Contrasts Between Nation‐Specific Traditions in Manufacturing: Evidence on Building a Finnish Paper Mill to East Germany

Abstract

There is ample evidence for the claim that solving generic management problems needs accommodation to the specific national and institutional context. For example, forest industry corporations located in various parts of the world differ in relation to how and when their management has reacted to the aging of production facilities and the opportunities for expanding operations. As a rough generalization, whereas the North American forest industry firms have aimed at maximizing return on investment through ‘end‐game’ with the technologically outdated production facilities, the North European firms have preferred to expand the scale of the production units and to compete with the low production costs. However, these kinds of nation‐specific ways of action prove limited especially when the firms transfer their operations over national borders. This is because in those circumstances the ‘home base’ institutional support is missing. As a consequence, when building a greenfield plant in a distant location the management can not take it for granted that the previously successful technological designs and concepts would match the new personnel's cultural traditions.