The Borneo Company Limited:The Origins of a Nineteenth Century Networked Multinational

The origins of British-based trading companies are to be found in the international mercantile networks which linked together Britain's commercial centres with the rest of the world during the nineteenth century. One such network, drawing together participants with operations in Singapore and Sarawak, was formalized under the title of The Borneo Company Limited (BCL) between 1851 and 1856. To function effectively, these inter-personal networks of merchants required a high degree of trustworthiness among the participants in order to overcome principal/agent problems, since direct supervision from the headquarters in London was not feasible. However, in order to expand, it was necessary to widen the circle of network participants and to incorporate new types of competence. This contribution analyses the early history of BCL with a view to understanding the way in which the process of growth was managed, distinguishing between three different types of expansion: engaging in production as well as trade; extending the geographical scope of the organization; and diversifying into new markets

The Evolution of International Business Enterprise

This paper outlines the development of international firms over the period from 1870 to 1945. It shows how British and other European trading firms developed international investment operations using the medium of free-standing companies. This was the origin of Royal Dutch Shell amongst other firms. It then considers the emergence of international Foreign Direct Investment that was stimulated by the developments of the Second Industrial Revolution in the latter years of the nineteenth century. The production of standardised products using system of mass production, and the scientific breakthroughs in chemistry and electrical engineering, amongst others, brought to the fore international firms such as Siemens and General Electric, Singer, British American Tobacco and Ford. The growth of these enterprises suffered a setback during the First World War from which German firms were slow to recover. The Great Depression that followed the US stock market crash in 1929 brought the first era of globalisation to an end. The work of Alfred D. Chandler and Geoffrey Jones in explaining the development of international companies is given particular attention

International Business Enterprise before 1945: Evolution of the Global Cigarette Market.

This paper examines the international growth and development of the British-American Tobacco Co. from 1900 to 1945. As one of the first cases of a market-driven multinational corporation, the paper is able to highlight both the international development of the industry through its various historical phases, and the kinds of problems that a pioneering multinational was forced to deal with. BAT's international management, for example, was among the first to face the issue of globalisation versus localisation in relation to its international product marketing that is now fundamental to the implementation of a successful global business strategy

Business on Trial: the Tobacco Securities Trust and the 1935 Pepper Debacle

The prosecution and imprisonment of Lord Kylsant in 1931, following the collapse of the Royal Mail Shipping Group, has long been acknowledged as a landmark event in the history of financial accounting. Far less attention has been given to the equally high profile conviction and imprisonment of three businessmen four years later in the wake of the notorious pepper scandal. This paper examines the background to the scandal, particularly the role played by an investment vehicle called the Tobacco Securities Trust, and compares the subsequent trial and conviction to that of the Royal Mail case. The findings of the paper serve to endorse studies by accounting historians arguing that Britain’s legal environment played a critical role in promoting improvements in the financial disclosure policies evidenced amongst leading British companies during the second quarter of the twentieth century

Technological Change and Innovation in Consumer Magazine Publishing: a UK-Based Study

This paper presents the results of research undertaken between 2002 and 2004 into the impact of technological change on the UK consumer magazine industry. The findings highlight patterns of innovation, both in the range of products (most notably monthly magazine titles) and the structure of organisations and work practices, which have tended to elude much of the contemporary debate within the “cultural industries” approach adopted in the media studies discipline. Instead, our analysis makes use of insights from the innovation literature to highlight the impact of technological discontinuities on the capabilities of both incumbent firms and new entrants. It also highlights the important and growing role that is being played in innovation-led industries through the adoption of organisational practices that find their origins in the traditions of project-based firms

Consumer-driven innovation networks and e-business management systems

This paper examines the use of consumer-driven innovation networks within the UK food-retailing industry using qualitative interview-based research analysed within an economic framework. This perspective revealed that, by exploiting information gathered directly from their customers at point-of-sale and data mining, supermarkets are able to identify consumer preferences and co-ordinate new product development via innovation networks. This has been made possible through their information control of the supply-chain established through the use of transparent inventory management systems. As a result, supermarkets’ e-business systems have established new competitive processes in the UK food-processing and retailing industry and are an example of consumer-driven innovation networks. The informant-based qualitative approach also revealed that trust-based transacting relationships operated differently from those previously described in the literature

Innovation and Performance in British-based Manufacturing Industries:Shaping the Policy Agenda

This paper analyses the relationship between business performance, R&D expenditures and innovation output. It utilises the second Community Innovation Survey (CIS2), a large-scale survey into firms’ innovation activities conducted in the UK by the DTI. We matched up CIS2 with performance data as derived from the FAME database, using the four year period after the survey. We find that many enterprises who claim to have produced innovation output, did not register any expenditures on formal R&D. Moreover, we find evidence that it is innovation output, the introduction of new or improved products and processes, which is correlated to productivity growth, not a high expenditure on R&D. The UK’s policy to support innovation via subsidising R&D expenditure may on the one hand fail to effectively target many firms who are successful innovators and on the other reward firms that engage in levels of R&D spending beyond the point where marginal social cost equals marginal social benefit. Our evidence strongly suggests that the key to supporting productivity growth in the economy as a whole is to develop policy initiatives that are able to facilitate product innovation directly

The Changing Nature of Sino-Foreign Business Relationships, 1842-1941

During the second half of the nineteenth century, foreign business enterprises relied considerably upon the service of compradors to extend their economic interests in the Chinese economy. Utilised initially to overcome the barriers presented by language difficulties, compradors were employed by western firms to undertake a variety of tasks covering both supervisory and co-ordination functions. With the growth of industrial interest by foreign businesses during the twentieth century, however, the comprador system fell into disrepute and during the 1930s was largely abandoned.This paper employs research based on primary source materials to trace this institutional transition for two specific cases. The Kailan Mining Administration (KMA), whose origins are to be found as an Anglo-Belgian free-standing company, took control of both the Kaiping and Lanchow coal mines in 1912. In order to expand its sales, the company employed the services of the comprador Liu Hongsheng who successfully built up the company’s market around Shanghai. In doing so, however, Liu became an important force in coal distribution in his own right, leading to tensions that were resolved through the creation of a joint venture operation called the Kailan Sales Administration (KSA) in 1925.British-American Tobacco (BAT) was set up in 1902 to administer the foreign markets of the American Tobacco Company and Britain’s Imperial Tobacco Company. In China, a distribution system was created using many Chinese collaborators of whom two were of particular importance. Wu Ting Seng, a member of the Chinese gentry, played a crucial intermediating role for the western company in a variety of its dealings with the Chinese. Cheang Park Chew, on the other hand, was an influential Cantonese merchant whom BAT used to distribute its goods throughout the Shanghai region. In both cases, BAT chose to alter the institutional arrangements with these collaborators from the contractual form to joint venture partnerships, unsuccessfully in the case of Wu, but with phenomenal success in the case of Cheang’s mercantile enterprise, the Wing Tai Vo Tobacco Corporation

New Product Development and Product Supply Within a Network Setting: The Case of the Chilled Ready-Meal Industry in the UK

This paper analyses inter-organizational networks that link together firms operating in the food processing and distribution industry in the UK. In doing so, the paper draws on insights recently developed by Mark Casson that treat inter-firm networks as an institutional response to the changing costs and opportunities of information management. Detailed analysis of product innovation and supply chain management issues within the industry, exemplified by the growth of chilled ready-meals, leads to the identification of two distinct but complementary inter-firm networks: a network of control and a network of innovation. In each case, the study finds that the critical information is derived from the retailers’ interface with consumers and thus that these information-based networks are effectively controlled by the leading supermarket chains. The study’s conclusions are considered in relation to the recent findings of the Competition Commission following its investigation into grocery retailing in the UK

Innovation and Organisation in the UK magazine print publishing industry: a survey

This paper examines innovation within the UK magazine publishing industry. We find that publishers are able to engage with niche interest groups in order to supply a high value-added product. The paper attempts define the characteristics of the industry and to examine the drivers of innovation through a survey and an exploratory approach to data analysis. We suggest that the frequently employed simple output measures of innovation do not adequately capture the innovation process in this industry or the range of activities carried out by firms. We find that groups of firms engage different patterns of innovative behaviour depending on the drivers of innovation. Firms that are more responsive to consumer trends are more likely to engage in a wider range of associated activities in order to add value from their consumer knowledge