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The company culture created by Lars Magnus Ericsson was egalitarian, informal and, for its period, radically humane. During the time he spent at Siemens & Halske in Berlin, he had been attracted by the excellent arrangements for the well-being of the employees, later using them as a model in his own workshop. He had already introduced the “sickness benefit” system in 1889, and from 1891 this offered its members and their families free medical care. His workers were paid considerably more than those at other factories, and they had shorter working hours, even though they were not short measured by later standards.

Johansson recalled:

“Right from the beginning, Ericsson had a good relationship with his employees. He knew about their problems and their attitudes through his own experience: he had stood next to some of them at the workbench and he viewed them as fellow workers, even when they were working for him. He could discuss things with them jovially and amicably at the workplace and never attempted to dazzle people with his superiority.”

The management of the factory was, Johansson wrote, “of the old-fashioned, patriarchal kind: it was not strict but the boss knew how to be obeyed”. “He often veiled his orders in the gentle guise of wishes without ever losing his power in doing so.” A modern leadership expert would probably object to the way Lars Magnus expressed his displeasure, which was said to be with “well chosen and sardonic sarcasm”. According to Johansson, there was never any significant conflict between Lars Magnus and his workers or their organizations.

A few judgments from Stockholms-Tidningen:

“He often visited his workers – he himself called them workmates – in person when they were ill or some accident had befallen the family, and when he left circumstances always seemed brighter. He was an exceptionally upright man who never sought to compromise with his conscience. He was also one of those who could admit their mistakes.”

It was certainly important for Lars Magnus’s treatment of his staff that he had been an apprentice himself at so many workplaces. This had given him insight into identifying which fellow workers had talent, and despite his caution he was ready to place his faith in the young and relatively untried. Examples include Hjalmar Kronvall, who became manager of the factory in St. Petersburg, and Axel Boström, who began in the company as a 20-year-old and later succeeded Lars Magnus as managing director.

It has already been pointed out that Lars Magnus was unconvinced of the value of higher education. When he retired as managing director, the company had very few qualified engineers and a small administrative unit in relation to its size.

Another factor behind his success is what perhaps can be described as a harmonious private life. Lars Magnus’s life and career cannot properly be described without reference to his wife Hilda, wrote Stockholm-Tidningen:

“She played an active role in both his practical and theoretical work. He talked to her about his creations in the making; from her came the encouragement to continue his exertions; he confessed his difficulties to her; he sought her criticism. Nobody should believe that the L.M. Ericsson telephones, with all their intricacies, created themselves. Where telephones are concerned, theory is not enough. It is a question of testing them in practice and there can be few that realize how much testing and work went into L.M. Ericsson’s products. The workshops at Tulegatan were of fairly modest dimensions to begin with but telephone cables had been laid between the different rooms that could be used to test different designs. This work was undertaken by the inventor himself and his wife, and to make sure that other noises did not interfere more than necessary, as a rule it took place during the small hours. Mrs Ericsson had to run from room to room to repeat again and again in a predetermined tone of voice while the inventor himself listened to the almost imperceptible variations in the reproduction offered by the devices. These were labors that were both physically and mentally exhausting …”


Author: Svenolof Karlsson & Anders Lugn.

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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