-structured interviews with six different small or medium sized international service firm representatives that all had the first-hand knowledge regarding their company’s process of delivering services from home market to other European countries. The results of the study provide a detailed description and analysis of intra- and extra-firm barriers to service-sector SME internationalization in the context of EU and indicate that in general, internal firm-specific barriers have a greater impact in determining firm’s possibilities to be engaged in cross-border service trade – external barriers played a smaller role. What might explain these results is that first of all, the study has full focus on service firms of smaller size and internal barriers tend to be particularly effective to SMEs as their resources, skills and capabilities are often limited, which limits internationalization possibilities. Second, the results may indicate that EU’s internal market and the free trade concept function quite well from service firms’ perspective, and the low service movement rate may be rather caused by firm’s own competences and resource-related difficulties than directly by flaws in the market. The results complete earlier literature and provide new and more detailed knowledge of barriers to cross-border service trade in the context of Europe. They also indicate that service internationalization should be observed separately from internationalization of traditional manufacturing firms due to unique service-specific characteristics. The findings of this study are particularly beneficial for small or medium sized service firm managers as it provides knowledge of delivering services across borders in Europe and of barriers that relate to that process.