Stakeholder relations as social capital in early modern international trade

Abstract

Stakeholder relations that are available through networks of various sorts are one benefit from social capital. According to the stakeholder approach to organisations, those relationships that contain most of the important attributes – such as power, legitimacy, frequency of contact and urgency – hypothetically dominate the business environment. This has caused modern corporations to view chiefly the dominant stakeholders as important. This study tests the importance of these attributes in early modern international trade; in other words, which attributes played a major role in the relations between Finnish tradesmen and their foreign contacts? The archives of two major Finnish trading houses from 1781 to 1852 provide sources for studying these stakeholder relations. The results of the study seem to confirm the importance of legitimacy and power in stakeholder relations, but they particularly emphasise the significance of frequency and urgency. Furthermore, dealings repeated over time between the parties created a resource dependency, thus further underlining frequency and power as important stakeholder attributes.

Keywords:

• social capital
• stakeholder relations
• early modern business

Notes

1. Nevertheless, intermediates such as shipmasters used oral communication with the overseas business partners. However, even in these cases masters usually reported carefully about these discussions to their principals at home.

2. The value of trade was taken from the account books. This caused certain difficulties, as we did not have ledgers available from all cross-cutting years. Thus, in case of Falander the 1781 contacts in letters were compared to ledgers from 1785. From other years in this case we did have all ledgers available. In case of Franzén, more straightforward analysis was done: namely, only the most important business partners were selected from the ledgers in first place. Thus, the selection is not as exact as in the case of Falander.

3. Names of Swedish consuls adapted from Almquist (1912–1915, pp. 345–448).

4. Torlades & Co. in Lisbon and Setubal, for example, was equally important to Joachim Donner in the first years of the nineteenth century as for his grandsons at the end of the century. FNAD, Joachim Donner (Kokkola) to Torlades & Co. (Lisbon), 24 November 1814. KHRm, Carl Donner (Kokkola) to Torlades & Co. (Setubal), 23 February 1872. (See also Casson, 1998; Mailath & Samuelson, 2006; Stobart, 2005).

5. OPAS, Zacharias Franzén (Raahe) to Gustaf Sterky (St. Petersburg), 21 July 1827.

6. The Sterky trading house was established in 1805 and was widely used by Finnish merchants up to 1892, when the last in a series of principals of the company died (Bonsdorff, 1977, 1980; Nikula, 1948).

7. OPAS, Zacharias Franzén (Raahe) to And. Wener (Stockholm), 1 January 1843; to Johan & Carl Scharp (Stockholm), 13 March 1843 and 22 January 1844; Ledgers, Daniel Sutthoff & Co. 1839–1851.

8. OPAB, Fredholm & Ekström (Marseilles), Circular, 30 April 1856; Moller's enka & Son (Lisbon), Circular, 1 March 1841.

9. VPAF, Abraham Falander (Vaasa) to Jan Bte. Lautier (Stockholm), 3 May 1781 and 18 June 1781.

10. FNADM, Clay & Square (Hull) account sent to Peter Malm Jr, 12 September 1829; Rew & Prescott & Co. (London) account of insurance for The Enterprise, 1 July 1829; Clay & Co. (Hull) to Peter Malm (Pietarsaari), 28 November 1829 (cf. Nikula, 1948, pp. 93–96).

11. As the number of different towns traded with was fairly considerable, in certain cases there are only a few examples per town available to calculate urgency with. Therefore, urgency my in some case be slightly over-estimated. Nevertheless, in the most important trading areas the number of cases is significant enough to reveal the importance of urgency.

12. FNAD, Joachim Donner (Kokkola) to Torlades & Co. (Lisbon), 23 November 1813; Ojala, 2002a, p. 195.

13. OPAS, Fredrik Sovelius (Raahe) to Captain A. Cannelin (Akyab), 2 February 1852 and to Cannelin (Amsterdam), 11 November 1852.

14. KHRm, Joachim Donner (Kokkola) to C.P. Tuderus (Lisbon) 4 April 1818; (Elsinore) 24 May 1818; 14 June 1818; 25 June 1818; 1 August 1818; 23 August 1818; (Reval) 23 August 1818.