ABSTRACT
With a population of about nine million people, Sweden is a relatively small country. However, Swedish business life during the twentieth century has been characterized by the development and growth of many multinational companies, such as Ericsson, Electrolux, Volvo, Tetra Pak, and IKEA. In 1997, Sweden had 282 listed companies with a weight in the world index of about 2.1 percent (Dahlquist and Robertsson 2001). Sweden’s multinationals grew strong in an institutional environment where CEOs were given strong positions in which they were able to balance the requirements of different stakeholders, i.e., the government, the banks, the shareholders, and the employees. Accounting and company legislation supported this strong position for top management, by dividend restrictions and encouraged creation of (hidden) reserves. In turn, the appointments of CEOs in the multinationals were to a large extent governed by the ownership spheres that controlled most of the multinationals in Sweden.
