From entrepreneurial enterprise to institution

Lars Magnus Ericsson gained respect for his expertise and for who he was. He was also a team player: the workers in his factory were also his colleagues and his own background enabled him to understand how they thought and felt. His colleagues confirm that he showed them every respect and treated them honorably. He adopted a low profile in public and was embarrassed by the attention paid to him when he had become successful.

The business that Lars Magnus had created gradually began to live a life of its own, rather like the characters in a novel taking control of the author who has created them. He was wise enough to retire and allow his creation to flourish on its own. We can only guess what he thought of the men who took over. In 1903, Lars Magnus bade his colleagues at Tulegatan farewell and was never again seen at the company for the remaining 23 years of his life.

Two world wars changed the way in which the people communicated and moved across national borders. Before the First World War, people could travel more or less freely throughout Europe. When it ended, passports had become compulsory and governments tightened their control of companies, their citizens and communications.


Individuals who communicate freely maximize their own opportunities – and become a risk for the forces threatened by this freedom. As far as we can tell, during the 20th century every country established systems to monitor the way its citizens used communication networks – some countries more than others. It has been considered in the national interest to have a state telecommunications agency, and a national telecommunications industry, and to protect the latter from competition. 

These changes in the world at large had an impact on L.M. Ericsson as well. Lars Magnus was a pioneer and an entrepreneur, pessimistic in his comments but bold in his decisions. When the telecommunications world ossified, L.M. Ericsson began more and more to resemble a government agency. It is ironic that, in the spring of 1940, at the beginning of the global conflict that was to consume the world for five years, L.M. Ericsson moved its head offices to premises that had been built according to all the rules of modernism and functionalism.

If anything characterized L.M. Ericsson’s new bastion in sheltered Sweden, it was orderliness and carefully considered, specific solutions. It was natural that a company based on such principles would look down its nose at a maverick outfit like SRA and the cowboys who worked for it – and at their odd ideas about widespread telephony using radio.

L.M. Ericsson was an institution, one that offered status and solidity. But what is left for such an institution to fight for?

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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