The Role of Networks in the Early Development of the Borneo Company Limited

This work provides an analysis of a British international business organisation of the nineteenth century. The contention is that this represents and excellent example of the use of networks in the development of foreign direct investments. The case presented is that of The Borneo Company Limited (BCL) and what is demonstrated is that in the absence of formal hierarchical structures, Britain was able to produce genuine multinational companies as early as the mid nineteenth century, using networks as the means of economic co-ordination. The evidence put forward shows that BCL co-ordinated the transfer of capital and technology from Britain to Asia, and that it took responsibility for the management of such capital and technology in the foreign locations to which this investment was directed. Thus, although BCL's origins are founded in the mercantile activities of trading groups such as Hendersons or McEwans, the company itself rapidly evolved into an investment group in its own right. The early history of BCL has been misunderstood in some respects, as certain activites that the company controlled have been ascribed to others, most notably Hendersons merchants. Therefore, this paper will go some way to setting the historical record straight. The search for theoretical explanations of the development of the company has uncovered a series of control networks that were extremely successful, however idiosyncratic.