The Challenge of Managing a Diversified Company: Tampella Corporation 1958–1995

Abstract

The dissertation asks to what extent the top management's capability of a conglomerate Tampella was sufficient to make decisions concerning long-term competitiveness and survival in the market, technology, and organizational dynamics? The dissertation is a comparative analytical narrative on Tampella's evolution between the years 1958 to 1995. The longitudinal approach is needed due to the slowly emerging consequences of strategic decisions – especially organizational changes. Furthermore, I evaluate the importance of different market variables in technological investment decision-making built on my industry-specific engineering capabilities. I demonstrate that the top management team's capability was critical in ensuring Tampella's operations' varied performance. The in-depth analysis of the single case proves the importance of a firm's top management's capability to understand its businesses, technology, and organization's core functions. The Tampella analysis also reveals that a firm's cash flow management is among the most critical determinants for success and failure. The dissertation contributes to the methodological and theoretical development of business history. The goal is a constructive dialogue between business history and the organizational theories and strategy on the other side. From the business history perspective, the dissertation focuses on a company's operational history from the perspective of capability literature. Furthermore, the dissertation focuses on industry history and industry research that highlights the pulp and paper industries' characteristics, including forestry cluster and their impact on a firm's profitability in the context of technology, markets, and their overall dynamics.