The effectiveness of financial innovation support tools. Comparative study of Latvia and Finland

In the Innovation Union Scoreboard of 2011, Latvia ranked last amongst the EU countries in innovation performance. Even though there is sufficient scientific and technological basis, the results remain modest or low in most of the indicators concerning innovations. Several aspects influence the performance a national innovation system. In Latvia, the low effectiveness is often attributed to lack of financial support tools. As a comparison, Finland was chosen because of its well-established and documented innovation system. The aim of this study is to research the efficiency and effectiveness of the current financial innovation support tool system in Latvia from the point of view of an innovating company. It also attempts to analyze the support tool system of Latvia and compare to the relevant parts of the Finnish system. The study found that it is problematic for innovative companies in Latvia to receive the necessary funding especially for start-ups and SMEs due to the low number of grant programs, funds and lacking offer from banks, venture capital and business angels. To improve the situation, the Latvian government should restructure the funding mechanisms putting a bigger emphasis on innovative start-ups and SMEs. That would lay a foundation for future growth and boost research and scientific activities in Latvia.

The Finnish Paper Workers' Union at a crossroads: Labor union representativeness in a changing environment, 1980-2008

This thesis consists of four articles and an introductory section. The main research questions in all the articles refer to the changes in the representativeness of the Finnish Paper Workers' Union. Representativeness stands for the entire entity of external, internal, legal and reputational factors that enable the labor union to represent its members and achieve its goals. This concept is based on an extensive reading of quantitative and qualitative industrial relations literature, which includes works based on Marxist labor-capital relations (such as Hyman's industrial relations studies), and more recent union density studies as well as gender- and ethnic diversity-based 'union revitalization' studies. Müller-Jentsch's German studies of industrial relations have been of particular importance as well as Streeck's industrial unionism and technology studies. The concept of representativeness is an attempt to combine the insights of these diverse strands of literature and bring the scientific discussion of labor unions back to the core of a union's function: representing its members. As such, it can be seen as a theoretical innovation. The concept helps to acknowledge both the heterogeneity of the membership and the totality of a labor union organization. The concept of representativeness aims to move beyond notions of 'power'. External representativeness can be expressed through the position of the labor union in the industrial relations system and the economy. Internal representativeness focuses on the aspects of labor unions that relate to the function of the union as an association with members, such as internal democracy. Legal representativeness lies in the formal legal position of the union – its rights and instruments. This includes collective bargaining legislation, co-decision rules and industrial conflict legislation. Reputational representativeness is related to how the union is seen by other actors and the general public, and can be approximated using data on strike activity. All these aspects of representativeness are path-dependent, and show the results of previous struggles over issues. The concept of representativeness goes beyond notions of labor union power and symbolizes an attempt to bring back the focus of industrial relations studies to the union's basic function of representing its members. The first article shows in detail the industrial conflict of the Finnish paper industry in 2005. The intended focus was the issue of gender in the negotiations over a new collective agreement, but the focal point of the industrial conflict was the issue of outsourcing and how this should be organized. Also, the issue of continuous shifts as an issue of working time was very important. The drawn-out conflict can be seen as a struggle over principles, and under pressure the labor union had to concede ground on the aforementioned issues. The article concludes that in this specific conflict, the union represented its' female members to a lesser extent, because the other issues took such priority. Furthermore, because of the substantive concessions. the union lost some of its internal representativeness, and the stubbornness of the union may have even harmed the reputation of the union. This article also includes an early version of the representativeness framework, through which this conflict is analyzed. The second article discusses wage developments, union density and collective bargaining within the context of representativeness. It is shown that the union has been able to secure substantial benefits for its members, regardless of declining employment. Collective agreements have often been based on centralized incomes policies, but the paper sector has not always joined these. Attention is furthermore paid to the changing competition of the General Assembly, with a surprisingly strong position of the Left Alliance still. In an attempt to replicate analysis of union density measures, an analysis of sectoral union density shows that similar factors as in aggregate data influence this measure, though – due to methodological issues – the results may not be robust. On this issue, it can be said that the method of analysis for aggregate union density is not suitable for sectoral union density analysis. The increasingly conflict-ridden industrial relations predicted have not actually materialized. The article concludes by asking whether the aim of ever-increasing wages is a sustainable one in the light of the pressures of globalization, though wage costs are a relatively small part of total costs. The third article discusses the history and use of outsourcing in the Finnish paper industry. It is shown using Hyman's framework of constituencies that over time, the perspective of the union changed from 'members of the Paper Workers' Union' to a more specific view of who is a core member of the union. Within the context of the industrial unionism that the union claims to practice, this is an important change. The article shows that the union more and more caters for a core group, while auxiliary personnel is less important to the union's identity and constituencies, which means that the union's internal representativeness has decreased. Maintenance workers are an exception; the union and employers have developed a rotating system that increases the efficient allocation of these employees. The core reason of the exceptional status of maintenance personnel is their high level of non-transferable skills. In the end it is debatable whether the compromise on outsourcing solves the challenges facing the industry. The fourth article shows diverging discourses within the union with regard to union-employer partnership for competitiveness improvements and instruments of local union representatives. In the collective agreement of 2008, the provision regulating wage effects of significant changes in the organization or content of work was thoroughly changed, though this mainly reflected decisions by the Labor Court on the pre-2008 version of the provision. This change laid bare the deep rift between the Social Democratic and Left Alliance (ex-Communist) factions of the union. The article argues that through the changed legal meaning of the provision, the union was able to transform concession bargaining into a basis for partnership. The internal discontent about this issue is nonetheless substantial and a threat to the unity of the union, both locally and at the union level. On the basis of the results of the articles, other factors influencing representativeness, such as technology and EU law and an overview of the main changes in the Finnish paper industry, it is concluded that, especially in recent years, the Finnish Paper Workers' Union has lost some of its representativeness. In particular, the loss of the efficiency of strikes is noted, the compromise on outsourcing which may have alienated a substantial part of the union's membership, and the change in the collective agreement of 2008 have caused this decline. In the latter case, the internal disunion on that issue shows the constraints of the union's internal democracy. Furthermore, the failure of the union to join the TEAM industrial union (by democratic means), the internal conflicts and a narrow focus on its own sector may also hurt the union in the future, as the paper industry in Finland is going through a structural change. None of these changes in representativeness would have been so drastic without the considerable pressure of globalization - in particular changing markets, changing technology and a loss of domestic investments to foreign investments, which in the end have benefited the corporations more than the Finnish employees of these corporations. Taken together, the union risks becoming socially irrelevant in time, though it will remain formally very strong on the basis of its institutional setting and financial situation.

Analysis of value drivers behind CRM adoption projects in financial services industry

This research is focused on deriving framework for the value thought for from the Customer Relationship Management system adopted by an enterprise operating in the financial services industry. It will analyze existing academic work to derive a conceptual value model, while applying secondary industry specific case studies provided by the CRM vendors to check the validity and commonality of these drivers. Furthermore this work locates the variances and correlation between value thought for from CRM system, scope of enterprise operations and size of the enterprise.

THE ROLE OF INFORMATION TECHNOLOGY IN CREATING SUSTAINABILITY VALUE FOR FINANCIAL INSTITUTIONS IN 2020 : a scenario planning approach

The growing importance of global sustainability issues has been causing many changes to the financial services industry. Facts such as climate change, social development and the financial crisis in 2008 have been making banks reconsider the manner that they consider environmental, social and economic factors in their decision-making process. At the same time, information technology (IT) has been transforming the financial service industry and its fast development has casted doubts on the way it should be managed within an organization. This current changing environment brings a number of uncertainties to the future that cannot be addressed using traditional forecasting techniques. This research investigates how IT can bring value to sustainability in the financial service industry in 2020. Through the use of a scenario planning technique, we analyzed how trends in the current environment (considering the relation between sustainability, financial institutions an IT) can lead to four different future scenarios. Then, we discussed how IT can improve a bank’s sustainability performance, considering the limitations of each scenario.

The us subprime crisis and stock market integration: evidence from the BRICS

The aim of this study is to examine the level of stock market co-movement in the BRICS countries and three major industrialized countries (Japan, UK and USA). While analyzing the interdependence and integration of markets, two subsets are examined: before (2000 – 2007) and during the global financial crisis (2007-2011). Generally, interdependence across markets is likely to increase during a highly volatile period. This is problematic because if it were true, the main benefit of international diversification would be reduced at times when it is most needed. The results reveal the dominant role of the US financial markets over the examined time period. Empirical studies of this research paper indicate that cross-market linkages have become slightly stronger during the ongoing subprime crisis than before crisis. However, results also show that an investor may obtain some international diversification benefits by investing especially in the BRICS countries despite the fact of unstable economic condition and growing globalization.

Effects of a Financial Transaction Tax - Do Transaction Costs Lower Volatility?: A Literature Review

In this literature review the theorethical framework of Financial transaction taxes and their assumed effect on market volatility is assessed. The empirical evidence from various studies is compared against the theory and a simple empirical review of the Finnish stock market is conducted. The findings implicate that financial transaction taxes can not reduce volatility and their actual effect on markets is dependend by many other factors as well. Some evidence even suggests that transactions taxes may actually raise volatility.

Financial Slack and Bidding Firms’ Takeover Announcement Stock Returns – an Event Study

Despite the fact that the literature on mergers and acquisitions is extensive, relatively little effort has been made to examine the relationship between the acquiring firms’ financial slack and short-term post-takeover announcement abnormal stock returns. In this study, the case is made that the financial slack of a firm is not only an outcome of past business and financing activities but it also may affect the quality of acquisition decisions. We will hypothesize that the level of financial slack in a firm is negatively associated with the abnormal returns following acquisition announcements because slack reduces managerial discipline over the use of corporate funds and also because it may give rise to managerial self-serving behavior. In this study, financial slack is measured in terms of three financial statements ratios: leverage ratio, cash and equivalents to total assets ratio and free cash flow to total assets ratio. The data used in this paper is collected from two main sources. A list comprising 90 European acquisition announcements is retrieved from Thomson One Banker database. The stock price data and financial statements information for the respective firms is collected using Datastream. Our empirical analysis is two-fold. First, we conduct a two-sample t-test where we find that the most slack-rich firms experience lower abnormal returns than the most slack-poor firms in the event window [-1, +1], significant at 5% risk level. Second, we perform a cross sectional regression for sample firms using three financial statements ratios to explain cumulative abnormal returns (CAR). We find that leverage shows a statistically significant positive relationship with cumulative abnormal returns in event window [-1; +1] (significance 5%). Moreover, cash to total assets ratio showed a weak negative relationship with CAR (significant at 10%) in event window [-1; +1]. We conclude that our hypothesis for the inverse relationship between slack and abnormal returns receives empirical support. Based on the results of the event study we get empirical support for the hypothesis that the capital markets expect the acquisitions undertaken by slack-rich firms to more likely be driven by managerial self-serving behavior and hubris than do those undertaken by slackpoor firms, signaling possible agency problems and behavioral biases.

Exchange rate volatility and the use of foreign currency derivatives: Impact of 2008 global financial crisis

This thesis examines the impact of foreign exchange rate volatility to the extent of use of foreign currency derivatives. Especially the focus is on the impacts of 2008 global financial crisis. The crisis increased risk level in the capital markets greatly. The change in the currency derivatives use is analyzed by comparing means between different periods and in addition, by linear regression that enables to analyze the explanatory power of the model. The research data consists of financial statements figures from fiscal years 2006-2011 published by firms operating in traditional Finnish industrial sectors. Volatilities of the chosen three currency pairs is calculated from the daily fixing rates of ECB. Based on the volatility the sample period is divided into three sub-periods. The results suggest that increased FX market volatility did not increase the use foreign currency derivatives. Furthermore, the increased foreign exchange rate volatility did not increase the power of linear regression model to estimate the use foreign currency derivatives compared to previous studies.

Mapping financial stability

The ongoing global financial crisis has demonstrated the importance of a systemwide, or macroprudential, approach to safeguarding financial stability. An essential part of macroprudential oversight concerns the tasks of early identification and assessment of risks and vulnerabilities that eventually may lead to a systemic financial crisis. Thriving tools are crucial as they allow early policy actions to decrease or prevent further build-up of risks or to otherwise enhance the shock absorption capacity of the financial system. In the literature, three types of systemic risk can be identified: i ) build-up of widespread imbalances, ii ) exogenous aggregate shocks, and iii ) contagion. Accordingly, the systemic risks are matched by three categories of analytical methods for decision support: i ) early-warning, ii ) macro stress-testing, and iii ) contagion models. Stimulated by the prolonged global financial crisis, today's toolbox of analytical methods includes a wide range of innovative solutions to the two tasks of risk identification and risk assessment. Yet, the literature lacks a focus on the task of risk communication. This thesis discusses macroprudential oversight from the viewpoint of all three tasks: Within analytical tools for risk identification and risk assessment, the focus concerns a tight integration of means for risk communication. Data and dimension reduction methods, and their combinations, hold promise for representing multivariate data structures in easily understandable formats. The overall task of this thesis is to represent high-dimensional data concerning financial entities on lowdimensional displays. The low-dimensional representations have two subtasks: i ) to function as a display for individual data concerning entities and their time series, and ii ) to use the display as a basis to which additional information can be linked. The final nuance of the task is, however, set by the needs of the domain, data and methods. The following ve questions comprise subsequent steps addressed in the process of this thesis: 1. What are the needs for macroprudential oversight? 2. What form do macroprudential data take? 3. Which data and dimension reduction methods hold most promise for the task? 4. How should the methods be extended and enhanced for the task? 5. How should the methods and their extensions be applied to the task? Based upon the Self-Organizing Map (SOM), this thesis not only creates the Self-Organizing Financial Stability Map (SOFSM), but also lays out a general framework for mapping the state of financial stability. This thesis also introduces three extensions to the standard SOM for enhancing the visualization and extraction of information: i ) fuzzifications, ii ) transition probabilities, and iii ) network analysis. Thus, the SOFSM functions as a display for risk identification, on top of which risk assessments can be illustrated. In addition, this thesis puts forward the Self-Organizing Time Map (SOTM) to provide means for visual dynamic clustering, which in the context of macroprudential oversight concerns the identification of cross-sectional changes in risks and vulnerabilities over time. Rather than automated analysis, the aim of visual means for identifying and assessing risks is to support disciplined and structured judgmental analysis based upon policymakers' experience and domain intelligence, as well as external risk communication.

Automated Purchase to Pay Process Value Modeling and Comparative Process Speeds

The importance of efficient supply chain management has increased due to globalization and the blurring of organizational boundaries. Various supply chain management technologies have been identified to drive organizational profitability and financial performance. Organizations have historically been concentrating heavily on the flow of goods and services, while less attention has been dedicated to the flow of money. While supply chains are becoming more transparent and automated, new opportunities for financial supply chain management have emerged through information technology solutions and comprehensive financial supply chain management strategies. This research concentrates on the end part of the purchasing process which is the handling of invoices. Efficient invoice processing can have an impact on organizations working capital management and thus provide companies with better readiness to face the challenges related to cash management. Leveraging a process mining solution the aim of this research was to examine the automated invoice handling process of four different organizations. The invoice data was collected from each organizations invoice processing system. The sample included all the invoices organizations had processed during the year 2012. The main objective was to find out whether e-invoices are faster to process in an automated invoice processing solution than scanned invoices (post entry into invoice processing solution). Other objectives included looking into the longest lead times between process steps and the impact of manual process steps on cycle time. Processing of invoices from maverick purchases was also examined. Based on the results of the research and previous literature on the subject, suggestions for improving the process were proposed. The results of the research indicate that scanned invoices were processed faster than e-invoices. This is mostly due to the more complex processing of e-invoices. It should be noted however that the manual tasks related to turning a paper invoice into electronic format through scanning are ignored in this research. The transitions with the longest lead times in the invoice handling process included both pre-automated steps as well as manual steps performed by humans. When the most common manual steps were examined in more detail, it was clear that these steps had a prolonging impact on the process. Regarding invoices from maverick purchases the evidence shows that these invoices were slower to process than invoices from purchases conducted through e-procurement systems and from preferred suppliers. Suggestions on how to improve the process included: increasing invoice matching, reducing of manual steps and leveraging of different value added services such as invoice validation service, mobile solutions and supply chain financing services. For companies that have already reaped all the process efficiencies the next step is to engage in collaborative financial supply chain management strategies that can benefit the whole supply chain.

Identification of research trends in the field of separation processes. Application of epidemiological model, citation analysis, text mining, and technical analysis of the financial markets

Choice of industrial development options and the relevant allocation of the research funds become more and more difficult because of the increasing R&D costs and pressure for shorter development period. Forecast of the research progress is based on the analysis of the publications activity in the field of interest as well as on the dynamics of its change. Moreover, allocation of funds is hindered by exponential growth in the number of publications and patents. Thematic clusters become more and more difficult to identify, and their evolution hard to follow. The existing approaches of research field structuring and identification of its development are very limited. They do not identify the thematic clusters with adequate precision while the identified trends are often ambiguous. Therefore, there is a clear need to develop methods and tools, which are able to identify developing fields of research. The main objective of this Thesis is to develop tools and methods helping in the identification of the promising research topics in the field of separation processes. Two structuring methods as well as three approaches for identification of the development trends have been proposed. The proposed methods have been applied to the analysis of the research on distillation and filtration. The results show that the developed methods are universal and could be used to study of the various fields of research. The identified thematic clusters and the forecasted trends of their development have been confirmed in almost all tested cases. It proves the universality of the proposed methods. The results allow for identification of the fast-growing scientific fields as well as the topics characterized by stagnant or diminishing research activity.

Analysis of corporate social responsibility (CSR) performance and financial performance of selected mining companies

The global concern about sustainability has been growing and the mining industry is questioned about its environmental and social performance. Corporate social responsibility (CSR) is an important issue for the extractive industries. The main objective of this study was to investigate the relationship between CSR performance and financial performance of selected mining companies. The study was conducted by identifying and comparing a selection of available CSR performance indicators with financial performance indicators. Based on the result of the study, the relationship between CSR performance and financial performance is unclear for the selected group of companies. The result is mixed and no industry specific realistic way to measure CSR performance uniformly is available. The result as a whole is contradictory and varies at company level as well as based on the selected indicators. The result of this study confirms that the relationship between CSR performance and financial performance is complicated and difficult to determine. As an outcome, evaluation of benefits of CSR in the mining sector could better be analyzed based on different attributes.

Liiketoimintatiedonhallinta strategisen suunnittelun tietolähteenä, Case: OP-Pohjola-ryhmä

Finanssiala on kokonaisuutena suurten muutosten ja vaatimusten kohteena. Toisaalta globalisaatio ja kehittyvä tietotalous antavat toiminnalle suuria mahdollisuuksia, toisaalta finanssikriisin jälkeistä aikaa on leimannut perinteisen korkokatteen supistuminen ja uusien tulonlähteiden etsintä. Entistä tehokkaampi tietojenkäsittely ja asiakastietojen hyväksikäyttö luo edellytyksiä toimia alalla entistä tehokkaammin ja ohjata yrityksen päätöksentekoa tiedolla. Tämän pro gradu –tutkielman tavoitteena oli tutkia tiedon roolia OP-Pohjola-ryhmän strategiaprosessissa ja luoda malli, jolla liiketoimintatietoa pystyttäisi käyttämään tehokkaammin ja tarkoituksenmukaisemmin hyväksi strategiatyössä. Tutkielma toteutettiin tapaustutkimuksena ja empiirinen aineisto hankittiin haastattelemalla organisaation strategiaprosessiin osallistuvia tahoja. Tutkimuksen tulosten mukaan OP-Pohjola-ryhmällä ei ole määrämuotoista tapaa käyttää hyväksi liiketoimintatiedonhallinnan tuottamaa dataa. Strategiaprosessin päätöksenteossa merkittävä rooli on yksilöiden toisaalta omista organisaatioista tuottaman liiketoimintatiedon ja toisaalta yksilöiden hiljaisen tiedon varassa. Tutkimuksen lopputuloksena luotiin malli, jolla strategiaprosessiin tuotetaan tietoa määrämuotoisen ja toistettavan prosessin kautta.

The accumulation of financial and social capital as a means to achieve a sustained competitive advantage for consumer co-operatives

By so far, scholars have discussed how the characteristics of consumer co-operatives (cooperative principles, values and the dual role of members as the users and owners) can potentially give them a competitive advantage over investor-owned firms (IOFs). In addition, concern for the community (as partly derived from locality and regionality) has been seen as a potential source of success for consumer co-operatives. On the other hand, the geographicbound purpose of consumer co-operation causes that consumer co-operative can be regarded as a challenging company form to manage. This is because, according to the purpose of consumer co-operation, co-operatives are obligated to 1) provide the owners with services and goods that are needed and do so at more affordable prices than their competitors do and/or 2) to operate in areas in which competitors do not want to operate (for example, because of the low profitability in certain area of business or region). Thus, consumer co-operatives have to operate very efficiently in order to execute this geographic-bound corporate purpose (e.g. they cannot withdraw from the competition during the declining stages of business). However, this efficiency cannot be achieved by any means; as the acceptance from the important regional stakeholders is the basic operational precondition and lifeline in the long run. Thereby, the central question for the survival and success of consumer co-operatives is; how should the consumer co-operatives execute its corporate purpose so it can be the best alternative to its members in the long run? This question has remained unanswered and lack empirical evidence in the previous studies on the strategic management of consumer cooperation. In more detail, scholars have not yet empirically investigated the question: How can consumer co-operatives use financial and social capital to achieve a sustained competitive advantage? It is this research gap that this doctoral dissertation aims to fulfil. This doctoral dissertation aims to answer the above questions by combining and utilizing interview data from S Group co-operatives and the central organizations in S Group´s network (overall, 33 interviews were gathered), archival material and 56 published media articles/reports. The study is based on a qualitative case study approach that is aimed at theory development, not theory verification (as the theory is considered as nascent in this field of study). Firstly, the findings of this study indicate that consumer co-operatives accumulate financial capital; 1) by making profit (to invest and grow) and 2) by utilizing a network-based organizational structure (local supply chain economies). As a result of financial capital accumulation, consumer co-operatives are able to achieve efficiency gains but also remain local. In addition, a strong financial capital base increases consumer co-operatives´ independence, competitiveness and their ability to participate in regional development (which is in accordance with their geographically bound corporate purpose). Secondly, consumer cooperatives accumulate social capital through informal networking (with important regional stakeholders), corporate social responsibility (CSR) behaviour and CSR reporting, pursuing common good, and interacting and identity sharing. As a result of social capital accumulation, consumer co-operatives are able to obtain the resources for managing; 1) institutional dependencies and 2) customer relations. By accumulating both social and financial capital through the above presented actions, consumer co-operatives are able to achieve sustained competitive advantage. Finally, this thesis provides useful ideas and new knowledge for cooperative managers concerning why and how consumer co-operatives should accumulate financial and social capital (to achieve sustained competitive advantage), while aligning with their corporate purpose.