Co-operative Structures in Global Business: Communicating, Transferring Knowledge and Learning across the Corporate Frontier (Routledge International Studies in Business History)

258 Pages·2000·3.49 MB·English

by  Gordon H. Boyce

Co-operative Structures in Global
Business
This volume explores how firms operating in industries as diverse as film making,
shipping, engineering, mining, bottling and advertising have collaborated to
develop innovative services, technologies and products to reach new markets.
Using a series of twelve historical case studies that are based on extensive archival
research, this book explains why firms succeeded or failed in communicating,
transferring knowledge and discovering new expertise. By analysing how workable
trade-offs between opposing forces have been achieved in the past, this study
provides a set of guidelines for executives who embark upon inter-firm projects.
Gordon H. Boyce teaches courses in business history, management and economics
at the Victoria University of Wellington, New Zealand. He is widely published on
the topic of inter-firm collaboration.
Routledge International Studies in Business History
Series editor: Geoffrey Jones
1 Management, Education and Competitiveness
Europe, Japan and the United States
Edited by Rolv Petter Amdam
2 The Development of Accounting in an International Context
A Festschrift in honour of R. H. Parker
T. E. Cooke and C. W. Nobes
3 The Dynamics of the International Brewing Industry since 1800
Edited by R. G. Wilson and T. R. Gourvish
4 Religion, Business and Wealth in Modern Britain
Edited by David Jeremy
5 The Multinational Traders
Geoffrey Jones
6 The Americanisation of European Business
Edited by Matthias Kipping and Ove Bjarnar
7 Region and Strategy
Business in Lancashire and Kansai, 1890–1990
Douglas A. Farnie, David J. Jeremy, John F. Wilson, Nakaoka Tetsuro
and Abe Takeshi
8 Women, Accounting and Narrative
Keeping books in eighteenth-century England
Rebecca E. Connor
9 Co-operative Structures in Global Business
Communicating, transferring knowledge, and learning across the corporate
frontier
Gordon H. Boyce
Co-operative Structures
in Global Business
Communicating, transferring knowledge
and learning across the corporate frontier
Gordon H. Boyce
London and New York
First published 2001
by Routledge
11 New Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor & Francis e-Library, 2001.
© 2001 Gordon H. Boyce
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any
form or by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Boyce, Gordon, 1954–
Co-operative structures in global business : communicating, transferring knowledge and
learning across the corporate frontier / Gordon H. Boyce.
p. cm.
Includes bibliographical references and index.
1. Business networks – Case studies. 2. International business enterprises – Management –
Case studies. 3. Technology transfer – Case studies. 4. Strategic alliances (Business) –
Case studies. I. Title.
HD69.S8 B69 2000 338.8´7–dc21 00-035383
ISBN 0-415-21644-3 (hbk)
ISBN 0-203-18767-9 Master e-book ISBN
ISBN 0-203-18890-X (Glassbook Format)
Contents
List of figures and tables vii
Preface viii
1 The theoretical and historical context 1
2 Agency agreements in international business: dynamic
model of shipowner–agent relations, 1870–1939 14
3 A family-based network: the Holt–Swire–Scott
connection, decision-support systems and staff
development, 1860–1970 35
4 A multinational joint venture: the Orient Paint,
Varnish and Colour Co., 1932–49 54
5 A purchasing co-operative: the Steel Manufacturers’
Nickel Syndicate, 1901–39 78
6 A licensing pyramid: John Brown Company and
International Curtis Marine Turbine Company, 1908–29 97
7 A technology transfer agreement: Babcock & Wilcox,
1880–1970 114
8 Learning within an inter-organisational group:
the Union Steamship Co. and oil propulsion, 1912–39 131
9 A joint exploration venture: Western Mining Corporation
and Hanna/Homestake, 1960–72 152
10 Contracts based on knowledge: the J. Walter Thompson
Company and Unilever – compounding intangible assets,
1900–70 170
vi Contents
11 An Australian supplier chain: the New South Wales
Bottle Co., 1909–80 188
12 Hollywood networks, 1970–99 205
13 Conclusion: inter-firm relationships 224
Notes 232
Bibliography 237
Index 245
Figures and tables
Figures
2.1 Dynamic model of shipowner–agent relationships 19
2.2 Agent’s wider business in the Port of New York 19
2.3 Shipowner’s London–New York line 21
2.4 Shipowner’s wider operations 21
3.1 Links in the Holt–Swire–Scott network 1860s to 1970s 38
5.1 Strategic links and information flows, 1902 81
5.2 Flows of reports on stocks of nickel held in the UK and
lines of authority for approving exports, 1902 86
5.3 Flows of invoices, payments, reports on deliveries of nickel,
and estimates of members’ consumption during the
next half-year, 1915–21 87
6.1 Curtis’s licensing pyramid 99
11.1 Links in NSWB’s supplier chain 189
Tables
5.1 The syndicate’s purchasing power 83
5.2 Size of levy in relation to rebate 89
5.3 The English Steel Corporation’s savings 94
5.4 The size of the rebate relative to the levy 95
8.1 Percentages of USS and British Empire fleets propelled
by diesel, oil-fired, and coal-burning engines in 1922–3
and 1938–9 135
8.2 Financial gains and losses arising from converting USS’s
trans-Pacific steamers to oil-firing 136
12.1 Revenues and costs (showing points at which gross
and net participation begin) for a hypothetical film 211
12.2 Market sectors 1980–98 217
Preface
This book is the outgrowth of an earlier study of business networks used by
British shipowners between 1870 and 1919. After completing that work, I decided
to cast the investigative net more widely and explore other forms of co-operative
structures that had been used in the past by business leaders engaged in other
industries. Teaching business history to management students in Australia and
New Zealand also encouraged me to think about co-operative principles that could
be distilled from historical experience and applied today.
I was also encouraged to pursue this project because Oliver Williamson’s path-
breaking work has intrigued me for years. I have read and re-read his books, and
each time I have come away with new insights and additional questions. His work
has provided a strong foundation for thinking about not only the economic logic
beneath co-operative structures but also the processes within them. (Having worked
in business, I was and am especially intrigued by how inter-firm relationships
begin and develop.) Williamson made some tantalising comments about atmosphere,
dignity and the benefits of arranging transactions, and it is towards these themes
that this study is directed. Along with Williamson, Mark Granovetter, Walter Powell,
and various sociological economists provided a basis for thinking about inter-
organisational relationships in systemic terms.
Business historians never take for granted the knowledge of archivists and the
wisdom of those business figures who ensure that corporate memories need to be
preserved for future generations. Today, when financial resources and facilities are
under such pressure from short-sighted ‘leaders’, these efforts deserve even greater
recognition. Since all but one of the cases below are based primarily on archival
sources, my gratitude is indeed considerable.
I acknowledge with thanks the assistance of Charlotte Havilland and John
Swire & Sons Ltd; Noel Butlin Archives of Business & Labour at the Australian
National University; Frank Strahan and Leigh Swancott and the University of
Melbourne Archive; Mary J. Auckland and the School of Oriental & African Studies
in London; the University Library Cambridge; Adrian Allan and the University of
Liverpool; the Keeper of the Records of Scotland for permission to use the records
of the John Brown Company, the Ellerman Lines papers, and the Babcock & Wilcox
collection; Michael Moss and the University of Glasgow; the Merseyside Maritime
Museum; Ellen Gartrell and Duke University; the History of Advertising Trust in
Preface ix
Raveningham; Ken Scadden and the Wellington Maritime Museum; the National
Maritime Museum in Greenwich; Furness Withy & Co., Ltd; Gilbert M. Ralph MBE
and the Western Mining Corporation; Unilever; and the J. Walter Thompson
Company.
I owe a great debt to Douglas Lowell, MSc, a treasured friend, who guided me
through the workings of the Hollywood film industry, commented extensively on
drafts of Chapter 12, and provided many friendly contacts in the industry. David
Shaheen, vice-president of Chase Securities, and Tom McGuiness, post-production
supervisor, provided specialised advice.
I am also grateful for the permission of the editors of the Australian Economic
History Review and Blackwell Publishers to include here revised versions of ‘The
Western Mining Corporation–Hanna/Homestake joint venture: game theory and
inter-organisational cooperation’, Vol. 37, no. 3 (November 1997), pp. 202–21 and
‘The Steel Manufacturers’ Nickel Syndicate Ltd, 1901–39: assessing the conduct
and performance of a co-operative purchasing organisation’, Vol. 38, no. 2 (July
1998), pp. 155–75. Likewise, I thank Manchester University Press and the editors
of the Journal of Transport History for permission to publish a rewritten version of
‘Union Steam Shipping Company of New Zealand and the adoption of oil propulsion:
learning by using effects’ [3rd series, Vol. 18, no. 2 (September 1997), pp. 134–55].
I am fortunate to be able to work with John Singleton, who is collegiality itself;
he read through drafts of nearly every chapter in this book and always provided
insightful comments. At Victoria University, I am also grateful to Professor Gary
Hawke for his encouragement over the past ten years. I acknowledge the assistance
of Professor Athol Mann and Monica Cartner, who broke through the onerous
regulations governing research funding and supported my application for a travel
grant. Finally, I thank Victoria University of Wellington for funding a sabbatical
leave and for the aforementioned travel grant.
The J. Walter Thompson Company generously awarded a research grant that
enabled me to visit the John W. Hartman Centre for Sales, Advertising, and Marketing
History at Duke University.
At other universities, Professors Simon Ville, Peter Townley, and Stephen
Nicholas read chapters and provided opportunities for me test out ideas in seminars.
At the LSE and the Business History Unit, Dudley Baines, Paul Johnson, and Terry
Gourvish arranged seminars from which I gained helpful comments. Professor
Tony Slaven offered the hospitality of the Centre of Business History in Scotland.
The University of Glasgow and the University of Melbourne kindly provided
fellowships and facilities. Over the years, I have benefited greatly from the academic
leadership offered by Professors Charlotte Erickson, Leslie Hannah, Paul Robertson,
Peter Davies, Skip Fischer, Geoff Jones, Mira Wilkins, Sarah Palmer, Frank Broeze,
John Armstrong, Keith Trace, and John Perkins. Steve Jones, Diana Olein, Mary
Rose, and Will Hausman have also been loyal colleagues. In Canada, Professor