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  • Slide 1
  • Performance measurement in business networks; TOWARDS MANAGEMENT AND LEADERSHIP MODELS FOR RUSSIAN BUSINESS NETWORKS. Seppo Niittymki HAMK University of Applied Sciences seppo.niittymaki@hamk.fi In detail: www.hamk.fi/stroi Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.20101
  • Slide 2
  • Research Questions, Approach and Research Methods 1. What are the main features of management and leadership models and Performance Measurement Indicators (PMI) used at present in Finland ? 2. How should these models and PMI be adjusted to Finnish Companies in Russian business environment? 3. Constructive approach. 4. In STROI Network project both qualitative and quantitative methods were applied, 129 interviews were reported and 64 answers for quantitative questionnaires were received. Selected quotes of interviews and answers for surveys are used in this presentation. Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.20102
  • Slide 3
  • Different Approaches of Research in STROI Network Project 8.4.2010 Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 3 Constructive Approach Qualitative Business Practices Constructive Approach Quantitative 2. Russian researchers` approach 1.Finnish researchers` approach 3. Joint approach: Triangulation
  • Slide 4
  • The development trends in performance measurement (Kulmala and Lnnqvist, 2006). 8.4.2010 Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 4
  • Slide 5
  • Uniqueness of the Russian Market (Basic comments by Prof. Alex Settles (ASe), HSE Moscow, additional comments by the author and other experts mentioned. Different motivations (ASe) Company Rautaruukki: Bonus motivates more in Russia Differing traditions in management both Soviet and post-Soviet (ASe) Prof. Olga Tretyak: Power shrinks, when costs are saved...no tradition in cost saving Russian tradition of authoritative leadership equaling effective leadership (ASe) Naulap (2000) and company NCC`s experience Lack of team building tradition hampers network formation Konecranes interview, why they don`t ask neighboring room instead of calling Finland Extensive informal networks positive and negative aspects for firm Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.20105
  • Slide 6
  • Cultural differences between Finland and Russia (Sources: www.geert-hofstede.com and Russian researchers Yu&N. Latov (2003) and A.Nautov (1996), which are presented with white arrows according to Filinov et al 2009)www.geert-hofstede.com 8.4.2010 Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 6 PDI, Power Distance IDV, Individualism MAS, Masculinity UAI, Uncertainity Avoidance LTO, Long Term Orientation N/A White Arrows: Score results given by Russian researchers according to analysis of their own.
  • Slide 7
  • Management and Leadership styles in Finnish-Russian Business Networks according to authors experience and interviews (Expressed as an application of Blake& Mouton -model) Source for basic model: http://www.leadership-and-motivation-training.com/blake-and-mouton.html (Nov 19, 2009)http://www.leadership-and-motivation-training.com/blake-and-mouton.html Finns Russian Direction of future development MANAGEMENT OF NETWORKS: CONCERN FOR TASK No efforts to tasks Authoritarian style; money talks Network leader Middle of the Road (Politician) LEADERSHIP OF NETWORKS: CONCERN FOR PEOPLE Country club, relations most important No efforts to people Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.20107
  • Slide 8
  • Topologies of Business Networks (VTT) Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.20108
  • Slide 9
  • STROI project perspectives: Main success factors Main Networked companys main targets for business in Russia Trust-building in inter- organizational relationships; Supplier/ Customer relationships management Performance Measurement in the networked company; PM in the network P1: Business sector for a networked company P5: Customer orientation and marketing P2: Common vision of the network Description of the business network P3: Competence of human resource Development relationships in the network; HRM in Russia and Finland P4: Internal development Working environment (Learning organization); Network growth; Decision-making in a networked company P6: Measuring network performance Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.20109
  • Slide 10
  • Learning and growth Internal processes Customers Finance Business Sector Vision of the Business Network Balanced Score Card -structure of the Stroi Network -project Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.201010
  • Slide 11
  • 3) The Network Score Card (NSC) approach (Jrvenp, 2009) Financial indicators (growth, profitability, network value) Customer perspective Network processes (Efficiency, flexibility, productivity, innovation, learning, etc.) Networks operating models (control) Network culture (trust, community, interaction) Network resources (e.g., know-how, relationships) Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.201011
  • Slide 12
  • Main aspects of the network performance measurement (Sivadasan et al., 2002; Westphal et al., 2004) Reliability of the partners Flexibility or the ability to respond adequately to a changing environment Commitment to the network Measuring whether materials, information or resources are delivered in the agreed cost, quantity, quality and time. There are also trust-related aspects of reliability, such as keeping information confidential when agreed, and no advantage is taken of the partners problems. Identifying the ability of network members to absorb problems of other partners, and coping with them Measuring information and knowledge sharing, decision synchronization and incentive alignment among members of the network Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.201012
  • Slide 13
  • Learning and growth Internal processes Customer Finance Business Sector Vision of Business Network From Balanced Score Card (BSC) to Network Score Card (NSC) Network Resources Network Culture BSC NSC Networks operating models Network processes In Finland: competition Russia: relationships In Finland: purchasing department Russia: gifts and services Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.201013
  • Slide 14
  • A Model for Planning and Implementing Strategy in Project Business P1: Business Sector P6: Finance P5: Customer orientation P4: Internal development P2: Network Vision P3: Human Resources Performance Measurement Indicator Targets Country Sector Scenario Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.201014 PESTE Demand Forecasts Indicators
  • Slide 15
  • Common Dimensions of Performance Measurement P3: Human resources P4: Development P5: Customer P6: Finance P1: Business sector P2: NW Vision Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 8.4.201015
  • Slide 16
  • Six most important factors for each perspective 8.4.201016 Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks
  • Slide 17
  • 14 most important factors to be measured on the basis average values 8.4.201017 Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks
  • Slide 18
  • 8.4.2010 Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 18 Most important factors to be measured. Reliability according to method triangulation with two different methods: Red circle: difference more than 20%. Green circle: difference on results less than 20%. Web-robol Interview
  • Slide 19
  • The Most Important 14 Factors to be Measured in Different Perspectives (P1-P6) on the Basis of Triangulation of Different Datasets (Interview and web-robol survey) P1: Business Sector, 1 company reputation P2: Network Aspects 2 punctuality of delivery times 3 number of reclamations 4 confidence within network 5 common development and 6 streamlining activities P3: Human Resources 7 staff turnover 8 work satisfaction P4: Internal Development 9 trend of productivity P5 Customer Orientation 10 growth of turnover and 11 order book change 12 profit of a product P6: Finance 13 return on capital employed 14 profit 8.4.2010 Seppo Niittymaki, Moscow, April 8th 2010 Performance Measurement in Business Networks 19