The Forming of Operative and Financial Strategies in Global Corporations
Chapter 5: The first half of the 20th century
The decades around the turn of the century saw significant technical breakthroughs and innovations in the forest-based industry, which brought about a substantial increase in its productivity. Those changes affected most parts of the value chain, from the cutting of timber to the transportation of the finished good to the customer. A road-based transport system was developed and soon replaced the one based on rivers. Moreover, the horse was removed from most forest work, as was sawing by hand. Instead, many kinds of machinery took over. The radical mechanization of the operational flow – that is to say, the introduction of tools, machines and systematization in the production processes – required significant capital, and therefore initiated a long period of steadily increasing economies of scale. It was during these years that pulp production more and more came to dominate the industry at the expense of timber and wood products. The growing economies of scale put the firms’ financial flows more into focus, which brought about changes in the requirements associated with corporate shareholding and – consequently – began to alter the distribution of ownership in the industry.
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