Lars Östman towards a general theory of financial control

The early period 

 

At an early stage within the private sphere, ownership and executive position were formally 

separated. Stock markets were established. Auditing was introduced. During the first decades 

of the 20

th

 century, centralistic hierarchies with functional responsibilities were dominant in 

companies, which were rather small and manageable. Activities within the public sphere 

were not large. They were carried out in traditional function-driven form, with the emphasis 

on a vertical process.  

Many functions ran parallel in rather limited organisations and needed to be coordinated 

towards an output – either as products to be sold in pay-driven organisations or to fulfil the 

aims of function-driven organisations. Certain large, private organisations operated a 

multinational activity; the spatial dimension with each country was then important for the 

structure of the organisation.  

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For the private sector, generally, freedom of trade was the leading idea in most respects. 

The bank and insurance sectors, however, were monitored by surveying authorities.  State 

monopolies already existed or were established in certain fields, such as mail services and 

telecommunication, and another kind of monopoly was created for radio broadcasting.    

Unions for workers in private companies and federations and a confederation of trade 

unions had existed since the late 19

th

 century as a consequence of the transformation from an 

agricultural to an industrial society. In the beginning, they were organised with occupations 

as the basis.  Relations with employers and their federation were hostile. After a few 

decades, industrial unions and federations were created; all workers at the same work place 

should belong to a certain union, irrespective of their occupation. In addition, some labour 

legislation was passed.