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 14: SCA: a dramatic expansion period

Sven-Erik Sjöstrand

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


Mölnlycke’s CEO Daun noticed that big international corporations showed increasing interest in Mölnlycke’s products. They also looked at the Nordic countries as a potential new market, and Procter & Gamble, in particular, was seen as a threat. To address this threat, SCA had to decide whether it was possible for Mölnlycke to concentrate on the Nordic market, or whether it might have to expand its ‘home domain’ to all of Europe – or even go global. Daun was of the opinion that a sole presence in the Nordic countries would be impossible to defend, as the impact of diseconomies of scale in production and marketing would then hit hard. Mölnlycke’s top management made a list of possible acquisitions in (primarily) Europe, and leading managers travelled around with that list in their heads and talked with high-level managers in the prioritized companies. If more ‘serious’ leads developed, Daun – and sometimes Rydin – would join SCA’s staff in those meetings. In packaging Nördeno’s contribution mattered the most for many of the negotiations in that field – he knew almost everybody and everything in that business. However, for SCA as a whole, Martin-Löf (and before 1988 Rydin) – typically together with Bertorp (Chief Legal Officer) and Rietz (CFO) – led most acquisition processes. That team usually also carried out many of the crucial negotiations.

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