Abstract: Management and Networks: To What Extent Were Free-Standing Companies Controlled from the Home Country? Four Scottish Examples, 1865-1885

Kevin Tennent

Abstract

Although the free-standing company was an important form of foreign investment before 1914, its implications for economic development in home and host countries remain unclear. Scotland was home to at least four hundred free-standing companies between 1862 and 1900. A core debate concerns the level to which these were entrepreneurial firms or purely devices for speculation. I examine four companies to analyze the role of their Scottish head offices: two agricultural companies operating in Australia and New Zealand and two U.S.-hosted firms. The two firms operating in Australasia were more effective in establishing control over their operations by devis-ing clear command structures. The Australasian-hosted companies were more adept than the U.S.-based firms at using the head office presence to establish marketing links in the United Kingdom. I conclude that the role of the head office is important for establishing competitive advantage for the free-standing company in its operations in the host country.

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