Volvo's HR Practices - Focus on Job Enrichment

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Case Details:

Case Code : HROB062
Case Length : 13 Pages
Period : 1973 - 1999
Pub Date : 2004
Teaching Note :Not Available
Organization : Volvo Car Corporation
Industry : Auto and Ancillaries
Countries : Sweden

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Gyllenhammar's apprehensions proved correct when Volvo closed down Kalmar plant in 1994. However, Volvo's efforts in bringing changes in work design offered valuable lessons to both the academic and corporate community.

Analysts appreciated Volvo for its constant emphasis on learning from experiences and implementing the lessons so learnt in its new initiatives. This contributed significantly to the development of human-centric production systems. These systems brought to life several theories and concepts, which had earlier only been enunciated in textbooks but rarely practised with the kind of seriousness with which Volvo did.

Background Note

Volvo was founded on July 25, 1924, when Gaustaf Larson (Larson), an engineer and Assar Gabrielsson (Gabrielsson), an economist, met over a meal and agreed to build a car suited for Sweden's roads and climatic conditions.

The two founders had worked earlier for SKF, a famous Swedish bearings manufacturer, where they nurtured the dream of building a car. In 1926, the duo prepared 10 prototypes of the car to convince SKF into investing in their company.

SKF not only agreed to invest SEK 200,000 kroner, but also lent its patented name, AB Volvo. On April 14, 1927, the new company rolled out its first car, the OU4, from a factory near Goteberg, Sweden. The day marked the official date of inception of AB Volvo (Volvo)3. In September 1929, Volvo reported its first ever profits. In 1934, Volvo launched its first bus, the B-1. The product rapidly gained acceptance as a vehicle fit for rural areas.

By the time World War II broke out in 1939, Volvo had established itself as a profitable automobile manufacturer with a broad product range.

The company's automobile engines were known for their reliability and were used in cars, buses, boats, fire tenders and military tanks.

Volvo began exporting vehicles on a major scale to Latin America, Japan, China, Israel, Ireland, Holland and Belgium. Volvo's financials were boosted during the war period (1939-1945), when it supplied a large number of vehicles to the military.

In 1946, Volvo introduced its first diesel bus, the B-56, which became immensely popular as a city bus as well as a tourist coach. By 1948, Volvo emerged as a major tractor manufacturer. In 1949, Volvo rolled out its 100,000th vehicle from its assembly lines. In 1955, the company began exporting to the US.

In 1963, Volvo commenced car production in Canada, becoming the first European automobile manufacturer to set up such facilities in North America. Its manufacturing facility in Belgium became operational in 1965. Volvo created a separate truck division in 1968.

The 1970s witnessed a significant change in Volvo's operations, under the leadership of Gyllenhammar. In 1972, the Volvo Technical Centre (VTC) was established, which had R&D facilities, including a safety centre and an Emission Laboratory...

Excerpts >>

3] Taylor, Lynda King, Worker participation in Sweden, Industrial & Commercial Training, January 1973.


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