Lars Östman towards a general theory of financial control

From the 1930s to the 1960s  

 

Companies had grown and continued to grow, and more or less clear combinations grew up; 

some companies owned shares in other companies. In the Swedish case, some of these 

companies and combinations had an international profile. The basic structure of 

organisations was mainly the same as before; centralistic hierarchies with functional 

responsibilities were predominant. However, even though the stock market was not 

influential on company activities, greater attention than before was attached to external 

financial reporting, at least in the accounting profession. The mass media – many 

newspapers and radio broadcasting – devoted little interest to business and organisational 

life. 

Despite violent controversies, relations between trade unions and employers´ associations 

developed in a co-operative direction. In a spirit of mutual understanding and as an 

expression of common interests, basic agreements were reached in the 1930s. Later on, 

federations of unions and employers agreed on employee influence and information. The 

main procedures in organisations were affected only marginally by this development.  

Activities within the public sphere expanded, especially during the post-war years, but not 

very rapidly. Function-driven units were controlled in traditional forms with an emphasis on 

vertical budget processes that started long before the period in question. In the post-war 

years, national regulation of horizontal flows in the private sector increased and State 

authorities were introduced to survey prices, competition and consumer rights. Markets for 

foreign exchange dealings and banks were regulated and controlled at the national level. 

Banks were obliged to invest an essential part of their capacity in government and housing 

bonds. A social insurance system was decided in the late 1950s with charges based on 

wages. For the most part, pension funds that were founded with these charges as inflow were 

allowed to invest in interest-bearing securities.