Old Swedish Business in New International Clothes Case Studies on the Management of Strategic Resources in Foreign-Acquired Swedish R&D firms

Abstract: Which conditions are needed for research and development firms to stay competitive? Such firms must continually develop new products and processes if they are to provide their customers with value, and equal, if not exceed, the offerings their competitors provide. Firms that lack sufficient innovation and creativity risk losing customers, their reputation, and their position in corporate structures and in their industries.Even worse, they may be forced to liquidate their assets, file for bankruptcy, merge with other divisions, or be sold. There are many possibilities, and few of them can be said to be positive for the firm, its owners, or its employees. However, this thesis tells the story of how a Sweden-based firm, which was divided and sold to foreign, multinational corporations, survived as three separate research and development firms in southern Sweden. It examines how these three firms (all working in air handling technology) built on their historic legacy and continued as significant players in their industry.The analysis takes a resource-based view in its examination of the firms’ competitive advantage derived from its resources and resource management. The examination is based on Jay Barney’s VRIN framework and Robert Simons’s Levers of Control framework. The analysis identifies and describes the firms’ technical, financial, human and relationship resources, and analyses whether these resources are strategic or complementary.It confirms previous research that finds research and development firms can stay competitive if they have strategic resources such as test facilities, employees with expertise and experience, and strong relationships with suppliers and customers. It also finds that complementary resources such as information technology contribute to the competitiveness of research and development firms.The contribution of this thesis to previous research is its analysis of the significant role management control has in managing the resources of research and development firms. The thesis develops a management control model for such firms – the Integrated Resource Management model – that has four alternatives resource management strategies. These strategies are: Bureaucratic Resource Management, Structured Resource Management, Flexible Resource Management, and Explorative Resource Management.