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BPP HR

CIPD Professional Development Scheme

TITLE PAGE

Candidate Name/Number Sarah O’Brien

Programme APD

Cohort Number APDL69

Tutor Name Tracey Smith

Assignment/ Assessment Title Management Research Report

Due date for submission 15/12/2009

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This is my original work and it was produced to meet the needs of the CIPD
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TABLE OF CONTENTS

EXECUTIVE SUMMARY

1. INTRODUCTION

1.1 The Researcher


1.2 Background to the report
1.3 Terms of reference
1.4 Structure of the report

2. CRITICAL LITERATURE REWIEW

2.1 Theory of leadership


2.2 How the results were collected
2.3 Future Leadership Demands
2.4 Cultural effects on leadership
2.5 Future trends

3. RESEARCH METHODS & METHODOLOGY

3.1 Types of methodology used


3.2 Selection criteria of students
3.3 Selection criteria of professionals

4. FINDINGS & ANALYSIS

4.1 Survey findings students


4.2 Survey findings professionals
4.3 Analysis

5. CONCLUSIONS

6. RECOMMENDATIONS

7. BIBLIOGRAPHY

8. APPENDICES
EXECUTIVE SUMMARY

The purpose of this research report is to review future leadership demands and
identify the criteria effecting job selection to secure Stora Enso’s position as an
attractive employer for leaders. This Future Leadership report was carried out by
interviewing Human Resource and Management professionals, reviewing various
periodicals, books and Research Reports. The second stage of the report was
completed by sending surveys to university students in China, Finland, Germany
and the USA. The objective of the student survey was to identify the most
important criteria when selecting a job when leaving University. The same survey
was sent to current leaders in the forest and non-forest industry organisations. The
baseline requirement was that these professionals have 5 years or more working
experience, their feedback was evaluated as one sample and per country.

The demands on leaders has been directly affected by globalisation, the drive for
financial results remains the same but the style needed to achieve the results has
had to adapt to the new demands being made by employees and continuous
change in the business environment. Trust / knowledge between different cultures
is increasing due to continued exposure and globalisation, mixed teams are
becoming more prevalent and effective as they became common and achieve
success. Due to the change in culture, few people have the ingrained employer
loyalty that was prevalent decades ago, this will continue to evolve and future
leaders / companies will have to evolve with it.

There will be tough competition for talented leaders in the future. Therefore Stora
Enso should pay more attention to finding Universities to co-operate with and
recruit students during their studies. This is now more important than ever because
the image of the forest industry is declining, at least in Europe and North America.
After arousing students’ interest the company should offer an excellent working
environment (number one criteria in the survey) and this is where superior leaders
are needed. Today’s leaders cannot be involved with all the details in a business
environment which is moving faster and faster, nor do they have time to micro
manage lower levels of the organisation. Therefore common rules (mission, vision,
values) are fundamental and team members have to be able to take the lead.
Management from the background works when you have recruited the right type of
people. Young talents also appreciate independence at work especially in Finland.
According to the student survey the 3rd most important issue was competitive
salary. In fact this was the most important matter to American students and
professionals but there were more variation within Finnish, Chinese and German
responses. Good possibilities for career advancement were in the Top 4 within all
four nations and 2nd in the combined results. Chinese students appear to be more
ambitious than Americans and Europeans. Professionals appreciated competitive
salary more than students. It was number one in their ranking. Excellent working
environment and good potential for career advancement were important for
professionals as well. Unfortunately I could not draw conclusions between non
forest professionals and other professionals due to too low response from non-
forest professionals.

According to the student research there was a large variation between the
willingness to become leaders: 42 % of Finns, 39 % of Chinese, 17 % of German
and only 13 % of Americans indicated manager as a career path.
1. INTRODUCTION

1.1. The researcher and her organisation


I am the Head of HR for Stora Enso UK and Ireland. In the UK and Ireland I am
responsible for 300 employees and globally I am part of an in-country HR network
that supports 32,000 employees world-wide,

Stora Enso is a global paper, packaging and forest products company producing
newsprint and book paper, magazine paper, fine paper, consumer board, industrial
packaging and wood products. The Group has 85 production facilities in more
than 35 countries worldwide, and is a publicly traded company listed in Helsinki
and Stockholm. Our customers include publishers, printing houses and paper
merchants, as well as the packaging, joinery and construction industries.

Stora Enso’s annual production capacity is 12.7 million tonnes of paper and board,
1.5 billion square metres of corrugated packaging and 6.9 million cubic metres of
sawn wood products, including 3.2 million cubic metres of value-added products.
Our sales in 2008 were EUR 11.0 billion, with an operating profit of EUR 388.4
million.

1.2. Background to the report


I am completing this research report to enable me to complete my professional
CIPD studies thereby enabling me to graduate.

My organisation, Stora Enso, is an ambitious company with ambitious people. In


our Mission, Vision, Values which have recently been revised, we have articulated
these ambitions. Our ability to achieve our vision and strategic targets is highly
dependent on the way we lead and manage.

Stora Enso's Leadership Behaviour model identifies the current and future
leadership characteristics, skills and behaviours needed within the organisation.
The model is aimed to help us in:

• aligning our development activities more closely with Group Strategy


• identifying development needs both for individuals and teams
• improving open-mindedness and entrepreneurship
We are very good as an organisation in understanding what competencies we
expect from our leaders and seem to have all the tools available to do this however
I was not convinced that we offered everything we could or should to ensure the
most talented leaders in the world would come and work for us in the first place.

Therefore, I decided to research what are the future leadership demands and how
Stora Enso can secure its position to remain and attractive employer for leaders.

1.3 Terms of reference

• To research whether Stora Enso is an employer of choice for successful


and emerging leaders
• To understand what Stora Enso has to offer future leaders
• Identify the barriers/issues to recruiting the best leaders in the business
• Make recommendations to the board about the changes required to ensure
we remain an employer of choice with future leaders.
1.4 Structure of the report
2.0 CRITICAL LITERATURE REVIEW

2.1. Theory of Leadership


Leadership is a widely researched subject in the science community and also in
business. The oldest leadership studies were related to warfare, one of the most
classic is Chinese Sun Tzu's "The Art of War", which was written some 2000-2500
years ago. Since then the term leadership has been defined by several
interpretations, some of the definitions are complex and sophisticated, Stogdill
defines it simply "as the ability to affect human behaviour so as to accomplish a
mission or influencing a group of people to move towards its goal setting or goal
achievement". Consequently, it is of utmost importance to Stora Enso to be able
to recruit or develop internally the right kind of leaders to achieve our set goals.

2.3 Future leadership demands


In this project work we monitored future leadership demands 5-10 years time
frame by interviewing Human Resource and Management professionals /1- 6/.
Leadership demands are forecast to change in forest industry because the
business environment is changing rapidly. Uncertainty must be tolerated when
forest companies are carrying out their restructuring programs to improve
profitability. Poor leadership performance should not be accepted and companies
should evaluate their leadership on regular basis. This is because a company’s
performance and quality depend on its leaders among other factors. Leaders in
particular steer a company and have a major influence on an enterprise’s
employees. Also companies that are still more production than employee/customer
oriented must change their attitude to survive, since the paper business has
developed into a demand driven market. This means that in times when higher
profitability is being requested combined with higher customer satisfaction, the
company’s leaders are in focus.

Key factor affecting the leadership demands in forest industry is higher average
age of employees than in many other industries There will be three generations in
work life within 10 years and transfer of tacit knowledge is essential. Experienced
and younger employees have different expectations for leaders. Experienced
employees respect leaders who have experience and know how as well as good
leadership skills. It will be challenging to get young potential leaders to commit.
Selling and buying dialog between employer and employee is emphasized.

What then are the main demands for leaders? People challenge. Executives are
smart, highly experienced individuals, under increasing pressure to constantly
manage change across multicultural teams in a dynamic international market /8/.
Good communication and project management skills are an asset. Leaders need
to be flexible, open to change, have patience and interest in building relationships,
consistent attitudes and correct responses to failures and set-backs. Emotional
intelligence is also important. According to Finnish Management and Organizations
professor Heilmann, in the future, leaders need to spend more time with external
partners like community communication, media and other stakeholders.

She also states that the main drivers for demands on leadership are well organized
environment designed to support good performance like clear targets, tools and
time management. You must be able to distinguish essential and unessential
duties. There is no instruction manual available for every single problem and you
need to be aware of company’s mission, vision and values to be able to act
according to company rules. Especially values are becoming more and more
important in business life. They are playing an important role in displaying a
company’s philosophy. So it helps to employ people that fit to the company’s way
of doing business. Considered from employers` view, as well as from employees`
view they assist people in identifying themselves with their employer and act
according to particular rules. Professor Sandstrom warns that favouritism of
similarity is risky. Recruiting must be done based on competence ignoring e.g.
gender, race etc. Act local – think global attitude is favourable. Leadership /
Management should live according to existing needs, e.g. change and crisis
management.

2.4 Cultural effects on leadership


Gerard Bannon told in his lecture “Bridging the Cultural Gap” at SEMP course 24
that trust and knowledge between different cultures has increased. However we
can raise a question if increased knowledge automatically increases trust between
intercultural teams. In global forest companies like Stora Enso there are lots of
opportunities for international communication, job rotation and expatriates working
to extend multicultural knowledge. However interrelationships surpass cultural
knowledge when judging trust within a project group.

We have also found out in this project work that mixed international teams are
effective and give better output than one nation teams. It is difficult to prove this
statement right or wrong but if a given project task is the only common
denominator for the group then you will have more focus on the given task and
spend less time for small talk and other unessential issues. Of course
competencies of team members are more important than mixture of different
nationalities. Different time zones, long distances and misunderstanding of foreign
language hinder effective use of mixed national teams. Mixed national teams
appear to set higher leadership standards due to different cultural backgrounds of
team members and achieving the goal is a common target.

2.5 Future trends


The drive to have less hierarchical levels in organizations offers a cost reduction
measure and increased efficiency, such as quicker decision making. At a Stora
Enso unit there were 7 organization levels in 2001 and one less today. Today there
are more organization levels in forest companies than e.g. in ITC companies.
Leaders are being required to show higher competence in broader areas due to
the drive to flatten organizations and cut hierarchy. Networking skills and self
determination of leaders is important. It takes time to change management styles
to less hierarchal as more trust and responsibility must be placed at lower levels.
The role of being a change agent is vital to organizations; Managers have to
believe in what they are doing and receive the support of Executive Management.
Given status works in different ways in different business cultures. In Europe and
the United States you have to earn your own status within project groups and
teams. However “right” titles open doors outside the company.

Professor Heilmann was asked to evaluate how well “Mapping of LEA Behaviours
with Stora Enso’s Leadership Behaviours Model” correspond with future leadership
demands. She thinks it is well formulated and the right characters are emphasized
like strategic thinking, communication skills and feedback giving.

Nokia’s recruiting policy of future talent is not limited to education but also having
the right attitude and being open minded. Nokia Finland’s HR director Outi
Taivainen points out that technical education is still important but we are looking
for the right type of people who are not prejudiced, can tolerate uncertainty, are
good at networking and are innovative thinkers’ /9/. Large companies like Nokia
are putting more focus on training leaders after recruiting the right type of person.

Stora Enso Finland’s HR Manager (Organizational Development) Kati Tanninen


suggests to create global leaders’ virtual communication platform for information
sharing and getting to know each others (e-learning).

Dr. Judith Bardwick PhD, Professor of Clinical Psychiatry, University of San Diego
stated that “People join organizations and leave their Managers; immediate
Managers carry the most weight and have the greatest effect in retention.” Dr
Bardwick stated that in order to retain Leaders, they must be hired first, that
selection of the type of Leader desired would play a more important roll than any
type of retention incentive. In short you have to have the right people on the bus. /
4, 11/

A Watson Wyatt, 2007/2008 Global Strategic Rewards Study based on a survey of


946 companies and a complementary survey of 13,000 employees found that
setting clear expectations and delivering on reward promises is the formula for
having a dedicated, productive workforce. Globally companies are making more
workers eligible to participate in incentive compensation programs, although nearly
one-half of employers also raised the financial targets that must be met to earn
those bonus rewards. /10, 13/.
The study identified the following as the top five reasons for leaving a company

Employee View Employer View


1) Stress levels (37%) Base Pay (52%)
2) Base Pay (33%) Career Development Opportunities (47%)
3) Promotion Opportunity (26%) Promotion Opportunities (45%)
4) Career Development Opp. (23%) Relationship with Manager (35%)
5) Work/Life Balance (22%) Work/Life Balance (24%)

Clearly career growth is important, stress levels may be seen as subjective, but
was ranked by Employee’s as the number 1 reason for leaving a company. This
could be considered to support the conclusion that employees hire into
organizations but leave their Managers as stress is generally seen as flowing down
the ranks. Since stress is not mentioned by employers, it would be interesting to
identify a method to gauge a leader’s ability to handle stress, i.e. personality tests,
mentoring, monitoring etc. as well as too identify what levels of stress a person can
tolerate without affecting their performance negatively.
3.0 RESEARCH METHODS & METHODOLOGY

3.1 Types of methodology used


This study has both a qualitative and quantitative part. The qualitative part was
carried out by interviewing Human Resource and Management professionals,
reviewing various periodicals, books and Research Reports. The quantitative part
was accomplished by sending a survey to university students in China, Finland,
Germany and USA. The objective of the student survey was to identify the most
important criteria considered when selecting a job after University. The same
survey was sent to current leaders in the forest and non-forest industry. The
baseline requirement was that these professionals have 5 years or more working
experience, their feedback was evaluated as one sample and per country
(questionnaire appendix A/B/C/).

The survey consisted of a questionnaire with 24 selection criteria of employees


and background information of a respondent. The 24 criteria where determined in
discussions between myself and the Corporate HR team, interviews with human
resources staff and questionnaires from business magazines. The final selection of
criteria was made by me.

For the student surveys I asked HR colleagues in other countries to contact and
distribute the survey to students from different universities within their respective
countries (Germany: Dortmund/electrical engineering, Dresden/paper making,
Hamburg/wood sciences, Iserlohn/mechanical engineering; USA: Michigan
Technological University, an Engineering / Forestry school, and the University of
Minnesota, a Business school; Finland: Lappeenranta University of
Technology/Faculty of Technology, Faculty of Technology Management, School of
Business and University of Helsinki/faculty of forestry; paper making engineering in
China: South China University of Technology (Guangzhou), Shanxi University of
Science & Technology (Shanxi) and Nanjing Forestry University (Jiangsu). In total
145 student answers were received (Germany 50, USA 16, Finland 56 and China
41).

The questionnaire was sent to professionals in Germany, USA and Finland, again
utilising my colleagues in global HR. Furthermore, I queried responses from the
most recent Stora Enso Management Programme (SEMP) participants. SEMP is
an exclusive in-house general management training programme for Stora Enso´s
emergent Managers. From professionals 123 responses were received (Germany
30, USA 21, Finland 51 and SEMP 21 responses).

Students were asked to give 1-10 points to every criterion, professionals however
were asked to name only the 10 most important criteria. Therefore, results
between students and professionals are not directly comparable.

3.2 Selection criteria of students (China, Finland, Germany & United


States)

3.3 Selection criteria of professionals (Finland, Germany, United States &


SEMP 24 Managers)
4.0 FINDINGS & ANALYSIS

4.1 Survey findings of students (China, Finland, Germany & United States)

4.1.1 China
China has a massive pool of low-cost, hardworking labourers and a rapidly
expanding number of well-educated engineers. According to Jack Welch it is their
work ethic which may be their single principal strength.

My conclusions are based on 41 answers from Chinese university students. Their


Top 5 ranking was:
1. Good possibilities for career advancements average points (8.75)
2. Excellent working environment (8.46)
3. On-the-job training (8.34)
4. Occupational health services (8.32)
5. Competitive salary (8.02)

The 5 least important matters were:


1. Sport activities sponsored by employer (6.27)
2. Business day care for their children (6.39)
3. Location of workplace (6.72)
4. Supplementary pension (6.95)
5. Share options (7.18)

The variation in Chinese students’ answers were much smaller than e.g. variation
in American students’ answers. 39 % of Chinese students wanted to become
managers. I did not obtain feedback from Chinese professionals therefore I can not
conclude how Chinese Managers would respond.

4.1.2 Finland
According to this survey the five most important matters for Finnish students were:
1. Excellent working environment and good colleagues (9.18)
2. Good possibilities for career advancement (8.74)
3. Flexibility to organise working hours (8.47)
4. Competitive salary (8.39)
5. Independence (7.71)

A competitive salary is naturally important, but it is ranked "only" number four in


this survey. It seems that Finnish students believe it is more important to enjoy the
actual work they are doing and have the possibility of career advancement. In
Finland working is not only seen as "earning daily bread", because it takes up the
bulk of every day life one has to be pleased with the working environment in which
they spend their time.

The five least important matters were


1. Business day care (4.53)
2. Share options (5.24)
3. Supplementary pension (5.41)
4. Pension insurance (5.74)
5. Sport activities (5.66)

This outcome was predictable because the public system for day care and
pensions are well developed in Finland. Furthermore, pensions are also distant
matters for young people, sport activity facilities are not company-related and
systems for share options are not that wide-spread in Finland.

4.1.3 Germany
The survey is based on 50 answers from different German university students. As
one can see from the survey, graduates and students are mainly not interested in
monetary benefits (e.g. high salaries, company share programs).
According to this survey the five most important matters for German students were:
1. Excellent working environment and good colleagues (9.29)
2. Protected workplace (8.31)
3. Flexibility to organize working hours (8.29)
4. Good possibilities for career advancement (8.08)
5. On-the-job-training (7.63)

The conclusion from the statistical evaluation of the survey shows that social
aspects mean more to them. In particular they are looking for an excellent working
environment, good colleagues and a protected workplace. Furthermore they want
to stay flexible when it comes to working hours, good possibilities for their career
development and on-the-job training.

The five least important matters were


1. Share options (4.54)
2. Sport activities sponsored by employer (4.76)
3. Business day care (5.29)
4. Location of workplace (5.60)
5. Company growth strategy (5.73)

Monetary interests such as pension insurance (7.41), competitive salary (7.27) and
share options (4.54) seem to attach less weight to their decision whether to work
for Company A or Company B.

4.1.4 United States


Students in the United States top five choices:
1. Competitive Salary (9.50)
2. Good working Environment (9.31)
3. Good Possibilities for Career Advancement (8.31)
4. Defined Company structure (7.94)
5. Clear Task Development (8.00)

Clear Company structure and Health insurance are also cited as important criteria
when selecting an Employer.
Five Least Important:
1. Pension Insurance (3.25)
2. Sport Activities (3.31)
3. International working environment and Extra holidays (3.50)
4. Business Day care (3.63)
5. Supplemental Pension (4.81)

U.S. Students scored working abroad in an international working environment very


low; given the globalization of industry this seems contrary to the high scores given
to career advancement. Training programs also scored very high for US students.
There was a large variance between U.S and Chinese students, although it is only
supposition, this may be due to cultural differences or the low number of
responses returned. 75% came from Males and 70% identified specialist as their
career path.

4.1.5 Student combined results, average of four countries


On an average of four countries the top five criteria were:
1. Excellent working environment and good colleagues (9.06)
2. Good possibilities for career advancement (8.47)
3. Competitive salary (8.30)
4. Flexibility to organize working hours (8.00)
5. On-the-job-training (7.67)

The five least important matters were:


1. Business day care (4.96)
2. Sport activities (5.01)
3. Extra holidays (5.89)
4. Opportunities for working abroad (5.94)
5. Supplementary pension (6.01)

There were no big surprises among the top five criteria, but internationality – both
"opportunities for working abroad" and "International working environment" were
scored low. This is somewhat alarming for Stora Enso representing international
business and in a situation where new emerging markets are emphasized to
improve competitiveness.
4.2 Survey findings of professionals (Finland, Germany, USA & SEMP 24
Managers)

4.2.1 Finland
According to this survey the five most important matters for Finnish professionals
were:
1. Excellent working environment (7.27)
2. Competitive salary (6.55)
3. Good possibilities for career advancement (6.47)
4. International working environment (4.43)
5. Independence (3.88)

Four of the five most important categories were the same for Finnish students and
professionals. Excellent working environment was the most important matter for
both professionals and students. The biggest difference in ranking was that
professionals valued competitive salary more than students. Professionals also
valued international working environment higher and students preferred the
possibility for flexible working hours.

The five least important matters were:


1. Business day care (0.0)
2. Supplementary pension (0.06)
3. Extra holidays (0.08)
4. Sport activities (0.14)
5. Trainee program (0.43)

Like Finnish students, day care, sport activities and pension issues were not
important for Finnish professionals because they are not employer related issues
in Finnish society. Length of holidays are also at a good European level, so there
is not that much need for them and also not time to spend them in current hectic
working life. Low appreciation of trainee programmes was an unexpected
outcome.

4.2.2 Germany
According to this survey the five most important matters for German professionals
were:
1. Excellent working environment, good colleagues (7.00)
2. Competitive salary (6.10)
3. On the job training (4.30)
4. Protected workplace (4.07)
5. Clear task description (3.70)

Like the students, they are also interested in social matters, with one exception.
We think that in the future the compatibility of job and private life is becoming more
and more important.

The five least important matters were:


1. Share options (0.00)
2. Extra Holidays (0.00)
3. Location of workplace (0.03)
4. Business day care (0.03)
5. Sport activities (0.03)

It is quite interesting, though we are talking about globalization and the need for
international educated persons, the aspect of internationality in a company seems
to be less attractive for professionals (international working environment 2.10,
opportunities for working abroad 0.83) as well as students (6.39, 5.76).

4.2.3 United States


Professional Survey showed the top five categories were:
1. Competitive Salary (8.86)
2. Supplemental Pension (6.19)
3. Good Possibilities for Career Advancement (5.24)
4. Excellent Working Environment (5.00)
5. Flexibility to organize working hours (3.57)

Note the difference in ranking of international working environment between the


Students and Professionals. Professionals ranked an international working
environment almost twice as important as Students; this may be a result of work
experience showing the necessity of working abroad to secure employment and
advance ones career as more of the larger companies are either owned or operate
outside the United States.

The least important five:


1. Sports Activities (0.05)
2. Extra Holidays (0.14)
3. Location of workplace (0.24)
4. Pension Insurance (0.52)
5. Business Day Care (0.57)

It is surprising that Company Image and Structure scored low, although it does
support the findings of Employee’s having less loyalty toward the employer.

4.2.4 SEMP 24 managers


According to this survey the five most important matters for SEMP 24 managers
were:
1. Excellent working environment (6.38)
2. Good possibilities for career advancement (6.05)
3. International working environment (5.14)
4. Competitive Salary (5.00)
5. Company image (5.00)

Like most of the other professional respondents SEMP managers ranked excellent
working environment, career advancement and competitive salary among top five
criteria. International working environment – like Stora Enso – was valued more
than among other professional groups. This would suggest that Stora Enso is
currently hiring the “right” type of people.

The five least important matters were:


1. Occupational health service (0.19)
2. Business day care (0.29)
3. Sports activities (0.33)
4. Pension insurance (0.33)
5. Location of workplace (0.43)

Four of the five least valued criteria were social ones among SEMP Managers.
Those criteria were commonly ranked low also by many other respondent groups.
Location of workplace was valued low, which is good for Stora Enso point of view,
because there is a need to circulate managers/leaders in various positions. It
should also be pointed out that the SEMP class is 99% European

4.2.5 Professional average of three countries & SEMP 24


On an average the top five criteria were:
1. Competitive salary
2. Excellent working environment and good colleagues
3. Good possibilities for career advancement
4. Flexibility
5. Company’s Financial Performance

The five least important matters were:


1. Sport activities
2. Business day care
3. Extra holidays
4. Location of workplace
5. Pension insurance

An “Excellent Working Environment” would be understood to be an environment


which takes into consideration the other important elements mentioned, depending
on where a person is in their working career these elements may change slightly.

4.3 Analysis
5.0 CONCLUSIONS - HOW CAN STORA ENSO SECURE ITS POSITION AS
AN ATTRACTIVE EMPLOYER FOR LEADERS?

People have different values. In a Finnish study /15/ students were categorized in
four different groups based on their attitudes. Career oriented (31 %) are looking
for success, manager task and international experiences. Work oriented (13 %)
take their job seriously but they are not ambitious enough to become leaders.
“Stress evasive” (22 %) work mainly for money and work is not playing a big role in
their life. Ethical people (33 %) want to do work which has social meaning. It is
important to find the right type of people for leadership positions. On the top of
accurate recruiting employers must be skilful enough to maintain the motivation of
talented leaders. Work / life balance is becoming more important for career
oriented people – maybe not yet in China but elsewhere. It is said that society is
transferring from innovation driven to wealth driven /16/. Employers must offer
flexibility to leaders to get them working even smarter. However there is a risk that
freedom turns to dead weight if leaders can not perform time management, set the
right targets and motivate their subordinates to achieve those targets.

Our research has shown that compensation is still very important, what Stora Enso
needs to build upon since the forest industry is not regarded as exciting is the
opportunities it does offer, possibility of working abroad, career advancement due
to its shear size and diversity, also clarity in company structure - purity of vision
from the top is vital, challenging opportunities as well as worthwhile rewards or
bonuses that are followed though upon.
According to our study, company image was not among Top 5 criteria when
selecting a new job. Significance of company image was scored even lower for
professionals than it was for students. However there has been lots of discussion
about how to improve Stora Enso’s image to get young talent to find their way to
the forest industry. Stora Enso can not afford to ignore image building and it should
also put more efforts into finding Universities to co-operate with to recruit young
talent during their studies. It is not good enough to just “be” a good place to work;
this must be publicized outside the company, this will help in recruiting
experienced workers who can get up to speed much faster and with less training
than fresh graduates. Both current (professionals) and future (students) leaders
valued mainly same selection criteria. Four of five top criteria were the same:
competitive salary, excellent working environment, good possibilities for career
advancement, flexibility to organize working hours. Additionally professionals
chose company’s financial performance and students on the- job-training among
top five criteria.

Mentoring is an efficient and helpful tool to promote high potential employees.


Many leaders are busy with their daily work and are unable to spend much time
with their staff, the most important resource, fluctuation in performance and
frustration are the consequences. Therefore it is important to work with an ideal
mentoring program. Frequent feedback is a crucial tool for personal development.
Mentoring is also becoming important to keep key personnel in the company and
groom them for advancement./7/

Expectations have changed. Employee’s no longer have the loyalty toward


employers they did 20 or 30 years ago./4,11/ The world is much smaller than it was
even 10 years ago, place a call to a software support number form anywhere in the
world and you will in all likelihood be speaking with someone in India.

Employees remain with companies that offer challenges, rewards, and security.
The forest industry is currently a very challenging environment to operate in
successfully, the leaders and leadership styles required today are different than
those that were required in the past. Employee expectations are dependant on
where they are in their professional career, hopefully the information presented in
this report will allow Stora Enso to further develop the retention program which will
motivate current employees and draw future leaders to it.

6.0 RECOMMENDATIONS
7.0 BIBLIOGRAPHY

Interviews

1. Pia Heilmann, Professor, Management and Organizations, D.Sc.,


Lappeenranta University of Technology – 27 May 2009
2. Jaana Sandstrom, Professor, Accounting, D.Sc. Lappeenranta University of
Technology - 27 May 2009
3. Kati Tanninen, HR Manager, Organizational Development, D.Sc. Stora
Enso Finland – 26 June 2009
4. Judith M. Bardwick, PhD. Clinical Professor of Psychiatry, University of
California - 08 June, 2009
5. Edward Liatila, Research Scientist, Michigan Technological University – 26
May 2009
6. Charles Evans, HR Manager, Werner Electric, Beloit Wisconsin – 21 June
2009

Literature, articles and other studies


7. Harvard Business Manager Spezial, “Strategie und Führung im 21
Jahrhundert May 2008
8. Finnair Bluewings magazine, “Go global” article by Tim Bird, page 55, May
2008
9. Talouselämä magazine, Nokia Finland HR director Outi Taivanen interview,
page 40, May 2008
10. Watson Wyatt Human Capital Index: “Human Capital as a lead indicator of
Shareholder value”
11. Book - One Foot Out the Door Dr. Judith M. Bardwick, PhD
12. Press Release – Watson Wyatt: “Companies Worldwide Struggle to Attract,
Retain Workers”
13. Watson Wyatt - 2007/2008 Global Strategic Rewards Study
www.Watsonwyatt.com
14. Book – Winning, Jack Welch and Suzy Welch, International paperback
edition 2007
15. Study – Työnantajamaine (Reputation of Employer) – 15/30 Research T-
Media 2007
16. Talouselämä magazine, Director Risto Penttilä interview, page 23,
15.August 2008
17. Stogdill, R.M. (1950) 'Leadership, membership and organization',
Psychological Bulletin, 47: 1-14
8.0 APPENDICES

APPENDIX – A

MANAGEMENT / HR EXPERT QUESTIONS:

WHAT ARE FUTURE LEADERSHIP DEMANDS

Name

Title

Time

Place

1. Will the demands on leadership change? Why or why not? How?

2. Will the demands on leaders change? Why or why not?

3. What are the main drivers for demands on leadership?

4. Do you believe that trust/knowledge between different cultures has increased?

5. Mixed national teams work better/ faster? True or false? Why?

6. Is there less hierarchy in organisations in the future?

7. Given status doesn't work any more. True or false?

8. Project team works are shorter nowadays. People don't get to know each others
so well. Culture-conscious is more important than earlier?

9. Others comments:
APPENDIX - B

PROFESSIONAL SURVEY

HOW CAN A COMPANY SECURE ITS POSITION TO REMAIN AN


ATTRACTIVE EMPLOYER?

From the following list please choose and score the top ten most important to you
ranking them as 1 being the lowest and 10 the highest.

____ Trainee programs

____ International working environment

____ Supplementary pension ( 401K USA )

____ Pension insurance

____ Occupational health service

____ On-the-job training

____ Sport activities sponsored by employer

____ Competitive salary

____ Excellent working environment, good colleagues

____ Pay by results (extra bonus)

____ Flexibility to organize working hours (e.g. due to family reasons)

____ Extra holidays (unpaid)

____ Good possibilities for career advancement

____ Independence

____ Company’s Financial Performance


____ Companies Growth Strategy

____ Opportunities for working abroad

____ Clear company structures

____ Clear task/ responsibility descriptions

____ Protected workplace (possibility for long time employment)

____ Company image

____ Business nursery schools, day nursery

____ Share options (stock options)

____ Location of vacancies, opportunities

____ Other:

What kind of career path have you mainly planned? (Circle answer)

1. Manager
2. Specialist
3. Developer inside the company (e.g. strategy work)
4. Other:_______________________
5. I don’t know

Gender: (Circle answer)

1. Female
2. Male

Nationality:

Currently working in the Forest Industry?

Yes
No
APPENDIX - C

STUDENT SURVEY

HOW CAN A COMPANY SECURE ITS POSITION TO REMAIN AN


ATTRACTIVE EMPLOYER?

Give points 1-10 for following issues how important you consider them when
selecting your employer after university studies.
Points: (1=lowest importance, 10= highest importance)

____ Trainee programs

____ International working environment

____ Supplementary pension (401K USA)

____ Pension insurance

____ Occupational health service

____ On-the-job training

____ Sport activities sponsored by employer

____ Competitive salary

____ Excellent working environment, good colleagues

____ Pay by results (extra bonus)

____ Flexibility to organize working hours (e.g. due to family reasons)

____ Extra holidays (unpaid)

____ Good possibilities for career advancement

____ Independence

____ Company’s Financial Performance


____ Companies Growth Strategy

____ Opportunities for working abroad

____ Clear company structures

____ Clear task/ responsibility descriptions

____ Protected workplace (possibility for long time employment)

____ Company image

____ Business nursery schools, day nursery

____ Share options (stock options)

____ Location of vacancies, opportunities

____ Other:

What kind of career path have you mainly planned? (Circle answer)

1. Manager
2. Specialist
3. Developer inside the company (e.g. strategy work)
4. Other:_______________________
5. I don’t know

Gender: (Circle answer)

1. Female
2. Male

Nationality:

Currently working in the Forest Industry?

Yes
No