This chapter examines Falconbridge's managerial structure in the 1930s and the agency problems in the organization. As mentioned in the introductory chapter managers do not always act in ways consistent with the owner's maximization of profits. These problems were present not only between owners and managers but also between the mother company and the Norwegian affiliate. We will use one major issue to illustrate the transatlantic agency problems, namely the planning of a new nickel refinery in Canada. Such a move would block all expansion in Kristiansand and threaten the future of the Norwegian refinery. The plans were therefore vehemently opposed, in particular by Grønningsæter, but also by plant manager Steen. Both were staunch Norwegian patriots. They did not restrict themselves to arguments but also tried to create ‘facts on the ground', that is, they modernized the Kristiansand plant without being authorized to do so.

Several factors affected Falconbridge's decision about where to refine nickel: costs, technological considerations, market considerations and, not least, Ontario politics. We will look into these matters as they throw light upon the Kristiansand refinery's position within Falconbridge. But in order to understand Falconbridge's development and choice of path, we must first turn the attention to the inner life at the top level in the company.

Managing Falconbridge

The letters between Grønningsæter and Steen give a unique insight into how the management in a multinational company such as Falconbridge functioned, though viewed from only two people's point of view.