Impact of Globalisation and Regionalisation Strategies on the Performance of the World's Pulp and Paper Companies

The first objective of the study was to explore the development of globalisation and regionalisation within the pulp and paper industry during 1990-1998, and to define the drivers pushing companies towards globalisation. Another aim was to determine the objectives pursued by the top 100 pulp and paper companies in the globalisation and regionalisation process. The third objective was to determine whether the initial drivers and objectives, and the resulting outcomes of the companies differed from each other, and if so, how and why. Based on this, the characteristics of companies that have performed better than the industry average were analysed in further detail. The fourth and ultimate objective of the study was to determine what kind of impact different globalisation and regionalisation strategies have had on the pulp and paper companies’ performance. Finally, it is discussed whether the results of the study could be generalised to other sectors of industry. Altogether 21 performance measures were analysed, quantitatively or qualitatively. The quantitative part includes analyses of several operative and financial performance measures of the top 100 pulp and paper companies during 1990-98. The qualitative part includes interviews with 36 top managers at 14 case study companies in nine countries conducted during the winter and summer 2001/2002. Because of the diversity of measures and the overall multidimensionality of the study approach, the findings are intended to promote versatile use of different globalisation and internationalisation models. The present study combines the models with profound and unique empirical data derived from consulting company data banks, various public sources, as well as extensive interviews with senior executives. This interrelated construct is designed to present a systematic view of the pulp and paper industry’s globalisation and regionalisation. The study contributes to the research on globalisation and foreign direct investment by introducing various measures of the success of different globalisation and regionalisation strategies. It identifies the companies that have been successful in the globalisation process and outlines the reasons for success. The study suggests that company performance correlates positively with the progress of globalisation. It also concludes that, contrary to popular belief, related diversification is not, on average, less successful than the focus strategy. The study also shows that North American globalising and global companies are better valued than their competitors in Europe or Asia, where investors do not put a premium on companies with a more global size