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The role of management control has not received sufficient attention in the literature on value creation so far. Therefore, this paper aims to investigate the role of control in value creation in industrial networks. More specifically, the aim is to examine the management and control of interfaces between key resources within and between firms, in the networks surrounding firms, when they attempt to create value. All the firms that take part in a value-creation process have both formal and informal control systems: these firms have budgets, specific routines, reward systems, and sanctioned “ways to behave.” The paper relates the Industrial Marketing and Purchasing (IMP) group's research on interaction, relationships, and networks with control literature, and presents a framework for controlling resource interfaces in a network setting. Two in-depth cases illustrate the role of control in value creation. The first case covers the development of a low-weight newspaper grade that Holmen and its paper mill Hallsta initiated. The second case examines the attempt to develop and commercialize a new, energy efficient pulping technology.

This chapter analyses conditions under which residents of a small Russian town accept the concepts “pollution” and “ecological risk.” The town in question is Sokol in the Vologda oblast of the Russian Federation, where there are two pulp and paper mills and other forest industries. Sokol is a typical small town with a population of about 40,000. The pulp and paper mills are locally run. The issues surrounding Sokol's pulp and paper mills generally present a typical Russian picture (Kuliasova & Kuliasov, 2002a, 2002b) with one major exception. Industrialization in Sokol goes back more than a century and thus reflects the broader history of the 20th century.

In this chapter, we explore the impact of socioemotional and financial wealth on the resource management of family firms. We use MoDo, a Swedish pulp and paper firm, covering three generations of owner-managers from 1873 to 1991, to grasp the shifting emphases on socioemotional and financial wealth in the management of the company. Identifying four strategic issues of decisive importance for the development of MoDo, we analyze the organizational values that guided the management of these issues. We propose that financial and socioemotional wealth stand for two different rationalities that infuse organizational values. The MoDo case illustrates how these rationalities go hand in hand for extended periods of time, safeguarding both financial success and socioemotional endowments. However, in a situation where the rationalities are no longer in line with the development of the industry context, the conflict arising between the two rationalities may have fatal consequences for the firm in question.

Empirical evidence from the past decade confirms that multinationals increasingly see the environment as a strategic issue, whether in terms of limiting damage to the bottom line from adverse publicity, or actually gaining in the marketplace by pioneering more environmentally conscious solutions. During the same period, NGOs have become a visible part of the political process, in influencing the environmental strategies of multinationals through direct action, as well as by forming broader coalitions aimed at influencing the agenda at multilateral institutions such as the WTO and the OECD regarding environmental concerns and the behavior of multinationals. This chapter explores the importance of different environmental drivers on the behavior of firms in the pulp and paper industry, with particular focus on the role of Greenpeace in changing industry practices. We discuss the extent to which the paper industry might be a special case in this respect, and conclude by assessing the implications for public policy.

This study investigates whether CEOs exercise discretion in recognizing environmental liabilities surrounding their turnover. Extant theories on the agency problem predict that outgoing CEOs tend to boost or maintain the reported earnings in their final years (“Horizon” problem or “Cover-up”) and incoming CEOs sacrifice the reported earnings in their transitions year (“big-bath”). We find empirical evidence that incoming CEOs recognize significantly higher environmental liabilities in their transition year compared to the following years, supporting the “big-bath” hypothesis. This finding provides evidence that CEOs use environmental liabilities as a tool of earnings management surrounding their turnover in an attempt to maximize their accounting-based compensation.

Labor management cooperation, and the adoption of high-performance work systems (HPWS), are central topics in recent industrial relations research, with much emphasis given to “best-practice” success stories. This paper uses a case study analysis, relying on conventional, and oral history interviews, to explore why managers, union leaders, and workers in two Maine paper mills rejected the cooperation and the HPWS model. It explores how local history and culture, regional factors like the dramatic International Paper (IP) strike in Jay, Maine, instability in industry labor relations, management turnover, and instability in corporate governance contributed to these two mills’ rejection of Scott Paper Corporation's “Jointness” initiative during the period from 1988 to 1995. The study argues that intra-management divisions blocked cooperation on the management side, and that the Jay strike created a “movement culture” among Maine's paper workers, who developed a class-conscious critique of HPWS as a tactic in class warfare being perpetrated by paper corporations.

Previous research has been relatively insensitive to the potential combined effects that the shared industry background and country of origin might play in the development of MNCs. This is although there are various external constituents that pose distinctive demands especially on such groups of MNCs. The 15-year period of internationalization of three major Finnish paper companies examined in this study represents MNC development as a collective endeavor in which individual companies are especially influenced both by each other and by their joint external constituents. These influences materialize in analogous timing and patterns of internationalization across individual companies. In its entirety, the study thus suggests that the development of MNCs which operate in the same line of industry and originate from the same country can be considered an outcome of a mutual process that involves interaction both with each other and their shared external constituents. This also means that MNCs then are not only competitors, but simultaneously also a source of mutual support in their ever-continuing evolution.

This chapter presents a conceptual framework to understand the role of multinational enterprises in the process of environmental standard setting in the global economy. Inside the multinational, we discuss the impact of path-dependency and irreversibility on environmental investment, and the importance of the integrated network structure of the multinational in enabling the transfer of standards within the firm. Outside the firm, we discuss the impact of regulation and market forces, and particularly the role of NGOs, in triggering change in firm behavior both at home and abroad. We conclude by considering the impact of supranational institutions on the environmental behavior of multinationals.