[kand] Kauppakorkeakoulu / BIZ

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    Exploring Tension Complexity and Dynamics: A Case Study of Management Control Systems in the Private Sector Amidst Changing Environments
    (2023) Ylitalo, Aaro; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    Inspired by management control research, this paper aims to contribute to the literature on management control systems (MCSs) by examining how interactions within management control systems in a private sector company can simultaneously weaken and strengthen control (Tension complexity) and how these tensions can change over time (Tension dynamics). The empirical focus of this paper lies in the case study of a private sector company. This study also investigates tensions in changing environments and how managers manage these tensions. There has been extensive research on the behavior of management control systems (MCS) and the tensions between them. However, research on tensions, especially in the form of case studies, has predominantly focused on public entities and areas such as innovation projects in the public sector (Argento et al., 2023) during crises. Tensions in the private sector, particularly in changing environments, have not been extensively studied. This study aims to address this research gap in a case study setting. The findings indicate that, due to their complex and dynamic nature, tensions require continuous attention from management. The tension relationship between control elements can generate something positive that would not have emerged without tension, while, on the other hand, it can create something negative or disrupt something (van der Kolk et al., 2020). This study explores tension complexity and dynamics in management control systems in the private sector amidst changing environments. In addition to exploring the empirical manifestations of tensions, this study makes a theoretical contribution by integrating MCS and tension literatures. This study delves into the meaning of tension, operationalizing these frameworks in a case study setting. Tensions require continuous attention from managers, balancing the combinations of four levers of control that are internally consistent. This case study operationalizes the research question and frameworks in a vehicle financing company in Finland.
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    Acquiror Size, Acquisition Announcement Returns, and Periods of Financial Distress
    (2023) Kaltio, Tuomo; Kokkonen, Joni; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    This thesis studies the relationship between acquiror size and acquisition announcement returns with the objective of assessing whether the negative size effect found in previous studies holds in the Nordic M&A markets as welI. Additionally, I provide new insights on the possible explanations behind this phenomenon. I examine a sample of 1,425 acquisitions by public Nordic companies from 2000 to 2022 and find an average abnormal announcement return of 3.1%. However, large acquirors gain 5.7% lower average abnormal announcement returns than small acquirors. The size effect is robust to firm and deal characteristics and holds irrespective of the form of financing or the organizational form of acquired assets. The evidence on possible explanations behind the size effect aligns most convincingly with equity and growth signaling theories. As for the crises, this study does not find conclusive evidence on reversed size effect during periods of financial distress.
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    Kaupan kohteen tarkastuksen oikeudellinen merkitys yrityskaupassa ympäristövastuiden kannalta
    (2023) Prehti, Tatu; Hietanen-Kunwald, Petra; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    Due diligence -tarkastus tarkoittaa prosessia, jossa kaupan kohde eli esimerkiksi ostettava yritys tarkastetaan huolellisesti. Ympäristöoikeudellisiin vastuisiin ja velvoitteisiin kohdistuva tarkastus tunnetaan käsitteellä environmental due diligence (EDD). Erityisesti sellaisten yritysten kohdalla, jotka toimivat ympäristöriskejä sisältävillä toimialoilla, EDD-tarkastus on varsin yleinen käytäntö. Lainsäädäntö ei kuitenkaan tunne käsitettä eikä tarkastuksen suorittamiseen velvoita mikään säännös tai viranomainen. Tässä tutkielmassa analysoin lainopin keinoin, mitä oikeudellisia perusteita ympäristövastuiden tarkastukselle on löydettävissä yrityskaupan yhteydessä. Tutkimus kohdistuu EDD-tarkastuksen olennaisimpaan sisältöön, johon kuuluvat ympäristövahinkovastuu sekä maaperän ja pohjaveden puhdistamisvelvollisuus. Sekä ympäristövahinkolaissa että ympäristönsuojelulaissa on vastuusäännöksiä, jotka tekevät EDD- tarkastuksen suorittamisesta hyvin perusteltua. Lisäksi tarkastusta voi tietyissä tapauksissa perustella oikeudellisesti myös maakaaren ja kauppalain säännöksillä. Toisena tutkimuskysymyksenä analysoin, miten tarkastuksen tulokset voidaan ottaa huomioon kauppakirjan ehdoissa. Osapuolilla on teoriassa hyvin laajat mahdollisuudet sopia ympäristövastuiden jakautumisesta keskinäisessä suhteessaan. Korvausten hakeminen jälkikäteen voi kuitenkin olla hankalaa, kallista ja riskialtista. Osapuolet eivät voi myöskään sopia vastuista kolmansia osapuolia tai viranomaisia sitovalla tavalla. Kauppakirjaan otetuilla ehdoilla ei voi siis korvata EDD-tarkastusta. Tarkastuksesta saatavan raportin avulla sekä ostajalla että myyjällä on paremmat edellytykset arvioida, minkälaisia ehtoja kauppakirjaan tulisi ottaa.
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    Corporate Decision-Making in Geopolitical Crises: The Role of ESG Policies During the Russia-Ukraine Conflict
    (2023) al Azawi, Lara; Kokkonen, Joni; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    I analyze the impact of Environmental, Social, and Governance (ESG) policies on multinational companies’ decision-making during the Russia-Ukraine conflict and the following stock market reactions. I present evidence that higher ESG scores significantly influence firms to discontinue operations in Russia, whereas Human Rights Scores do not. I also show that complete withdrawals from Russia experience a favorable market reaction, though these reactions are moderated for firms with higher ESG and Human Rights Scores.
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    The Adoption of Ar of Ar by Consumers in the Tourism Industry
    (2024) Müftüoglu, Meyra; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    In this new, rapidly evolving technological era, the tourism industry is no exception to the transformative potential of new technologies. In a world where travelers increasingly are looking for different and personalized journeys, advancements in augmented reality (AR) offer the potential to create self-sufficient tourists. This thesis aims to understand how new technologies have affected and will affect the tourism industry in the future. This research will primarily focus on augmented reality, which develops tourists to be more self-sufficient, and its benefits and challenges to the consumers. The research will analyze the motivation behind the actual use of AR. This study seeks to fill the research gap in consumers’ growing self-sufficiency by adopting AR applications. Qualitative research was chosen for this study to reach the research objectives. Interview questions considered the following concepts: perceived usefulness, perceived ease of use, autonomy and competence, perceived risk and trust. The findings of this study show a positive transformation in the tourism industry as a result of augmented reality (AR) applications. AR technologies significantly enhanced consumers’ travel experiences by providing timely and contextually relevant information. The ease of using AR applications played a crucial role in influencing tourists to adopt these technologies, with respondents highlighting the user-friendly nature of such tools. Moreover, the examination of autonomy and competence demonstrated a favorable connection between tourists’ ability to be self-sufficient and their engagement with AR tools. Participants expressed a feeling of empowerment in customizing their travel experiences. Despite these positive aspects, challenges such as perceived risk and trust emerged, indicating concerns related to data security and the reliability of information provided by AR.
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    Incorporating elements of Beyond Budgeting
    (2023) Vartio, Aino; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    New methods in management control seek to avoid the pitfalls of budgets, moving away from their time-consuming nature and emphasis on cost reduction, and instead placing a greater focus on value creation. Plenty of discussion evolves around beyond budgeting that aims to abandon budgets, even though organizations have made limited progress in their endeavors to eliminate or substitute budgets (Østergren and Stensaker, 2011). This thesis is a single case study that investigates the challenges a case company has faced at the early stages of adopting parts of the beyond budgeting (BB) principles into their operations. It shows how does budgeting without a budget function in practice, and how management control is run by a single control system that includes the purposes of planning, target setting, budgeting, and evaluation metrics. The findings indicate that ambitious targets sometimes lead to criticism, and traditional budgeting along BB might cause barriers that might affect the effectiveness of operations.
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    Maximizing revenue through a circular supply chain
    (2023) Kuosmanen, Jenny; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    The principles of circular economy are becoming an even more important topic among consumers, managers and researchers, who are increasingly discussing the topic. Various regulations have been set for companies to improve their environmental sustainability, and these are often seen as negative and expensive changes among managers. Through analyzing existing literature on the topic, the objective of this thesis was to identify and discuss the different ways in which a company can adopt the circularity principles into its supply chain, while at the same time increasing streams of revenue. The review considers different factors, for example business model, supply chain structure and company image, and how these affect the profitability of transitioning to a circular supply chain model. The results show opportunities and challenges in implementing circularity into supply chains. Servitization and flexibility in supply chain structure were revealed as important factors in the process of successfully implementing circular supply chains in order to maximize revenue generation. Companies in industries such as fashion and technology have successfully implemented some principles of circularity into their supply chains, while the pharmaceutical industry still faces challenges mainly due to regulatory constraints.
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    The Effect of Big Data Analytics on Environmentally Sustainable Decision-Making in SCM
    (2023) Säde, Juho; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    Big Data Analytics (BDA) has emerged as an important tool in enhancing environmental decisions in Supply Chain Management (SCM). As the importance of environmentally sustainable decision-making has increased with regulatory and customer pressure, BDA has emerged as a tool to guide decision-making in SCM. Managers need to understand the importance of BDA is essential for managers to gain an advantage in SCM. This thesis aims to analyse prior literature on BDA and its implementation in environmentally sustainable supply chain management and provides challenges and opportunities that companies face when implementing these practices. This thesis contributes to previous studies on the subject comparing sources to conclude holes in current research. In the reviewed literature, BDA has been shown to improve environmental sustainability in SCM through new data-analysis capabilities. BDA also comes with downsides in the form of cost and talent needed. However, the use of BDA has been shown to improve the supply chain through both reduced costs and improved environmental performance.
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    Comparative analysis of innovation execution in organisations
    (2023) Ollanketo, Juho; Seppälä, Tomi Seppälä; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    This thesis is aimed to compare innovation execution in different organisations. Using a comprehensive methodical analysis, this thesis finds similarities and differences in the approaches that organisations use. As all the interviewed organisations primary innovation and development focuses on new technological aspects, it is important to mention that these organisations are in different industries and are not competitors. The analysis will have a thorough angle on the subject and the comparison on the interviews. This review investigates the umbrella term of innovation, and in certain parts delves deeper into the more precise terms and subcategories. The term innovation will be throughly analysed starting with the first innovation theory, moving to innovation management and the changes that have been seen in the theory behind it. This thesis also discusses on the different types of innovation in organisations and the approaches on them. After the theoretical background, the discussion and juxtaposition of the interviews and theory will be analysed. This will add to an understanding of the smaller intricacies of innovation execution in specific organisational contexts.
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    Effectiveness of gamification: Literature review on elements of gamification
    (2023) Lahtinen, Kaapo; Reza, Movarrei; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    This paper focuses on the effectiveness of gamification. Gamification is a con-cept that is used to describe intentional use of game elements for creation of gameful experiences in non-game contexts. Gamification research has in-creased rapidly in the past two decades which is the results of positive findings on gamification. Therefore, -- to use the concept and theories efficiently -- understanding of the concept is vital because information systems have the tendency to fail without sufficient knowledge. The most significant findings of this research are that gamification effectiveness is result of motivation that individual game elements create. These elements draw effect from gamification design quantified-self and social networks. Effects of gamification are behavioural actions, emotions, and feelings such as entertainment and engagement. Also, contexts have a role in what motivational characteristics should be emphasized. These previously described motivational effects can be analysed with the help of self-determination theory and goal-setting theory.
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    Predictive Analytics in Fashion Retail In-ventory Management
    (2023) Valtonen, Vappu; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    The purpose of this literature review is to explore the role of predictive analytics in inventory management within the context of fashion retail. The review will research the use of predictive analytics in inventory management, as well as the opportunities and challenges that it contains. The literature review also addresses how businesses use predictive analytics in their supply chains. The research shows that despites the challenges concerning this topic, the opportunities consist of improved forecasting, cost reductions, optimized supply chain and enhanced profitability. The use of predictive analytics in fashion retailer’s inventory management is a developing area, however, there have been positive results with it in many aspects.
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    The Human Factor in Disinformation: Analyzing the Organic Reach of Disinformation on Social Media
    (2023) Pesonen, Otto; Seppälä, Tomi; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    This thesis examines the mechanisms and human factors influencing the organic reach of disinformation on social media. Through literature review, the thesis explores the relations between user characteristics, cognitive biases, and the structure of social media platforms. This thesis is qualitative study, which utilizes mainly peer-viewed sources. The thesis underscores the impact of humans over automated bots in spreading false information, challenging the assumption that technological interventions alone can alleviate this trend. The contribution of information overload, confirmation bias, and echo chambers to the dissemination process of disinformation are explored. Key findings include the significant role of human behavior in spreading disinformation and the impact of trust in information sources. In addition it highlights the importance of media literacy, the influence of psychological and demographic factors, and the role of social media algorithms in shaping the dissemination of disinformation. The thesis suggests that, in order to reduce the influence and effects of disinformation, it is crucial to adopt a strategy that includes educating individuals in media literacy and critical thinking skills.The research also identifies the need for further research on the true impacts of organic reach to supplement the findings and provide more actionable insights into combating disinformation in the digital landscape.
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    Wearable Technology in the National Football League
    (2023) Paasonen, Olli; Seppälä , Tomi; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    In the National Football League, teams' decision-making has never been as data-driven as today. One of the most recent technical advancements in the world of sports sciences has been the introduction of wearable technology. This refers to technology athletes can wear during their activity on the field, providing a way to collect an immense amount of data on their overall performance and health. From GPS trackers to advanced biometric sensors, teams can optimize how players train, compete, and recover at an unprecedented level. Having access to various biometric data, teams can develop analytical models for predicting injury risk and proactively mitigate the occurrence of injuries. Ultimately, wearable technology helps maximize the performance and longevity of players. This thesis will uncover the impact of wearable technology on player health in the National Football League through an extensive literature review.
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    Benchmarking Private Equity: Evaluating the performance of buyout and venture capital funds relative to public equity markets
    (2023) Kauppinen, Olli; Seppälä, Tomi; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    As private equity has assumed a pivotal role in investors’ portfolios, allocators need to carefully assess the return and risk of the asset class. The illiquid nature and lack of good quality data poses challenges for modelling private equity. This thesis studies the performance of over 1,800 U.S. and European focused buyout and venture capital funds, that are of vintage years 1990 to 2015, using high-quality, fund-level, cash flow data from Preqin. The thesis focuses on relative performance against public equity markets. For buyout funds, I find even higher excess returns than previous research. Buyout overperformance compared to S&P 500 averages 30%, 21 % and 18 % for vintages 1990 to 1999, 2000 to 2009 and 2010 to 2015 respectively over a fund’s life. I find average annualized excess return of 4.1 % for buyout funds over the whole sample. Some recent literature suggests that buyout has lost its edge over public equities in terms of relative returns in recent years. The findings of this study suggest that this is not the case. For Venture capital funds, I find significant outperformance against the S&P 500 from 1990 to 1999 and 2010 to 2015 but underperformance in 2000s. Venture capital overperformance averages 44%, -5 % and 44 % for vintages 1990 to 1999, 2000 to 2009 and 2010 to 2015 respectively over a fund’s life and the annualized excess return averages -.6 % for the whole sample. The conclusions are mostly robust and qualitatively similar when assuming different levels of systematic risk. Additionally, benchmarking against different public market indices shows that the findings are also generally robust to the choice of benchmark.
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    Budgeting in times of increased uncertainty: How rolling forecasts are used in a construction company facing an industrial crisis?
    (2023) Kolehmainen, Laura; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    This single-case study investigates the budgeting practices of a Finnish construction company, and the changes the company has made in those practices during the industrial crisis. Based on the empirical evidence received via one interview with the company’s business controller, the company was found to have a well-functioning budgeting approach: a flexible and continuous form of budgeting by an interactive use of rolling forecasts and scenario planning. The increased emphasis on the planning and control reasons to budget was seen in times of increased uncertainty as prior literature in management accounting research have discussed. The industrial crisis did not change the institutionalized budgeting processes and practices since they are seen to be serving well in the company. However, similar to other research of management control and crisis, the control and planning function of budgeting, especially resource allocation, became more important in the times of increased uncertainty. The frequent and accurate forecasting has a crucial role on the company’s action plan formation, resource allocation and decision-making. In addition, the importance of cost management and control increased and was paid more attention on.
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    Design and introduction of management controls in a startup company: A case study on Wolt
    (2023) Lakka, Matias; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    Rapid growth of a company can often lead to a lack of control. Management controls and the relations between them in a startup’s birth and growth stages are fairly unknown. Therefore, a case study on a successful startup company aims to provide additional knowledge on the topic. This thesis will use a single case study of a Finnish technology company Wolt. Studying a company that scaled rapidly is a valid avenue of study as the findings can be seen as applicable in various circumstances and contexts. The research is retrospective to gain knowledge on the actions Wolt took in its birth and growth stages to improve and retain control. Akroyd et al. (2019) studied the interdependencies of different sets of controls in a New-Zealand entrepreneurial company. This thesis takes into account administrative, financial, and cultural controls and studies their interdependence and formality similarly to Moores and Yuen (2001).
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    Supply chain risk management strategies amid geopolitical disruptions
    (2024) Arminen, Oleg; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    Recent disruptive events in our globalized supply chains have highlighted the inherent vulnerabilities in them, prompting public interest in mitigating the effects of these disruptions. This thesis presents a comprehensive analysis of supply chain risk management (SCRM) strategies in the context of geopolitical disruptions, with a primary focus on the Russian-Ukrainian conflict. The thesis explores the nature of geopolitical disruptions in supply chains and how multinational enterprises (MNEs) navigate and manage these risks. Additionally, the decision-making factors of MNEs regarding offshoring are also reviewed. The thesis is conducted as a literature review with the addition of case studies on SCRM strategies of MNEs depending on their decision to either exit or stay in Russia. Literature on previous geopolitical disruptions highlights the application of reactive and proactive measures by supply chain managers to mitigate the impact of geopolitical disruptions. Researchers have also identified prominent factors that influence supply chain decision-making during geopolitical disruptions. This study also delves into the implications of global disruptions caused by the conflict in sectors of energy, agriculture, and non-food raw materials. Disruptions in these sectors demonstrate the extensive and farreaching impact of the conflict on global supply chains. The decisions of MNEs presented in the case studies are analyzed through SCRM theory. The main takeaways are the constraints of implementing SCRM strategies for MNEs operating in Russia and the overall risky and uncertain operating environment in Russia prompting many MNEs to leave the market. As with previous geopolitical disruptions, the current conflict emphasizes SCRM strategies and the resilience of supply chains which are supported by modern technology. This integration helps to mitigate the impact of supply chain disruptions and reduce the probability of future disruptions. The conflict heightened the importance of emerging markets, as global supply chains shift towards these regions.
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    Unintended dysfunctional consequences of Management Control Systems – Organizational decline in post merger context
    (2023) Berg, Peik; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    This thesis explores the topic of unintended dysfunctional consequences of Management Control Systems (MCS) in post-merger context. It pursues to examine how MCS, generally recognized important for organizational success, can on the other hand contribute to organizational decline after mergers. The phenomenon is being examined by conducting a single-case study and collecting empirical evidence from an interview with an executive team member from Company X. The study is limited on focusing on cybernetic, planning and rewarding and compensation controls. The findings of this study indicate that inadequate post-merger integration and unrealistic growth expectations contribute to significant organizational decline. In addition, it underlines the importance of managerial cognition in affecting post-merger integration, which consequently shapes the MCS configuration.
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    How a company-specific crisis affects budgeting
    (2023) Antikainen, Juha; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    This thesis examines the ways company-specific crisis affects budgeting and tensions the possible change may cause. The purpose of this study is to com-pare the theory based on budgeting in a crisis to the effects of a company-specific crisis on budgeting in the case of Company A. The thesis is conducted using existing literature and the arranged interviews with the current CEO and Senior Controller of Company A. When it comes to tightening of budgetary controls and tensions caused by the changes the findings of this study are mostly in line with the previous litera-ture. However, this study finds that the company-specific crisis caused an in-crease in the importance of budgeting in the role of performance evaluation and highlights the possibility of bottom-up budgeting as a way of reducing ten-sions between top management and employees.
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    The reasons and sequencing of financial management control systems adoption in early-stage companies: a case study
    (2023) Svartström, Kasperi; Juhani, Vaivio; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    Studies regarding management control systems (MCS) have been conducted for decades now. Research on the matter has traditionally been more focused on large, established firms, but it has also taken interest in these systems in the context of earlier stage firms. There exists empirical evidence which supports the importance of management control systems to early-stage firms and startups (Davila, 2005), however there are still some questions without answers regarding them. This thesis examines the adoption of management control systems in the context of early-stage companies. In particular, the study focuses on two aspects related to their adoption in early-stage companies: which systems should be adopted first, and is their adoption conditional on other systems being adopted before them. To offer insights and real-world examples, a case study of a Finnish, high-growth startup company has been conducted. Using the collected empirical evidence, this thesis aims to bring forward the reasons leading to the adoption of individual systems, as well as to offer insights on MCS as an entity in the context of early-stage companies. A timeline of the adoption of the case company’s systems is also compared with the findings of Davila and Foster (2007) for further illustration of the sequencing of MCS adoption. For comparability with the aforementioned paper, this study focuses on 9 individual systems from 2 separate categories: financial planning and financial evaluation.