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

Cox, Howard and Metcalfe, S. (1998) The Borneo Company Limited:The Origins of a Nineteenth Century Networked Multinational. Asia Pacific Business Review, 4 (4). pp. 53-69. ISSN 1743-792X (electronic) 1360-2381 (paper)

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Abstract

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.

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