Academic journal article Academy of Marketing Studies Journal

Effects of Substantial Operating Environment Changes on Mode of International Operations

Academic journal article Academy of Marketing Studies Journal

Effects of Substantial Operating Environment Changes on Mode of International Operations

Article excerpt

INTRODUCTION

In the course of Finnish history, the forest industry is the one single industry on which the development and prosperity of Finnish society has relied the most. This has led to the prevailing situation in which Finnish society and the sentiment of the nation has taken the forest industry as "its own", something to take care of and nurture. It is the generally held view in Finland that the interests of the Finnish forest industry and of the Finnish state converge. This belief, in fact, can be accounted for by the fact that Finland is, of all industrialized countries, the one that depends on its forest industry exports the most (Raumolin, 1990). Compared with other major forest-industry product exporters such as Canada, which is the largest exporter, and Sweden, which is the fourth largest exporter, of the total exports in Finland, the share of forest industry products is some fifteen percentage units higher (Finnish Forest Industries Federation, 1999). This heavy forest industry dependency of Finland makes the development paths of Finnish companies worthy of study.

The devaluation policy of the Finnish government in the past illustrates the dependency of Finland on the forest industry most strikingly. For decades the business cycle of the forest industry seemed to govern the devaluations of the Finnish markka: As the cycle went into its slump, the government was forced to devalue the markka, thus giving some relief to the Finnish forest industry in the world market, helping it regain its competitiveness.

The forest industry, being of such importance to Finland, has raised the interests of Finnish scholars in many different fields of sciences and disciplines. Although their interest in the forest industry is wide-ranging, overall descriptions and analyses concerning the development of the industry are surprisingly few (see Nasi, Sajasalo & Sierila, 1998; Nasi, Ranta & Sajasalo, 1998). In the international science arena, considering Finland's status as the leading exporter of printing and writing paper grades in the world, studies concerning the Finnish forest industry have remained so far underrepresented.

When discussing the Finnish forest industry in the following sections, by definition, only the chemical forest industry (paper, paperboard and pulp industries) is considered. This leaves the mechanical forest industry outside the scope of the current paper.

AIMS OF THE PAPER

The aim of this paper is to identify some of the major changes which have affected the Finnish forest industry in past decades, to describe the changes, and to present a preliminary analysis of some effects of the most noticeable changes at the different levels of the industry's operating environment. The emphasis of the examination is placed on the role of jointly-owned marketing associations in the internationalization process of the Finnish forest industry companies, and the effect of the changes on it. The role of the associations in the internationalization process has thus far, by and large, remained unstudied.

METHODOLOGY AND DATA

This paper follows the basic ideology of case research (Yin, 1994). The data used are based primarily on publicly available archival sources of three origins: first, annual reports of the Finnish forest industry companies; second, magazine and newspaper articles dealing with the industry; and third, publications provided by the Finnish Forest Industries Federation, mainly as a source of statistical information.

In this paper, the notion of change is important and central. Descriptions of internationalization processes, as well as descriptions of any other strategic processes, (Melin, 1992) include information about change, and thus always need be understood within a process context. It is the very process of internationalization, or an epoch (Melin, 1992; Kutschker, Baurle & Schmid, 1997) within it, that is the current paper's subject of interest. …

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