Articles

Chapter 1

An approach by geographic areas of the diffusion processes of managerial practices

Chapter 2

An approach by point of interest: technique, branch, sector, company

Chapter 3

Disseminators of doctrine, authors and tenets of management

Partners

French influences in a Finnish company in an era of industrial break-through and modernisation: Société Michelin’s welfare program and G.A. Serlachius AB in the 1920s and 30s

  • Susanna FELLMAN

    Academy Research Fellow, Economic and Social History
    Department of Political and Economic Studies
    University of Helsinki
    susanna.fellman@helsinki.fi

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In this article the significance of France as a source for models in Finnish management in an era of modernisation and rapid industrial progress is the focus of study. A special attention is put on how one manager, Gösta Serlachius, owner and manager in the pulp- and paper company G.A. Serlachius Ab (GAS), adopted in the 1920s a welfare program very similar to the one developed by Société Michelin and which had been implemented in the company town Clermont-Ferrand in 1914. The Michelin program was translated in its entirety into Swedish – the mother tongue of Gösta Serlachius - and studied in detail by the company’s key persons.  Especially GAS’ maternity services and child benefit allowances resembled significantly the Michelin program. The welfare program was considered ahead of its time in a Finnish mill community and a source of pride for company management.

Finland is often considered a ‘text-book’ example of successful late-comer economy, experiencing a rapid catching-up process in the 20th century. One reason for this has been ascribed to Finnish managers and professionals being skilled copiers of foreign technology and of foreign models in the field of management and organisation. The extensive influence of technology and know-how from Germany and the US is well-known. However, models were also received from other advanced countries, e.g. from Great Britain, France, and Sweden[In many cases the German or American models came to Finland via Sweden, where they first were ‘filtered’.].

In this article one concrete example of influence from French management in the Finnish manufacturing industry in the inter-war period will be illuminated. The focus of attention is on how Gösta Serlachius, owner and manager of the pulp and paper company G.A. Serlachius Ab (GAS) in the small mill community of Mänttä, in the 1920s and showed a great interest in the French company Société Michelin’s elaborate welfare program. Gösta Serlachius travelled extensively and he was always on the lookout for models in the field of management and organisation from his journeys. He also sent out his professional employees to get acquainted with new technology and models in forerunner countries. Gösta Serlachius and his professionals learnt about the welfare system of Société Michelin and especially the maternity and child benefit program raised his interest. However, also other welfare services in Michelin, for example the housing program and model houses for workers, were studied with great interest. The workers’ poor housing situation was a burning problem in Mänttä. The family and maternity allowance program was translated in its entirety into Swedish - the mother tongue of Gösta Serlachius – and a summary of all the welfare services was presented in a detailed report.[’Huvudsakligaste sociala organisationer hos bolaget Michelin &amp:0; Cie.’ Introduktionsbrev, Michelin, Amerika 1926. Gösta Serlachius’ archive. Gösta Serlachius art museum. Joenniemi Mänttä.]

Obviously, it is difficult to draw strong conclusions about any direct influence, especially as similar solutions can be found in many other Finnish companies and elsewhere in Europe. Extensive welfare programs were common in Finnish mill communities during this time period, primarily out of necessity – there was no other to take care of the task – but also as a result of the prevailing paternal tradition according to which the company was to take care of their employees ‘from the cradle to the grave’. Serlachius also received inspiration from other countries in this field. On the other hand, the welfare program in GAS was particularly extensive and especially when it comes to child and maternity benefits, GAS was something of a forerunner in the Finnish context. Many of the details in the welfare services developed by GAS also resembled strongly those adopted in Michelin. Furthermore, as the extensive parts of the program was translated and studied in detail it can be assumed that it at least formed an inspiration for certain solutions and benefits.

Here I will, firstly, aim to evaluate the role of the model provided by Michelin in GAS.  The welfare programs in both companies are compared and the possible influence from the French company is discussed. Secondly, these programs will also be analysed against their local societal context, and against the goals and targets of the owner managers in these two companies. Although the similarities in many cases were striking, also some divergences can be found. The goals of the programs seem also to have been somewhat different in the companies. The local societies and the local context varied, as well as the prevailing societal discourses in the two countries. It has been emphasised that the transferring and diffusion of institutional models are a complex process of adoption, translation and adaptation to local circumstances, depending on the institutional context in the receiving country and on how the local actors interpret the models.[There is an extensive literature on this, e.g. Djelic, Exporting the American model :0; both being brands for which GAS later became well-known. The Serlachius family sold the company in the 1980s, but the brand name ‘Serla’ is still famous on the Finnish market for tissue paper.

Gösta Serlachius is one of the legendary figures in Finnish business history, but he is perhaps best known for his activities outside GAS, particularly in the foundation of the big Finnish forest industry export cartels Finnish Paper Mills’ Association and in the Confederation of Finnish Employers (Suomen Työnantajien Keskusliitto STK). He had close relations with the highest political elite, which gave him important assignments within the newly independent State, first during the Civil War (1918) and later particularly in connection to the development of Finnish trade relations with other countries. He was, however, also an able manager. Although Serlachius was not an engineer, he was very interested in technological and organisational innovations. Moreover, one of his best qualities was that he was able to employ skilled experts.[Fellman, ”Hur leds ett storföretag? – G. A. Serlachius Ab på 1920- och 30-talen.” [The management of big business – G.A. Serlachius in the 1920s and 30s], Historisk Tidskrift för Finland,  2005 Vol. 90 nr. 2.]

Gösta Serlachius also had a great interest in fine art and succeeded in building up a sizeable art collection. His former home, Joenniemi Manor in Mänttä, is today an exclusive art museum. He was also interested in architecture and took an active interest in all construction projects in the firm, from both a technical and an architectural point of view. The heritage of the company, particularly from the era of Gösta Serlachius, is still prominent in Mänttä.

 

2. The time period:0; Lottmann, The Michelin Men. Driving an Empire, I.B.Tauris &amp:0;Co. London 2003, 82.]The full family program – the so called Allocations Familiales program - was introduced in 1916, but the company had already earlier a very elaborate and structured health care and housing program.

One reason for the attention the Michelin program received was that the company lent its name to the French so called pronatalism-movement. This movement was strong in France during the first decades of the 20th century, due to a declining nativity. There were fears of a depopulation of the French nation. In the 1920s the issue became even more to the fore as the First World War had a severe impact on the population. Women were to bear more children to preserve the economic and military strength of France.[Huss, “Pronatalism in the inter-war period in France”, Journal of Contemporary History Vol. 25, 1990, 39-68 :0; Harp, Marketing Michelin Advertising &amp:0; Cultural Identity in Twentieth-Century France, John Hopkins University Press, 2001, 126ff.] The movement was not only concerned with promoting a higher nativity, but also with the welfare of mothers and children. Healthy children and mothers would reduce child mortality and give rise to healthy and fit adults, which in turn would promote the future prosperity of the country. Thus, the pronatalism movement was part a general modernisation of France. Similar trends can be noticed in many countries in the interwar period and particularly as a result of the growing nationalism, but it received a particularly strong foothold in France as the country was one of the first countries to consider a decline in birth-rates.[Huss, op. cit.,1990.]Especially André Michelin was deeply engaged in this societal issue and the company produced for example a brochure where the message was that the Michelin Company and the town Clermont-Ferrand formed, thanks to the family program, a good example that more children could be born in France. The Bibendum was on the front cover of the brochure holding children in his arms.[Harp, 2001, op. cit., 221.] The Michelin program was also presented in e.g. Bulletin de l’Alliance Nationale and was throughout the 1920s given as an example to be followed by others.[Harp 2001, op. cit., 143.]

The welfare system in Michelin was extensive with a particular focus on health care services, family benefits and a housing program and they are of special interest here. Families with many children received considerable child allowances. The child allowances were among the highest in France at the time and grew with the number of children.[Gueslin, 1993, op. cit., 111 especially Table.] During pregnancy, the expecting mother received medical examinations and upon the birth of the baby, a maternity allowance and a small package with medical and hygiene products for the newborn and herself. The company also allowed a maternity leave for up to one year for women employed in the company with compensations for income reductions for the leave. These services would induce mothers to take well care of their babies. During this period mothers with infants could visit the company’s small nursery were she could receive guidance in how to take care of her baby and to help her with breast-feeding. Breast-feeding was considered extremely important for the welfare of the child and the maternity leave would promote this. Mother employed in the company also had the right to have their old job back if they wished to return to work after the maternity leave. The employees’ families could also visit the company welfare clinic for bigger children. The company also had a considerable family pension scheme and benefits in case of death or injuries.

The family allowance system was complemented with work safety measures, with insurances and medical care for the employees, and with day-care centres, nurseries, and a primary school for small children. For youngsters there were vocational evening schools, summer camps, and sports’ clubs. The company established a cooperative bank for their employees, in which the employees could deposit part of their salary and become shareholders in it. Long-term employees could increase their shares in the cooperative bank and thus build up decent savings for themselves.

An extensive housing program was also developed in the Michelin Company. The housing situation and the sanitary problems were one of the most urgent problems in the company town.[Gueslin 1993, op. cit., 101.] In the late 19th century primarily barracks and other lodgings for several families were built, but in the early 20th century the goal became the single-family houses. The houses were rented to the employees, according to the size of the family. Big families had priority to company houses and their rents reduced. The model houses were to be designed especially with the needs of the housewife in mind, as, according to owners of Michelin, she spent more time in the house than the husband and thus it was important that she felt at home. The house was to be spacious, but not too spacious to avoid extensive cleaning, and hygienic. The issue of hygiene was of course linked to the health issue and the promoting of the healthy environment for the children. According to Herbert Lottman, “the principles of hygiene were elevated to doctrine”.[Lottmann 2003, op. cit., 85.] The program developed rapidly. In the early 20th century, about 12 % of the workforce of Michelin lived in houses provided by Michelin, but in 1936 already 42.5% inhabited a house provided by the company.[Gueslin 2001, op. cit., 105.] Besides the actual house, also the environment was important. Clermont-Ferrand was to be nice and healthy to live in – and as such also morally and mentally uplifting. Gardens and green areas were important and according to one contemporary visitor Clermont, it was the most beautiful garden city in France.[Gueslin 1993, op. cit., 117.]

As mentioned earlier the promotion of a high nativity was one important goal of the welfare program. The measures had apparently the intended effect:0; an activity which was seen as pioneering at the time.[As the authorities put new requirements on the maternity hospitals and children and prenatal clinics the activity became primarily an affair for the municipality after 1937. GAS gradually decreased the financing, but contributed still some funds to the hospital during the war. In 1949 the whole activity was taken over by the municipality.] Moreover, new activities, like a day-care centre for working mothers, summer camps for children were taken up, while also leisure activities like sports, gardening and scouting became important.[Säde Ry historiikki 1920–1970, osa II. Säde-yhdistys kotelo 1. GAS archive. G A Serlachius museum  Mänttä.]

 

Gösta Serlachius took a personal interest in the activities of Säde. He was especially interested in ‘the fostering task’ and he always stressed these aspects. One of the primary goals was to educate a new generation of hard-working people with high moral standards and abilities to make a living for themselves. This was of course considered as suitable for working-class children. In the children’s home the young girls were to learn domestic abilities and child care in order to become good future nurses, nannies and mothers. This was important as these girls were to be the raisers of the following generation. The moral and pedagogical issue was to the fore for example when a day-care centre for children of working mothers was discussed in 1937. He considered the establishing of a day-care centre for working mothers, combined with “a summer home for weak and unhealthy children” as a good idea. The day-care centre would obviously also be beneficial for the female workers of his company – and thus for GAS – but he considered that it would first and foremost have an important pedagogical task.[’PM ang. ett tilltänkt barnhem i Mänttä’. Säde-yhdistys kotelo 1. GAS archive. G A Serlachius museum  Mänttä.]

In line with the ideologies of the time Serlachius considered that safety and welfare work would increase the efficiency and productivity in the company.[Kettunen, Suojelus suoritus, subjekti. Työnsuojelu teollistuvan Suomen yhteiskunnallisessa ajattelu- ja toimintatavoissa, Historiallisia Tutkimuksia 189, SHS, Helsinki, 1995.] The goal with the social activities would moreover secure a stable workforce, which would be both loyal and political trustworthy. In the children’s home and in the summer camps this ideological and moral fostering was particularly important. In the aftermath of the Finnish Civil War of 1918, Gösta Serlachius was extremely suspicious of any activity which could be considered threatening to the social order. Also in GAS the raising of a healthy, hard-working new generation was important, but perhaps less out of a need to promote growing birth-rates, but more about fostering a new generation of morally high standards without revolutionary tendencies. This would also enable the building of the recently independent nation marked by significant social tensions. On the other hand, Serlachius, like the Michelin brothers, had also a genuine concern for his ‘own’ employees – provided they were loyal and did not participate in any revolutionary activities. 

 

5. Workers’ housing in GAS

 

As mention in the introduction, the poor housing standard was an urgent problem in GAS in the early 20th century. Houses for the workers had been built in Mänttä already since the foundation of the plant, but the workers’ houses from the late 19th century were considered inferior both in size and in quality. Gösta Serlachius was very active in improving the housing standards of ‘his’ workers. One reason was the bad image this problem had given rise to. In the 1910s it was in the press pointed out that the housing situation in Mänttä was among the poorest in the Finnish mill communities.[Mönkkönen 1993, op. cit., 97.] The ‘housing question’ was also one of the most burning issues in the building of the Finnish nation after the independence in 1917. The prevailing national discourse was that Finland in particular lagged behind its’ Nordic neighbours when it came to housing standard – a fact which gained support in statistics long into the post-war period - and that this was a source for concern. Poor housing formed a threat to the physical, social and moral development of the future generation and as a result it was a root to social problems and formed a breeding-ground for radicalism.[Salmela 2004, op. cit., 92.] Not surprisingly it was in particular working class’ housing that was the issue of concern. Obviously, they often had the poorest dwellings, but the élite was also worried about their moral standard and the political orientation.

Gösta Serlachius had strong views on the housing question and he and the professionals in GAS discussed this a lot and looked for models for workers’ houses both at home and abroad. Thus they investigated closely the housing program of Société Michelin and the “cheap houses with gardens” for Michelin’s workers with big families – habitations à bon marché – which the French company had come up with.[Bilaga 3 till ’Huvudsakligaste sociala organisationer hos bolaget Michelin &amp:0; Cie.’ GAS archive. G.A.Serlachius museum. Mänttä.] During this period the ideal in GAS became, as in the Michelin Company, to avoid worker’s barracks and focus on single or semi-detached houses with a small garden.[’Esitelmä pidetty Mäntän maakunnallisessa huoltoväen kokouksessa 3/10 1938. I.L.’ GAS archive. G.A.Serlachius museum. Mänttä.] The simple, but functional planned and built by the GAS Company resembled the family houses for one to four families constructed by Michelin. One of GAS’ subsidiaries, KOLHO sawmill also started to produce pre-fabricated small wooden single-family houses in the 1940s. The planning of pre-fabricated housing made the company discuss what was to be seen as good for small families, what families wanted and what was feasible to produce.

The single-family house was the ideal and GAS rented and sold parcels to its employees for them to build their own houses on. It also gave loans to cheap rates and promoted savings in the savings bank so that the family could get a mortgage. But also GAS’ own housing program became extensive. Although many workers had a house of their own (on land bought or rented from GAS), 60 % of the workers lived in the late 1930s in one of GAS owned houses.[’Selostus naisten koskevista yötyötä koskevasta tutkimusmatkasta.’ Sisko Anian arkisto 4812. GAS archive. Central archive for Finnish busisness, Elka.] Among the white-collar employees the share was even higher:88; Contemporary France, 2000, vol. 8, no. 3, 345–357.]

 Local variations between these two cases can, however, also be observed. In Finland the question of promoting nativity was less to the fore, while it was more important to foster a new generation of a high moral standard who would not threaten the social order. Moreover, they were to be healthy and well-prepared for tasks in the building the nation. The Finnish birth rates were favourable at the time, and the WWI had not affected the population, although the Civil War and its aftermaths with Spanish flu and unhealthy war camps temporarily affected the population figures, and especially the younger age-groups. Thus, this example also reflects how societal models, ideologies or managerial strategies can be re-phrased or re-labelled to fit the social context and prevailing discourses and ideologies.

 

 

 


References

 

Biggs, L., The Rational Factory:0; Contemporary France, 2000, vol. 8, no. 3, p.345–357

Djelic, M.-L., Exporting the American model:0; Cultural Identity in Twentieth-Century France, John Hopkins University Press, 2001

Hjerppe, R., « The Convergence of Labour Productivity », in Kryger Larsen, H. (ed.), Convergence? Industrialisation in Denmark, Finland and Sweden, Helsingfors:0;Co, 2003

Markussen, O., « Danish Industry, 1920–1939:0