Relationship between financial and socially responsible decision-making in Finnish state-owned companies – Evidence from institutional logics’ perspective

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School of Business | Master's thesis
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This thesis examines the relationship between financial and socially responsible decision-making in Finnish state-owned enterprises. In today’s world corporate social responsibility is of high interest to many stakeholders of companies and the Finnish state makes no exception. Finnish Government has set ambitious targets regarding sustainable development, and this extends to its ownership policies. Furthermore, the Finnish state has ownership in vast number of companies with different ownership interests. Together these matters make the Finnish state an interesting player considering ownership steering and corporate governance of Finnish state-owned companies. By gathering evidence from a time period 2016-2021, I examine how Finnish state-owned enterprises have balanced financial and responsible decision-making. As data for the thesis I use CEO reviews of the companies as these publications present the relevant issues concisely. I use both quantitative and qualitative methods to analyse the CEO reviews: quantitative methods are based on frequency analysis of the most often used words that appear in these CEO reviews, whereas qualitative part focuses on the relationships between words. Quantitative part is examined by performing Friedman tests to find out whether there are differences between different ownership groups – listed, commercial non-listed and non-listed special-purpose companies – and qualitative part brings more depth to the analyses by shadowing light to the relatedness of different matters discussed in the CEO reviews. As a theoretical framework I use institutional logics that are socially constructed values, beliefs and norms that steer the behaviour of individuals and organizations. Results show that there are no significant differences between the three ownership groups when considering the frequencies of the most used words. Only exception to this is year 2020, when covid-pandemic reached Europe. Most often used words among Finnish state-owned companies are financial and operational words, whereas sustainability-related words and state-related words are used much less frequently. During the examined period, only among listed companies the use of sustainability-related words has increased. Qualitative results show that sustainability-related terms often appear either alone or in relation to operational matters but usually not combined with financial matters. Overall, the results show that market logic is the dominant institutional logic among Finnish state-owned companies. Even though the Finnish state requires a strong emphasis on sustainability issues in decision-making of state-owned companies, sustainability logic seems to be subordinate to market logic.
Thesis advisor
Ikäheimo, Seppo
state-ownership, corporate social responsibility, institutional logics, CEO
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