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By emphasizing the rigid character of centralized bargaining, many students of Sweden's political economy end up by wrongly characterizing its national industry as ‘Fordist’. By contrast, this chapter argues that the strategic responses to increased competitiveness actually varied across sectors. In motor vehicles and electrical engineering, the experience of diversity of market realities, heterogeneous institutions, and conflicting political goals forced enthusiastic proponents of Americanization to modify or abandon their view on the fundamentals of industrial efficiency. Pressure from customers for innovation, small batch production, adaptation, and successive upgrading of existing products created obstacles to standardization. It was not until increased liberalization of world trade and competitive pressures began to make themselves felt in export as well as domestic markets that the ambiguities of Swedish industrial practices became manifest, spurring national industry to redefine its identity through a process of strategic debate and selective adaptation.

This chapter analyzes the prevalence of business groups in Sweden. The Swedish economy has since the early twentieth century been dominated by a rather small number of large and internationally oriented companies. The relations between banks and industry have been important in understanding the long-term growth of the Swedish economy. Two business groups—the Wallenberg group and the Handelsbanken group—stand out as especially resilient and dynamic. The Wallenberg and Handelsbanken groups have both developed into diversified business groups with a commercial bank in the center of each. The successful Swedish business groups have also to some extent been dependent on indirect support from the Swedish state, allowing the large groups to maintain their dominant position.

This study demonstrates that the presence of diversified corporate forms within the insurance industry does not always lead to the dominance of what is, according to theory, the most efficient business form, the joint-stock corporation. Swedish mutual insurance companies have often been connected to various popular movements and have thus obtained quasi-monopoly rights for writing certain kinds of insurance. This has been important as a means of obtaining economies of scale and creating efficient organizations, and has allowed them to compete with their joint-stock rivals. Mutuals have also remained important players in the insurance market by keeping policyholders’ interests in focus through creative product diversification and by expanding nationally to reach customers outside of their original base. Mutuality also protected them against hostile takeovers that weakened the stock corporations. Mutual insurers not only survived as independent companies but also were a success.

In Swedish life insurance, mutual and stock insurers have competed since the late nineteenth century. Stock insurers were prime movers controlling the early market. After the establishment of the first mutual insurer in 1887, however, stock insurers lost substantial market share. By the mid-twentieth century, mutual insurers controlled 70 per cent of the life insurance market. In this chapter we explain how and why the mutual form was more successful than the stock organizational form in Swedish life insurance from the late nineteenth century to the mid-twentieth century. Our preliminary results show that mutuals were more successful than stock companies in attracting demand from the growing wage-labour population. By introducing the concept of industrial insurance and by keeping claims experiences low, mutual companies were able to efficiently expand their businesses and their market share.