Paper for EBHA Conference in Frankfurt 2005-07-31

The Role of History in the Modern Company – Ericsson and the Past

Brita Lundström Division of History of Science and Technology, Royal Institute of Technology, ,

Commercial Use of History and Corporate Identity The big companies have a great impact on the society of today. Not only for the economic growth in society, but also a great impact on cultural life in society, in commercials, in branding and as sponsors of different kinds of events. Traditional business history, focus on the company’s economical behavior. Due to the companies power in our commercialized society it can be very fruitful to look on companies as a cultural phenomenon, and use a cultural historical perspective in the analyze of the companies cultural behavior. A study of the company, not only as an economic unit, but also as a cultural unit.

In the heritage of Pierre Nora, thoughts about history and memory and the concept of “use of history” has grown fast among historians. It has been shown in many studies that history can be told in many different and parallel ways and be useful for many different purposes. (In Sweden for example: Aronsson 2002; Karlsson 1999; Zander 2001). Furthermore, the research has shown that not only academic historians are the history tellers, it could also be a political party, a municipality, or like in this paper, a company. In this respect I look upon the company as a cultural unit with memory and history as one important part of the identity.

In Business Studies, corporate identity, reputation and branding have become important fields of research (For example: Holger & Holmberg 2002; Salzer-Mörling 1998; Schultz et al. 2000). Branding is a way to express identity, which has been important to companies and products for a long time. In the corporate identity the vision and mission of the company are formulated, and the company should have a storyline. Beside of this, the corporate story, or the history of the corporation, has become more and more important. Companies use their history in the concept of the corporate identity. One indicator of this trend, that it has become more important to companies to use their history, is that service-companies specialized on heritage-driven marketing and communication has arisen.

By combining these two approaches, use of history and corporate identity, a new light can be put, on history and identity, within companies. In my research I look upon how industrial companies use their history, in the present and in the past. Is it a new phenomenon that companies use their history, or have they always done it? Has the way of usage changed?

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The aim of this paper is to discuss business history as a useful part in a company’s culture. I will show how the way of using the history have had different features in different times, due to the context. (It is as well the results in my forthcoming doctoral thesis). I will first present my observations from my case study, the Swedish telecom company Ericsson. There are three moments, which I have identified, where identity and history has been expressed in a special way. After the presentation of use of history in Ericsson, I will discuss the results on a more general level.

1940: The Boarder Between the Future and the Past LM Ericsson was established in 1876, by Lars Magnus Ericsson (1846-1926). Almost from the very beginning the company produced telephones. Already in the 1890’s their products could be found on an international market. The company grew very fast, and they enlarged their factory in Stockholm city, gradually. But in 1940 they had to move. They moved to a new, modern factory building, in the area Midsommarkransen in the southwestern part of the Stockholm out-skirt, and the place got the name Telefonplan [Telephone Square]. The factory was built after the latest ideas, and became a modernistic model factory. It was built out in the green, like a factory in a park, and it was characterized by light and space. The functionality of the new factory was very important. Rational flows of raw material, products and people were well planned, and expressed by the architect.

The factory at Telefonplan became also an important change in identity for LM Ericsson. In a leaflet with the title, A New Era… the new LM Ericsson was presented. The image at the leaflet, but also the text in it, expressed clearly that the company left an era behind and was heading for the future. Like the architect, the managing director expressed a rational way of thinking. They tried to implement a new identity. It was not only in the expression of buildings, texts and images that this appeared. Another interesting appearance was that in the old factory there was a small museum showing the historical development of products. In the new factory, they had an exhibition-room to show their new technology instead. The former museum got only a small part in a corner in the exhibition-room. This was a very modernistic way of using the history. The company wanted a shift in identity. The future was most important. To show how new the modern and new era was, the history was used as a reflection or contrast.

1976: Celebrating the Future or the Past? In 1976, LM Ericsson had their 100-years anniversary, celebrated with lots of jubilee festivities. The official aim of the jubilee was stated. “It is important to emphasize that we are not celebrating our 100-years anniversary by historical reasons mainly, but we intend to use this occasion for strengthening our position and reputation as one of the world’s leading telecommunication companies. Our results and achievements today, has obviously greater importance for our continued success, than our historical background.” This indicates that history was useful in the building of the corporate identity.

One of the jubilee activities was a big investment in the history: a three-volume historical account (Attman et al. 1976). The professor in economic-history, Arthur Attman, was the chief author, and the result was traditional business history of good quality. Even the company’s expectations of the book were that it could be useful in partner relations. The content should be oriented to a presentation of the current company and development tendencies in the light of the historical development.

A celebration week was organized when customers, communication ministers, and other officials from all over the world were invited. The reason to gather all the people was the jubilee, but the

2 company took the opportunity to show their latest product: AXE, the brand new digital switching system. With help of the 100 years anniversary the company enrolled and strengthened the relations to important people. The driving force in this jubilee was the chairman of the board of directors and the president.

2001-2005: Corporate Identity, Marketing and History Today Ericsson is the largest supplier of mobile systems in the world. But even if Ericsson is one of the biggest companies in Sweden they faced serious troubles during the first years of 21’s century. During the 1990’s Ericsson really prospered due to the development of the digital mobile systems. They presented their identity as a modern company, forced by the newest technology and the latest research. Heading for the future. They applied the latest marketing trends in commercials and in sale-shows. But the good times shifted very fast with its starting point in the beginning of 2000. The year after, 2001, Ericsson had their 125-years anniversary. But it shouldn’t be such a big celebrations as in 1976. They published a new historical account, based on the 1976 book. The jubilee was planned during the times of prosperity. But when it was time for the anniversary, times of depression had come. Something interesting happened. The jubilee was almost reduced to silence.

But at the same time, Ericsson began to work with a new corporate brand. The starting point for this work was formulated as the values and ideas that the founder, Lars Magnus Ericsson, had developed. The Company traced their roots and the ideas should be based on the Company’s history. In the same project they used storytelling among the employees to find the Company’s identity and the “Ericsson-spirit” to build the corporate brand.

Furthermore, in 2003 Ericsson moved their headquarters from the Telefonplan factory to their office-buildings in , built in the 1970’s. They left the modernistic factory building that had become a symbol for the company, for the area Kista that was launched as the Silicon Valley of Sweden. The new premises were kind of anonymous, so the new headquarters were instead decorated with symbols, gathered from the history. The company made an “experience center”, a visitor’s center, where they showed their products. A “history wall”, or a history exhibition, was one important part. In addition to that, all the conference rooms in the new premises were named after persons, places and products from the company’s history. A short story about the place, the person or the product, were presented on a plate at the door.

The Ericsson Company use their history in a new way. Not at least the president and CEO, Carl- Henric Svanberg, often use historical references in presentations and speeches. A consequence is, that the history also is used more like a mythology, where the grounder, Lars Magnus Ericsson, gets all the characteristics as “imaginative engineering, superior craftsmanship and widespread international operations”. Today, the history-tellers have become more marketing consultants than historians.

Summary Each of the three moments has had different ways of using the history. In the 1940’s it was a very rationalistic way of using the history in the LM Ericsson Company, it was a part of the modern movement and the rational way was to use the history as a contrast to the contemporary. In the 1970’s the LM Ericsson Company used the history in a very strategic way. Owing to a jubilee they introduced a new product and enrolled important people. Today, the Ericsson Company use the history in marketing strategies, and sometimes it is in an almost mythological way.

3 A Worldwide History in a Worldwide Company? The perspective for the three moments mentioned, is the perspective of use of history by the management at the headquarters in Stockholm, or the parent company. But in a big group as Ericsson with different subsidiaries and divisions, there are a lot of parallel histories. The different businesses want to tell their story in jubilees, at homepages and historical accounts. In the 1990’s and the beginning of 21’st century there were a lot of different stories. For example, in 1997 and historical account of Ericsson in Russia were published, and in 2004 one historical account of Ericsson in Mexico and one of Ericsson in Poland was published. Moreover, there are several historical accounts from Swedish divisions. By analyzing these books, there is a very disparate picture of the same group that appears. This picture doesn’t fit the picture of corporate identity, in the meaning that the same picture of the company shall appear wherever you are in the world. Or is there an Ericsson canon that is told wherever you are, complemented with the special subsidiary’s story?

Conclusion Here I have sketched some features from different periods in my case study. By analyzing on a more abstract level I have found some more general features. This is from one case study only, and of course the level of generalization is limited. But anyway I find it meaningful to do a sketch on this level, and I leave it to other researchers to sophisticate, confirm or reject my matrix. (See matrix in the end of the document.)

Each time have their way of using the history. In the 1940’s it was a very rational way of using the history in the Ericsson Company, the history was used as a contrast to the contemporary. In the 1970’s they used it in a very strategic way to show a new product and to enroll important people and in our days they use it in marketing strategies and sometimes in an almost mythological way.

It is also clear that it has been different actors in different times. In 1940 there was an engineer who was the driving force for taking care of the history in the old museum. In 1976 it was the management who was the driving force, and today it is the people working with marketing and information.

The main focus of the content, or what is told of history, has changed also. In 1940 the history was the products, and it was the products linear development that was in focus. In 1976 there was a focus on the economic development and the historical account that was then written, was like the “big” history. Today it is a focus on people and their contribution to the company, there is scope for different stories, and you can choose the one that fits your purpose. The different histories from the subsidiaries strengthen the picture of today’s company with many stories.

My synthesis is that the differences in the use of history in the Ericsson Company depend on greater movements in the society. In the 1940’s the modernism had great impact on the company. Ericsson built a new factory, which was rational, hygienic, spacious, and light. The engineers and the researchers were important for the company’s image. It was important to be modern, too, and the modernism was determining for the way using the history: as a contrast to the modern.

Today it is a post-modernistic way of using the history. The post-modern society is characterized by consumption and seeking for identity, and therefore even the history becomes marketing and corporate identity. The searching for identity in history is also an important part in the post- modern society and “the History” falls apart in different stories.

4 In 1976 we can see a shift between the modern and the post-modern society. There was still one “History”, but the company realized the potential in using the history for commercial use.

At last, history has always had some importance for companies, but it has been used in different ways. Today, it is more important to have an identity based on the history in the company’s name, heart, and soul, than it is to have an identity based on the products and the buildings.

But there is also one interesting contradiction in the post-modern company’s usage of history. In the post-modern company there have appeared a lot of different corporate stories from all over the world. But due to the concept corporate identity, you should find the same picture of the company wherever you are. This is the contradiction. I think, in the coming years, that we will find a new kind of use of corporate history, towards a corporate canon. A fundamental story, which will be the foundation wherever you are, and then the subsidiaries can supplement with their own story.

Literature Aronsson, Peter (2002). Historiekultur, politik och historievetenskapen i Norden. Historisk Tidskrift 2002:2 (Tema: Historiebruk), 189-208. Attman, Artur, Kuuse, Jan, Olsson, Ulf & Jacobæus, Christian (1976). LM Ericsson 100 år. 3 vol. Telefon AB LM Ericsson, Stockholm. Holger, Lena & Holmberg, Ingalill (eds.) (2002). Identitet : om varumärken, tecken och symboler. Raster, Stockholm. Karlsson, Klas-Göran (1999). Historia som vapen : Historiebruk och Sovjetunionens upplösning 1985- 1995. Natur & Kultur, Stockholm. Meurling, John & Jeans, Richard (2000). Ericssonkrönikan : 125 år av telekommunikation. Informationsförlaget, Stockholm. Salzer-Mörling, Miriam (1998). Företag som kulturella uttryck. Academia adacta, Bjärred. Schultz, Majken, Hatch, Mary Jo & Holten Larsen, Mogens (2000). The Expressive Organization : Linking Identity, Reputation, and the Corporate Brand. Oxford University Press, Oxford. Zander, Ulf (2001). Fornstora dagar, moderna tider : Bruk av debatter om svensk historia från sekelskifte till sekelskifte. Nordic Academic Press, .

Archival material Telefonaktiebolaget LM Ericsson, Centre for Business History in Stockholm.

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Shift Between Modernism Modernism / Post-Modernism Post-Modernism

1940 1976 2005

THE USE OF Rationalistic Strategic Mythologic HISTORY

The Marketing and ACTORS The Engineer The Management Communication People

Linear THE CONTENT Development by Different Development of Economic Development OF HISTORY People’s Contribution Products

THE ROLE OF Contrast to the Deliberated History / Scope HISTORY Contemporary ”The Big Story” for Different Stories

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