weden is neutral. The country is a member of the United Nations, and the European Free Trade Association (EFTA), which is composed of the industrial countries of Western Europe which are not members of the European Economic Community (EEC), or The Common Market. Among the Scandinavian countries, only Sweden is actively seeking EEC membership. Sweden has a precise plan already set in motion that looks to EEC membership in 1995 (The race, 1991, pp. 52 53). The agreement in November 1991 between the EEC and the EFTA, however, may cause some EFTA countries to defer any consideration of EEC membership, and to rely instead on the broadened access to the EEC markets provided by the new EEC EFTA agreement. Sweden, however, is expected to pursue its plan to become the next EEC member on 1 January 1995. Sweden's pursuit of EEC membership is a major reason underlying Volvo's negotiation of a strategic alliance with Renault, a company based within an EEC member country, in 1990 (Melcher, 1992, pp. 50 51).
Domestically, Sweden has a social democratic orientation, and has had for decades. The country has the highest level of governmentally funded social services of any western country. In content, its social services equal those in any socialist country, while, in quality, Sweden's social services exceed those in any socialist country. To most Americans, Sweden appears to be socialist. In fact, however, the country has a market economy, with private ownership of business organizations. Taxation levels are high, however, to support the level of social services funded by the government. High taxation levels are another reason that Volvo pursued a strategic alliance with Renault. In effect, the alliance, it was hoped, would permit Volvo to transfer some production to a lower cost area.
Volvo is a major worldwide producer and marketer of automobiles, buses, trucks, engines, and aerospace equipment (Ozaroff, 1993, p. 112). The compa...