Rethinking Corporate Governance

Rethinking Corporate Governance

The Forming of Operative and Financial Strategies in Global Corporations

Sven-Erik Sjöstrand

Rethinking Corporate Governance’s extensive and insightful empirical investigation offers a radically new approach to corporate governance. This ground-breaking volume describes and analyses the key nature-based and actor-based forces that ultimately determine corporate governance processes and long-term corporate paths. Generally, such forces work in complex and intricate interplays that to a large extent vary among corporations. The author argues that actions taken by individuals have a special status among those forces, as they not only generate impact in themselves, but also involve interpretations of the possible effects of all the other forces. Among those actions, the ones taken by the shareholders stand out as particularly decisive both for the governance processes as such and for how corporations develop over time.

Chapter 7: From Domänverket to Sveaskog: reviving the original core business

Sven-Erik Sjöstrand

Subjects: business and management, corporate governance, international business, strategic management, economics and finance, corporate governance

Extract

Back in 1978 a study had suggested certain minor changes in the relationship between ASSI and Domänverket (e.g. that most forests in ASSI’s cutting areas ought to be transferred from Domänverket to ASSI). ASSI responded by calling attention to its 1977 proposal about a merger between the two organizations. However, nothing of significance materialized until 1984, when ASSI and Domänverket negotiated a new long-term timber agreement. A few years later (1987), the two organizations also agreed that Domanföretagen should take over some of ASSI’s sawmills (Karlsborg [soon closed], Lövholmen and Seskarö). Domänverket was profitable during those years (1984–88) and delivered about SEK 800 million to the state. At that time, the conditions for the Swedish forest-based industry were favourable, and nothing indicated a downturn. Still, the investments were usually made abroad, which was explained by the relatively high cost for timber and wages in Sweden, and by growing uncertainty regarding future energy sourcing. ASSI’s timber deliveries continued to be a problem all through the 1980s.

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