Assessing the resource usage decisions and financial performance in Finnish sawmills within the resource-based view framework

Abstract

Lahtinen, K. 2009. Assessing the resource usage decisions and financial performance in Finnish sawmills within the resource-based view framework. 40 p. Dissertationes Forestales 89. Available at http://www.metla.fi/dissertationes/df89.htm. The business environment of Finnish sawmills has changed notably since the 1990s due to the internationalization of operations and increased competition from the emerging producer countries. Especially for the sawmills in higher cost-level countries, the ability to create value with special products and providing customer services have been emphasized as crucial to business success towards the present date. Still, empirical evidence of those linkages between the strategic choices and the competitiveness of woodworking firms is largely lacking. The purpose of the study is to examine, within the resource-based view (RBV) framework, the impacts of resource usage decisions on the financial performance of Finnish largeand medium-sized (LM) sawmills in the 2000s. The study materials comprise literature, firm-level financial accounting information and interview data analysed with a literature review, a regression analysis and the multi-criteria decision analysis (MCDA) method. According to the results, resources associated with access to raw material, reputation and services, collaboration and technological know-how have affected the financial performance of LM sawmills the most during the current decade. Reputation, services and collaboration have the highest strategic potential while the strategic capacity of raw material and technological know-how in enhancing the competitiveness of LM sawmills is more ambiguous. The resource valuations of the managers and the actual influence the resources have had on LM sawmills’ financial performance have not corresponded in all cases. Some of the managers’ least valued resources have actually been strategic resources for sawmills and vice versa. The results indicate that, when seeking solutions to enhance sawmills’ competitiveness, managers should also take into account the less conventional resources in the strategic planning processes of the firms. Compared with this study, the results could be generalized in the future by gathering interview data from a larger sample and by increasing the number of accounting periods in performance measurements. In addition, since the challenges of the global business environment are similar for all woodworking companies operating in the higher cost-level areas, new research information could also be acquired by gathering comparable homogenous firm-level data from several countries.