An international business blunder: Fennia 1913-16

Kurt Pedersen, Peter Sørensen and Jesper Strandskov

Business History, 2010, vol. 52, issue 6, 892-911

Abstract: In 1913 Otto Mønsted A/S, Denmark's leading margarine manufacturer, acquired a majority share in Fennia, a small and insignificant Finnish margarine company. The Danish company had extensive knowledge of all functional aspects of margarine, and had up to 1909 been a dominant player in the British margarine industry. In spite of the massive international experience that had been accumulated by Otto Mønsted A/S the Finnish venture turned into a disaster, because for all their experience the Danish managers committed an impressive range of failures. The work of N. Nohria and S. Ghoshal is applied to the case, and a theoretically consistent analysis is provided. The conclusion of the paper is that the analytical framework of Nohria and Ghoshal serves well in this respect. It is further shown that value-added chain analysis is useful in linking functional failures to a corporate governance perspective. In the final resort, World War I killed off the experiment, but it was doomed anyway. Almost 100 years have passed, but today managers have lessons to learn from this event.

Keywords: foreign direct investment (FDI); business blunder; margarine industry; multinational management; business history (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1080/00076791.2010.499429

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