The Forming of Operative and Financial Strategies in Global Corporations
Chapter 13: SCA: the search for a new core business
As already introduced briefly in Chapter 5, SCA’s development from 1929 to the 1950s was largely influenced by its attempts to integrate a dozen independent organizations. The process had to be carried out in two steps: first, the establishment of regional groupings and then the formation of an integrated corporation. SCA’s leading actors were supportive, and initially they wanted to see strong subsidiaries that dominated their regional markets; later they intended to exploit the potential scale advantages inherent in the grouping as a whole. The controlling bank (Handelsbanken) also backed that two-step strategy because it would simplify a future sell-out of (units of) SCA. In a memo, Ernfrid Browaldh (Deputy CEO of the bank) addressed the organizing issue, providing both a description of the merits of the suggested grouping and a sketch of an imagined holding company. His organizational chart for SCA also outlined a possible division of responsibility between the mother company and the rather independent subsidiaries. Apart from the efforts to co-ordinate the mother company with its relatively autonomous subsidiaries, there were also strong forces that favoured rationalization of the central units and the idea to move the group’s HQ from Stockholm to Sundsvall. The HQ re-location would put top management in closer contact with the company’s everyday operations.
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