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MERCURIUS 2014 TURKU SCHOOL OF ECONOMICS is a business school that offers a wide range of studies in the field of economics and business studies. Our work is based on high-quality, international level research in these fields. We train entrepreneurialminded, innovative, and responsible future decision-makers and experts in an international environment. CROSS-DISCIPLINARITY is part of our everyday work, and it is apparent in the operations of our world-class research groups and in the range of studies we offer, which is in many respects unique. Innovation, forecasting future developments, and responsibility are overarching themes in all our operations.

”WE WANT TO PARTICIPATE IN BUILDING A SUCCESSFUL AND SUSTAINABLE SOCIETY.” SHARED VALUES and co-operation between the staff and the students form the basis for our work. Our core values are an ethical and critical approach, creativity, openness, and communality. MARKUS GRANLUND, Dean of Turku School of Economics, Professor of Management Accounting

MERCURIUS 2014 Who are we? TURKU SCHOOL OF ECONOMICS makes a difference by contributing to research regarding innovations and innovative practices. Advances in research have been achieved through intense cooperation with our academic partners domestically and internationally and in close, long-term relations with the business community. The articles of this magazine introduce our experts and their research topics. Focus areas in research Entrepreneurship Management control Networks in business Economic policy and markets

“Research that revolutionises the future is born out of cooperation and a passion for science.” AINO HALINEN-KAILA, Vice Dean, Professor of Marketing

COLLABORATION in research, development, and education is carried out by all departments, subjects, and units. Alumni play an important part in our community.

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WE ARE one of the most significant providers of education in economics and business studies in Finland. A wide selection of courses, high-quality teaching, and our positive and international study environment attracts thousands of applicants every year.



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TO CHANGE OR NOT TO CHANGE? Researchers from Finnish universities joined forces for a project aimed at sharing the best transformative practices of dozens of enterprises. The purpose was to show that change does not have to be difficult: major revamps can be based on minor adjustments in daily work. TEXT TARU SUHONEN ILLUSTRATION MILLA RISKU


n 2012–2013, researchers from six Finnish universities analysed the implementation and management of business renewal in SMEs. The project involved dozens of enterprises, for which the project team developed new working methods while observing existing practices. Although the research team wrote academic conference papers and articles on the subject, they otherwise remained very close to the daily work of the enterprises involved. The common thread involved showing that renewal is easy. ‒ Learning to think out of the box is often enough, says Satu Aaltonen, Project Researcher in Entrepreneurship at Turku School of Economics. The research team of the project points out that all members of an organisation are responsible for bringing about change. This leaves managers with the task of enabling renewal. For example, do meeting practices leave room for brainstorming? Do corporate facilities enable spontaneous encounters between staff?

Satu Aaltonen compares the role of the physical workplace to new learning methods and environments. ‒ In a school classroom, the pupils’ and teacher’s desks are based on a certain, old way of thinking and traditional roles. Similarly, the physical environment and solutions in the workplace affect how easy it is for an employee to take an active role, or whether people from different departments can engage in creative interaction. During the project, researchers found a need for new thinking in SMEs. While large enterprises have their own development and innovation systems, smaller ones often feel that they are devoting their resources to anything but renewal. ‒ Of course, SMEs develop gradually and adjust their product and service offerings, but not all have time to pause and consider revamping the business. Instead, constant fire-fighting is a familiar scenario.

Five steps towards revamping a business Researchers found a need for new thinking in SMEs. Satu Aaltonen picked five easy practices worth considering in every organisation and workplace.

Act on the hunches of new employees A new employee enters the work community as an outsider. It therefore pays to encourage him or her to engage in constructive criticism and openly question things. ‒ Longer-serving employees may say that this is the way we always do things, but nothing is self-evident to a new recruit, comments Satu Aaltonen. For this reason, it is worth arranging a feedback meeting for a new employee around four weeks after he or she starts, in order to go through any ideas that come up. ‒ New ideas should not be rejected out of hand, or simply left hanging. The entire work community should also be clearly informed that questioning of current working practices is not the

same as criticising employees. On the other hand, the new employee needs to be tactful too. He or she should be encouraged to remain active after the first few months. Well-functioning feedback could even encourage other employees to share ideas.

Good ideas should not be the preserve of the boss Researchers have found that in small, owner-led firms in particular, change is often led by the entrepreneur him or herself. This is a double-edged sword. On the one hand, an entrepreneur full of ideas can inspire others. On the other, bosses like this can render employees passive, with responsibility resting solely on the shoulders of an endlessly inventive

managing director. It also matters how the entrepreneur introduces his or her ideas to the working community. ‒ This should be done when things are calm. Bursting in to share new insights while people are busy and telephones are ringing is seldom the best way to go about it, states Aaltonen. In small enterprises, the managing director often chairs meetings and feels duty-bound to speak first. ‒ This can lead to silence among more reticent employees or those who view development as being beyond their role.

Development needs time Many organisations hold regular meetings on current business issues. Such firms should examine their meeting practices – researchers recommend that firms hold off from trying to resolve wider-reaching issues in weekly or other regular meetings. ‒ Weekly meetings are for resolving day-to-day issues. If you think that new ideas will bubble to the surface under ’Any other business’ at the end of a meeting, think again! Either reserve time early in the meeting for morestrategic discussions, or arrange a separate meeting, Aaltonen instructs.

Strengthen the positive spin, break the negative one Sharing success and achievements creates a sense of community. For example, Satu Aaltonen refers to a sales organisation in which sales deals are immediately announced by ringing a bell. This repetitive practice strengthens the positive spin. Achievements could also be flagged up in other sectors. And there is no need to use bells or carnivals to do so. ‒ A simple ’thank you’ is often enough. Managers should remember to thank employees when there is reason to do so. However, the management is not solely responsible for shaping the work community. The boss cannot always

simply sense that someone needs a nudge to move forward. Everyone needs to remember to give little nudges of this kind. Breaking the negative spin is just as important as creating a positive one. ‒ If a colleague or subordinate’s performance is below par, or he or she seems under the weather, why not ask if

everything is OK? While some people are more empathic than others, it pays to raise certain issues, even if this feels difficult.

Intrapreneurship stems from trust For some time now, entrepreneurship researchers at Turku School of Economics have been referring to intrapreneurship, an entrepreneurial way of working within an existing organisation. ‒ An intrapreneurial employee works in a new way, is creative and committed to his or her work and takes the initiative. At their best, intrapreneurial employees are a source of renewal for a company, says Satu Aaltonen. Researchers have found that when responsibility is pushed down to employee level, staff tend to see things from the entire organisation’s perspective. ‒ In this way, everybody takes responsibility for the success of the enterprise. •

Research teams from the Universities of Turku, Oulu, Lapland and Eastern Finland, Lappeenranta University of Technology and Aalto University participated in the INWORK project. The researchers represented the fields of entrepreneurship, management and organisation, innovation management, international business, knowledge management and marketing.

Living strategy is an interaction TEXT TARU SUHONEN




The more difficult the issue, the more important it is to create interpretation and mutual understanding in an interactive situation.

irsi Lainema, D.Sc. (Econ. & Bus. Adm.), studies strategic management in the Department of Management and Entrepreneurship in Turku School of Economics. She says that at the moment, it is very typical to include more and more groups of personnel in the strategy work of companies and organisations. – The general outlines are still given by the company’s management, but strategy as practical work touches an increasing number of people. Lainema gives lectures on strategic management to students and teaches at T ​ SE exe – Turku School of Economics Executive Education and Development at the University of Turku. The focus in company training sessions is often on the challenges faced by the participants. – Different personnel groups need functional methods that support involvement to help with interpreting strategy in their own work. The management uses a lot of time in making interpretations and structuring them. In fact, it is unrealistic to think that other groups could catch on to the strategy, if they have not been able to consider and work on the content themselves, says Lainema.

Provide opportunities for interaction Everyday questions on implementing strategy are also interesting from

the point of view of research. In her own research, Lainema focuses on the interaction between people working in the organisation and the practices they use to create social order. Lainema says that companies need research-based information on how to do strategy work and what kind of roles are natural for different actors. The more difficult the issue, the more important it is to create interpretation and mutual understanding in an interactive situation. Lainema emphasises that the participation must be genuine. – It is not enough to publish the strategy and the goals in the Intranet, send an e-mail to the personnel, or organise a briefing where one person talks and people can ask questions afterwards. Organisations should consider what really should be tackled first in order to transform the strategy into practices, actions and work.

Leave room for the unexpected The use of language and word choice is also important for the success of strategy work. Language is used to say to whom the strategy belongs. Lainema notes that implementation and introduction into practical use as terms imply that the thoughts of the management are implanted into the subordinates. – Strategy is action, and it should also be described as an action. According to Lainema, strategy should not be used as an explanation after the fact for successes and

Organisations should consider what really should be tackled first in order to transform the strategy into practices, actions and work.

failures, for example. Strategy should not be glorified, equalling success with a good plan. – This leaves it unclear how the success or failure was reached, and there is no opportunity to learn from the experiences.

Dare to bring issues to the table New information does not always support the original plan, which may be difficult to challenge. People want to maintain the fluency of their familiar daily processes, and it is not easy to change or question practices. Lainema, who has studied interaction in meetings, says that resistance is not always large-scale.

– People are pretty skilled at subtle resistance. They can sidetrack meetings or start joking, using up time in the meeting, if they are not ready to discuss a new proposal, for example. It is ingenious, because this kind of resistance is not directed against anyone, and it is not so destructive that it prevents creating goals. Strategy can also remain on paper only, if the organisation operates in a culture of politeness. – If nobody dares to talk about things that can cause irritation or negative feelings, strategy may remain a dead letter. If people really want change, they have to bring issues to the table at some point.





ig data is information that we all participate in producing, constantly. We generate usable data, for example, when we use mobile phone applications or leave our mark in patient data systems. The masses of data offer companies and public organisations opportunities, the use or lack of use of which creates discussion. Big data involves everyone. Professor of Information Systems Science Jukka Heikkilä notes that business analytics in and of itself is nothing new. Companies have always taken advantages of their databases, but now the data flows in increasingly from outside the company. – Services becoming digital has caused the field to explode. Currently, there are so many sources available that networked activities can be controlled in a way that is completely different from before. At the same time, data processing has developed significantly in the last few years. At the moment, the information systems scientists and network researchers of Turku School of Economics are investigating what kind of business models make the analysis of big data profitable. The researchers are involved in the D2I project in DIGILE, a non-profit

Finnish limited company owned by companies, universities and public bodies. DIGILE is one of Strategic Centres for Science, Technology and Innovation implementing the Finnish innovation policy. There are two big questions in the project by researchers of Turku School of Economics. The first question asks what makes people provide information for the use of companies. – Mining data leads often to the creation of a personal data register, which leads to issues with data protection. In addition, with crowdsourcing it is essential to gain rights of use for information collected from different sources. We think about how to get the rights to use the data collected by devices from people and communities: is it worth paying for or can the data be used in other ways, and how should the collected data be managed safely and reliably? The other question in business modelling is related to what should be done with the data. Business scientists look for information on how people behave in the data. – You can start to generate things such as cycles of behaviour that can be used for forecasting only after a large amount of diverse data has been collected. In online sales,

“Services becoming digital has caused the field to explode.” Jukka Heikkilä

data collected on seasons makes it possible to see how things should be done the next time. Business modelling related to information resources means matching information systems with strategies. – The need for understanding the enterprise architecture of a company grows continuously, because

businesses are different from before. They are databases, processes and platforms, and less and less command structures. People are used to looking at things rationally and systemically, but the operative business models and the visions of the management on how businesses work are currently diverging from each other at a breakneck speed.

JUKKA HEIKKILÄ, Professor of Information Systems Science, studies ways to combine business models, enterprise architecture, and practical activities in networked business in the Data to Intelligence (D2I) project.

Can business potential be found from emotions in the future?


he emotions that are present in people’s lives are underutilised in innovation and product development, say Birgitta Sandberg, Postdoctoral Research Fellow in International Business, and Professor of Marketing Leila Hurmerinta. The duo, who has studied the usage of emotions in business and innovations, believe that things will soon change. – Technology has been a source of innovations for a long time, but it

is only in the last few years that the interest in issues such as combining emotions and technology has grown, says Sandberg. According to the researchers, the field of opportunities should be seen from a wider perspective than it is today. – The innovation activities have been based on trying to understand the customers’ expectations by anticipating their behaviour. We believe that in the future, business potential will be found in the

”The field of opportunities should be seen from a wider perspective than it is today.” Birgitta Sandberg and Leila Hurmerinta

emotional motivators that affect the customers’ behaviour. Sandberg and Hurmerinta analyse the business opportunities related to negative feelings particularly in the Opportunities in Tears project, which is a part of the common NEMO – Business Value from Negative Emotions project between Turku University of Applied Sciences, the University of Turku, and the Tampere University of Applied Sciences. – That negativity should be or even could be turned into something positive is an old idea. For example, in products and services related to grief or the fear of loss, there is no attempt to change the emotion, simply to focus it correctly and turn it into action. The meeting of the customer and the product could be characterised as a slowly progressing familiarisation and commitment process, Hurmerinta says. Identifying negative emotions as opportunities requires courage and empathy.

– Unconventional ideas tear the basics of marketing apart. Even if the product is sold and marketed positively, the emotional experience of the customer should be understood. One must be subtle in an emotionally sensitive area, says Hurmerinta. In their project, the researchers aim at identifying industries where awareness of emotions is important, but where it has not yet been taken into account. The object of research is the whole lifespan of a human being and the normal life events. Working in a sensitive area also challenges the researchers. – Using grief and conflicts in business is a taboo: with products based on grief, there are often questions on whether such a thing should even be sold. The market has an expectant demand for the studies, Hurmerinta says.

LEILA HURMERINTA is a Professor of Marketing in Turku School of Economics. Among other things, she teaches innovation, product management, and entrepreneurial marketing as a generator of business growth. Hurmerinta’s research questions are related to the internationalisation of small companies as opportunity processes, innovative marketing, commercialisation of innovations, and combining research methods. BIRGITTA SANDBERG is a Postdoctoral Researcher Fellow in International Business. She coordinates the Global Innovation Management (GIM) Master’s Degree Programme and teaches courses in innovation management. Sandberg’s research subjects are related to the commercialisation of innovations, emotions in the innovation process, and radical innovations, among other things.


F “In strategic forecasting, a fruitful development project is openly innovationcentric, it bravely opens new doors, and mentally conquers new worlds.” Sirkka Heinonen

oresight should involve a systematic approach, long-scale observation, comprehensiveness, criticism, questioning, seeing things in different ways, multidisciplinary aspects, and responsibility, lists Professor of Futures Research Sirkka Heinonen. Heinonen has been involved in developing methods for strategic foresight for companies for a long time. ‒ Foresight expertise is a skill that is needed more and more at companies. The more uncertain the operating environment becomes, and the faster and more surprising the development is, the more central role foresight plays in maintaining competitiveness. According to Heinonen, the emphasis on foresight leads to a new kind of management

paradigm, where people proactively try to prevent problems instead of concentrating on solving problems. ‒ By anticipating different development options, it is possible to systematically prepare for the future instead of simply reacting to events. In development projects, the ear must be finely tuned to the needs and wishes of the customers. Diverse combinations crossing the borders of different industries help with foresight work. ‒ In strategic foresight, a fruitful development project is openly innovation-centric, it bravely opens new doors, and mentally conquers new worlds. •

SIRKKA HEINONEN works as a Professor of Futures Research in the Finland Futures Research Centre. She is the Regional Manager of the Helsinki office, responsible for the international Master’s Degree Programme in Futures Studies. Heinonen’s ongoing research project involves futures in the media, construction, and energy. Heinonen is a member of the Club of Rome.



is a great opportunity



lli Hietanen, the Head of Development for the Finland Futures Research Centre, talks calmly but decisively about an uncertain future. Hietanen says that large social and economic changes will occur even faster in the future. – If there is any phenomenon that controls the modern day, it’s the increasing speed of change. The people trying to prop up the old will have a hard time of it. Those who can make change into a strength and invent new things continuously will have the competitive advantage, says Hietanen. According to Hietanen, the maritime industry has gotten stuck on the production of cruise ships. He does not claim that maritime industry is entering its twilight years. On the contrary: in the future, people will be more and more involved with the sea. It is simply

that the expertise related to the cruise ships prevents Finns from seeing that the maritime industry goes far beyond cruise ships. ‒ Why would we restrict ourselves to building ships, when we could build houses, energy plants, factories, shopping centres and spas in the sea – anything. On the other hand, if we stop making ships soon, we can use the same technological expertise in air, on land, or even in space. ‒ Instead of bemoaning our fate, we should take a different attitude towards what is going on in the world and ask first what opportunities the new situation can bring. Even if it involves destruction, such as a pandemic or war, because even those things always open possibilities. When large companies move their jobs abroad, they should be replaced by cultivating small and medium-sized


businesses that do completely new things and create jobs. ‒ All creative, completely different thinking is usually born in small companies that, in time, grow into new giants in their field. Or at the very least, their networks grow into large ecosystems. The essential

thing is that we have a society that constantly generates something new. There are already new, creative companies in the maritime industry germinating in the shadow of the shipbuilding industry in Southwest Finland and Satakunta. According to Hietanen, the society should just be able to nurture the creative maritime, forest and information industry

Olli Hietanen is the Head of Development for the Finland Futures Research Centre, which specialises in futures research and foresight, and is the largest academic futures research organisation in the Nordic countries. It employs over 50 experts in three different offices, located in Turku, Helsinki, and Tampere.

much more. The nation should be encouraged to be enthusiastic and become entrepreneurs. ‒ Our high level of expertise together with entrepreneurial spirit would be a ’killer’ combination. The problem is finding the can-do spirit in Finland. ‒ If we stop making ships soon, we can use the same technological expertise in air, on land, or even in space. ■

Finding your


In the Master’s Degree Programme in Global Innovation Management, Jonathan Mumford learned how much theories have to do with business in practice. Now he studies innovations as a result of interaction between different actors, with the goal of understanding human creativity better.


onathan Mumford came to study in the Master’s Degree Programme in Global Innovation Management (GIM) in Turku School of Economics, when he was doing his Bachelor’s degree in 2010 and requested his teacher Peter Zettinig at the Victoria University of Wellington in New Zealand for a recommendation for an application for a traineeship in New York. Zettinig promised to provide a recommendation for Mumford, and also informed him that he was currently teaching in the Master’s Degree Programme in Global Innovation Management in Turku School of Economics. Mumford visited the programme’s website and changed his plans: New York was abandoned for Turku. ‒ The GIM programme was a perfect continuation for the studies in international business I had started in New Zealand, says Mumford. The story is a good illustration of the international character of the GIM programme. At the moment, the students in the programme are from twelve countries all around the world. ‒ The fact that the students in the programme come from different countries, cultures, and backgrounds is a wonderful learning experience in itself. We learn quickly that an open mind and common goals help with solving

potential problems. In addition, our common characteristics are invariably more important than our differences. Mumford says that the studies in the GIM programme are never boring. Both the content and the teaching methods used vary. ‒ During the courses, you don’t just sit there and be taught; instead, studying is sharing ideas and creating knowledge together. Guest lecturers help with understanding the connection between theoretical concepts and the realities of the world of business. Mumford graduated from GIM last year. Now he is working on his doctoral dissertation as a Doctoral Candidate in

the subject of International Business in Turku School of Economics. Mumford studies how innovations are born as a result of interaction between different actors, businesses or individuals. ‒ I believe that I can understand human creativity better with the help of the research. I want to be involved in constructing theories that improve our understanding of the process of innovation and develop it. Mumford calculates that it will take him four years to complete his doctorate. Before his GIM studies, Mumford worked in a small international high technology company in Australia. He believes that the world of academia will never be too far away, even if his work leads somewhere else in the future. ‒ The importance of knowledge is increasingly recognised, and the border between universities and the world of business is becoming less and less clear. The Master’s degree studies in the GIM programme also gave provisions for a career as a researcher. Mumford says that he has learned a lot about conducting qualitative research, finding research questions, questioning issues, and analysis. ‒ These skills are important in working life for everyone in a position that requires critical and creative thinking and problem-solving abilities. ■

“I want to be involved in constructing theories that improve our understanding of the process of innovation and develop it.”

International Master’s degree programmes at Turku School of Economics • International Master in Management of Information Technology • Master’s Degree Programme in Futures Studies • Master’s Degree Programme in Global Information Technology Management • Master’s Degree Programme in Global Innovation Management Read more:


Academy Professor Anne Kovalainen,

WHAT IS BREAKING DOWN OUR WORKING LIFE? Anne Kovalainen lists three of the most visible things that are changing working life.


ccording to Academy Professor Anne Kovalainen, it seems that the individual doing work is the focal point of the change in working life. Negative issues are associated with the change: it is experienced as haste, uncertainty, or a demand to constantly surpass yourself. Kovalainen thinks that it would be worth changing the perspective. Despite living in egocentric times, we should remember that solving the challenges of the changing working life is also the organisations’ responsibility. ‒ When the focus is on an individual, employees may easily feel that they should always be better and more efficient. It is the duty of the employers to be able to recognise diversity and create different career paths. Jobs and positions cannot remain the same when employees think about work in a different way from the previous generations, says Kovalainen. •

Academy Professor ANNE KOVALAINEN’S research interests lie in equality and the economy from a gender perspective within the context of global economy. Kovalainen leads the Turku Centre for Labour Studies, a multi-disciplinary forum within the University of Turku for research, education and development as well as cooperation with working life in the field of labour studies. 



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EGOCENTRICITY Work intrudes in a person’s life in many ways. Taken to extremes, your whole life can turn into branding yourself. ‒ Highly educated people in particular think that the self is a product to be sold. There is less work done together for a common goal. This is not the best operating model from the point of view of the work community or for doing the work. When people are building their own careers, it’s more difficult to set common goals, Kovalainen says.

TEMPORARINESS Structuring work as projects creates a feeling of temporariness. Project work demands more from both the employee and the employer: for example, it may be difficult to plan family leaves. Kovalainen notes that a hectic pace can easily start to control how people operate. In fact, sometimes the haste is only a feeling of being in a hurry. ‒ A good example is how difficult it is to stop reading your e-mail, because if you don’t react within one day, people start asking where you are and why you’re not responding, notes Kovalainen.

COMMITMENT Commitment to work has changed. Instead of the company or organisation, the employee may be primarily committed to the work community or an interesting project, which is often implemented in a multidisciplinary network with third parties. ‒ In a network economy, it matters who is paying your wages, reminds Kovalainen.

Managers as a model for defeating


Suvi-Tuuli Helin wrote an awardwinning Master’s thesis on human resources. At the same time, she created a framework for her company that combines well-being with human resource management.


uvi-Tuuli Helin, 26, is a freshly minted Master of Science in Economics and Business Administration, who studied, in her thesis, how key persons in a company experience stress during the working day, and how the stress they experience is connected with work engagement. She studied the equation through physiological measurements, in addition to which the participants wrote a journal of their experiences during the working day. ‒ Physiologically, stress is an increase in activity level, and it shows in heartbeat when the heart reacts to stimuli both external and internal to the system. In her thesis, Helin studied key persons in the companies, because when the managers are aware of their own well-being, it also promotes well-being on the other levels of the organisation. ‒ It is very important to create a culture in the organisation where taking care of your own health and well-being is allowed. A small group has a great responsibility over how the others cope. Helin emphasises that stress is not always negative: there is also positive stress, which is a resource. In physiological measurements, Helin observed that positive stress is connected to the experience of work engagement. ‒ When people get excited, they are active. Experiencing work engagement is subjective, and everybody must learn to identify it themselves. Combining measurements and journal entries is intended to assist in this. The essential thing is how well you can recover from stress. Helin’s method also

helps with identifying the restorative moments in a day. ‒ It is not dangerous to expend a lot of resources in one day. But if you don’t recover, you will become exhausted, and then the activity level is not so high after all. It becomes a rat race. Now Helin, too, is an entrepreneur. In her company, called the Wellness Factory, she conducts measurements based on the method created in her thesis. ‒ Practical conclusions transformed easily into business activity. In my work,

When the managers are aware of their own well-being, it also promotes well-being on the other levels of the organisation. it has been wonderful to see people reach big results even with small actions. Personally, I have been excited about every new person and measurement – this is the richness of entrepreneurship. Suvi-Tuuli Helin was rewarded for her Master’s thesis with the award of the HR thesis of the year in 2013 by the Finnish Association for Human Resources Management. The advisor for SuviTuuli Helin’s Master’s thesis was Senior Research Fellow Timo Lainema from the Department of Management and Entrepreneurship. •


Management control has succeeded when different aspects of a corporate culture are in balance. Openness and innovation need closing drivers and direction in order for them to be fruitful.


he culture of the company is its most important control mechanism, says Postdoctoral Research Fellow Jan Pfister. Pfister researches and teaches in the area of performance measurement and management control in the Department of Accounting and Finance. He states that in its inner control system a strong and functional organisation brings together necessary control and empowering practices that enable creativity. For example, directions are balanced with process ownership and the kind of discussion that approves of many, different but equally correct, ways of thinking.

Pfister’s culture based management control system integrates the more technical aspects of control (e.g., performance measures) with the social aspects of control. ‒ Culture based management control system is a framework that can be placed in any control setting and used in interpreting the dominating culture. POTENTIAL TO INNOVATION According to Pfister, every corporate culture has both open and closed features that he calls opening and closing drivers. Both are equally essential. Openness is the word of the day, as it increases creativity and helps to generate innovation. ‒ Opening up the culture unlocks human potential and makes the organisation more open to the surrounding world as well. The relationship between financial control and innovation is not usually seen as fruitful. Pfister says that measuring has been seen as something that breaks innovation. Today it is clear that creativity need financial guiding and measuring tools as its counterparts. ‒ There is always tension between the open and the closed. While others want to go to new directions and change the world, in more conservative, controlling roles people focus on measuring risk. However, different roles are important, and these matters have to be seen from different perspectives. What is essential is to be able to work together and find shared denominators. It is crucial that the management is able to create a uniform culture.

“Opening up the culture unlocks the human potential and makes the organisation more open to the surrounding world as well.” A TOP ENVIRONMENT FOR RESEARCH Management control belongs to the field of Accounting and Finance. The research area is very multidiscliplinary, and the link to management research – for example – is strong. An internationally acknowledged research group studies management control at the Department of Accounting and Finance at Turku School of Economics. The research is focused on the innovation process. Jan Pfister joined the University of Turku in 2012, he is currently a Postdoctoral Research Fellow at Turku School of Economics and an Honorary/Visiting Fellow at Lancaster University Management School. ‒ Research in Management Control is of internationally high quality here in Finland. It is very fruitful to work in such a strong research environment that is very open-minded. The closeknit relationship with the surrounding society and businesses is great here! •


a healthier economy TEXT TARU SUHONEN




oral hazard. Professors of economics discuss the reasons for the current economic situation with a convincing unanimity: the cause for the downfall was excessive risktaking, based on the risk-takers’ awareness that the losses would be shared. ‒ It is always the worst case scenario when the bankers collect their winnings when they are doing well, and when they do badly, the taxpayers cover the losses, says Kaisa Kotakorpi, Professor of Economics. Kotakorpi is one of the growing number of economists calling for control and regulations. Suffering is created because risk-taking causes “incredible instability.”

In the past few years, there have been suggestions for many different kinds of regulatory instruments, and their effectiveness is being investigated. A large part of the work of economists is modelling the actions of economic agents. The research subjects spring forth from current issues. The University of Turku has one of the strongest departments of economics in Finland. There are five professors altogether, and the focus areas of the research done at the department include e.g. econometrics, forecasting, public selections, and research of economic policy and public economy. The economists emphasise that the field does not study ways of getting as much out of people as possible. ‒ We try to understand what factors guide economic decisions and how different incentives affect the actions of economic agents, Heikki Kauppi, Professor of Economics, says. The focus is on how to use and share limited resources in order to maximise the welfare of the society. ‒ Economics is a soft science, Kotakorpi says with a smile. ‒ Measuring things with money feels brutal, but the truth is that the globe

The University of Turku has one of the strongest departments of economics in Finland. is limited, and the resources must be allocated and made commensurate, she continues. The professors point out that research in economics provides important tools for decision-makers. They think that effectiveness analyses, for example, should be made by more parties than now. They consider training economics experts for the society as equally important. ‒ More economists are needed, both on the market and among the decisionmakers. Expertise in economics should be kept in mind in career planning, says Kauppi. ■


moment, Kauppi is on research leave, during which he mainly focuses on problems related to economic forecasting. “Generally, I am interested in studying and developing econometric methods. Empirical applications are also an important part of my research.”

PROFESSOR KAISA KOTAKORPI STUDIES TAXATION AND LABOUR MARKET POLICY. Kotakorpi has several ongoing research projects, which are related to the evaluation of the Finnish tax proposal trial and the effects on employment of activating young unemployed people. “I also study politics.”

From partial optimisation towards a committed business relationship TEXT HANNU AALTONEN PHOTOGRAPH PĂ„IVI KOSONEN

Although conditions vary between different sectors, business relationships and enterprises, it is clear that frequent competitive bidding is not the most optimal long-term solution for the client. The more complicated the business environment becomes, the more the role of a genuine partnership between companies increases in importance, says Hannu Makkonen, a Postdoctoral Research Fellow who studies inter-organisational business relations.


innish b-to-b markets are characterised by a purchasing culture in which the client seeks to attract as many bidders as possible. This is supposed to enable the client to pick the best possible offer. Postdoctoral Research Fellow Hannu Makkonen has doubts about this culture. In particular, Makkonen has studied business relationships between Finnish electricity distribution companies and service suppliers. He has also examined the emergence of the Finnish service sector. A service supplier studied by Makkonen aptly describes the nature of fierce competitive bidding: ”The winner is either the one most desperate for work or the worst at calculating the true costs.” According to Makkonen, electricity distribution services are in transition. Development of the sector has rested on the shoulders of a few active players whose achievements are genuinely admirable: they have created a stable service sector which performs tasks previously handled in-house by electricity distribution companies, but much more efficiently and effectively. By arranging competitive bidding rounds for standard functions, distribution companies have managed to attract bidders while making effective comparisons of price and quality. However, it is now time to move on. – Very strong productisation of services leads to a situation in which you get precisely what you ask for. This

may prevent bidders from offering more innovative solutions to the complex problems faced by the client. However, technologies and methods are continuously developing, leaving no room for uncertainty as to whether it is the buyer or seller who is following and shaping this development within business relationships and services. In an increasingly complex business environment, would it be wiser for enterprises to keep all functions inhouse rather than engaging in frequent competitive tenders? – If a buyer feels that it knows best what should be done and how, then the task is probably best done in-house. However, in a highly complex situation in which the supplier rather than the buyer knows best, the buyer should perhaps give thought to how it might integrate the best suppliers into its own operations, as genuine partners. FROM PARTIAL OPTIMISATION TO A SHARED OPERATING CULTURE Makkonen poses the question of how a culture of extreme competitive bidding affects the degree to which service providers are willing to develop their operations. In such a culture, bidders do not always have the resources required to consider how they might genuinely benefit the clients business as well as their own. ‒ Instead of intense competitive bidding rounds, client companies could join forces with suppliers to build a shared operating culture which

increases commitment to and investment in the business relationship. Otherwise, there is a risk of partial optimisation: each member of the operating chain focuses solely on its own profits, while nobody takes a holistic view of the operating chain›s development. In its purest form, b-to-b purchasing involves the buyer providing detailed specifications of the product or service. At the other extreme, the buyer simply tries to develop its business activities and pays little attention to the practicalities. According to Makkonen, the optimum solution probably lies somewhere in between. – For a service business, the ideal approach may be somewhere in the middle: the process and responsibilities are defined in sufficient detail and success can be clearly measured. While a supplier should always have the freedom to evolve and develop, the buyer must also retain some control. In such an environment, both the client and the supplier have an equal and meaningful position. •

”Instead of ruthless competitive bidding, client companies could join forces with suppliers to build a shared operating culture which increases commitment to and investment in the business relationship.”

HANNU MAKKONEN is a Postdoctoral Research Fellow in Marketing at Turku School of Economics. Business networks is one of TSE’s focus areas in research. This area involves several research groups engaged in the study of networks as either inter- or intra-organisational structures.

University increases focus on


Sustainable Development Studies has become a permanent feature of the University of Turku’s curriculum. Studying Sustainable Development is multidisciplinary. This means that each student contributes the often distinct perspectives of his or her main field.


ustainable development is one of the University’s most interdisciplinary study modules, attracting students from all faculties. According to Dr. Minttu Jaakkola, who has coordinated the study module for four years, interdisciplinary dialogue provides students with an overview of sustainable development and an understanding of how its various aspects are integrated. – In some contexts, such aspects may be utterly contradictory, which can also generate conflicts. For example, mining may be ecologically unsustainable in a certain region, while also bringing economic sustainability. We try to teach students about the sources of such conflicts and how to promote sustainable development. Only by understanding this can we prioritise sustainable development and take sustainable decisions, adds Jaakkola. Sustainable Development Studies helps students to see the various levels of sustainability: its global aspects and goals, and the local levels at which sustainability is promoted in practice. – For example, the global need for minerals co-exists with the equally global goal of caring for the environment while securing everybody’s right to a good life.

A student team presenting their report on the societal sustainability of the Arctic. Pictured: Eero Hannula, Pekka Veiste, Saana Talja and Daniel Telén.

Decisions on mineral excavation have an impact on the local economy, people and the environment. The multidisciplinary nature of sustainability is also reflected in the study module’s management group; this includes professors and experts of environmental law, geography, environmental science, ethnology, economics and futures research. According to Jaakkola, various aspects of sustainable development are increasingly prominent in the business world. Sustainable Development Studies is supplemented by Responsible Business Studies taught by Turku School of Economics. – Responsible Business Studies focuses on how the principles of sustainable development can be integrated with business activities. Jaakkola has paid personal attention to the debate on and attitudes to the conservation of the Saimaa ringed seal. This involves various aspects of sustainability and operators who work at different levels. – For example, conflicts arise from the relationship between local and scientific knowledge, or from government intervention in local people’s lives. Certain economic aspects are also involved: while the Saimaa ringed seal brings tourists to the region, local lives and livelihoods are hampered by the related conservation measures. •


Magazine of Turku School of Economics. The articles of this magazine introduce the TSE's community and expertise. Designed to be read on a m...

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