PROJECT REPORT ON GOTA

To: Prof. Sumanta Sharma

By:

INTRODUCTION TO THE ORGANISTION:
Volvo is active in more than 180 countries worldwide, mainly in Europe and North America as well as to a considerable
extent in Asia. he Volvo !roup consists o" ei#ht main business areas, which are supported within the #roup by
a number o" business units. $ist o" Volvo %usiness Areas.
Volo !P
is responsible "or product plannin#, product development and purchasin# "or the !roup&s truc' operations
Volo Po"#rtra$n
supplies the Volvo !roup with diesel en#ines, transmission systems and axles
Volo Part%
supplies services to support the a"termar'et "or business areas within the !roup
Volo T#&hnolo'y
develops new technolo#ies and business solutions "or the !roup companies
Volo (o'$%t$&%
develops and mana#es lo#istic solutions "or the automotive and aerospace industries worldwide
Volo IT
supplies ( solutions "or industrial and commercial processes within and outside the !roup
Volo T#&hnolo'y Tran%f#r
develops and supports new businesses with relevance "or the Volvo !roup
Volo Bu%$n#%% S#r$&#%
provides Volvo companies with rational, cost)e""icient and hi#h *uality services in the human resources and
"inancial administration areas
Our $%$on:
he Volvo !roup+s vision is to be valued as the world+s leadin# supplier o" commercial transport solutions. Volvo
Vision ,0,0 is our lon#)term sa"ety and environment strate#y. Volvo Vision ,0,0 aims to incorporate public and private
bene"its into each car. he aim is to create a car that is excitin# to drive and that you can "eel #ood about drivin#. his
vision is Volvo -ars+ way to di""erentiate ourselves in a competitive mar'et and to stren#then Volvo -ars+ position as an
excitin# and trustworthy brand.
Our m$%%$on
%y creatin# value "or our customers, we create value "or our shareholders.
.e use our expertise to create transport)related products and services o" superior *uality, sa"ety and environmental care
"or demandin# customers in selected se#ments.
.e wor' with ener#y, passion and respect "or the individual. %y creatin# value "or our customers, we create value "or
our shareholders. .e use our expertise to create transport)related hard and so"t products o" superior *uality, sa"ety and
environmental care "or demandin# customers in select mar'ets. .e wor' with ener#y, passion and respect "or the
individual./ Volvo 0enta supplies technically advanced en#ines and power systems to demandin# customers in selected
marine and industrial applications. 1ur product and service o""erin# is desi#ned in the spirit o" -ustomer 1rientation
and Volvo -ore Values 2 3uality, 4a"ety and Environmental -are. 1ur products and services shall #enerate competitive
advanta#es "or our customers and provide end users with superior reliability and per"ormance. 1ur business operations
shall contribute to an increased volume base and pro"itability "or the industrial operations o" the Volvo !roup.5
5.e wor' with ener#y, passion, and respect "or the individual.
)ANAGE)ENT SU))AR* AND COUNTRIES +HERE OPERATIONA(:
1n 6ay 11, 1718 A% Volvo submitted an application to have the trade mar' &Volvo& re#istered as a name "or several
di""erent products. .hen, !usta" $arson and Assar !abrielsson met by chance on 9uly ,8, 17,: over a plate o"
cray"ish, and a"ter en;oyin# their meal a#reed to start up production o" &he 4wedish -ar&. 4o it was in 9une 17,< the
"irst prototype cars le"t !alco&s premises in 4toc'holm.
he 17,0s was a period o" rapid pro#ress "or truc's and truc' transport. (n the early years o" the decade, truc's were
very old)"ashioned, o"ten "itted with chain)drive systems and solid rubber tyres. =rivers were all too o"ten exposed to
"luctuations in temperature and the elements. .hen the "irst Volvo truc' rolled o"" the production lines in 17,8 it was,
however, sha"t)driven, had pneumatic tyres and the driver sat in a "ully enclosed cab. Even at this early sta#e in truc'
development, Volvo truc's were built to a very hi#h standard in terms o" their reliability and *uality, especially
compared to non)4wedish truc's, which had not been desi#ned with the poor 4wedish climate and poor 4wedish roads
in mind. >i#ht "rom the start, a Volvo truc' was considered to be ?and in "act was@ "airly expensive ?somethin# that
also applied to Volvo cars@. -ustomers chose a Volvo #enerally "or its to superior *uality and ru##edness in spite o" its
hi#her price. he "irst bus, aptly)named %1, was launched in 17A:, and aircra"t en#ines were added to the #rowin#
ran#e o" products at the be#innin# o" the 17:0s.
$in'ed to these companies are a number o" business units that supply components and services to support the
companies #lobally. his or#aniBational con"i#uration permits companies to wor' closely with their customers and
e""iciently utiliBe !roup)wide resources. 1n 9anuary ,8th, 1778 Volvo !roup sold its business area Volvo -ar
-orporation to Cord 6otor -ompany "or D4E<.:8 billion. he "ocus o" Volvo !roup is now lar#ely set on commercial
vehicles. he !roup+s position in the area o" commercial vehicles was "urther consolidated with the ac*uisition o"
>enault ruc's and 6ac' ruc's in ,001, and thus the roots branched o"" to both Crance and the D4. he last ten years
the company has under#one rapid #rowth in the service area with, "or example, "inancial solutions supportin# the sales
o" the manu"acturin# business units. !roup sales o" products and services are conducted throu#h wholly owned and
independent dealers. he #lobal service networ' handles customer demand "or spare parts and other services.
he !roup+s structure enables it to levera#e economies
o" scale in several areas, such as product development, production, spare parts supply and lo#istics, as well as in
administration and support "unctions. A 'ey "eature o" the Volvo !roup+s #rowth strate#y is to increase its presence in
emer#in# mar'ets, primarily in Asia and Eastern Europe. =urin# ,00<, the !roup increased its sales in Eastern Europe
by :1F. Volvo implemented investments in Asia durin# ,00< in 9apan and -hina. hese provided a plat"orm "or
increased sales and in the lon# term are expected to contribute to the !roup+s #rowth tar#et. he Volvo !roup+s #oal is
to be the world+s leadin# supplier o" commercial transport solutions. Volvo currently has well)established positions in
the European and North American mar'ets. he Volvo !roup wor' on three principles which were corporate since the
company initial sta#e,
,ual$ty:
3uality is an expression o" our #oal to o""er reliable
products and services. (n all aspects o" our
operations, "rom product development and
production, to delivery and customer support,
the "ocus shall be on customers+ needs and
expectations. 1ur #oal is to exceed their expectations.
.ith a customer "ocus based on everyone+s
commitment and participation, combined
with a process culture, our aim is to be number
one in customer satis"action. his is based on a
culture in which all employees are responsive
and aware o" what must be accomplished to be
the best business partner
.
Saf#ty:
4a"ety is concerned with how our products are used in society. .e have had a leadin# position
in issues re#ardin# sa"ety "or a lon# timeG our
#oal is to maintain this position. A "ocus on
sa"ety is an inte#ral part o" our product development
wor'. 1ur employees are hi#hly aware
o" sa"ety issues, and the 'nowled#e #ained
"rom our internal crash investi#ations is applied
in product development. 1ur #oal is to reduce
the ris' o" accidents and miti#ate the conse*uences
o" any accidents that may occur, as
well as to improve sa"ety and the wor' environment
"or the drivers o" our vehicles and e*uipment.
En$ronm#ntal &ar#:
.e believe that it is sel")evident that our products
and our operations shall have the lowest
possible adverse impact on the environment.
.e are wor'in# to "urther improve ener#y e""iciency
and to reduce emissions in all aspects o"
our business, with particular "ocus on the use o"
our products. 1ur #oal is that the Volvo !roup
shall be ran'ed as a leader in environmental
care. o achieve this #oal, we strive "or a holistic
view, continuous improvement, technical development
and e""icient resource utiliBation.
he Boar- of D$r#&tor% is char#ed with the or#anisation o" the company and mana#ement o" the company&s
operations. he %oard shall also issue #uidelines and instructions to the -E1. (n addition, the %oard shall ensure that
the company&s or#anisation in respect o" accountin#, mana#ement o" "unds and the company&s "inancial position in
#eneral includes satis"actory control. %oard o" Volvo -ar -orporation, as per =ecember ,00<:
Credri' Arp, 0resident and -E1, Volvo -ar -orporation.
Hans)1lov 1lsson, -hairman, Volvo -ar -orporation.
$ewis %ooth, Executive Vice 0resident, Cord o" Europe and 0A!.
9ames !ouin, Vice 0resident -ontroller, Cord 6otor -ompany.
9oe $aymon, !roup Vice 0resident Human >esources, Cord 6otor -ompany.
=avid 4mith, =irector Cinance, Cord o" Europe and 0A!.
Anders Narvin#er, independent.
%ernt 6a#nusson, independent.
$ennart hIrnblad, 4wedish Dnion o" -lerical and echnical Employees in (ndustry ?4(C@.
6i'ael 4JllstrIm, 4wedish 6etalwor'ers& Dnion.
6ar'o 0eltonen, 4wedish 6etalwor'ers& Dnion.
Elisabet .enBla"", !eneral -ounsel, Volvo -ar -orporation, is secretary to the %oard.
-ountries where the company is operatin# world wide in various aspect are,
Ar#entina
Australia
Austria
%el#ium
%raBil
-hile
-hina
-olombia
-Bech >epublic
=enmar'
E#ypt
Cinland
Crance
!ermany
!reece
Hun#ary
(ndia
(ndonesia
(ran
(reland
(srael
(taly
9apan
Korea ?4outh@
$ebanon
6alaysia
6exico
Netherlands
New Lealand
Ni#eria
Norway
0a'istan
0hilippines
0oland
0ortu#al
>omania
>ussia
4audi Arabia
4in#apore
4outh A"rica
4pain
4weden
4witBerland
aiwan
hailand
ur'ey
Dnited Arab Emirates
Dnited Kin#dom
REPORT O. DATA CO((ECTION AND ANA(SIS:
VO(VO PEST ANA(*SIS ////
Pol$t$&al
0olitical "actors include re#ulatory issues that a""ect your productMservice line ?e.#. er#onomics issues and the current
re#ulatory rulin#s@, le#al aspects such as patents and or ;ust the current political climate. he automotive industry in
!Itebor# and .est 4weden, where Volvo will soon celebrate 80 years o" operations, would bene"it #reatly "rom
increased trade policy cooperation between the ED and the D4. his applies to automobile manu"acturers li'e Volvo as
well as to subcontractors o" 4wedish and European car and truc' manu"acturers. (n all actuality, increased cooperation
between Europe and the D4 is a vital measure "or increased competitiveness "or the automotive industry in 4weden.
Emissions o" #reenhouse #ases and noxious emissions "rom cars $and use by road transport Environmental impact by
our supplier+s Environmental impact by our dealers.
4ome vehicles pictured may contain non)D.4. e*uipment. 4ome models may be shown with optional e*uipment.
Curther in"ormation can be obtained "rom your Volvo >etailer. /Volvo "or li"e/ is a re#istered trademar' o" Volvo -ars
o" North America, $$-.
USER AGREE)ENT AND COP*RIGHT NOTICE
Volvo -ars o" North America lead lo#istic carrier ?$$-@ represents privacy and will 'eep all in"ormation provided
con"idential.
he Volvo (nternet site ?the /Volvo .eb site/@ is sponsored by Volvo -ars o" North America, $$-. ?/Volvo/@ and o""ers
#eneral product in"ormation about Volvo cars and other in"ormation o" #eneral interest. (t is accessible worldwide to
anyone with (nternet access. Access to and use o" the Volvo .eb site are sub;ect to the terms and conditions set "orth in
this Dser A#reement and -opyri#ht Notice and all applicable laws and re#ulations, includin# laws and re#ulations
#overnin# copyri#ht and trademar'.
his Dser A#reement and any disputes arisin# out o" or related to the Volvo .eb site shall be #overned by, and
construed and en"orced in accordance with, the laws o" the 4tate o" -ali"ornia. Any communication or material
transmitted to Volvo -ars o" North America, $$- via the Volvo .eb site or (nternet e)mail is transmitted on a non)
con"idential basis.
E&onom$&
Economic "actors include current "inancial "orces on your tar#et mar'et. (s there currently a recessionN (s the stoc'
mar'et "allin# or risin#, etc. he Sto&0holm Sto&0 E1&han'# is a stoc' exchan#e located in 4toc'holm, 4weden.
Counded in 18<A it is the primary securities exchan#e o" the Nordic -ountries. (t was ac*uired by 16O in 1778, and in
,00A the operations were mer#ed with those o" the Helsin'i 4toc' Exchan#e. 0rior to the introduction o" electronic
tradin# on 9une 1, 1770, all tradin# was conducted on the "loor o" the 4toc'holm 4toc' Exchan#e %uildin#.
>i#ht now the trend in 4weden stoc' mar'et is towards downside but its expected that very soon it will see an
upward trend due to "avorable political conditions.
So&$al
4ocial "actors include chan#es in social trends, "ads, or demo#raphic #roups as they a""ect your tar#et mar'et and their
current opinions. his could include chan#es in shoppin# habits, such as the increase in online shoppers or the super)
mall trend. (t could also include the a#in# o" your current tar#et mar'et, or the population increase in the over 80 #roup.
>educin# ener#y consumption by 80F per unit produced by ,008 compared with ,00A. =oublin# the use o" carbon)
dioxide neutral ener#y by ,008 compared with ,00A
80.<F o" the country&s population is "emale. .hich means there are more women drivers which are independent and
pro"essionalsN Volvo is 'nown to be a "amily car and 8:F o" its revenue is #enerated throu#h women buyers. .omen
in 4weden are considerin# ri#ht now stability in their li"e i.e. they want to have children and want to #et married. 1ver
the "ew years, there has been constant decrease in the divorces in 4weden.
(ncreased mobility o" people usin# our products
.or'in# conditions in our suppliers+ and dealers+ "acilities
ra""ic accidents. >educin# the number o" people in;ured and 'illed in tra""ic accidents has lon# been one o"
our primary product development #oals. Volvo cars are amon# the sa"est on the mar'et, and we also
participate in many activities and pro;ects in which we contribute our 'now) how and experience to improve
road sa"ety.
he business mana#ement system ?%64@ developed by Volvo -ars incorporates a business philosophy, policies,
instructions and other provisions which help to ensure that we wor' in compliance with relevant le#islation, and with
our own "inancial, *uality, environmental and other #oals.
(ncorporatin# the re*uirements o" (41 7001 and (41 1:001, %64 is audited by $loyds at overall and unit level. Volvo
-ar -orporation holds multi)site certi"ication certi"yin# that its %64 system is complete and is used correctly within
the company as a whole. %y the end o" ,00<, 70F o" Volvo -ars employees were wor'in# in units certi"ied in
accordance with (41 1:001.
>e#ardless o" their #eo#raphical location, Volvo -ars imposes hi#h standards on its suppliers in terms o" *uality,
product development, cost e""ectiveness, delivery capacity and environmental care. Amon# other thin#s, all production)
related suppliers must possess environmental certi"ication under (41 1:001 veri"ied by a third party.
T#&hnolo'y
echnolo#ical "actors include everythin# that a""ects your productMservice, its mar'et, or in"ormation)#atherin# e""orts
o" your mar'et that comes as a result o" chan#es in technolo#y. his would include the (nternet, wireless
communications, handheld electronic devices, and anythin# else technolo#y)driven that is a""ectin# your
productMservice or service. >esearch P echnolo#y is an area o" critical and "undamental importance to a ma'er o"
hi#h)technolo#y transport e*uipment such as Volvo. Volvo echnolo#y ?VE-@ is an innovation company that, on
contract basis, develops new technolo#y, new product and business concepts "or /hard/ as well as /so"t/ products
within the transport and vehicle industry. Volvo primary customers are the Volvo !roup companies and Volvo -ar
-orporation but also some selected suppliers. (n addition, they participate in national and international pro;ects in
certain strate#ic areas, or#anised in common research pro#rammed, involvin# universities, research institutes and other
companies. (ts >P= wor' involves a number o" basic areas, e.#. transportation, telemetric, internet applications,
databases, er#onomics, electronics, combustion, mechanics, industrial hy#iene and industrial processes, and usin#
techni*ues such as systems en#ineerin#, multi)physical and chemical modelin#, pro#rammin# and simulation. %eside
the >P= areas, VE- o""ers specialist services in the areas o" intellectual property protection, standardiBation and
in"ormation retrieval.
Q erminatin# all use o" oil and coal "or the heatin# o" "acilities.
-hallen#es re#ardin# product use:
Q Achievin# hi#h "uel e""iciency and low emissions throu#hout product li"e cycles
Q 6easurin# a#ainst the best
Q -onsistently carryin# out activities to become the industry leader
Q 0roducin# environmental data "or "ollow)up and communication "or each new product
developed
Q (mplementin# a strate#y "or tomorrow+s "uels
Q (ncludin# alternative "uels and alternative drivelines in product plans.
VO(VO S+OT ANA(*SIS ////
Str#n'th:
he company has a stron# base on )
i. 4avin# social cost by implementin# environment "riendly pro;ect
ii. Advance technolo#y in manu"acturin# cars
iii. =urability in providin# *uality services durin# replacin# en#ines part
iv. 4tron# supply chain helps reduce time la# in deliverin# to the customer
+#a0n#%%:
-ompany reco#niBed the "ollowin# outcomes as it wea' point where they are behin# their close competitors)
i. $ac' o" inventory and production control by the company mana#ement.
ii. (ne""iciency in meetin# the inventory mana#ement durin# the deliverin# period to the respective
customer.
O22ortun$ty:
i. -ompany has a prospective potential to #row in the emer#in# #rowin# mar'et such as (ndia and china
which currently share a low concentration comparin# to the European mar'ets.
ii. =evelopin# the usa#e o" venturin# in the #rowin# mar'et where the purchasin# powerMdisposable
incomes o" a customer are hi#h.
Thr#at:
i. he environmental conscious on #lobal warmin# is turnin# out to a""ect the company lo#istic, which are
lar#ely dependent on sea route.
ii. he up comin# sa"ety promises on cars "rom the nearness competitor a""ect the company sa"ety brand.
VO(VO BUSINESS )ODE(:
VO(VO .INANCIA( PER.O)ANCE ///
(ncome statements Volvo !roup "irst six months
(ndustrial
operations -ustomer Cinance
Elim and
reclassi"ications Volvo !roup otal
4EK 6 ,00R ,00< ,00R ,00< ,00R ,00< ,00R ,00<
Net sales 1,8,171,<,10 A,<77 A,8,1 88< 1,10, 1A,,:8, 1A0,R,7
< <
-ost o" sales
?78,88
1@
?7<,8<
,@ ?,,1:0@ ?1,7:7@ ?88<@ ?1,10,@ ?101,<0R@ ?77,71A@
!ross income ,7,A18,7,,:: 1,887 1,8R, 0 0 A0,8R: A0,81<

>esearch and development expenses
?8,01A
@
?A,788
@ 0 0 0 0 ?8,01A@ ?A,788@
4ellin# expenses
?10,R<
8@
?7,777
@ ?<7<@ ?<0<@ 0 0 ?11,:<1@ ?10,<08@
Administrative expenses
?A,8,8
@
?A,,88
@ ?1R@ ?1,@ 0 0 ?A,8:8@ ?A,,R0@
1ther operatin# income and expenses 1R8
?1,07<
@ ?,7@ ?<<@ 0 0 1:: ?1,1<,@
(ncome "rom investments in associated
companies A78 :: 1 0 0 0 A78 ::
(ncome "rom other investments :7 1A1 0 0 0 0 :7 1A1
1peratin# income 10,<A111,081 81< 888 0 0 11,::R 11,7<7

(nterest income and similar credits 8:7 :AA 0 0 ?87@ ?110@ :87 A,A
(nterest expenses and similar char#es ?8A7@ ?:8,@ ?0@ 0 87 110 ?:80@ ?AR,@
1ther "inancial income and expenses ?R7@ 7 0 0 0 0 ?R7@ 7
(ncome a"ter "inancial items 10,8<111,0:1 81< 888 0 0 11,ARR 11,7,7

(ncome taxes
?A,,8R
@
?,,7<8
@ ?A0:@ ?,8R@ 0 0 ?A,871@ ?A,,81@
(ncome "or the periodS R,,R: 8,0R< 81, <01 0 0 R,R8< 8,<R8

S Attributable to:
E*uity holders o" the parent company R,R8< 8,<:<
6inority interests A0 A,
R,R8< 8,<R8

%asic earnin#s per share, 4EK A.8A :.,R
=iluted earnin#s per share, 4EK A.8A :.,R
VO(VO CO)PETETIVE ANA(*SIS )))
his analysis compares the company with its closest competitors on various parameters such as business se#ments,
product o""erin#s P their D40s ?uni*ue sellin# points@, #eo#raphical covera#e, "inancial per"ormance, 6PA
developments and business strate#ies.
1. (ndustry Analysis 4ection: his section covers an analytical overview on the respective industry se#ment,
companies+ per"ormance vis)T)vis industry trends, issues, challen#es, trends and opportunities.
,. -omparative 4.1 analysis on the company, its competitors and respective industry se#ment in a tabular "ormat.
his analytical report is especially created "or top mana#ement, investors, business analysts and decision ma'ers to #et
a comprehensive perspective on product o""erin#s, "inancial per"ormance, mar'etMindustry position, and business
strate#ies etc o" the company in relation to its competitors P industry se#ment.
VO(VO STRATEGIES ADOPTED )))
S2#&$al$3at$on
=evelopment and manu"acturin# o" selected components.
=evelopment, production and product support o" en#ines and product support "or industrial #as turbines.
6aintenance o" selected commercial en#ine pro#rams and #as turbines.
4pare parts and customiBed services "or commercial products.
Int#rnal &o/o2#rat$on
echnolo#y, ways o" wor'in#, prescribed "orms "or leadership, processes, techni*ues, utiliBation o"
capacity and syner#ies between business areas and trans"er o" s'ill.
1b;ectives li'e *uality, productivity and cost e""iciency, as well as competence development, are vital to us. 3uality is
not only about rules and re#ulations but is also a way o" livin# "or us. .hat we do on the shop "loor is ;ust as important
as the wor' the pilot does while drivin#, to ensure the sa"ety o" the passen#er.
o be able to meet the challen#es o" the "uture, we wor' continuously with innovative and cost)reducin# improvements.
An 1perations =evelopment pro#ram, stren#thened by 4ix 4i#ma, is an inte#rated part o" our operations plannin# and
execution, and enables our employees to wor' proactively with the improvement #oals o" the operational plan. Each
individual is there"ore part o" Volvo industries strive "or operational excellence. 1ur s'illed wor'"orce and hi#hly
developed team approach is a 'ey asset in this wor'.
4E* .INDING5 (EARNING AND RECO))ENDATIONS:
Volvo should be leadin# in the wor' with road sa"ety amon# other competitors
Volvo should provide the same #eneral level o" sa"ety wherever they are in the world.
4a"ety should ta'e a prominent part in product development and be based on 'nowled#e o" the user&s
expected behaviour and on systematic haBard and accident analysis.
4a"ety thin'in# should be reco#niBed with the Volvo !roup brand.
Volvo supports a holistic approach in the selection o" "uture "uels, prioritiBin#, on a well to wheel basis, the
ener#y e""iciency and #reenhouse #as emissions.
>enewable ener#y resources are limited "or several decades with present ener#y consumption.
1ptimisation o" ener#y use is needed between transportation, heatin# and electricity sectors to ensure
e""icient use o" available ener#y resources and hi#hest potential "or -1, reduction.
Volvo is continuously aimin# "or improved "uel e""iciency in the complete vehicle operation re#ardless o"
the choice o" "uel.
Volvo supports an evaluation o" di""erent alternative "uels in order to reduce dependence on "ossil "uel in
the transport sector.
Volvo wor' itsel" to be a developmental and reliable employer and business partner.
(t ta'es into account o" the environmental and social issues in purchasin#, production and distribution.
CONC(USION:
Althou#h mana#ement spend most o" their time on small and un#lamorous duties
descriptions o" these down)to)earth activities are rare. Available accounts are instead
o"ten related to the "ew public mani"estations companies ma'e to mobiliBe support. o
convince mana#ement then must present a theory o" the company+s history and
elaborated ideas o" how the "uture .ill be "aced. (n this context it is not "easible to admit
that the present situation lar#ely results "rom continuous experiments and accidental
occurrences even i" this may be nearest to the truth. hus it is unavoidable that history is
rationaliBed and the or#aniBation shown at its best in o""icial accounts. 4ocial scientists, have a tendency to "ind reason,
cause and "unction in all behavior. Uhe notion that #oals are posited to ma'e sense out o" unplanned adaptations and
accidental developments, and thus are less plans o" action that are rational than rationaliBations o" unpredictable
encounters with diverse and shi"tin# interests, is essential "or the case study5 .his tendency to arran#e history to "it the
ima#e desired by mana#ement and what is institutionaliBed as rational behaviour has been demonstrated in a number o"
*uantitative studies reviewed above and is supported by this *ualitative study as well. However, the Volvo case
demonstrates that not only may the past be distorted but a desired "uture state may be treated as i" it had already
materialiBed. hus in some instances the accounts o" the present may only ma'e sense i" they are interpreted as
illusions, a vision not yet realiBed.

he di""erent observed between the o""icial stories and substantive events is not
uni*ue to Volvo but can be #eneraliBed to other companies as well. hus, o""icial stories
have to be care"ully interpreted and the alle#ed intended and rational behaviour have to
be *uestioned. his does not mean that the presentations o" strate#y and strate#ic
thin'in# are o" no value. %ut instead o" strate#y mainly conceived as #uidin# the -ompany into the "uture with an
impact lar#ely on substantive matters the opposite may be true. (t helps mana#ement to #ive a consistent, coherent
explanation to present events and occurrences and has more o" a Usymbolic role5. hus strate#y may be considered as
an important device to #ive meanin# to the "unctionin# o" the -ompany, which is important in order to mobiliBe
support and motivate people.

.hen the Volvo history is reconstructed the interplay o" vision and opportunism is
illustrated. he evolution o" the -ompany is in line with that observed in other success"ul
companies. Accordin# to some o" the most e""ective strate#ies uncovered by the industry research unit Ucombined
deliberation and control with "lexibility and or#aniBational learnin#5. he case hi#hli#hts the important o" holdin# onto
an idea and #ivin# it several chances. he Volvo case is uni*ue as the "ounder and -E1 remained so lon# in o""ice.
=espite the initial problems they "aced in the company they continued with their experiments and did not #ive up the
ori#inal idea.
(t is an illustration o" how a vision, personal involvement and a lon#)term perspective can
help position a "irm well in the "ace o" short)term setbac's. An aspect rarely treated in
the literature is that o" near "ailures where mana#ement, despite disappointments,
persistently stic's to its basic idea, 'eeps on experimentin# and eventually turns it into
success. However, a note o" caution may be needed. Cor every means o" access there is
probably a visionary who "ails, clin#in# stead"astly to his vision. %y and lar#e, Volvo "inally tame about as it was
planned. However, the per"ormance en route was rather erratic and it was necessary to re)interpret Ureally5 in order to
'eep the basic idea alive. Not only was the -ompany "lexible but this also characteriBed the accounts made by its
"ounder o" the past and present. Accordin#ly, the evolution o" the -ompany was not only directed by necessity and
chance but the leadership and vivid illusions presented were si#ni"icant as well. However, in the o""icial accounts the
"ocus lar#ely is on the plans not on unexpected events, serendipity, miscalculations and other aspects o" or#aniBational
learnin#.
HE K(N!=16 1C 4.E=EN has a vibrant prospect "or industrial #rowth and business opportunity. he
wor'ers are hi#hly s'illed and experience in the wor' "ield and each o" them is re#arded as important assets o" the
company by their respective employer+s. Economic liberaliBation has ensured that 4weden is now more similar to other
European countries with comparatively hi#h tax rates. he 4wedish /wel"are state/ model o" the ,0th century is an
example ?some economists and socialists said@ o" e""ective use o" national taxes, althou#h others disa#ree about its
continuin# e""ectiveness. he 4wedish wel"are system remains extensive, but a recession in the 1770s "orced an
introduction o" a number o" re"orms, such as education vouchers in 177, and decentraliBation o" some types o"
healthcare services to municipal control. 4ince the late 17<0s, 4weden has had the hi#hest tax *uota ?as percenta#e o"
!=0@ in the industrialiBed world, althou#h today the di""erence between other hi#h)tax countries such as Crance,
%el#ium and =enmar' has narrowed. 4weden has a two step pro#ressive tax scale with a municipal income tax o"
about A0F and an additional hi#h)income state tax o" ,02,8F when a salary exceeds rou#hly A00 000 4EK per year.
he employin# company pays an additional A,F o" an /employer&s "ee/. (n addition, a national VA o" ,8F or 18F is
added to many thin#s bou#ht by private citiBens, with the exception o" "ood ?1,F VA@, transportation, and boo's ?<F
VA@. -ertain items are sub;ect to additional taxes, e.#. electricity, petrolMdiesel and alcoholic bevera#es. 4weden is an
export oriented mar'et economy "eaturin# a modern distribution system, excellent internal and external
communications, and a s'illed labour "orce. imber, hydropower, and iron ore constitute the resource base o" an
economy heavily oriented toward "orei#n trade. 4weden&s en#ineerin# sector accounts "or 80F o" output and exports.
elecommunications, the automotive industry and the pharmaceutical industries are also o" #reat importance.
A#riculture accounts "or ,F o" !=0 and employment. 4weden is an export oriented mar'et economy "eaturin# a
modern distribution system, excellent internal and external communications, and a s'illed labour "orce. imber,
hydropower, and iron ore constitute the resource base o" an economy heavily oriented toward "orei#n trade. 4weden&s
en#ineerin# sector accounts "or 80F o" output and exports. elecommunications, the automotive industry and the
pharmaceutical industries are also o" #reat importance. A#riculture accounts "or ,F o" !=0 and employment. 4ince
1778 4weden has been a member o" the European Dnion, and as a conse*uence o" a new world security situation the
country&s "orei#n policy doctrine has been partly modi"ied, with 4weden playin# a more active role in European
security co)operation as well.
HE >E0D%$(- 1C C(N$AN= is a hi#hly industrialised, "ree)mar'et economy with a per capita output
e*ual to that o" other western economies such as the DK, Crance and !ermany. he lar#est sector o" the economy is
services at <8.R percent, "ollowed by manu"acturin# and re"inin# at A1.: percent. 0rimary production is low at ,.7
percent, re"lectin# the "act that Cinland is a resource)poor country. .ith respect to "orei#n trade, the 'ey economic
sector is manu"acturin#. he lar#est industries are electronics ?,1.< percent@, machinery, vehicles and other en#ineered
metal products ?,1.1 percent@, "orest industry ?1A.1 percent@, and chemicals ?10.7 percent@. (nternational trade is
important, with exports e*ualin# almost one)third o" !=0. Except "or timber and several minerals, Cinland depends on
imports o" raw materials, ener#y and some components "or manu"actured #oods. %ecause o" the northern climate,
a#ricultural development is limited to maintainin# sel")su""iciency. Corestry, an important export earner, provides a
secondary occupation "or the rural population.
Cinland was one o" the eleven countries ;oinin# the euro monetary system ?E6D@ on 9anuary 1, 1777. he national
currency mar''a ?C(6@, in use since 18<0, was withdrawn and replaced by the euro ?ED>@ at the be#innin# o" ,00,.
he .orld Economic Corum has declared Cinland to be the most competitive country in the world "or three consecutive
years ?,00A2,008@ and "our times since ,00,. (n recent years there has been national "ocus on innovation and research
and development, with special emphasis on in"ormation technolo#y. No'ia, the telecommunications company, is
#enerally re#arded as the sin#le most si#ni"icant cause o" Cinland&s success.
Cinnish trade relationships and politics were by lar#e determined by avoidance o" provo'in# "irst the "eudally ruled
(mperial >ussia and then the totalitarian 4oviet Dnion. However, the peace"ul relationship with both the 4oviet Dnion
and .estern powers was turned into an economic advanta#e. he 4oviet Dnion conducted bilateral trade with Cinland,
but .estern countries remained Cinland&s main tradin# partners. A"ter the 4econd .orld .ar, the #rowth rate o" the
!=0 was hi#h compared to other Europe, and Cinland was o"ten called /9apan o" the North/. (n the be#innin# o" the
17R0s, Cinland&s !=0 per capita reached the level o" 9apan and the DK.
(n 1771, Cinland experienced an economic collapse and "ell into a severe depression caused by economic overheatin#,
depressed "orei#n mar'ets and the dismantlin# o" the barter system between Cinland and the "ormer 4oviet Dnion.
6ore than twenty percent o" Cinnish trade was with the 4oviet Dnion be"ore 1771, and in the "ollowin# two years the
trade practically ceased. he #rowth in the 1780s was based on debt, and when the de"aults be#an rollin# in, an
avalanche e""ect increased the unemployment "rom a virtual "ull employment to one "i"th o" the wor'"orce. However,
civil order remained and the state alleviated the problem o" "undin# the wel"are state by ta'in# massive debts. 1771 and
a#ain in 177,, Cinland devalued the mar''a to promote export competitiveness. his helped stabilise the economyG the
depression bottomed out in 177A, with continued #rowth throu#h 1778. 4ince then the #rowth rate has been one o" the
hi#hest o" or#anisation o" economic cooperation and development ?1E-=@ countries, and national debt has been
reduced to :1.1 percent ?"ul"illin# the ED&s 4tability and !rowth 0act re*uirement@.