The case of Saab Automobile AB; From core capabilities into core rigidities - A trajectory towards demise

Abstract: This master thesis is addressing the case of Saab Automobile AB, creating a full historical reconstruction using primarily extensive quotes derived from semi-structured interviews with former Saab employees and other relevant actors. The aim is to depict and discuss the roots behind the company’s historically unique capabilities and its trajectory towards failure, together with the influence of General Motors’ ownership in this detrimental process. The empirics suggest that Saab’s sustained competitive advantages were mainly based on core capabilities derived from historically determined knowledge accumulations. However, the huge success of the company based on engineering core capabilities paradoxically evolved into core rigidities which enhanced a technocratic culture, decreasing the strategic and organizational fit with General Motors. This cultural clash was nevertheless not the only reason for Saab’s demise; low production volumes and General Motors’ mismanagement created a situation where the development of dynamic capabilities were inhibited. Due to the lack of reconfiguration of knowledge assets, the core capabilities of the firm faded over time, leading the company into becoming a shadow of its past, unable to cope with future challenges. This path towards demise ended in December 2011 when Saab Automobile AB, an icon of the automotive industry, went into bankruptcy.