Historical Perspectives on Contemporary Problems: Organizational Capabilities and Strategy and Structure of Large Pulp and Paper Firms, 1950-1980

The organizational capabilities of the leading firms shape to a great degree the structural evolution of the pulp and paper industry. The phenomenal expansion and structural change of the North American pulp and paper industry between 1950 and 1980 exhibited many of the dynamic forces in play today, as well as resulting in an industrial organization for which the next challenge was globalization. This paper examines in detail how some of the leading North American firms forged a corporate strategy of expansion and diversification in the post-World War II decades. The adoption of a diversified and multidivisional corporate structure by the leading firms completed one line of technological evolution in the industry, and subsequently directed large scale firms to attain competitive advantage through economies of scale and industry leadership. Similarly, the consolidation of the industry created a handful of leading firms with a national scope, whose next challenge was globalization and competition from Europe. The paper suggests that competitive strategy in the pulp and paper industry is intimately related to firm specific organizational capabilities, maturity of technology, and the duration of product life cycles.