Short-term performance pressures on British and Scandinavian firms: Case studies

A hypothesis is set out to account for the poor innovative performance of British engineering industries by contrast both with their rivals in other advanced countries, and with the British 'chemistry-based' industries. Engineering product innovation demands a high degree of interfunctional and external interaction, and offers low visibility. Corporate history and national culture have made it difficult to achieve the former - without decentralisation - and to cope with the latter - particularly after decentralisation. In both respects Sweden is better placed. Chemistry-based industries (particularly pharmaceuticals) have had less need for such interaction, and naturally tend to offer higher visibility - which the UK firms improved by avoiding diversification. It is explained how this hypothesis was developed through case studies of four British engineering multinationals with Scandinavian subsidiaries, two Swedish engineering firms, a British pharmaceuticals company, and a British glass multinational with a Scandinavian subsidiary.