Thriving Amidst Geopolitical Turmoil: Strategies for
Trading Organizations to Sustain Competitiveness
- A qualitative study on how a trading company successfully adapts to the
future and remains competitive in a changing market environment.
Fabian Krantz & Jonathan Brusberg
Graduate School
School of Business, Economics and Law, University of Gothenburg, Sweden
Master’s Degree Project, Spring 2024
Innovation and Industrial Management
Supervisor: Viktor Ström
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Acknowledgements
Writing this thesis has been both challenging and rewarding. However, the study would not
have been possible without the contributions of others. Therefore, we would like to take this
opportunity to express our appreciation to those who have contributed to the completion of
this thesis. First and foremost, we would like to thank all the respondents in this study.
Without your engagement and valuable experiences, this thesis would not have been possible.
Secondly, we extend our gratitude to our seminar group for their insightful contributions and
discussions throughout the term. Finally, we would like to extend a special thank you to Viktor
Ström for his invaluable support and assistance from start to finish with this thesis.
Fabian Krantz & Jonathan Brusberg
Gothenburg, May 31, 2024
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Abstract
Background and problem: International trading organizations face significant challenges in
adapting to the constantly changing global business landscape. This study aims to explore
how these organizations navigate these challenges and capitalize on opportunities for
competitiveness and relevance. By examining practical strategies and capabilities, the
research seeks to shed light on how trading companies effectively manage complexities in a
dynamic market environment, bridging theory with real-world practices.
Research aim: This thesis central inquiry revolves around understanding how the trading
industry navigates challenges and opportunities arising from an uncertain business climate
influenced by geopolitical events.
Research question: To achieve the research aim, the guiding research questions to this study
are: How do international trading companies adapt to a rapidly changing market
environment, considering geopolitical impacts? And the sub-question, What strategies and
methods are used to ensure relevance in the highly competitive market? To achieve this goal,
the study is structured around three main perspectives: Past, Present, and Future. Trough
this, the study strives to create an understanding of how change is managed through thus
perspectives and thus how competitiveness and relevance can be established.
Research design: The research question was studied using a qualitative approach influenced
by interpretive epistemology, aligning with the exploratory nature of the study.
Semi-structured interviews were conducted to delve into participants' perceptions and
opinions. The in-depth information gathered from the semi-structured interviews is then
compared against a carefully selected analytical framework to foster understanding and
address the research question.
Discussion and conclusion: The study highlights the importance of organizational
adaptability and competitiveness in the dynamic international trading industry. It emphasizes
the significance of corporate foresight and proactive risk management strategies for success.
Furthermore, the findings underscore the crucial role of dynamic capabilities and resilient
relationships in navigating market complexities and capitalizing on opportunities in a volatile
global environment.
Keywords: Dynamic capabilities, Corporate foresight, Geopolitical events, Techno-economic
paradigm, Creative destruction.
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Table of Content
1. Introduction........................................................................................................................................ 6
1.1 Background.................................................................................................................................. 6
1.2 Problem discussion...................................................................................................................... 7
1.3 Purpose and research question..................................................................................................... 8
1.4 Delimitation................................................................................................................................. 9
1.5 Disposition................................................................................................................................. 10
2. Literature Review............................................................................................................................. 11
2.1 Technological revolution and societal change........................................................................... 11
2.1.2 Creative destruction..........................................................................................................13
2.1.3 Techno-economic paradigm............................................................................................. 14
2.1.4 Geopolitical effects...........................................................................................................14
2.2 Organizational capabilities and structure...................................................................................15
2.3 Corporate foresight.................................................................................................................... 19
2.4 Analytical framework................................................................................................................ 24
3. Method...............................................................................................................................................26
3.1 Research strategy....................................................................................................................... 26
3.2 Research design......................................................................................................................... 27
3.3 Research process........................................................................................................................28
3.4 Secondary data collection......................................................................................................... 29
3.4.2 Inclusion and exclusion criteria........................................................................................30
3.5 Primary data collection.............................................................................................................. 30
3.5.1 Selection of respondents...................................................................................................30
3.5.2 Interview guide.................................................................................................................32
3.5.3 Interview setting............................................................................................................... 32
3.6 Data analysis.............................................................................................................................. 33
3.7 Research quality.........................................................................................................................33
3.7.1 Transferability.................................................................................................................. 34
3.7.2 Credibility.........................................................................................................................34
3.7.3 Dependability................................................................................................................... 34
3.7.4 Confirmability.................................................................................................................. 35
3.8 Ethical considerations................................................................................................................ 35
4. Empirical Findings........................................................................................................................... 36
4.1 The developing market.............................................................................................................. 36
4.1.1 Technical revolution within the trading industry..............................................................36
4.1.2 Trend shifts and development in the market demand for products.................................. 39
4.2 Organizational capabilities.........................................................................................................40
4.2.1 Risk management within the trading industry..................................................................41
4.2.2 Long-term relationships before short-term profitability.................................................. 44
4.2.3 Organizational capabilities............................................................................................... 45
4.3 Corporate foresight.................................................................................................................... 49
4.3.1 Predicting the future......................................................................................................... 50
4.3.2 Current market trends.......................................................................................................52
5. Discussion.......................................................................................................................................... 55
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5.1 Technical revolution within the trading industry....................................................................... 55
5.2 Organizational capabilities.........................................................................................................58
5.3 The future of the trading industry.............................................................................................. 63
6. Conclusions....................................................................................................................................... 67
6.1 Theoretical implications.............................................................................................................69
6.2 Managerial implications.............................................................................................................69
6.3 Future research...........................................................................................................................70
References..............................................................................................................................................71
Appendix............................................................................................................................................... 75
Appendix A. Interview guide...........................................................................................................75
Appendix B. Data Structure.............................................................................................................77
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1. Introduction
The introductory chapter of the paper introduces the research area and provides background
information. It outlines the questions that the research aims to investigate, emphasizing the
importance of how trading organizations manage complexity and the ever-changing market
environment. It also explores how this affects the trading industry and emphasizes the
importance of companies navigating through this environment. The chapter explains how
several moving parts significantly influence these organizations, as well as why it is
interesting and relevant to examine how these companies successfully handle this.
Additionally, the chapter presents the research discussion, purpose, and research question,
followed by the delimitations of the thesis and finally the disposition of this paper.
1.1 Background
In today's global business environment, organizations encounter a continuous stream of
changes and challenges. Technological advancements, shifting customer preferences, and
increased competition drive a dynamic reality where companies must adapt to survive and
thrive. Historically, technological revolutions, as described by Perez (2010), have reshaped
the landscape by introducing new ways of production, communication, and consumption.
Which has historically led to the emergence of new businesses, the demise of others, and the
flourishing of some. Schumpeter's (1939) concept of creative destruction underscores how
innovations replace old business and create opportunities for new players to emerge,
highlighting the importance of perceiving change and avoiding stagnation with outdated
services and products.
With this in mind, it can be observed that organizations involved in international trade are
heavily impacted by the ever-changing world. These organizations operate in complex market
conditions where they conduct profitable business through imports and exports worldwide.
This means that events affecting the world greatly influence the business model of these
organizations to a large extent. Similar to how Mohamed (2018) emphasizes how Industry 4.0
offers opportunities to meet complex customer needs and Perez (2010) describes the latest
technological revolution and the impact of digitalization on industries, there are many
opportunities for trading organizations to navigate through an increasingly complex global
market. For these organizations, it is also about creating opportunities to manage and embrace
changes. Just as McCraw (2007) and Tripsas (1997) emphasize the importance of established
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companies understanding and adapting to the technological and market changes that come
with these technological revolutions, where the ability to understand and leverage these
changes has become more critical than ever. This is particularly important for trading
organizations, where it is crucial to take advantage of changes in global trade and be at the
forefront to build competitiveness and make profitable deals.
In light of these changes, it is evident that the ability to adapt and find innovative solutions
will be crucial for success in today's market. Teece (1997) terms this ability as dynamic
capabilities, arguing that these capabilities differentiate successful companies from
unsuccessful ones. In an era where markets and industries are changing faster than ever,
organizations' dynamic capabilities to adapt to the new reality become increasingly significant
in creating conditions for long-term competitiveness in this rapidly evolving and fiercely
competitive market we witness today.
1.2 Problem discussion
International trade organizations face a complex reality where they must navigate rapidly
changing market conditions and geopolitical events that can affect their operations in various
ways. Flack and Mitchell (2020) illuminate how our world is viewed as a complex system,
where understanding and predicting the future pose significant challenges. Thus, these
organizations need a long-term strategy and the ability to adapt to future challenges.
Blackhurst and O’Grady (2007) highlight the constant risks from geopolitical factors, such as
political instability and regulatory changes, which can impact the operations and profitability
of businesses.
To survive and thrive in the global market, international trade organizations must consider
many aspects. It is crucial for these types of companies to develop key competencies that
contribute to creating conditions and competitiveness in managing changes affecting
international trade. This includes the ability to anticipate and actively adapt to manage
changes in a constantly complex business climate. Similar to Teece (1997) who emphasizes
the importance of adaptability in the form of dynamic capabilities to build long-term
competitiveness through first-mover advantages. Meanwhile, corporate foresight, as
described by Fergnani (2022), becomes crucial. This involves systematically exploring trends
and disruptions, combined with the ability to adapt and react to changes, which are absolutely
essential for this type of business. By becoming experts in understanding the relationships
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between market changes, geopolitical events, and their impact on business operations,
organizations can minimize risks and capitalize on opportunities.
In summary, the rapid change in the market and geopolitical influencing factors pose a
challenge for international trade organizations. Therefore, it is interesting to examine and
analyze how organizations handle this complex reality. By studying strategies and capabilities
considered important in the trading industry, the study aims to create an understanding of how
trading companies not only survive but also thrive in the constantly changing global market.
1.3 Purpose and research question
Our central inquiry revolves around understanding how the trading industry navigates
challenges and opportunities arising from an uncertain business climate. This entails a
significant focus on how companies within the industry utilize specific methods and means to
best anticipate and manage future challenges. The study aims to establish an understanding of
how international trading companies maintain competitiveness over several years in a
changing business landscape. Essentially, our goal is to examine the interplay between
tradition and renewal within the trading industry. Here, an organization at the international
level within the trading industry will be explored to observe how organizational capabilities
can not only mitigate future threats but also be leveraged for competitiveness.
RQ1. How do international trading companies adapt to a rapidly changing market
environment, considering geopolitical impacts?
The study highlighted that there are significant strategies and methods within the trading
industry. To examine this further, the following sub-question was formulated to deepen the
investigation of RQ1.
What strategies and methods are used to ensure relevance in the highly competitive
market?
Considering the constantly changing global business climate, there are several capabilities for
organizations engaged in international trade that determine how these organizations
successfully manage this ongoing change. Therefore, this study aims to investigate and
understand how trading organizations practically handle and work with these capabilities.
Through this, it seeks to explore how they build competitiveness and ensure relevance in an
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ever-changing market. The research seeks to create an understanding of how these
organizations manage these aspects in practice. At the same time, the study exploratively
aims to examine how they differ from and resemble existing models and theories in this area.
Given that trading organizations operate in such dynamic businesses, there is interest in
examining how literature relates to reality and whether any clear success factors emerge for
managing this complexity in this type of industry.
1.4 Delimitation
To thoroughly study and explore this research question within the timeframe of this study,
certain specific limitations have been applied. The study is therefore confined to a selected
international trading company that serves as the study object. Furthermore, the study is
delimited to the actual trading department within the chosen organization, as well as the
support functions directly related to the trading department. The study is delimited to a
practical perspective, with a particular focus on how the organization successfully adapts to
the future to remain competitive. Given that this is a master's thesis, it was deemed unrealistic
to conduct an extensive exploration of an entire industry with numerous trading organizations
within the given timeframe typical for this type of research. Consequently, the findings of this
thesis are somewhat limited as only one organization within the industry has been examined,
which may lead to incomplete conclusions for the entire industry. Nevertheless, the study is
still considered relevant as it provides insights from the study organization, which has
extensive experience in the industry.
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1.5 Disposition
The remaining part of the thesis consists of the following disposition:
Chapter 2. Literature review
This chapter elaborates on prior research concerning dynamic capabilities and other pertinent
theories. This serves as the analytical framework employed for both data collection and
analysis.
Chapter 3. Method
This chapter elucidates the data collection methods utilized and the methodological choices
applied in this study.
Chapter 4. Empirical Findings
This chapter presents the empirical data collected from the interviews with the case
organization.
Chapter 5. Discussion
This chapter discusses the empirical findings in relation to the selected theories based on the
analytical framework.
Chapter 6. Conclusions
The results obtained in this study are summarized by attempting to address the research
question. Furthermore, the theoretical contributions of the study, managerial implications, and
suggestions for further research are discussed.
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2. Literature Review
The literature review to be presented in this chapter aims to explore relevant theories
regarding how companies manage change, embrace innovation, and maintain
competitiveness over time. To achieve this goal, the chapter is structured around three main
perspectives: Past, Present, and Future. Based on this framework, an analytical framework
has been designed and will be presented in the chapter. Additionally, the chapter begins with
a historical perspective, addressing concepts such as technological revolution, Industry 4.0,
creative destruction, and technological paradigms. Subsequently, it discusses organizational
capabilities that companies can develop to enhance and sustain their competitiveness.
Finally, the chapter examines theories and previous research on organizational approaches to
corporate foresight and scenario planning.
2.1 Technological revolution and societal change
From Perez´s perspective (2010), a technological revolution is characterized by a series of
radically transformative events across the economy, society, and technology. These
revolutions are often characterized by new technologies or production methods that result in
significant changes within society and the economy, thus creating opportunities for further
innovation and development. Perez (2002) delineates five technological revolutions that
occurred between the late 1770s and the 2000s. The revolutions mentioned by the author are
presented chronologically, starting with the Industrial Revolution in the late 18th century,
followed by the Age of Steam and Railways in the 1830s, and subsequently the Age of Steel,
Electricity, and Heavy Engineering in the late 19th century. The 20th century commenced
with the introduction of the Ford Model-T, marking the onset of the Age of Oil, the
Automobile, and Mass Production. Finally, Perez (2002) introduced the fifth and final
revolution, the Age of Information and Telecommunication, which gained momentum during
the 1970s. As previously noted by Perez (2010), a technological revolution leads to extensive
societal, technological, and economic changes that pave the way for new innovation, as
evidenced by the five technological revolutions presented by Perez (2002). For example, the
effects of the Age of Oil, the Automobile, and the Mass Production revolution led to
economies of scale that created entirely new conditions and opportunities for development
and improved living standards for society.
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According to Schumpeter (1939, p. 167), the emergence of innovations does not occur
randomly; instead, technologies interlink and tend to arise in proximity to other innovations.
Additionally, the author places the entrepreneur at the forefront of technological development,
arguing that the entrepreneur should be seen as the driving force behind innovation and
change in the economy. As previously noted, Perez (2010) defines a technological revolution
as a series of mutually related radical breakthroughs forming a significant constellation of
interdependent technologies, akin to a cluster of clusters. Here, new technologies increasingly
interact rather than operate in isolation. According to the author, these clusters of new
technologies then pave the way for further new technologies. Furthermore, it outlined how
technological revolutions represent a vital and central aspect of societal development through
their accompanying transformative changes and advancements in society, economy, and
technology. Thus, a technological revolution can be seen as a significant upheaval of the
economy's creative potential, enabling ample room for innovation. The new innovation may
lead to a new set of generic technologies, infrastructures, and organizational principles that
can enhance the efficiency of industries and activities (Perez, 2010). Schumpeter (1939)
challenges the classical view of economic equilibrium, suggesting that the economy is in a
process of constant change rather than constant equilibrium. The author coined the idea of
creative destruction where new technologies and innovations not only create new markets but
also render obsolete and replace old products and companies.
Further, Mohamed (2018) emphasizes how our current business environment is undergoing
radical changes, with increasingly complex and rapidly evolving customer needs. This has
traditionally been one of the underlying drivers behind the industrial revolutions that have
occurred at various times. The author suggests that the essential question now is the need for
flexibility and real-time responsiveness to market changes. Industry 4.0 is described as the
ultimate pathway to enable the satisfaction of complex customer demands in the rapidly
changing market. Mohamed (2018) explains how the core of Industry 4.0 consists of the
Internet of Things, which enables the connection of people, products, and systems. Saurabh et
al. (2018) describe Industry 4.0 as the fourth industrial revolution characterized by a
combination of new technical components and principles to achieve horizontal and vertical
integration. Koch et al. (2014) provide a similar description of Industry 4.0, agreeing that it is
the fourth industrial revolution. However, they further explain how it is best understood as a
new level of organizational control over entire value chains and product life cycles, and is
even more focused on meeting individual customer requirements.
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2.1.2 Creative destruction
Within the framework of economics and innovation, McCraw (2007) elucidates the term
creative destruction, coined by Schumpeter (1939).. McCraw (2007) presents a contemporary
interpretation of Schumpeter's (1939) concept, which describes a process where new ideas,
technologies, or innovations surpass and replace older, established systems or methods. It
stands as a crucial aspect of Schumpeter's theory of economic evolution and innovation.
McCraw (2007) places the emergence of creative destruction within the historical context of
the post-World War II era, characterized by global recovery and the rise of new technologies
and business paradigms that have reshaped the global economy.
Moreover, McCraw (2007) elaborates on how technological advancement is integral to the
creative destruction phenomenon. Technological progress serves as a catalyst for reshaping
the economy, engendering opportunities for economic growth and transformation. This
transformative effect is symbolized by creative destruction, wherein outdated structures and
business models succumb to obsolescence, paving the way for novel and innovative
alternatives. McCraw (2007) posits this as an ongoing process of transformation, wherein
firms and industries fail to adapt to risk obsolescence at the hands of more agile and efficient
counterparts.
Additionally, Tripsas (1997) sheds light on the phenomenon of creative destruction and
delineates strategies employed by established companies to weather such changes. It
underscores the pivotal role of complementary assets in navigating the creative destruction
process. Specifically, it elucidates how incumbents possessing critical specialized
complementary assets may maintain a competitive edge over new entrants, notwithstanding
potential technological superiority. Tripsas (1997) outlines three key factors shaping
incumbents' and newcomers' commercial viability in the face of competency-eroding
technological shifts: investment in new technology development, technical prowess, and the
capacity to leverage benefits from technological innovation through specialized
complementary assets.
Tripsas (1997) further expounds on how the equilibrium among these factors dictates the
success of established firms or newcomers amidst competence-disrupting technological
upheavals. It delineates scenarios wherein established firms, by either abstaining from
investing in new technology or possessing inferior technical capabilities compared to
newcomers, can maintain market dominance if they retain valuable specialized
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complementary assets. Conversely, if technological shifts depreciate the value of these assets,
established firms may lose their competitive advantage, enabling newcomers to seize market
control. This analysis underscores the intricate interplay between technological innovation,
complementary assets, and market dynamics in navigating the terrain of creative destruction.
Since creative destruction and techno-economic paradigms are closely interconnected, as they
both describe how innovation and change impact the economy and society as a whole, the
next chapter will elaborate on how techno-economic paradigms, along with the dominant
technological methods, ideas, and norms, govern how innovations occur and how they are
accepted and disseminated in society.
2.1.3 Techno-economic paradigm
Perez (2010) delineates the techno-economic paradigm as the ultimate and most effective
means of harnessing and utilizing new technologies, both within and beyond the emergent
industries. Consequently, the techno-economic paradigm serves as a guide for the emerging
and rapidly expanding sectors as they emerge through the utilization and diffusion of new
industries. The evolution and dissemination of each technological revolution and its
techno-economic paradigm constitute successive major waves of development. In contrast to
Kondratiev´s (1935) and Schumpeter´s (1939) exposition on long waves of technological
development, which focus on the ups and downs of economic growth, Perez (2002) contends
that attention should be directed towards explaining the diffusion of the technological
revolution's myriad effects on the economy and society, including its impact on the space for
growth.
2.1.4 Geopolitical effects
When analyzing supply chain dynamics, Blackhurst and O’Grady (2007) also emphasize the
importance of considering geopolitical factors. They assert that geopolitical events and
developments, such as changes in government policies, trade agreements, or international
tensions, can profoundly influence the operations of supply chain networks. For instance,
shifts in diplomatic relations between countries may lead to alterations in trade regulations or
the imposition of trade sanctions, disrupting the flow of goods and materials along supply
chains. Furthermore, the authors highlight the interconnectedness of global supply chains,
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noting that disruptions in one region or sector can have cascading effects throughout the
entire network. For example, a political conflict or trade dispute affecting the production or
transportation of a critical component in one country can disrupt the entire supply chain,
impacting manufacturers, distributors, and consumers worldwide.
In addition to traditional geopolitical concerns, Blackhurst and O’Grady (2007) also
underscore the significance of emerging geopolitical issues, such as cybersecurity threats and
environmental regulations. They argue that the increasing digitization of supply chain
operations and growing environmental consciousness globally introduce new geopolitical
risks and considerations that must be taken into account by supply chain managers and
policymakers. Overall, the authors stress the need for supply chain stakeholders to adopt a
proactive approach to managing geopolitical risks and uncertainties. By staying informed
about geopolitical developments, fostering resilient supply chain structures, and establishing
contingency plans, organizations can better mitigate the impact of geopolitical disruptions and
ensure the continuity of their operations in an ever-changing global landscape.
To summarize, the previous chapters have focused on change and how change occurs on a
larger scale. It has also presented what factors that drive change. Now, in the upcoming
chapters, the organizational factors will be presented. This will primarily include research on
how companies are affected and can manage change to remain competitive.
2.2 Organizational capabilities and structure
Elucidating how large established companies often struggle to handle radical innovations,
Christensen (1997) refers to this challenge as the innovator's dilemma. According to the
author, established companies are focused on improving and optimizing their existing
services and products to meet the current demands and needs of customers. This stems from
these companies having an infrastructure and culture centered on enhancing and maintaining
already existing business models. It results in difficulty identifying and investing in new
radical innovations that differ from their already existing business operations. Christensen
(1997) elaborates on how these radical innovations typically consist of introductions of new
technologies or business models that change and disrupt the established markets. The author
emphasizes how these innovations often originate in smaller niches or low-price segments
where large companies are not competing. Finally, the author points out how large established
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companies often do not engage with new innovations until they have reached a stage in the
innovation cycle where they are adopted by the mainstream and have left the initial niche
market.
Figure 2.1 The S-curve concept of technology life cycle. (Gao et al., 2013)
To consistently succeed as an organization over extended periods, managers must not only be
adept at placing the right person in the right position but also have a deep understanding of
the organization's capabilities and constraints, argues Christensen et al. (2000), who
emphasize that organizations possess capacity regardless of their employees or other
resources. Furthermore, Christensen et al. (2000) suggest that when an organization faces
significant market changes, the worst possible approach may be to drastically adapt the
organization to the change. Instead, it is crucial to understand precisely which changes are
feasible for the organization to retain its capability. Beer and Nohria (2000) also emphasize
the importance of not rushing to change the organization, arguing that doing so increases the
risk of losing focus and control over the actual outcomes of the change. Instead,
decision-makers in organizations must first understand the nature and processes of
organizational change. According to Beer and Nohria (2000), there are two theories of
corporate change: Theory E, based on economic value, and Theory O, based on
organizational capability. Beer and Nohria (2000) explain how organizations often have a
combination of these two theories, resulting in conflicting goals. Therefore, they advocate for
managing them separately and at different times, although some organizations successfully
manage them simultaneously by combining goals with minor compromises.
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Furthermore, Dyer and Singh (1998) share perspectives that argue that a company's
competitive advantage stems from the resources and capabilities owned and controlled by the
organization itself. They elucidate how companies that purchase standardized inputs do not
create any competitive advantages as the inputs are either too readily available or the value
they create is approximately equal to the cost of acquiring them. Instead, competitive
advantages can be created in relationships within the value chain, where parties are willing to
make relationship-specific investments and combine resources in various ways. Dyer and
Singh (1998) argue that interorganizational relationships can be a strong source of
competitive advantages if the relationships extend beyond standardized exchanges of goods
and services. They contend that a company's critical resources today extend beyond its own
organizational boundaries, with interorganizational relationships considered a key factor in
creating competitive advantages and distinguishing oneself from competitors.
In the realm of organizational competitiveness, Teece (1997) introduced the concept of
dynamic capability, which refers to a firm's ability to swiftly and effectively adapt to external
environmental changes. The author further expounds on how a firm's dynamic capabilities are
paramount for its survival in a competitive and evolving market. A firm's dynamic
capabilities are thus perceived as pivotal for its ability to identify and exploit business
opportunities, as well as to address threats from competitors and market conditions. Teece
(1997) underscores the significance of managing and developing a firm's resources and
competencies to enable continuous renewal and innovation. The author contends that through
the cultivation of dynamic capabilities, firms can establish avenues for long-term competitive
advantages.
Perry (1989) concurs with Dyer and Singh (1998) that advantages and profits are possible in
the value chain in situations where companies are willing to make relationship- and
transaction-specific investments. Furthermore, Williamson (1985) presents three types of
relationship-specific approaches, beginning with site specificity, followed by physical asset
specificity, and finally human asset specificity.
In situations described as site-specificity by Williamson (1985), subsequent production stages
are located close to each other. This approach has proven effective in reducing inventory and
transportation costs, ultimately resulting in lowered costs for coordinating activities. Physical
asset specificity, according to the author, pertains to transaction-specific capital investments,
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where specialized machinery and tools for specific exchange partners are presented as
examples. Moreover, the author describes how physical asset specificity has enabled
differentiation and increased quality among products through enhanced product integrity.
Finally, human asset specificity is described as transaction-specific know-how transactions
enabled through long-term relationships. Williamson (1985) emphasizes how opportunities
for cospecialization increase when partners develop experience working and doing business
with each other, which can ultimately result in more efficient communication, improved
quality, and increased speed to market.
Over the past decades, Kaplan and Norton (1996) explain how information has become
central to companies' pursuit of competitiveness. According to the authors, this has resulted in
the ability to leverage intangible assets becoming significantly more important than the ability
to both invest in and manage tangible assets. In response to this shift, the concept of the
balanced scorecard was coined as a framework for managing this change. The authors
elucidate how the concept is structured around four measurable criteria aimed at generating a
comprehensive view of the organization's performance in relation to the buildup and
acquisition of intangible assets. In addition to considering financial performance through
financial metrics, the model also highlights three additional perspectives: metrics for
customers, internal business processes, and learning and growth. According to Kaplan and
Norton (1996), the balanced scorecard enables companies to track financial results while
monitoring progress in building capabilities and acquiring intangible assets needed for future
growth. The model is described as a useful tool for enabling the alignment of long-term
strategies and short-term actions. Most companies, according to the authors, overly prioritize
their short-term financial goals and metrics, leading to the neglect of strategy development.
According to Kaplan and Norton (1999), the foundation of the balanced scorecard consists of
the following: the financial perspective, customer perspective, process perspective, and
finally the learning perspective. The Financial perspective is an integral part of the balanced
scorecard perspective as it focuses on measuring financial performance and the potential for
strategies to lead to increased profitability in the business. The customer perspective takes
into account customers and market segments and uses metrics to measure the company's
performance in this area. According to Kaplan and Norton (1999), it is common to measure
factors such as customer satisfaction and market share within this perspective, which are
often used as a basis for customer and market strategies. The process perspective focuses on
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goals and metrics for the organization's long-term innovation cycle as well as its short-term
operational cycle. The purpose is for management to develop processes that enable the
development of new products and services to meet future customer needs. Kaplan and Norton
(1999) highlight this perspective as crucial for enabling long-term economic success. Finally,
the Learning perspective is about creating conditions for organizational learning, where
benefits can be derived from new knowledge and processes. Kaplan and Norton (1999)
explain that the key to long-term profitability in today's highly competitive business
landscape lies in an organization's ability to create value for its stakeholders.
In summary, the preceding chapters have addressed how organizations can cultivate various
essential capabilities to maintain competitiveness over time. Moreover, the ensuing chapter
will present theories pertaining to how businesses can navigate an uncertain future in the
business landscape, thereby preparing themselves and ensuring their competitiveness moving
forward.
2.3 Corporate foresight
Flack and Mitchell (2020) depict how the world is a complex system and what it means to
understand and predict the future. The author presents that today's complex reality is
characterized by many integrated actors that increase uncertainty about the future. It is also
emphasized here that the collective results of actions feed back and affect the entire system,
amplifying or weakening and changing patterns in non-apparent ways. Complex systems are
vulnerable to events with probability distributions with heavy tails, leading to unexpected
extreme events. The author advocates that instead of predicting and controlling outcomes, the
focus should be on designing robust and adaptable systems to navigate through various future
possibilities.
Moreover, the concept of corporate foresight, introduced by Fergnani (2022), elucidates a
dynamic, firm-level capability enabling companies to assess future scenarios in the business
climate. Similar to how Flack and Mitchell (2020) portray the complex world we live in,
Fergnani (2022) describes how this type of complexity and uncertainty increasingly threatens
to collapse different business climates. Therefore, the author continues to emphasize how it
has become increasingly important for actors not only to make business decisions based on
past data but also systematic evolution of possible futures. This is precisely what Fergnani
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(2022) argues is the essence of corporate foresight. The concept is also clarified as the ability
to systematically use heuristic processes to search for environmental trends and
discontinuities, as well as design and evaluate multiple possible future outcomes of these
trends and discontinuities. At an organizational level, it is argued that this area should,
therefore, be closely related to strategic decision-making, as the purpose of the process is to
prevent and provide decision-making information about the predicted future.
Rohrbeck (2010) further presents how corporate foresight can be seen as a dynamic capability
of organizations. Here, the concept is contextualized as the dynamic ability to interpret the
future at a systematic organizational level. Key components for corporate foresight are
presented, emphasizing its role in achieving competitive advantages and survival in an
unstable environment. The author introduces a sophisticated eight-component framework,
consisting of six primary components (information gathering, people and networks,
inclusiveness, method sophistication, technology variation and integration, foresight-strategy
linkage) and two supporting components (foresight system, future perspective). Information
gathering involves the breadth and depth of collected information to identify environmental
disruptions and trends. People and networks focus on the quality of human resources involved
in foresight procedures and the level of connection to external stakeholders. Inclusiveness
concerns the involvement of different individuals at different organizational levels in
foresight processes. Method sophistication refers to the ability to systematically interpret
future-relevant information collected through foresight practices. Technology variation and
integration involve the ability to select and integrate different foresight methods according to
context and goals. Foresight-strategy linkage describes the ability to translate foresight
information into strategic guidelines for future preparedness. The author also emphasizes the
importance of each component to enhance the company's foresight capability and impact
outcomes at both organizational and individual levels.
Another perspective on corporate foresight is shared by Vecchiato (2015), who explains how
this process can create value if the organization conducts the work successfully. This value, as
described by the author, is defined as first-mover advantages and strategic agility. Vecchiato
(2015) explains that there are two basic prescriptions that companies can use to manage
future uncertainty. Either they should strive harder to make more accurate predictions
(rational strategies) or be flexible to adapt quickly (adaptive strategies). When done
successfully, the author argues that the primary benefits a company can gain are being
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pioneers and leading market changes. Conversely, the drawbacks are missing out on these
advantages due to being late and failing to anticipate such changes. Success in being a
first-mover tends to lead to higher profits and market shares. This is achieved through a
longer time on the market with competitiveness, thereby creating the opportunity to foresee
external changes ahead of competitors.
Finally, Vecchiato (2015) describes how the above competitive advantages can also be
achieved through Doz and Kosonen's (2008) concept of strategic agility. Doz and Kosonen
(2008) explain how strategic agility is the ability to continuously adjust and adapt strategic
direction in core operations. Similar to how Rohrbeck (2010) presents corporate foresight as a
dynamic capability of organizations, strategic agility falls into this framework as a
component. Strategic agility thus entails the ability to create value for a company in
innovative ways, not only by creating new products and services but also through new
business models. Doz and Kosonen (2008) further describe how strategic agility enables the
organization to manage an unknown future environment through purposeful interaction
between top management and three meta-capabilities. These three meta-capabilities are
presented as strategic sensitivity: the intensity of awareness and attention to strategic
developments, resource fluidity: the internal ability to quickly reconfigure capabilities and
reallocate resources, and leadership unity: the leadership's ability to make bold, swift
decisions without getting stuck at the top level.
Introducing scenario planning as one of many tools within corporate foresight, Schoemaker
(1995) sheds light on its significance. Here, the author describes how scenario planning
stands out in strategic planning for its ability to capture a wide range of possibilities in rich
detail. Scenario planning essentially involves how a manager can identify fundamental
uncertainties and then construct a variety of scenarios that will help compensate for common
decision-making errors, overconfidence, and tunnel vision.
Schoemaker (1995) also chooses to present an analogy between scenario planning and
planning to climb a mountain to provide a clear understanding of how the process might
unfold. For instance, two-dimensional planning to climb a mountain could involve a detailed
map, planned supplies, tools, and so forth. Here, the author suggests that these traditional
planning tools overlook variable elements, such as weather, animals, other hikers, and so on.
Instead of gathering detailed data from previous seasons and constructing computer
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simulations, Schoemaker (1995) argues that scenario planning goes a step further. Scenario
planning explores the common impact of various uncertainties that stand side by side.
Practically, this can be seen as reducing the extensive amount of data to a limited number of
potential situations. Each scenario illustrates how different factors can interact under specific
circumstances. By formalizing the relationships between these factors, a company can create
quantitative models. After this, it is recommended that some form of evaluation of each
scenario based on consequence and likelihood be conducted.
Describing how the process can appear and how companies can develop various scenarios,
Schoemaker (1995) provides insights into scenario planning. The process of scenario
planning involves several key steps: Define the Scope: Determine the time frame and scope of
analysis, considering factors such as technological change, product life cycles, political
elections, and competitors' planning horizons. Identify Major Stakeholders: Identify those
who will have an interest in or be affected by the issues being analyzed, such as customers,
suppliers, competitors, employees, shareholders, and government entities. Identify Basic
Trends: Identify trends in political, economic, societal, technological, legal, and industry
domains that are likely to impact the issues identified in step one. Identify Key Uncertainties:
Identify uncertain events that could significantly affect the issues being analyzed, considering
various economic, political, societal, technological, legal, and industry factors. Construct
Initial Scenario Themes: Use the identified trends and uncertainties to create initial scenario
themes, considering extreme possibilities or clustering outcomes around high versus low
continuity, preparedness, turmoil, etc.
Figure 2.2 Illustrates the various building blocks for scenarios. (Schoemaker 1995)
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Furthermore, Schoemaker (1995) presents further crucial aspects of Scenario planning. Check
for Consistency and Plausibility: Ensure that the scenarios are internally consistent and
plausible by assessing the compatibility of trends, outcome combinations, and stakeholder
reactions. Develop Learning Scenarios: Refine the scenarios based on consistency checks and
strategic relevance, organizing possible outcomes and trends around strategically relevant
themes. Identify Research Needs: Conduct further research to fill knowledge gaps and
enhance understanding of uncertainties and trends. Develop Quantitative Models: Formalize
interactions among uncertainties through quantitative models, if necessary, to assess the
consequences of various scenarios. Evolve toward Decision Scenarios: Iterate the process to
converge toward scenarios that can be used to test strategies and generate new ideas, ensuring
relevance, internal consistency, archetype, and equilibrium in the final scenarios.
Finally, the quality of the final scenarios should be assessed based on their relevance, internal
consistency, archetype, and ability to describe a wide range of possibilities while highlighting
competing perspectives and internal logic within each future.
Moving forward, similar to Schoemaker (1995), Schwenker and Wulf (2013) presents a more
condensed planning framework for a time period that is often shorter than five years. This
framework includes the following six processes: (1) Definition of Scope: Identify goals, time
frame, stakeholders and participants for the project. (2) Perception Analysis: In the second
step of this process, the analysis involves examining both internal and external stakeholders
and their views on the industry's development. (3) Trend and Uncertainty Analysis: This stage
can be considered as both the third and fourth steps of Schoemaker´s (1995) process. The
analysis aims to organize and rank the factors identified in the initial steps while also
pinpointing crucial elements that influence the future. These elements will serve as the
foundations for the two scenario dimensions utilized in the scenario development phase. (4)
Scenario building: In the following step, scenarios will be created based on uncertainties and
trends identified earlier. These scenarios will elucidate potential future outcomes, with four
plausible and coherent scenarios constructed by combining uncertainties with other external
trends and factors. (5) Strategy Definition: In this stage, strategies and potentialities for each
of the four scenarios are formulated. It is crucial here to define concrete plans, enabling the
creation of robust strategies. Once the strategy for each scenario is determined, the common
themes across these strategies will be amalgamated to create a core strategy that can be
23
implemented regardless of changes. This approach fosters flexibility and allows for efficient
resource allocation. (6) Monitoring: The final stage of the process builds upon the defined
strategies and marks the beginning of their implementation within the firm. Schwenker and
Wulf (2013) recommend here that the firm monitor the surrounding environment and external
factors. This allows for maximum flexibility, enabling the firm to know when to make
adjustments or take actions as needed.
In summary, we can see in the figure below which clarifies Schwenker and Wulf's (2013)
six-step process, which is a condensed planning framework based on Schoemaker's (1995)
original framework.
Figure 2.3 Scenario planning process steps. Reproduced from (Schwenker and Wulf 2013)
2.4 Analytical framework
The analytical framework of the study is depicted in Figure 2.4 and aims to provide an
overview and guide for the analysis of the collected theories and models. The analytical
framework is divided into three parts: past, present, and future. Each of these segments
symbolizes different components of the study's theoretical chapters, with the past representing
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Chapter 2.1, the present representing Chapters 2.2, and the future representing Chapter 2.3.
The figure then illustrates how these three segments collectively influence an organization's
dynamic capabilities, which constitute the foundation for the organization's competitive
potential. The figure clearly shows that several factors affect the different time perspectives in
the framework, where strategy in particular appears as a separate whole that also affects the
present. As the arrows indicate, strategy refers to organizational decisions related to current
competitiveness and adaptability. The figure also shows how dynamic capabilities are
developed and contribute to managing the different time perspectives depicted in the
framework. In summary, the analytical framework illustrates how this thesis has segmented
its theoretical section into different components and how these components impact the
development of the organization's dynamic capabilities, thereby forming the basis and
potential for competitiveness.
Figure 2.4 An overview of the analytical framework. Inspired by Teece (2018).
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3. Method
This chapter describes how the study was conducted and why a qualitative approach was
chosen. The chapter outlines the procedure for method selection, data collection, sampling,
and interview method. Furthermore, it will be presented how the data analysis was
conducted. Finally, various concepts related to research quality for qualitative studies that
are relevant to this study will be presented.
3.1 Research strategy
To provide a basis for addressing the research question, the study will adopt a qualitative
methodological approach. Bell et al. (2019) assert that a qualitative method creates conditions
to attain details, fostering opportunities for a deeper understanding. The authors further
describe how the qualitative research method places significant emphasis on soft data,
requiring a deeper understanding than, for example, a survey study would have generated.
This approach is considered the most suitable for this work since the study aims to increase
understanding, which entails high demands for data richness. This research utilized an
abductive method. Bell et al. (2019) explain that an abductive approach involves working
with theory and data simultaneously. This choice was based on first developing a theoretical
understanding of the subject, followed by analyzing the data and making logical connections
between previous research and the collected data. Additionally, the research question focuses
on how the organization practically works with this aspect. A literature review was also
conducted to identify gaps and deficiencies in the existing literature. This was done with the
aim that this study, based on relevance, could fill these identified gaps in the existing
literature. This is achieved through an exploratory approach, involving research and
comparisons that provide context and supplementation where current deficiencies exist,
especially in the theory of change created by innovation (Robbins & O'Connor, 2023).
For data collection, semi-structured interviews are considered the most optimal approach. The
choice is based on the need to create a deeper understanding of the area and how the
organization practically works and addresses challenges. The interviews are based on a set of
open but predetermined questions, allowing respondents to guide the conversation based on
these questions. This method is considered appropriate as it allows for non-predefined
questions that give rise to good discussions and a natural conversation with the respondent
26
about the subject. Semi-structured interviews enable flexibility and openness to identifying
new patterns in the empirical data. (Bell et al., 2019)
However, Bell et al.(2019) point out that even when interviews are at their most informal,
they disrupt the normal flow of events. The authors also argue that interviews result in less
naturalistic insights compared to other methods, such as participant observations. This may
lead to studies and research that solely rely on interviews being more superficial, providing a
weak foundation for scientific generalization. Furthermore, the authors describe how
interviews rarely expose deviant or hidden activities. Atkinson and Silverman (1997) claim
that interviews encourage participants to recount their experiences in a way that positions
them as authentic. According to the authors, this results in exaggerated accounts of individual
experiences.
3.2 Research design
Bell et al. (2019) outline how a qualitative method tends to advocate for a constructivist and
interpretive epistemology to understand phenomena through human interpretations. Since the
study is also exploratory, it is influenced by an interpretative approach, implying that
understanding is sought through the interpretation of participants' perceptions and opinions.
For the research design, this resulted in semi-structured interviews with open-ended research
questions. Similar to how Bell et al. (2019) emphasize participants' perceptions and opinions
in this approach, these participants can be seen as the study's respondents from the
semi-structured interviews. It can be argued that the study's approach is supported by a social
constructivist ontology, where, as Bell et al. (2019) explain, this means that reality is
constructed through human interpretation. This research design is motivated by collecting
abundant data that allows access to different perceptions, interpretations, and competencies at
various organizational levels.
The study also employs thematic analysis. Bell et al. (2019) describe how thematic analysis is
a method in research and data analysis aimed at identifying, analyzing, and reporting patterns
and themes within a dataset. This method is usually used to extract deeper insights from
qualitative data, such as interviews, focus groups, or text documents. Thematic analysis
enables a systematic and structured processing of information to understand and interpret
various aspects of a phenomenon or subject area. In the study, thematic analysis is applied to
create an understanding of the organization's active work within a specific study area, with
27
the goal of revealing and analyzing the central themes expressed by the study participants.
These themes may be linked to competencies and skills required to understand and engage in
the organization's work within the research domain. The study also utilizes multiple data
sources to gather rich and detailed narratives about these competencies. These sources may
include interviews with key personnel within the organization, observations of work
processes, and the literature review that is employed. By integrating different types of data
sources, a broader and more versatile understanding of the subject is created. This approach
allows for exploring the subject from various perspectives and obtaining a more holistic
picture of the competencies crucial for the organization's active work in the chosen study
area.
In summary, for the study, a thorough thematic analysis involves a multi-step process. This
includes familiarizing oneself with the data, generating initial codes, identifying themes,
grouping themes, and then interpreting and reporting the results. Within the study,
semi-structured interviews are therefore used as a central part of the research, but analytical
frameworks are also employed to shape the subject and guide the research question. This
approach is justified for the study based on how Bell et al. (2019) explain that using thematic
analysis in combination with multiple data sources can enhance the reliability and validity of
conclusions, contributing to a more robust and informative study on the organization's work
in the chosen study area.
3.3 Research process
Figure 3.1 An illustration of the research process.
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Figure 5 illustrates the research process of the study, which commences with the
identification of an area of interest where insufficient research regarding practical
applicability was noted. Based on this, a study object was selected, and a research question
was formulated. Subsequently, a theoretical framework was constructed from carefully
reviewed and selected previous research and theories deemed relevant to the study.
Concurrently, data were collected through semi-structured interviews with respondents
associated with the study object. This data then underwent thematic analysis, whereby
recurring themes and sub-themes were identified and synthesized. The results of the thematic
analysis were subsequently juxtaposed with the theoretical framework, wherein differences
and similarities were discerned. The process culminated in a compilation of the results of the
analysis, which addressed the research question.
3.4 Secondary data collection
Data has been gathered through an extensive search of existing data with the aim of providing
an overview of theories, models, and practical cases that led to a changed business landscape.
3.4.1 Literature review
The theoretical framework was established and largely completed prior to the collection of
empirical data. This is because Yin (2014) outlines how qualitative studies benefit from an
existing foundation of a theoretical framework to guide the collection and analysis of
empirical data. The literature review of the study primarily consisted of academic literature,
including peer-reviewed articles in areas such as dynamic capabilities, creative destruction,
technological revolution, and corporate foresight, among others. To ensure the reliability of
the theoretical framework and thereby ensure the quality of the study, only reliable search
engines have been utilized. The following search engines were utilized during the collection
of the theoretical framework: Supersearch from the University of Gothenburg, Google
Scholar, and Web of Science. Utilizing more than one search engine can be crucial for a
study, as the use of carefully defined keywords can lead to missed relevant research in a
single search engine (Bell et al., 2019).
29
3.4.2 Inclusion and exclusion criteria
In an early stage of the secondary data collection, boundaries were established regarding
criteria for literature inclusion and exclusion. This was done with the aim of maintaining
transparency towards the reader, where the frameworks for the selected literature for the study
are clear and serve a purpose for the research. Therefore, this section contributes to clarity
regarding why and how these criteria were set and how they align with the purpose of the
study in exploration. The inclusion criteria thus encompass selected literature and theory on
organizational capabilities within a changing external environment. It also includes selected
research methods and practical tools for managing an uncertain future for organizational
purposes. Since the study aims to explore how it works in practice, the literature focuses on
organizational context. As research literature is extensive in this area, certain literature and
theories have been excluded as it has been deemed that they do not meet the applicability
requirements for a trading environment or do not align with the organizational context that the
research targets.
3.5 Primary data collection
Primary data will be obtained through semi-structured interviews. Bell et al. (2019) outline
how interviews provide opportunities to gather detailed and in-depth data in a qualitative
study. This section aims to provide a description of the selection process, interview guide, and
interview setting to clarify how the primary data for the study was collected.
3.5.1 Selection of respondents
Bell et al. (2019) underscore the importance of ensuring that respondents are highly relevant
to the specified research question when selecting participants to ensure the quality of the
study. To ensure this, the study's participants consisted of employees at various levels within
an international organization operating in the trading industry. Similar to what Bell et al.
(2019) mention as a common method for qualitative studies, the interviews employed
purposive sampling, targeting employees at different levels within the company. This
sampling method was chosen because it was deemed most suitable, with the assumption that
it would offer the study various experiences, insights, and perspectives. This was considered
the most advantageous approach to provide the study with a more holistic perspective on the
operations of the study subject, aiming to result in an understanding of the organization that
30
provides a foundation and creates opportunities to answer the research question. The selection
of respondents from various departments within the organization was deemed advantageous
for creating a comprehensive picture necessary for the study. Additionally, purposive
sampling was considered advantageous for the study, as it requires deeper understanding and
insights from relevant individuals to effectively answer the research question. To preserve the
anonymity of the respondents, each respondent's name has been replaced with a letter and a
number corresponding to the part of the organization the respondent belongs to. Here, T
represents trade, F represents finance, L represents logistics, and finally, R represents risk.
The number represents the chronological order in which the interview was conducted within
each area of the organization.
Table 1. An overview of respondents.
Respondent Professional Title Years of Date Length Conducted
Employment (min)
F1 CFO 5 25/03-24 46 In Person
F2 Financial Manager/ Group 9 27/03-24 30 In Person
Controller
L1 Shipping 7 21/03-24 33 In Person
R1 Vice President Finance and <1 26/03-24 44 In Person
Risk
R2 Head of Trade Finance 29 27/03-24 49 In Person
T1 Senior Vice President for 12 13/03-24 32 In Person
Trade
T2 Sales Manager 4 15/03-24 28 In Person
T3 Sales Coordinator 3 15/03-24 25 In Person
T4 Vice President for Trade 16 21/03-24 44 In Person
T5 Sales Manager 3 26/03-24 32 In Person
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3.5.2 Interview guide
Semi-structured interviews were used as the main source for data collection. The choice of
semi-structured interviews was based on the need for detailed, in-depth, and descriptive data.
The collection of relevant data was ensured by designing the interview questions based on the
research question to ensure they were aligned with the research (Bell et al., 2019). The
questions in the interview guide mainly consisted of open-ended questions that allowed for
follow-up questions. This type of questioning was used to ensure that the respondent had the
opportunity to somewhat direct the conversation to provide a comprehensive detailed picture
from their own perspective. Since the main aim of the study was to explore how international
trading companies work to stay relevant in a highly competitive market, a significant portion
of the interview focused on understanding the working methods of trading companies to
remain relevant in the market. Furthermore, there was a clear connection between the
questions in the interview guide and the theoretical framework of the study. This was done to
facilitate a good and clear comparison between theory and practice.
3.5.3 Interview setting
Respondents were provided in advance with the interview guide and an overarching
description of the study. This gave the respondents the opportunity to prepare and offer more
thoughtful answers. However, it also meant that spontaneity in the responses decreased.
Furthermore, the interviews were conducted in person and recorded with the agreement of the
respondent, as Blumberg et al. (2011) explain how recording interviews ensures and
facilitates data analysis. Recording also enabled a more accurate and precise transcription of
the interview (Bell et al., 2019). The authors argue that in-person interviews create
opportunities for a more personal connection with the respondent. Additionally, opportunities
are created to observe nonverbal signals and body language. This implies that these aspects
may have been missed in interviews conducted digitally, potentially affecting the results.
Both authors were present during all the interviews, which was considered important by the
authors for the study. This allowed for a division of tasks among the authors, where one could
conduct the interview while the other focused on taking notes. All interviews were conducted
in the respondents' first language to ensure mutual understanding and fluent dialogue,
32
primarily in Swedish in this case. In situations where interviews were not conducted in
English, transcription and selected quotes were translated into English.
3.6 Data analysis
After the completion of the semi-structured interviews, an analysis process was initiated. This
process began with listening to the recorded material followed by transcription. The
transcription process of the interviews was carried out promptly after each interview, as Bell
et al. (2019) emphasize how this results in more reliability since the interview is fresh in
memory. The transcribed texts are analyzed using thematic analysis (Bell et al., 2019).
According to the authors, thematic analysis is a method where patterns and themes recurring
in the collected data are systematically identified, analyzed, and reported. This method is
considered effective for identifying patterns and providing a deeper understanding, which is
crucial for the study. This process is also supported by Gioia et al. (2013), who describe it as
effective in maintaining a high standard of qualitative analysis in research. It also enables a
structured yet flexible method for discerning relevant themes from complex datasets. These
themes are developed through the compilation of codes identified from the transcribed
interview material. This is seen as an iterative process where the codes result in patterns and
themes emerging, weakening, or strengthening. To counteract and manage the risk of
analytical bias in qualitative data, the use of a structured method for analysis is of utmost
importance. This approach enables the empirical results to be analyzed against the study's
theoretical framework. Once themes and subthemes are identified, the main themes for the
empirical results are constructed, forming the basis for the final analysis.
3.7 Research quality
Bell et al. (2019) outline criticisms against qualitative research methods, describing how these
methods often tend to be biased and subjective. However, the authors further explain that a
well-designed theoretical framework can reduce the risk of subjectivity. Additional criticism
associated with the choice of a qualitative method is that the study's limited scope tends to
result in findings that cannot be generalized or applied in other environments and situations.
Fejes and Thornberg (2009) also elaborate on how quality in qualitative research is not as
clearly defined as in quantitative studies, such as validity and reliability. Kuckartz (2014),
instead, introduces new criteria for qualitative research, focusing on process-oriented
standards with new criteria such as credibility, transferability, and dependability. Through
33
these aforementioned criteria, measures will be taken to ensure and enhance the study's
quality. Below is a description of these measures to be taken. In ensuring the quality of the
study, this will be elaborated upon based on the four criteria: transferability, credibility,
dependability and confirmability.
3.7.1 Transferability
Bell et al. (2019) explain how qualitative research often involves in-depth studies of small
groups sharing certain characteristics. According to the authors, qualitative research tends to
prioritize depth over breadth, resulting in findings that rely on the contextual uniqueness and
significance of the studied phenomena. A challenge for the findings is to ascertain whether
they are genuinely applicable in other contexts or in the same context but at different times.
Examining respondents in diverse contexts established a foundation for comparison.
Additionally, offering contextual details to the case respondents aimed to generate a
comprehensive description of the research findings, as suggested by Bell et al. (2019). This
approach empowers readers to form their own assessments regarding the potential
applicability to alternative settings.
3.7.2 Credibility
To achieve credibility for the study, prior research and literature are utilized to define
concepts and measures where applicable. Bell et al. (2019) elucidate the concept of
respondent validation, which entails ensuring, in some way or another, that the collected data
maintains high validity. Additionally, Bell et al. (2019) explain that establishing credible
findings involves not only conducting research according to good practices but also sharing
research outcomes with suitable circles for validation of credibility. To achieve this, the
transcribed interviews will be sent to the respondents to confirm accuracy.
3.7.3 Dependability
Bell et al. (2019) explain how an 'auditing' method can be applied to ensure comprehensive
records are maintained throughout the research process. Yin (2014) emphasizes that a
systematic method and clear protocols are crucial in a well-conducted case study. Both Bell et
al. (2019) and Yin (2014) further explain how transcribing the interviews is crucial to enhance
the reliability of the data as they provide an evidential chain. To increase the reliability of this
34
study, the data collection and analysis processes were meticulously explained and based on
well-established research methods.
3.7.4 Confirmability
Bell et al. (2019) emphasize how the researcher's personal values and theoretical tendencies
must not be allowed to influence any part of the study to achieve high confirmability.
Confirmability is seen as a crucial measure for assessing the research quality of a study's
objectivity. To enhance and increase the confirmability of this study, respondents were
involved by being given the opportunity to approve the outcome of their respective
interviews. Additionally, another researcher in the field was involved in the development of
the research methodology. Continuous practice of reflexivity and awareness of the existence
of potential biases has thus permeated the entire research process. To ensure that the
researchers acted in good faith, the aforementioned measures were taken. This was to ensure
as high confirmability as possible, although Bell et al. (2019) describe how complete
objectivity is deemed impossible to achieve within business research.
3.8 Ethical considerations
Given that a significant portion of the data in the study was obtained through interviews,
research ethics were of utmost priority. The study primarily considered the research ethical
principles outlined by Vetenskapsrådet (2002): the requirement of information, consent,
confidentiality, and utilization demand. These commitments are honored by ensuring that
details such as names and workplaces remain anonymous, and a code was created instead to
correspond to each respondent's interview. It was also clarified that participation was entirely
voluntary and that the interview could be terminated at any time. Information about the
study's purpose and the use of collected data was provided before the interview. It was
emphasized that this type of data would solely be used for the study and, therefore, would be
kept confidential from unauthorized individuals. Bell et al. (2019) elaborate on how one of
the challenges of qualitative research methodology is the interpretation of the collected data
when conducted by researchers. To address this challenge and reduce the risk of
misinterpretations and distortions of the data, notes made during all interviews by each
respondent were analyzed and verified.
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4. Empirical Findings
In this section, the empirical findings resulting from a meticulous examination of the data
from the conducted semi-structured interviews are presented. These findings illustrate central
insights and patterns that have been discerned through thematic analysis from the vast
amount of data generated by the interviews. Similar to the structure of Chapter 2, the data in
this chapter will also be presented in three sections: Past, Present, and Future. The purpose
of this division is to establish a basis for comparability with relevant literature and to provide
an overview of how the trading industry has evolved over the years, what they are doing to
facilitate change management today, and what they anticipate regarding changes in the
future.
4.1 The developing market
This chapter will compile the respondents' accounts of how the organization has been affected
by significant changes over the years and, through that, illustrate the Past. The changes
presented provided insight into how the market has evolved and how the organization must
adapt, reshape, and embrace those changes to remain competitive over time. As a result of
this, an understanding was created of how technological revolution and changes in the
external environment impact a trading organization. This section of the chapter aims to
compile and elucidate how changes in the market and in society affect trading organizations.
4.1.1 Technical revolution within the trading industry
The respondents unanimously agreed that significant changes have occurred in the industry
over the years. They emphasized that both work processes and the typical way of doing
business have undergone significant changes. According to the respondents, it is the
advancement of the technological revolution and its effects on the trading industry that have
constituted the fundamental changes the industry has undergone. The respondents made it
clear that digitization in recent years has resulted in major changes in many parts and aspects
of the business. The access to information, both in terms of quantity and speed, was portrayed
as the most significant effect of digitization on the industry. Several respondents highlighted
36
how this new approach to gathering information has resulted in everything moving much
faster today.
In the past, it was important to have offices everywhere in all the markets in
which one was active because information traveled so slowly. Today, it is not
as important because information has become so readily accessible. - T4
The quote above illustrates an example of how the technological revolution and the
advancement of digitization have resulted in changes within the business. However, the
respondents also emphasized the importance of being physically present in countries where
they conduct business. They argued that this is not the case in all situations where they do
business, but rather that in the past, it was inevitable to have offices in all the countries where
one does business, whereas today, one can operate in a country without needing to be
physically present. Today, the choice to have a physical presence in a country may be about
the need to try to ensure the discernment of false or true information rather than just gathering
information in itself. The respondents explained, in connection with their account, that
information is now much more accessible, but there are also challenges in being critical of all
the information that is now available. The respondents describe how there has been a shift
from being a challenge to access information in the past to it now being a challenge to discern
between false and true information in the vast amount available.
The information flows much, much faster today. It's difficult to be critical of
sources and to understand whether something is really true... This is a major
challenge and can have significant consequences. In recent years, this has
really accelerated very rapidly. It's moving so incredibly fast now, and we
can't stop it. -F1
The respondents also described how the effects of technological advancements in the trading
industry have impacted the traditional way of conducting business within the sector. They
explained how the progress of technology and digitization has made it easier for suppliers and
customers to engage in transactions without the need for external intermediaries. They also
explained that given the current direction of development, this approach will only become
easier for both suppliers and customers. At the same time, the respondents clearly
emphasized that their role is not about specializing in solving simple transactions but rather
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about tackling more complex and risky ones. Within that segment, respondents felt that
digitization and technological advancement had not had as significant an impact. They partly
attributed this to the fact that many of the countries they do business with are lagging behind
in technological development.
Several of the respondents mentioned how the availability of real-time information leads to
both challenges and opportunities for a trading company. It was described as one of the most
prominent differences within the industry compared to the early 2000s. From one day to the
next, a country where business was thriving could be completely excluded due to geopolitical
events such as war, sanctions, or political elections. Several respondents mentioned the
conflict between Russia and Ukraine as an event that led to disruptive changes in a very short
time. They explained how their efforts to terminate all types of business dealings with Russia
occurred very soon after the conflict began. Respondents clearly described that this would not
have been the case 10-15 years ago. Back then, there would have been a much longer delay
between the event itself and the companies' actions because they did not have the opportunity
to access the information so quickly.
Today, we must react almost in real time when geopolitical events occur.
Since we receive the information almost at the same moment as the event
happens, everything moves incredibly fast today. If we don't react and act
immediately, we fall behind. - T4
Another aspect highlighted by several respondents was how the handling and processing of
certain types of documents and certificates required for shipments between countries and
continents largely remain the same today as they did 50 years ago. The respondents explained
how working with this type of paperwork still requires physical documents with stamps,
which differs from many other aspects within the transportation industry where digitization
has led to a significant reduction in the need for physical components in processes. The
respondents explained that this is due to both the requirement for very high security and
meticulous documentation in transportation, but perhaps primarily the difference in the
adoption of technological advancement between different countries. However, most
respondents believed that even this process could be digitized shortly.
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4.1.2 Trend shifts and development in the market demand for
products
A trading organization does not produce its own product. These types of organizations do not
purchase materials and manufacture their own product that are then sold to a customer.
Instead, the business transaction occurs by purchasing a product from a supplier, which is
then sold directly to a customer. These types of organizations thus function as intermediaries
between suppliers and customers. Respondents explained how the international perspective
comes into play, where trade occurs through a purchase made somewhere in the world and
how the material is then sold market to market worldwide. In this type of commodity trading,
it is ,therefore, not possible to control pricing to any great extent; it functions more like a
stock market. It is therefore crucial for organizations to be aware of market fluctuations
occurring globally. Respondents also emphasized a clear shift in how trends change more
rapidly today than they did before.
Compared to before, I would say that trend swings occur more rapidly today.
This means that conducting business today is more challenging than before,
as many more external factors influence these shifts in trends. However, I
would also say that these conditions create opportunities for us, to do
business because transactions tend to become more complicated. -T4
Based on this, the respondents explained how crucial it is for the organization to follow trend
shifts and changes in demand for products traded on a global level. Here, the respondents
elaborated on the importance of the organization being present and aware of the changes
occurring in the markets. It was also emphasized here that this is crucial given that they
themselves do not have their own product and therefore must know what customers demand
and understand what they should purchase. Even in this area several examples were given of
how global trend shifts and groundbreaking market trends have affected the organization. The
following quote, for example, illustrates the impact of digitization on certain product
demands that the organization trades and sells.
A change in product demand can also be observed where, for example, the
demand for traditional writing paper and newspaper paper has decreased
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and transitioned more towards packaging and consumable paper-based
products due to the advancement of digitization. - T1
Furthermore, it became clear that the organization's international playing field also impacts
how a trading organization must adapt to shifts in trends. Respondents were informed about
how they can observe development and trend shifts happening at different speeds and to
varying extents on a global market basis. Considering how the demand for certain products
changes and is affected by these shifts for the organization, the company must also adapt
because some countries are further ahead in development than others. From a digitalization
perspective, respondent F2 explained how, for example, continents like Africa and South
America still demand traditional writing paper, as they are not as developed in the technical
advancement as other continents.
The significance of adaptability for the organization will be further discussed later in Chapter
Four. However, as the above statement illustrates, a clear picture is painted of how market
developments and trend shifts vary from market to market. Within this, the importance of
how the organization must stay updated and adapt to remain competitive at an international
level is also emphasized.
4.2 Organizational capabilities
In this part of the chapter, the organization's practices, values, and priorities will be presented
to provide an overview of the organization's Present, demonstrating what it is currently doing
to foster long-term competitiveness. Initially, the challenges and risks affecting a trading
company are outlined. Furthermore, the importance of maintaining a long-term perspective in
its operations is emphasized. Finally, the organizational characteristics considered important
and significant for managing a changing market environment are presented.
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4.2.1 Risk management within the trading industry
The respondents unanimously agreed that the trading industry is a risky business. They
explained how there are several risks that directly or indirectly impact the organization,
ranging from economic risks such as customers not paying, to geopolitical risks where
countries engage in conflicts with each other, similar to the example mentioned earlier with
Russia and Ukraine. These are described as significant risks for a trading company to
consider. One of the respondents described how the justification for the existence of a trading
company is to be a risk-taker, as intermediaries should assume the risk in a sale from both the
customer and the supplier. According to the respondent, trading firms are not needed in
so-called risk-free transactions; buyers and sellers can conduct the transaction on their own.
Therefore, trading companies come into play when one of the parties in a transaction involves
risk, which could, for example, be due to the political instability of specific countries,
economic situations, or other types of uncertainties.
In Sweden, for example, or to Germany or to France, likewise. It's not a big
deal; paper mills sell there themselves, while very few paper mills would be
willing to take the risk of selling to Nigeria. But we are willing to do it, and
that's why we exist, you could say. We cannot be afraid to take risks; we
should not be. We should be risk-takers. It's our raison d'être, but calculated
risks then. So we insure a lot of those deals, we actually do it with all the
deals we can insure. Which means that we offload some of the risk we've
taken on ourselves. - T5
The respondents explained how the most common risk for their business is the economic risk
of not getting paid by their customers. However, they also outlined how this does not
necessarily mean that business with those customers stops. Rather, they described various
ways to ensure the deals or try to motivate the customer to pay to avoid being forced to
abandon the customer. Respondents working in the trading function within the business
explained how this is an important part of building relationships that lay the foundation for
long-term cooperation with both customers and suppliers. Long-term relationships were a
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recurring theme among the respondents and were considered one of the company's success
factors. They argued that strong relationships with both customers and suppliers are crucial
when unexpected risks arise due to, for example, geopolitical events. One respondent
followed up this statement by giving an example of a situation where a country experienced
an economic crisis and the customer could not pay all its suppliers. In such situations, the
company, thanks to its good relationship with the customer, wants to be the supplier that the
customer prioritizes paying first.
The respondents also explained how their approach to risk differs from many other companies
that are not active in the trading industry. Geopolitical events such as wars, conflicts, or
natural disasters have only negative consequences for most companies. While for a trading
company, situations can be analyzed in a more nuanced way, where it often emerges that even
if an event creates a myriad of problems, it also presents opportunities.
Geopolitical events affect us tremendously; that's what we thrive on. We
love geopolitical events, regardless of what they entail or where they occur.
In a world where there are no major changes, we wouldn't be needed. The
reason we exist is that geopolitical events arise, complicating the work for
buyers and sellers. - T1
The quote above illustrates the trade industry's stance on geopolitical events. A recent
example of such an event, which has had a significant impact on numerous companies and
countries, especially in Asia, Europe, and North Africa, is how pirates in the Red Sea have
forced a significant portion of the ships that were supposed to pass through the Suez Canal to
instead circumnavigate South Africa. This has resulted in a substantial increase in both
delivery times and freight costs for the cargo. Consequently, it is no longer as economically
viable for European countries to trade with Asian countries and vice versa, leading to
devastating consequences for many businesses.
Suddenly, it becomes much more expensive for Asia to transport goods to
Europe and North Africa. This led to customers in North Africa, Europe,
Turkey, and countries around the Mediterranean becoming very interested
in buying more European cardboard almost overnight. For a trading
company, this means that if we have a lot of European cardboard either in
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our warehouses or if we have the opportunity to quickly buy from the mills,
it becomes a huge advantage for us. So, the situation in the Red Sea is great
for us in that regard. - T1
The respondent further explained that this could have had significant consequences for them
if they had done a lot of business with Chinese paper mills and had no backup in Europe.
Therefore, the respondents emphasized the importance of spreading out their risks by not
being too dependent on any single supplier, customer, country, or market.
We have to be in many markets; we have to have many different qualities. It's a
constant hunt for suppliers and qualities. It's important for us as a trading
company to represent several suppliers so that we're not completely dependent
on a few. Things are happening all the time in the world... Things arise all the
time, where our partners all over the world are affected and involved. We take
a lot of risks in the company. So, it's crucial for us not to put all our eggs in
one basket. - R2
A tool that the organization utilizes is the balanced scorecard. The respondents described the
balanced scorecard as both a useful and appreciated tool within the organization. It emerged
that the tool has had a very positive impact on the organization's overall understanding of the
various departmental needs, workflows, and goals. Respondent F1 emphasized the need to
maintain a holistic understanding of the business, including its internally interconnected
processes. By using the balanced scorecard, the organization can better navigate through the
various streams of work and information, thereby avoiding working in separate silos and thus
becoming "blind" to the effects and conflicts of interest that may arise along the way.
Respondent F1 further explained how this tool also enables open and transparent
communication within the organization by clearly visualizing and communicating thoughts
and visions for the future. In this way, it becomes clearer what the organization is striving for
and how the various units are involved in achieving the organization's overall goals and
visions. By making responsibilities and work distribution within the group visible and clear,
the balanced scorecard not only fosters a sense of involvement and commitment but also the
effectiveness and success of the organization as a whole.
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The balanced scorecard is an important tool because it creates
opportunities for understanding each other and the entire process flow.
Because it's easy to get tunnel vision in one's own part of a process flow and
want to develop and improve it as much as possible. But that can have a
negative impact on both upstream and downstream in other parts of the
business...With the balanced scorecard, we can share our thoughts and
visions for the future in a very good way and make it visible. - F1
4.2.2 Long-term relationships before short-term profitability
An interesting aspect highlighted during the interviews was how crucial relationship building
is considered within the industry. It's not uncommon for a customer or supplier to receive
over 50 emails a day with similar offers for similar products. So, standing out and actually
being the seller or buyer who closes the deal is very challenging today. It was evident among
the respondents that the importance of long-term relationships is crucial nowadays and that
the job of creating new potential long-lasting relationships can be very demanding. It emerged
that it's not entirely uncommon to do business with a customer or supplier over an extended
period where you don't make any money. Instead, you prioritize building a relationship with
the customer or supplier, and only when that's in place do you start doing business where you
make money from it.
Many times, you may want to get in with a new major customer, and then
you may be prepared to think long-term…OK, I want to make a profit
sometime this year from this customer, but maybe is´s not the time for that
right now. The most important thing is that we get an order. - T2
Respondents also mentioned that through a good relationship with, for example, a supplier,
you build a sort of barrier against others who want to do business with your supplier. Despite
the above discussion, respondents assess that the importance of having good relationships
with their suppliers is more crucial than with their customers. This is because respondents
claimed that as long as you have access to products, you will always have something to offer,
but if you have nothing to sell, it doesn't matter how many buyers you have good relationships
with.
You can see in our industry that if you have a long-term relationship with a
supplier, it's difficult for others to break in there. In our industry, people
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want to be sure that we fulfill our promises. Over the years, we've shown
that through ups and downs, we keep our word. I think that's incredibly
important. Customers are a bit more challenging because you don't really
need that long-term relationship there. Customers come and go a bit more
often than suppliers. - F2
Several respondents highlight the importance of long-term relationships and a long-term
mindset when doing business. Respondent V1 clearly illustrates with this example how a
long-term mindset is always present within the organization. At the same time, other
respondents are clear that trading companies must be quick to handle short-term solutions to
stay relevant in the market.However, this is presented in more depth later in the chapter.
It's not just about looking at how to make money today, but also how we'll
make money and do business in 10 years, for example. Maybe we won't be
able to do that if we take the first opportunity where the risks are high.
Instead, we should build trust, gradually gain more volume, and do a good
job so we can make good money over time. - T2
The respondents are clear about how the view of long-term relationships and a long-term
mindset forms the foundation for the organization's potential for long-term competitiveness in
the market. This was explained to be a characteristic that has been present within the
organization for a long time and is also considered to be one of the reasons why the company
is still active and competitive today. The organization plays a significant role in this work as it
sometimes involves prioritizing long-term profitability over short-term profitability in order
to highlight opportunities for more sustainable profitability. This approach and mindset are
considered possible for the organization thanks to the advantageous ownership structure that
exists within the company.
4.2.3 Organizational capabilities
Several aspects emerged as respondents described the abilities and characteristics that
contribute to the organization's competitiveness. Initially, it was evident that the
organization's long history in trade, as well as the collective expertise present both internally
and externally through its local offices in various markets, constituted significant factors in
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how the company has been able to maintain its competitiveness over a long period. This
observation seemed natural, especially considering that the organization does not produce its
own products but instead relies on the competence of its personnel, corporate culture, and
other internal resources to develop the business and ensure its profitability.
A crucial factor is the competence within the organization, that we have key
skills required for the types of business we conduct. Specifically, the
managers in the sales units who have been with us for a long time and have
experience of the ups and downs in a fluctuating market. I believe that
experience and expertise enable them to identify patterns and, to some extent,
predict what they think will happen in the future while knowing how to handle
the situation that exists today. Then this knowledge is passed on to new
employees and retained within the organization. - T2
Furthermore, within the same area, a picture emerged from the respondents that the
organization's existence is based on trading in markets where their suppliers do not want to
sell. These suppliers assess that either the risk is too high or that it is too complex to conduct
sales of products to these specific markets. A turbulent macroeconomic environment,
geopolitical circumstances, and events affecting the world create business opportunities for a
trading organization. However, it was also clearly evident from the respondents that the role
that this type of intermediary organization holds and the approach they apply in business
operations is not something that anyone can handle. Respondents explained that it is the
personnel within the organization who must possess expertise and the ability to manage these
complex situations for the entire business model to prove profitable.
Of course, geopolitical events affect us like everyone else. But what's
interesting is that the more difficult it is to conduct trade in the world, the
more we are needed as an organization. Because our role is to step in as
intermediaries when sellers and buyers are not willing to take risks on each
other, that's where we come in with our expertise and stitch the deal
together. - R1
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Several respondents were on the same track, and the quote below reinforces the image the
trading organization has of geopolitical events. The quotes illustrate the recurring theme of
the respondents' attitude and perspectives on geopolitical events from a corporate standpoint.
Historically, as a trading organization, we are quite well adapted to these
types of events. And we also benefit from them. In a market that is completely
stable and functioning as it should, there are others who can do our job
instead. But it's precisely when things get chaotic that our know-how is truly
put to the test. For us, it's all about being experts at managing a tumultuous
world. - L1
Many of the respondents also emphasized that each deal represents a form of craftsmanship in
itself. The trading process requires multiple variables to harmonize for the deals to prove
profitable. As previously noted, traders need to navigate both purchases from suppliers and
sales to customers amidst shifting macroeconomic conditions. In addition to this, there are
other factors that affect the profitability of deals, especially when the organization operates at
an international level, such as logistical challenges regarding shipping, currency management,
and handling of sanctions, among other things.
In this context, the respondents explained how the company structure contributes to increased
competitiveness compared to competitors. One of the central parts in this context is that the
business has dedicated support functions that handle these uncertainties, which in turn means
that the organization possesses key competencies internally. The quotes below illustrate this.
We actively work on risk mitigation. We have a compliance department that
can naturally pick up on geopolitical changes in areas when it comes to
sanctions or similar. We also have a Trade Finance department that is very
skilled at minimizing the risks of customer losses in difficult countries or
countries that are geopolitically vulnerable. - F1
Other respondents also highlighted the importance of the support functions within the
organization. Another respondent specifically described how these support functions work
and are applied, as well as their strategic role in the organization. The quote below illustrates
this.
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Something that may differentiate us from other organizations in the industry
is that we, for example, have specialized functions that are in very high
focus. For instance, the shipping department. We have our own freight
procurement department and do not rely on freight forwarders… We have
chosen to centralize and thus have that key competence by specializing and
niching within certain areas where we have internal expertise. The same
goes for the Trade Finance Department and Treasury Department, which
handles various types of risk. - L1
4.2.4 Adaptability
An essential capability highlighted by the respondents was the organization's adaptability,
within which the solution-oriented corporate culture was also emphasized. As previously
mentioned, the organization operates in a complex business environment where many factors
influence operations. Therefore, adaptability is of utmost importance in conducting business
and contributing to international trade to the extent that the organization conducts its affairs.
I would say that flexibility and adaptability are something that we constantly
need to consider and actively work on on a daily basis. Above all, I believe
that collaboration among us employees is crucial here, but also collaboration
with external parties. -T3
As the organization deals with markets deemed more complex and where suppliers
themselves are reluctant to sell, the importance of an enabling corporate culture was
emphasized, where employees are given the opportunity to explore and create solutions on
their own. It was emphasized that this is of great significance for the organization's
development and continued ability to drive its business forward. Within this framework, it is
evident that the organization follows a corporate culture where knowledge and information
are shared among employees to enable the identification of solutions to problematic
situations. Additionally, the importance of learning from past experiences and situations to
promote the organization's development and capacity for action is emphasized.
I believe it's important to have a corporate culture where making mistakes is
acceptable. It's crucial for us that employees are challenged and
encouraged to think outside the box. With the type of business we conduct, it
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should be permissible to have wild and crazy solutions, and ideally, they
soar, but in the worst-case scenario, they don't. However, deriving learning
from these mistakes and using them as continuous learning for the
organization is crucial. It's also important that knowledge is shared with all
other employees.- F1
The respondents clearly emphasized the significance of their corporate culture, flexibility, and
adaptability for the organization. Considering that the company conducts global operations,
they are heavily influenced by global events. Geopolitical events and situations affecting the
world have a significant impact on a trading organization with global operations. Respondents
identified several aspects affecting business operations, everthing from political elections in
the USA to port strikes in Finland to political conflicts in Peru, the list is long.
These influences are significant both in the short and long term. In the long term, it involves
maintaining good relationships with customers and suppliers, where the organization must be
prepared to find new solutions in case of any problematic situations to fulfill its commitments
to these stakeholders. In the short term, it requires the organization to adapt and be creative
when opportunities arise that must be seized quickly, even amidst a chaotic geopolitical
climate. Although respondents emphasized that they always strive to anticipate potential
events or market situations, they often find themselves in situations where they must be
solution-oriented to enable the execution of business.
We aim to minimize the disruption of deals whenever feasible.We always
want the deal to go through. Therefore, as an organization, we always strive
to be solution-oriented. For example, if a country we do business with goes
bankrupt, there's a risk that we may no longer be able to conduct business
there. Such a scenario is about finding new solutions and redirecting our
business in a way that our losses in that market open up opportunities to
sell those products to another market. - T4
4.3 Corporate foresight
In earlier sections of the empirical chapter, it has been partly demonstrated how a changing
world, where constant events occur in various regions, greatly impacts trading organizations.
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As the organization is active in global trade, several quotes in previous sections have clearly
shown that phenomena like geopolitical events have a significant influence on this type of
business. Against this context, the following section will focus on the Future and the
respondents' perspectives on how the company handles, prevents, and anticipates potential
events in different markets with the aim of proactively being prepared for changes and
developing strategies to manage them.
4.3.1 Predicting the future
Initially, the respondents emphasized that the organization strives to be at the forefront and
stay updated on any changes or events occurring in the markets where they operate. It also
highlights that the organization continuously works to manage such situations in the best
possible way, but that in many cases, it is challenging and very complex to predict future
events. The following quote illustrates the respondents' view of how important it is for the
organization to always try to anticipate what will happen in different markets.
In our industry, I think it's crucial to try to anticipate what will happen.
With an international presence where we trade in several markets
worldwide, it's especially important to always stay updated and try to
foresee what will occur. Drastic changes can often have negative
consequences, but I believe that if you are well-prepared, you can also turn
this into advantages. However, it's, of course, difficult to precisely predict
what the future holds; in the end, we're just left with a well-calculated
guess. - F1
Several respondents pointed out the significant impact of geopolitical events on business
operations. It was explained how events originating geopolitically in one part of the world can
also have consequences for markets in other regions. An example reiterated by several
respondents was how geopolitical events in the USA, such as sanctions, fluctuations in the
dollar exchange rate, and tariffs for specific markets, affect trade. To protect against such
geopolitical events, respondents outlined both proactive measures and readiness to act when
such changes occur. At the same time, they also strive to anticipate how different outcomes of
such events can affect various parts of the company's business operations. In these scenarios,
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respondents explained how they systematically consider how an event can affect the market,
supplier prices, and customers' purchasing power.
The work of trying to anticipate future events in general is described by several respondents
as very difficult, with a significant risk that resources and time are spent planning and
anticipating events that never occur. Considering the focus on risk diversification, it is
important not to put all eggs in one basket. This means that the organization's focus is rather
on preparing to act when an event occurs instead. In daily operations, this means creating the
opportunity to actually act when events occur by being adaptable and quick. However, there
is a significant variation between different situations according to several respondents, who
point out that some events can provide indications of possible outcomes. A clear example
highlighted by several respondents was the US election, where the outcome can go in two
different ways. In such geopolitical contexts, the importance of having good foresight,
creating conditions for making quick decisions, and acting when the outcome is determined is
emphasized. Generally, when the outcome could be either one thing or the other, both the
work of anticipating future events and their consequences and the preparation work to quickly
handle unexpected events are considered particularly significant and as a competitive
advantage. A quote from one of the studied traders provides insight into their attitude and
perception of future prospects.
It's important and valuable to try to anticipate the future, but it can be
difficult to predict certain types of events. For example, if it's a natural
disaster or if Russia decides to intervene in Ukraine. In these examples, it's
difficult to predict what will happen no matter how much one tries. What we
can do is ensure that we have multiple options if something were to occur.
This means being aware that things will happen and therefore focusing on
how we can best respond when it potentially occurs. So, it's a part of the
preparations that are our lifelines during geopolitical events. - F4
Despite the significant challenge of trying to predict the future, the respondents agree that
trading companies demonstrate an impressive ability to make informed assessments and
weigh various factors against each other. Many of the respondents highlighted the crucial
importance of having personnel in place around the world to successfully navigate uncertain
times and identify possible trends and events. This strategy, which has been a cornerstone for
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trading companies for a long time, is still considered as important today as it was 50 years
ago. Physical presence is needed not only to gather information but also to gain a deeper
understanding of local conditions and cultural nuances, which are crucial for making accurate
analyses and forecasts. The most notable shift that respondents pointed out was that today's
trading teams are not only involved in collecting information but also actively working to
filter and analyze it to distinguish true information from false. In an era of information
overload and rapidly spreading misinformation, this has become an increasingly
time-consuming task for trading companies. The quote below further illustrates one
respondent's perspective on the work and the importance of trying to predict the future.
I believe it's really important. We need to try to stay one step ahead, even
though it's not always possible, especially with tough-to-predict stuff like
geopolitics...It's up to us to stay aware and, of course, consider how we
would handle it if the worst happens.That demands that we have a plan that
we probably aren't actively working on at the moment. But when the time
comes, we need to know what to do. So, to wrap it up, I believe it's
extremely important to be proactive and work on alternative possibilities if
something could happens. - F1
4.3.2 Current market trends
The respondents also provided insights into how they perceive shifts in trends that will
change the way the company does business in the future. At the outset of the topic, it was also
emphasized here how important it is for the business to keep up with trend changes.
Respondents emphasized the importance of long-term thinking in the industry in which the
organization operates. It was clarified that this type of business operates within a trust-based
industry, where suppliers and customers build close relationships with the organization,
enabling a significant portion of business over time. Respondents highlighted that this kind of
long-term sustainability in business is built by always delivering on promises and resolving
situations if any complications arise.
It's really important to have long-term thinking because we're in a
trust-based industry, just like many others. It's important for us to build
long-term trust, especially with our suppliers. It's about solving situations
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and building this trust by showing that we deliver on what we promise to
our suppliers.- T5
Considering the current market context, respondents portrayed how several aspects of their
business operations are dynamic, such as freight prices, product pricing, exchange rates, and
sanctions. Here, the importance of continuously being aware of developments in different
markets is emphasized. Respondents described how it is crucial to follow all types of
geopolitical trends, which are made possible by the presence of salespeople in each market
who stay updated. However, it was also highlighted that it is particularly important to focus
on trends in regions where the most activity occurs. Respondents explained that it is of utmost
importance to follow trends in areas where conflicts or other events with potentially
significant consequences, such as payment capability and sanctions, can greatly affect the
trading organization.
Above all, it's important to keep track of regions where things are
happening, especially in conflict areas where the risk can escalate
overnight. We must be very aware of the risks we are exposed to. As
mentioned, these changes can happen overnight, so such trends are crucial
for us. Being aware of the business you're doing and when it might be time
to say no and pivot. Being aware of these trends and being willing to make
decisions and not just let things roll on. - L1
Finally, regarding the aspect of trends, respondents considered it very important to keep up
with the trends that shape the future of international trade, as well as the industry's way of
doing business. It also emerged that there are benefits to being at the forefront of these types
of changes, both for building continued trust with customers and suppliers and also for having
a long-term advantage over competitors, which can result in increased competitiveness. The
quote below illustrates how respondents view future trend curves and how future changes can
affect the organization's way of doing business.
I believe we will see a significantly faster and more unpredictable changing
world in the future. Both for better and for worse. I also think it will become
harder and harder to do business and make good money from them. You
have to be very good at what you do and you have to have a very good
network - F1
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The respondents also emphasized the importance of being aware of and adapting to future
trends. For example, the use of tools such as artificial intelligence (AI) which can handle large
amounts of information in the rapidly changing future business climate, was discussed. There
was a discussion about the uncertainty surrounding how these trends will affect the industry in
the long term. At the same time, new sustainability regulations from the EU that companies
are obliged to follow were presented. These trends were identified as challenging to follow,
given their recent prominence, but the respondents also highlighted the benefits of being early
adopters and staying ahead when it comes to managing these trends effectively and
accurately.
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5. Discussion
This chapter will discuss how theory and empirical evidence differ and resemble each other.
The structure of this chapter will be the same as before: Past, Present, and Future. This
section aims to present the similarities and differences that emerged between theory and
practice, as well as to engage in a discussion of why this was the case and what the
explanation for this may be. The chapter also presents new research theory that has emerged
as relevant based on the empirical findings.
5.1 Technical revolution within the trading industry
The respondents made it clear that the technological revolution has had a significant impact
on many aspects of the trading industry. They emphasized that the rapid advancement of
digitization over the past decades has been the primary driver behind the industry's
transformation. This development has led to several factors within trading, including
communication, data management, data collection, and business processes, being altered due
to the increased use of digital technology and new innovative methods. The transformation
undergone by the trading industry aligns well with Perez's (2010) description of technological
revolution, where the author specifies how this type of revolution is characterized by a
number of radical technological changes driving development that alters technology, the
economy, and society. The fifth and most recently occurred revolution that Perez (2002)
presented should be seen as a direct precursor with strong connections to the change
digitization has brought about in the trading industry today. The main change trading
companies have encountered in the past decade has been about information access and
information management.
The results from the empirical investigation show that respondents' experiences and insights
within the industry largely correspond with Mohammed's (2018) and Koch et al.'s (2014)
description of Industry 4.0. These authors highlight how the business environment is
undergoing radical changes due to the need for flexibility and real-time response to the
rapidly changing market, driven by the speed of information. As several respondents have
previously pointed out, a trading company's fundamental purpose is strongly linked to its
ability to manage complex business situations. Mohammed (2018) explains how Industry 4.0
55
represents the optimal way forward to address an increasingly complex and demanding job
market. Therefore, the adoption and management of Industry 4.0 are deemed crucial for all
organizations, especially those specializing in handling complex business situations.
At the same time, it was possible to argue that the change referred to by several respondents
regarding their perception of the impact of digitization on the trading industry is largely
parallel to the change that the rest of society has undergone. Despite the respondents' claims
that the industry has undergone significant changes, it suggests that these changes mainly
follow the same patterns as the rest of society. This suggests that industry-specific changes
and developments in the trading industry have not had a directly decisive impact on trading
companies. This implies that the trading industry has been relatively mildly affected by
aspects such as the Internet of Things and vertical and horizontal integration methods, as
presented by Saurabh et al. (2018), Koch et al. (2014), and Mohammed (2018).
In addition to the effects discussed regarding the impact of digitization on information assets
in today's society, technology has also given rise to additional aspects affecting the trading
industry. As mentioned by the respondents the digitization's creation of various platforms has
created expanded opportunities for buyers and sellers to meet and do business without the
need for intermediaries. This was described by the respondents as an aspect whose
consequences can already be seen today and something that is expected to become
increasingly common in the near future as well. This is similar to Schumpeter's (1939)
assertion that innovation does not occur randomly but rather occurs when technologies are
linked together. Where so-called clusters of techniques integrate and result in innovations
emerging naturally. This aligns well with Perez's (2010) concept that new innovations further
drive the development of technologies that enable improved efficiency for industries and
processes.
Another concept presented by Perez (2010) was the techno-economic paradigm, which refers
to the most optimal and effective way to manage and exploit new technology. In relation to
Industry 4.0 and the technological revolution, it was previously noted that the trading industry
operates within, and the techno-economic paradigm can be seen as digitization and its
byproducts. The empirical results provided valuable insights into how the trading
organization views digitization and how the work of managing information overload is
processed. An example highlighted, which can be seen as linked to Perez's (2010)
56
techno-economic paradigm, was the need to physically have employees on-site around the
world where trading was taking place. In a world where information can be accessed with a
keystroke in real-time, respondents pointed out how the need for physical presence in
different markets is almost as important today as it was during the 20th century when current
information was significantly harder to come by. The best way to leverage this enormous
wealth of information is then stated to be the combination of vast amounts of data along with
human physical presence to discern true and false information. This approach is described by
the respondents as a success factor that creates competitive advantages both in terms of
decision-making and as it can provide indications of future events that may form the basis for
decision-making today.
The literature provides an in-depth account of the concept of creative destruction, where
authors like McCraw (2007) and Schumpeter (1939) explain how it refers to the process
whereby new ideas and technologies surpass and replace older existing systems and methods.
Respondents explained how their organization mainly deals with standardized products that
have existed for hundreds of years and are in demand worldwide. The digitization previously
discussed has had a significant impact on the demand for products such as regular newsprint
in many countries. This is consistent with the authors' account of creative destruction and the
impact new products and technologies have on the demand for existing ones. At the same
time, respondents described how there has been an increase in demand for other types of
paper-based products such as packaging materials. McCraw (2007) emphasizes how
technological advancements act as a catalyst that reshapes the economy and opportunities for
economic growth. The author describes how many companies fail with this type of transition,
creating opportunities for other more agile businesses to take their place. At the same time,
the situation regarding creative destruction typically becomes less devastating for
organizations in the trading industry as they often do not produce their own physical product.
Instead, as previously mentioned, they act as intermediaries, making the organizations
themselves much more agile and adaptable to changes in market demand. This aligns with the
example of how traditional newsprint has been replaced by demand for paper-based
packaging materials in several countries and how the organization has successfully undergone
that change.
At the same time, it is important to specify what and which regions are being referred to when
discussing the impact of digitization. For a trading company operating worldwide and
57
specializing in solving complex and difficult deals, it often involves developing countries. In
these countries, digitization, Industry 4.0, and the technological revolution we referred to
earlier are not nearly as widespread and developed. This means that, for example, the demand
for traditional newsprint is still high in large parts of the world despite discussions of creative
destruction for the product elsewhere. So, for a trading company operating worldwide, the
reality of creative destruction is more complex and nuanced than how McCraw (2007),
Schumpeter (1939), and Tipsas (1997) portray the concept.
5.2 Organizational capabilities
In the empirical chapter, it is evident how a trading organization operates within a risky
industry, where their business is conducted in markets where suppliers refrain from selling
products due to factors such as risk and complexity. This means that the organization's
employees are expected to act as experts in resolving situations and identifying business
opportunities in markets that are exposed to risks and heavily influenced by geopolitical
factors. In line with Christensen's (1997) concept of the "innovator's dilemma," where the
author describes how changes often disrupt the market, especially in less niche areas,
respondents' views on risk propensity, risk management, and promoting controlled risk appear
similar. This attitude contributes to a corporate culture characterized by problem-solving and
innovation, where employees are expected to be innovative to continuously find new
solutions that enable the company to maintain its competitiveness in the markets where they
operate.
Furthermore, respondents emphasized that if everyone could handle trading within the
organization's complex business climate, with the many dynamic parts in complex areas, this
type of organization would not be needed. This view of the situation resembles Christensen's
(1997) reasoning about how large established companies often hesitate to engage in and
embrace early innovations and changes due to perceived risk. In the trading organizations'
trading area, where large established suppliers do not want to offer trading, the organization is
required to actively seek solutions and embrace changes early on in the change curves. This is
because identifying profitable deals in an ever-changing business landscape is crucial.
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The organization's approach to managing this type of risk in practice aligned with Christensen
et al. (2000) argument, emphasizing the importance of effectively placing the right person in
the right position and having a thorough understanding of the organization's capacity and
limitations to maintain competitiveness over time. This reasoning aligns well with
respondents' description of the importance of maintaining awareness of risks through close
contact with the market, such as through local offices and strong relationships with
stakeholders in the market. This is also reinforced by Williamson (1985), who explains
so-called transaction-specific know-how transactions facilitated through long-term
relationships. Here, the author explains how opportunities for co-specialization increase when
partners develop experience working and doing business with each other, which ultimately
can result in more efficient communication, improved quality, and increased speed to market.
It was clearly outlined from the empirical section that placing the right expertise in
appropriate positions within the organization and creating awareness of its capabilities and
limitations contribute to the generation and creation of transparent information, enabling the
organization to be prepared for events that could potentially entail radical changes. Several
examples were presented that could involve situations where a country defaults or where the
domestic currency becomes too unstable to enable trading. The importance of the
organization continuously making assessments and daring to make decisions in this area was
emphasized, while it is crucial that the right person makes the right decision in different types
of situations. This applies regardless of whether it is a support function holding the relevant
expertise, a salesperson active in the market, or the compliance department. This also aligns
very well with what Christensen et al. (2000) presented above.
Furthermore, it becomes clear that there are several significant aspects of significance for the
organization when it comes to building competitiveness. In addition to the discussion on risk
and innovation management, as outlined above, other interesting aspects were also identified
in the empirical section. Similar reasoning can be found in Kaplan and Norton's (1996)
explanation of how information has become central to companies' pursuit of competitiveness
in recent decades. The authors point out that companies' ability to leverage intangible assets
has become significantly more important than the ability to invest in and manage tangible
assets. This reasoning resembles what the respondents explained regarding the organization's
lack of a self-produced product. Instead, it is the key competencies of the personnel and
59
information flows from a broad network that contribute to the trading organization's
competitiveness.
The respondents' descriptions clearly indicate that the organization possesses intangible assets
in the form of knowledge, experience, and expertise in-house, which provide competitive
advantages for the organization. This view resembles what Dyer and Singh (1998) and Perry
(1989) explained, where competitive advantages are created through relationships within the
value chain, where parties are willing to make relationship-specific investments and combine
resources in various ways. In this area, the respondents also emphasize the importance of
long-term relationships with partners and the exchange of information between parties.
Differences can be discerned in how the organization strives to build long-term relationships
where they can benefit from these relationships rather than making joint investments with
partners, as Dyer and Singh (1998) and Perry (1989) describe. Instead, similarities can be
found with Williamson's (1985) discussion of human asset specificity, where opportunities for
co-specialization increase as partners develop experience working and doing business with
each other. This can lead to more effective communication, improved quality, and increased
speed to market. This aligns well with what many respondents highlighted in the empirical
section regarding how the organization views long-term commitment to its business. Many
respondents argued that business relationships do not always need to be specifically profitable
in the short-term; instead, they should strive to build trust with customers and suppliers that
can benefit the organization on multiple levels in the long term.
Throughout this work, there has been a significant focus on building and maintaining strong
relationships to facilitate the establishment of long-term partnerships. This aspect has proven
to be of central importance, both according to the theoretical framework presented and based
on the empirical insights from interviews with respondents. One aspect that has not been
highlighted so far but that could potentially be a significant factor in organizations'
competitiveness is the importance that Granovetter (1973) attributes to weak ties. The author
explains how access to such weaker connections creates opportunities for the influx of new
information, new perspectives, and new business opportunities. These advantages can be
assumed to be particularly relevant for trading companies, and the empirical data suggests
that these aspects may have played a significant role in the operations of the organization
under study. Based on the empirical findings, we can conclude that an extensive network is
60
considered crucial, both historically and in today's business climate. This suggests that
superficial acquaintances or weak ties likely have played a significant role in the
organization's success.
In the empirical section, it emerged that the organization does not primarily use any
particularly specific technical tools or platforms that distinguish it from competitors. Instead,
the respondents emphasized the value of the balanced scorecard tool and considered it crucial
for promoting open and transparent communication within the organization by clearly
visualizing and communicating future thoughts and visions. It was emphasized how this tool
promotes clarity about responsibilities and workload distribution within the group. By
promoting a sense of involvement and commitment, the balanced scorecard contributes not
only to increased efficiency and success for the organization as a whole but also to a better
understanding of individuals' roles and significance in the process.
This view aligns well with Kaplan and Norton's (1996) description of the purpose of the
balanced scorecard, where the authors highlight its ability to enable companies to monitor
both financial results and progress in capacity building and acquisition of intangible assets
necessary for future growth. Moreover, connections can be drawn to how the organization
uses the tool to avoid creating conflicting goals within the organization. Instead, it serves as a
means to create a shared vision for the future and to clarify who is responsible for different
parts of the process. This preventive approach can be understood in the light of Beer and
Nohria's (2000) "theory E and O," where economic value and organizational capability often
conflict in the organization's development efforts. Beer and Nohria (2000) advocate managing
these aspects separately and at different times to avoid conflicts, although some organizations
manage to address them simultaneously by integrating goals with fewer compromises. As
previously emphasized, the trading organization does not quite operate in the same way as
Beer and Nohria (2000) advocate, but a clear picture emerged of how the balanced scorecard
made these internal change processes clearer within the organization to avoid contradictions.
This approach is surely used within the organization to manage the long-term and short-term
perspectives in the company's affairs and development work. This was also backed up on an
organizational level by how the respondents emphasized that the organization's ownership
structure prefers growth over profitability today.
61
Finally, significant similarities could be identified between how the company creates
competitive advantages under the conditions previously described in this section and how
Teece (1997) addresses dynamic capabilities. The respondents clearly demonstrated how
geopolitical events strongly influence the organization. In an ever-changing business
environment, where complexities arise continuously, a trading company needs to be agile and
adaptable to seize opportunities and manage challenges. Teece (1997) emphasizes the
importance of dynamic capability for a company's survival in a competitive and evolving
market, emphasizing that a company's dynamic capability refers to its ability to quickly and
effectively adapt to changes in the external environment.
The respondents repeatedly emphasized the crucial importance of adaptability for a company
operating within their industry. It emerged how this type of adaptability, similar to Teece's
(1997) description, aims to exploit business opportunities and address threats from
competitors and market conditions. The resulting corporate culture encourages employees to
contribute solutions and learn from their mistakes, as the organization often finds itself in
situations where they must quickly address consequences and turn them into opportunities. It
became clear that this type of dynamic capability, as Teece (1997) describes it, is of
significant importance for a trading organization.
Throughout this study, it has become evident that the organization under examination aligns
with O'Reilly and Tushman's (2013) description of an ambidextrous organization on many
levels. While ambidextrous organizations have not been explicitly mentioned in this paper, it
has become apparent during the course of the study that there are significant similarities with
how trading organizations operate. O'Reilly and Tushman (2013) describe this type of
organization as having the ability to leverage existing advantages while continuously seeking
out new opportunities. This description aligns well with the picture that the empirical findings
have painted of how trading organizations function. Several respondents explained that a
trading company should exploit, for example, a lucrative market as long as possible while
also not putting all their eggs in one basket, as markets can change very quickly. Therefore, it
is important to constantly search for new markets, customers, and suppliers.
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5.3 The future of the trading industry
Considering the sensitivity of the trading organization to geopolitical events and global
changes, the respondents emphasized the importance of future perspectives and assessments
in predicting what will happen. With the company's dynamic and complex operations, there
are many variables that can easily be influenced by macroeconomic conditions, which in turn
affect business in various markets around the world. Following this line of thought, it was
evident that the organization always strives to anticipate events by interpreting various signals
and gathering information from the markets. Similarly to Flack and Mitchell (2020) and
Fergnani (2022), the respondents explained how this is a challenging task, especially given
the complex business environment they operate in. Both Flack and Mitchell (2020) and
Fergnani (2022) highlight that a company's foresight is an important part of how they can
maintain success in a complex business environment, but also that the phenomenon is
difficult to master and sometimes requires flexibility and agility instead of investing resources
in predicting an uncertain future. This reasoning is highly relevant to the earlier discussions in
the chapters where the organization's adaptability was discussed as crucial for trading
organizations. Also here, in direct connection to theories of corporate foresight, the
respondents explained how it is sometimes practically impossible to predict an event, and in
these cases, it is more important to be well-prepared and have the ability to act appropriately.
It was emphasized that sometimes it is more important to be able to adapt to the event and
strategically leverage it to the organization's advantage. A recurring example was the pirates
in the Red Sea, which had a significant impact on freight prices from Asia to Europe. Because
this had such a large global impact, it was very difficult to predict the extent of the
consequences. In this example, the respondents explained how this situation affected their
organization in a way that complicated business in regions affected by the event, as well as
Asian deliveries to Europe and North Africa. Instead, the respondents highlighted how their
solution was to turn the situation to their advantage due to the conditions they had created and
the organization's choice to act quickly. While Asian competitors struggled to deliver their
products to these markets, the organization was able to adapt and redirect its operations to
these regions and conduct profitable business. This example, along with many others in the
empirical section, aligns well with how adaptability can lead to first-mover advantages as
described by Vecchiato (2015) in corporate foresight.
63
Both Vecchiato (2015) and Doz and Kosonen (2008) emphasize that competitive advantages
can be achieved through strategic agility and the ability to be flexible within corporate
foresight. It is clear that the respondents' descriptions of the organization's ability to adapt and
anticipate market developments provide the company with competitive advantages. This
reasoning aligns with Vecchiato's (2015) argument about how adaptable strategies can lead to
first-mover advantages, which in turn can result in higher profits and increased market share.
Being first in the market provides the opportunity to anticipate external changes before
competitors, giving a competitive edge. Similarly, Doz and Kosonen (2008) explain that
competitiveness can be achieved through agility, which entails a continuous ability for an
organization to adapt to changes.
Fergnani (2022) and Rohrbeck (2010) highlight the importance of actors and companies not
solely basing their business decisions on historical data but also actively developing a
systematic understanding of possible future scenarios. Rohrbeck (2010) emphasizes that a
company's foresight capability constitutes a dynamic capacity and presents a framework with
eight central components to promote this ability. These include, among others, information
gathering and developing strong people and networks. These aspects correlate well with the
respondents' descriptions of their method for anticipating the future, which involves
collecting and analyzing information, observing environmental trends, and identifying
potential discontinuities. In this way, the company can evaluate how different events and
conditions may impact its business operations in various ways. Dynamic capability has been
previously discussed in the chapter, but an interesting aspect is the view that Rohrbeck (2010)
presents within corporate foresight, which also aligns well with the respondents' view of the
organization's intangible assets, such as competence, adaptability, and problem-solving
ability, as crucial to their operations. In the absence of a tangible product, the organization
must be adept at handling complex situations in a challenging business environment, where
these key competencies or the company's so-called dynamic capabilities form the basis of the
company's foresight, playing a crucial role in how they build their business and maintain their
competitiveness.
Within the framework of dynamic capabilities, it is clear that there are connections between
the organization's view of the importance of placing the right person in the right position and
decisions made in various areas being made by individuals with adequate expertise, which
resonates well with Doz and Kosonen's (2008) description of how organizations manage
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uncertain future environments through targeted interaction between top management and
three meta capabilities. Within these meta capabilities, there are similarities with the authors'
portrayal of resource fluidity as one of them, which involves the organization's internal ability
to quickly restructure and reallocate resources, as well as leadership unity: leadership's ability
to make bold and quick decisions without getting stuck in hierarchy. These observations also
align well with the respondents' emphasis on the importance of leaders at higher levels in the
organization daring to make quick and appropriate decisions in situations arising from
changes in the business climate in the markets.
Furthermore, the respondents outlined how the work of corporate foresight can concretely
involve building various scenarios about the future. Where the different scenarios are
executed as a consequence of the execution of another event. However, this was described as
a slightly more theoretical work than a purely practical one actively worked on. Instead, the
work of creating different scenarios was described as a more overarching mindset that
employees have adopted to stay alert to what is happening around the world.
Interesting here is that there are both similarities and differences with Schoemaker's (1995)
explanation of the concept of scenario planning. The author describes how scenario planning
goes a step further than regular planning as it takes into account a significantly larger amount
of uncertainties. The respondents clarified that the main challenge with scenario planning is
the uncertainty about the future, which, according to their experience, has resulted in a limited
allocation of resources to this type of strategic work. In the trading industry, which is
characterized by a high degree of complexity and a multitude of variables, especially in
international business, the respondents experience forecasting the future as particularly
problematic. Despite this challenge, they emphasize that companies in this industry can
achieve competitive advantages by acting quickly and effectively in connection with
disruptive events.
Although the logic behind Schoemaker's (1995) scenario planning and its potential benefits
within the trading industry are prominent, respondents' experiences suggest that the process of
developing scenarios is too time-consuming, especially considering the limited likelihood of a
scenario actually materializing due to the unpredictability and rapid pace of change in today's
world. However, it emerged that there are occasions when scenario planning is used to some
extent in practice and where resources are actually allocated to creating different future
65
scenarios. This occurs in situations where there are two possible outcomes, such as in a US
presidential election. In such situations, many similarities are observed between respondents'
description of scenario development and Schoemaker's (1995) theory. However, the execution
is described as considerably simpler than the six-step model the author presents. Instead,
respondents explain that the focus is on identifying solutions and opportunities in both
outcomes of such an event, where the goal is rather to prepare to handle the actual outcome in
the best possible way.
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6. Conclusions
The final chapter of this thesis aims to present the ultimate conclusions derived from the
discussion and the answers to the study's research question. Furthermore, the study's
theoretical implications, managerial implications, and suggestions for further research are
discussed.
In the context of this study, it is evident that the international trading industry operates within
a complex business landscape that is constantly evolving. Many dynamic aspects of this type
of business are profoundly influenced by external events such as geopolitical occurrences. Tis
study focuses on understanding how organizations in this sector navigate these complex and
fluctuating circumstances while concurrently building competitiveness through organizational
governance to leverage these events to their advantage over time. Both theoretically, by
delving into a plethora of models and theories concerning how organizations can create
conditions for competitiveness, and practically, by examining the reality within a typical
trading organization, this study has sought to shed light on how this phenomenon is managed.
Through a selected analytical framework incorporating relevant theories in the field and
qualitative semi-structured interviews, the stated objectives were achieved, and the two main
research questions were addressed.
When addressing RQ1, How do international trading companies adapt to a rapidly changing
market environment, considering geopolitical impacts?, several essential factors emerged
regarding how trading companies succeed in adapting to a constantly changing business
environment influenced by geopolitical events. Being a learning organization that continually
strives to be adaptable and solution-oriented to respond to global changes agilely was
considered crucial. Additionally, the ability to function as an ambidextrous organization,
leveraging existing opportunities while constantly exploring and seeking new ones, was
described as significant for enabling long-term success in the industry. Geopolitical events
were found to impact these types of organizations prodoundly. Therefore, corporate foresight
was deemed an essential tool for anticipating market trends and creating conditions to adapt
to a constantly evolving business environment successfully. However, it was noted that
corporate foresight and scenario planning are simplified models with limited utility within the
complex trading industry. Instead, the work on these methods is described as fundamental to
proactively creating conditions to act on both threats and opportunities.
67
Regarding the sub-question, What strategies and methods are used to ensure relevance in the
highly competitive market?, several crucial aspects emerged concerning the strategies and
methods that trading organizations employ to remain competitive in the market. The study
clearly indicated that trading organizations operate in a complex business environment, where
they identify business opportunities in markets where many other companies are reluctant to
engage due to perceived risks and trading difficulties. From a risk perspective, this market
environment requires trading organizations to be more risk-tolerant than other companies. It
became evident that these organizations must also be innovative to maintain and create
competitiveness. From this perspective, being solution-oriented and having a corporate
culture that advocates controlled risk-taking, where employees are encouraged to think
outside the box, were identified as significant factors. The importance of why this is crucial
for the competitiveness of trading organizations was demonstrated by the fact that these
characteristics must exist as market conditions can change rapidly due to geopolitical events.
Risk mitigation based on strategic choices in how these organizations conduct global business
was also apparent in this area. This was considered crucial from a competitive perspective as
it provides opportunities for trading organizations to adapt their business when geopolitical
events affect their operations. The expression "not putting all eggs in one basket" was
recurrent, indicating that despite some markets being more lucrative at times, there are
significant risks associated with being too heavily invested in one supplier, customer or
market, making this type of risk mitigation particularly important.
Furthermore, within the strategic choices in trading organizations' business, long-term vision
and the establishment of a broad network were mentioned as crucial factors for creating and
maintaining competitiveness. It was evident that in this industry, good relationships create
conditions for adaptability and agility in an organization. Finally, it was shown that for these
types of organizations, intangible assets are more critical than tangible ones. Given that these
organizations do not produce their own product, intangible assets such as know-how,
competence, and dynamic capabilities are crucial for their competitiveness. In a constantly
changing market environment influenced by geopolitical events, expertise, know-how, and
continuous learning are crucial for trading organizations' opportunities to make favorable
deals.
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6.1 Theoretical implications
This thesis gives rise to three primary theoretical implications. The overarching division for
this study has been past, present, and future in order to create as fair a depiction as possible of
how an organization historically worked to maintain its competitiveness. Each of these
temporal perspectives leads to different conclusions, resulting in varied theoretical
implications. The first theoretical implication pertains to the past and highlights how the
study, by presenting several examples that align with concepts such as creative destruction
and techno-economic paradigm, confirms the relevance of these theoretical concepts within
the trading industry. Furthermore, the study also confirms the second theoretical implication,
concerning the present by demonstrating the applicability of the concept of dynamic
capabilities. Through the organization's descriptions of actions taken to strengthen its
dynamic capabilities to promote adaptability and organizational agility, the practical
relevance of the concept is affirmed within a complex industry. Finally, the thesis suggests
that the concept of corporate foresight, presented for the future, has some utility. However,
the study notes that this concept provides a view of reality that is too simplified to be
significant within such a complex and ever-changing industry as the trading industry.
6.2 Managerial implications
The managerial implications of the thesis extend to both trading companies specifically and
other organizations operating in the international market. For trading companies, significant
portions of the study's literature review and empirical findings can be directly applied,
offering valuable insights into how a trading company can sustain its competitiveness over
time. These insights can guide both long-term strategic decisions and short-term priorities.
Furthermore, the understanding of balancing long-term visions with short-term actions, where
the emphasis on building strong relationships sometimes outweighs short-term profitability,
may be relevant for various international organizations. The ongoing effort to combine
proactivity with the ability to be agile and reactive also provides useful insights for
companies in different industries operating in the uncertain and rapidly changing global
environment. The thesis's overall practical contribution lies in its ability to illuminate how a
well-functioning organization in a complex and highly competitive industry manages both the
challenges and opportunities arising from geopolitical events.
69
6.3 Future research
This thesis has examined and explored several interesting areas and aspects regarding how
companies in the trading industry work to remain competitive over time. Additionally, the
thesis has uncovered several promising strands for future research. One suggestion for future
research is a qualitative study that delves more deeply and focuses on the extent to which
trading organizations function as ambidextrous organizations. This aspect was not included in
the literature review of this thesis but was considered to have significant similarities after a
thematic analysis of the empirical material. Another possibility would have been to
investigate the significance of past and accrued organizational know-how for older
organizations compared to new younger organizations without historical organizational
experience. Furthermore, since this study was conducted in a Swedish company that operates
internationally, it would be of interest to conduct a similar study with trading companies from
other countries. This is to see if geographical differences have any significant impact on how
companies engaged in international trade operate. To test the reliability of this study, aspects
such as long-term relationships, risk mitigation, and adaptability, which were considered
important for the study organization of this thesis, would have been of interest to investigate.
70
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Appendix
Appendix A. Interview guide
General information
- For your information, both you and your organization will remain anonymous
throughout this study.
- Is it acceptable for this interview to be recorded and later transcribed for use in a
master's thesis?
- Could you please introduce yourself and provide details about your current role and
main responsibilities?
- How long have you been working within the organization?
Geopolitical Events
- How do geopolitical events affect your organization?
- How do you work to manage the difficulties and opportunities presented by these
events?
- In your experience and based on your own observations, how important do you
consider foresight and future outlook for the organization's business opportunities?
- What risks are particularly important for you to be aware of in your industry?
- How do you work to address these risks?
Capabilities
- What qualities do you believe make your workplace competitive within your industry?
- What would you say is important today to remain competitive within your industry?
- What challenges and opportunities do you see for the company in the current market
context?
- Could you mention a geopolitical example where you have previously
succeeded in capitalizing on an identified opportunity?
Ability to adapt to change
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- In what ways would you say you work with flexibility and adaptability in the
organization's daily operations considering geopolitical influence?
- Can you mention any specific tools or platforms that you have implemented to
improve your adaptability?
- How have technological and digital initiatives affected how you adapt to market
changes considering geopolitical instability?
- How does your corporate culture and employees contribute to your ability to adapt
and be innovative in a changing market environment?
- How important is it for you to have a long-term relationship with your customers and
suppliers, considering the uncertainty surrounding the rapidly changing market you
operate in?
Trends
- Which trends are particularly important for you to follow from a geopolitical
perspective?
- How do you work to follow such trends in the market?
- What methods and tools do you use to monitor and evaluate market trends and
competitive situations to identify opportunities and threats in the market?
- How important is it for you to have long-term foresight in your work, linked to
technological advancements and changing needs?
- Over your years in the industry, have you experienced any major changes related to
technological advancements?
Ending
- In your opinion, is there anything we haven't asked about that you believe could
contribute value to this research?
- Who do you recommend we speak with next?
- Could you provide us with a warm introduction?
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Appendix B. Data Structure
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