Employee Opportunism in Two Early Modern British Trading Companies

• Main Author: Unger, Robert Franklin
• Format: Thesis
• Language: unknown
• Published: Old Dominion University Libraries 2015
• Subjects: Arctic
• Online Access: https://dx.doi.org/10.25777/kwpn-sh87; https://digitalcommons.odu.edu/history_etds/2/

The English East India Company and the Hudson’s Bay Company were the most prominent of a score or more of seventeenth and eighteenth century joint stock European trading companies whose merchants conducted their trading activities around the globe. The extraordinary distances and length of time that separated the London directorate committees of both companies from their distant employees was perhaps their greatest managerial challenge. Neither company could directly supervise their employees at their remote trading concessions, whether it was India and the East Indies for the East India Company or sub-arctic North America for the Hudson’s Bay Company. Because of these circumstances, both companies confronted serious agency problems. The overseas operations of both companies were almost entirely subject to the discretion of their distant employees, who more often addressed their personal circumstances and interests than those of their company. An employee surreptitiously making private trades for the individual’s personal gain instead of trading for the company’s benefit, was considered by the London directorates as the most scurrilous act that was possible against one’s employer, as it directly undermined the company’s profitability. Other acts of personal opportunism by the employee that harmed the efficiency of the company were fraud, embezzlement, drunkenness, and avoidance of daily work responsibilities. One of the reasons that the great majority of the overseas trading companies ultimately failed was because these distant employee challenges could not be overcome. But the East India Company and the Hudson’s Bay Company prevailed through these challenges lasting three centuries or more. This study compares the two companies with respect to the problem of unwarranted employee opportunism. A number of scholars have postulated that each company had its unique managerial policies and tools that could control or minimize the problems, if not eradicate them.This analysis found that this was not the case. Instead, overseas company agents largely acted in their own self-interest, and could only sometimes be persuaded to act in accordance with company goals.