GN Store Nord. A Company in Transition, 1939–1988 (review)

The history of the Great Northern Telegraph Company (GN), as a born multinational enterprise, an exception in Danish business history, starts in 1869. International telegraphy had been its core business for seventy years when the board of the company in 1939, "made a historical decision" (p. 9) and supplemented telegraphy activities by investments in the manufacturing industry. Although the year 1988 does not mark a turning point of comparable importance, it gave way to some sort of retransformation of GN from a diversified industrial conglomerate into a "focused company with four related business areas—office headsets, mobile headsets, hearing instruments and diagnostics audiology" (p. 193). Therefore, it is understandable that Iversen's Copenhagen Business School Ph.D. dissertation brings this turbulent fifty-year period into focus. And, it has to be mentioned that he got free access for the whole period to GN's company archives comprising minutes from the board of directors' meetings, monthly reports by the management, and correspondence between the key actors of the company.

The book is divided into two parts. In the first and larger part, Iversen focuses on the strategic and structural development of GN from 1939 to 1988, distinguishing four periods. Whereas the telegraph connections between Denmark and all other countries, except Germany, were interrupted after the German invasion in April 1940 and the company "only survived due to the large accumulated reserves" (p. 27), direct German intervention into the management of GN seems to have been astonishingly weak. So, the board was able to continue its program of diversification. The rather troubled years from 1939 to 1948 were followed by a period characterized by stable development, lasting till 1966. The next—and again quite eventful—period covers the years 1967-1973. The last chapter of the first part addresses the 15-year period between 1974 and 1988 that were marked by "the creation of an expanding, but seldom profitable conglomerate" (p. 14).

In the second part, Iversen analyzes the changes of GN's governance system, drawing on the work of Alfred D. Chandler, Jr., and Neil Fligstein, but trying to "contextualise" them. The term "governance" is used by Iversen in "a broad understanding of GN's 'steering-system' consisting of internal and external key actors who negotiated, formulated and implemented the critical decisions of operational direction and organizational shape" (p. 140). The assumption behind his book is that transitions like that of GN did not occur by accident, but rather "as consequences of a continuous decision making process lead by individuals, who at a given moment, had the power to act" (p. 139). Iversen's analysis, therefore, focuses on the four "chandlerian" items: key actors, strategy, structure, and sub-unit power bases, supplemented by another two essential factors, "context and performance" (p.145). As a result of his period-by-period and factor-by-factor analysis, Iversen states that the governance systems in each of the four periods were marked "by a specific relationship between the different factors" and in all as a "cyclical movement from stability to instability", underlining the well-known view that organizations seek stability, "but internal shocks such as poor performance and external shocks involving context cause situations where key actors have to analyze the situation and react" (p. 182). And, it may come as no surprise, that during both stable periods GN's top management consisted of onemanaging director, whereas in the unstable periods the company was led by a "collective management" furthering internal conflicts.

To conclude, Iversen's book makes a valuable contribution to our understanding of the functioning of corporate governance or, in other words, of the causes for the persistence or fragility of companies. What distinguishes it is the thick and continuous archival basis, the convincing use of theoretical approaches and concepts, and the clearly arranged presentation of the findings.