Satu Pätäri

Coping with uncertainty – exploration, exploitation, and collaboration in R&D

This paper studies the formation of and the motives for research and development (R&D) activities. In it, we explore the linkages between explorative and exploitative R&D activities and the different types of governance structures firms use when organising R&D. Additionally, we analyse the relationship between different kinds of firm-external uncertainties arising from the operating environments and the organisation of R&D activities. Finally, we scrutinise the impact of the collaboration mode on a firm’s innovative performance, and stress the important role of knowledge sharing as a generator of success in innovative performance. We employ survey data from our sample of 299 Finnish companies. The findings indicate that a firm’s choice of R&D governance structure is partly affected by the selection of an explorative or exploitative strategy, which in turn depends on the degree of firm-internal uncertainty. External dynamism is an additional factor affecting the choice of the preferred governance structure.

Corporate social and financial performance in different industry contexts: the chicken or the egg?

Purpose - The purpose of the paper is to examine empirically Granger causality relationships between corporate social performance (CSP) and corporate financial performance (CFP) in four different industries. Design/methodology/approach - The paper uses the Granger causality test to analyse the causality relationships between CSP and CFP in clothing, energy, food and forest industries in the USA. The panel data used combined CSP and CFP measures over the years 1991-2009. CSP strengths and concerns are handled as distinct constructs. Findings - There is some evidence of bidirectional causality between CSP and CFP in the clothing, energy and forest industries; but in the food industry, CSP appears not to Granger-cause CFP. The results encourage accounting for the industry in empirical analyses, as well as the use of more than one measure for CFP in the analyses. Originality/value - The direction of causality between CSP and CFP has been specifically addressed in only a few studies. Because the causality relationship may, in addition, be concealed when multi-industry data are used, this paper contributes to the literature by examining the Granger causality between CSP and CFP in four different industry contexts using two different measures of CFP.

Mapping the evolution of corporate social responsibility – insights from the Finnish forest industry

The number of companies engaging in corporate social responsibility (CSR) has increased significantly. However, the ways in which CSR is understood and practised are strongly dependent on contextual characteristics, such as the industry. The objective of this study is to map the evolution of CSR in the Finnish forest industry. Drawing from thematic interviews with selected participants and from environmental and CSR reports, the underlying factors and stakeholders that have influenced the development of CSR at different times are identified. The findings indicate that there are four main areas in the evolution of CSR, during which the emphasis of different elements of CSR has varied. The stakeholder groups driving CSR have turned from authorities and trade unions to local communities, non-governmental organisations and customers. Managers may find the results useful when analysing the development of CSR practices and the role of stakeholders in this development.

Diversification strategies in the global pulp and paper industry - empirical analysis from years 1996 and 2006

Strategic change through diversification is seen to offer potential sources for competitive advantage. On the other hand, there are also many advantages associated to focusing on core capabilities instead of diversification. This article studies how pulp and paper industry (PPI) companies have managed to adjust their diversification strategies in reaction to the changes that have reshaped their operational environment. We will differentiate between related and unrelated diversification, and analyse, how the potential strategic reorientation has affected the profitability of the companies. The sample includes 108 PPI companies and the years to be studied are 1996 and 2006. The results indicate that the PPI companies really have reduced the degree of unrelated and related diversification. Although the strategic change is clear, the profitability effects of diversification were not so explicit.

Value Creation from Wood-Based Energy Sources

Global awareness of renewable energy has grown markedly in response to concerns about increasing greenhouse-gas emissions from fossil fuels, and price and availability problems related to non-renewable energy sources. This so-called “hype” around bioenergy has fuelled wide-ranging interest in renewable energy sources, and especially in biomass, which is expected to play a key role in the fight against climate change. The emerging bioenergy business offers promising avenues for value creation, especially for the firms in the pulp and paper industry that exercise control over forest-based biomass resources and have a wealth of experience related to global large-scale industrial processes. Moreover, these traditional forest-industry companies exemplify the changing nature of the competitive environment in many industries facing with drastic challenges through being forced to search for new value-creating strategies in order to create competitive advantage. Exploitation of this emergent business opportunity will nevertheless require the knowledge and resources of multiple actors, including energy-industry know-how about producing energy from various raw-material bases and distributing it to the markets. Given such a starting point, this particular study focuses on the determinants of value creation in the context of the bioenergy sector, which is emerging at the interface between the forest and energy industries. It thus explores the novel business opportunities related to biomass-for-energy in terms of what they are and how forest and energy companies could exploit them. The research perspective is primarily on Finland, which is one of the world’s leading bioenergy-using countries. By way of theoretical background, the paper builds on the literature on strategic management. This article enhances understanding of how value can be captured in the new forest-based bioenergy business, and of the determinants affecting the value creation. It thus sheds light on the value-creating opportunities that are just starting to take shape. In that sense it adds to the growing strand of literature on value creation from renewable energy sources. Moreover, its applicability extends even further to firms that assess their value creation when dealing with innovation and the redefinition of their business models.

Profiting from inter-firm relations - a study in the evolving bioenergy industry

The role of inter-organisational relationships has become central in the quest for competitive success. Nevertheless, the rate of alliance formation has not been high in the forest industry, although the sector is in great need of new value-creating business. This study explores whether the widespread interest in renewable energy will open up new opportunities for the industry and also for the energy sector. It is argued that there is excellent potential for collaboration between the two in the biomass-for-energy business on account of their complementary assets. A total of 1,129 strategic alliances and joint ventures related to the forest and energy industries, and to the emerging bioenergy sector are studied, with a view to identifying the key alliance types and the main motives for their formation. The findings indicate that alliance activity at the interface between the forest and energy sectors has been sparse, and that the existing inter-firm relations related to bioenergy remain outside their scope.

Internal and external factors of competitiveness shaping the future of wooden multistory construction in Finland and Sweden

Abstract In transitioning to a renewable material-based bio economy, growing public and industry interest is apparent for using wooden multistory construction (WMC) as a sustainable urban housing solution in Europe, but its business implications are not well understood. In our study, we evaluate, which internal and external factors of competitiveness are shaping the future of WMC, especially in the context of Finland and Sweden. Based on a multi-level perspective of socio-technical transitions, we conducted a three-stage dissensus-based Delphi study. The identified internal and external factors affecting the future competitiveness of the WMC business emphasize the importance of skilled architects and builders and the role of standardized building systems. Based on our results, the key aspects influencing the future competitiveness of WMC in the region are related to the development of technical infrastructure and project-based business networks, while additional changes in regulatory framework are perceived as less important. We conclude that towards 2030, the strong cognitive rules founded in the concrete-based building culture in these countries is likely to inhibit the dynamics of the socio-technical regime level. A change is also needed in the WMC business culture towards more open cross-sectoral collaboration and new business networks between different-sized players.

The acceptability of wind farms: the impact of public participation

ABSTRACT The planning process for wind farm projects appears to be a complicated matter in many cases. Despite the positive attitude towards wind power in general, local wind farm projects often face strong opposition. The aim of this study is to shed more light on residents’ perceptions of participation in the planning process of wind farms. This study is based on interview data (N = 22) and survey data (N = 291) collected from residents living near two Finnish large-scale onshore wind farms built about 1.5 years before the data were collected. The results indicate that residents’ participation in the planning process was rather passive and the vast majority of the respondents perceived that they did not have an opportunity to participate. Quite interestingly, perceived participation in the planning process resulted in a decrease in acceptability in terms of perceived well-being. Furthermore, the results indicate that the need for participation does not expire after the planning process for a wind farm has concluded. Thus, project developers should be prepared to continue communication with residents after the planning phase.