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Abstract
Jardine Matheson & Company, a 200-year-old Hong Kong trading company that began as a house of agency, has evolved to become a contemporary Asian multinational. This article focuses on the entrepreneurial ambition of founders William Jardine and James Matheson, the importance of reputation both to legitimacy and the survival and growth of the firm, with emphasis on the role played by the founders in shaping the legal environment for trade with China. The study uses Edith Penrose's Theory of the Growth of the Firm as a principal interpretive framework and draws its evidence from the founders' original letters and a previously unexamined resource, the free trade treatise of James Matheson called Present Position and Prospects of the British Trade with China.
Notes
1 Foss, “Edith Penrose, Economics and Strategic Management,” 89–90 reviews the Harvard and Chicago literature.
2 This view of Resource-based theory draws on Wernerfelt, “A Resource-based View of the Firm,” 171–80; Rumelt, “Towards a Strategic Theory of the Firm,” 556–70; Rumelt, “Theory, Strategy and Entrepreneurship,” 137–158.
3 Kay, Foundations of Corporate Success, 127. Kay's statement: ‘For each distinctive capability there is a market or group of markets, in which the firm that which holds it may enjoy a competitive advantage’, ignores Knightian uncertainty.
4 The Journal of Management Studies 41, No. 1 (Jan. 2004). This special issue was a point-counterpoint discussion of the Penrose paradigm. Additionally, Pitelis' 2002 volume The Growth of the Firm: The Legacy of Edith Penrose sheds light on Edith Penrose's unique contribution. My arguments draw on these and other sources.
5 Foss, “Edith Penrose: Economics and Strategic Management,” 155–158.
6 Fransman, “Information, Knowledge, Vision and Theories of the Firm,” 713–757.
7 Ravix, “Edith T. Penrose and Ronald H. Coase on the Nature of the Firm and the Nature of Industry,” 171.
8 Best, “Regional Growth Dynamics: A Capabilities Perspective,” 184.
9 Kor and Mahoney, “Edith Penrose's Contributions to the Resource-based View of Strategic Management,” 187–188.
10 Penrose, The Theory of the Growth of the Firm, 25. Hereinafter, the book will be abbreviated as Theory.
11 Ibid., 25.
12 Ibid., 48.
13 Ibid., 56.
14 Ibid., 53.
15 Ibid., 5.
16 Ibid., 45.
17 Chandler, Strategy and Structure, 94–99.
18 Hounshell and Smith, Science and Corporate Strategy, 466.
19 Penrose, “The Growth of the Firm: A Case Study,” 2; Kor and Mahoney, “Modern Resource-based Theory Future Research Building on Penrose's ‘Resources Approach’,” 109.
20 Penrose, “The Growth of the Firm: A Case Study,” 9.
21 Penrose, Theory, 137.
22 Richardson, “The Organization of Industry,” 883–896.
23 Ibid., 891.
24 Penrose, Theory, 31.
25 Ibid.
26 Ibid., 37.
27 Ibid., 85.
28 Ibid., 41.
29 Ibid., 42.
30 Ibid., 70.
31 Ibid., 5.
32 Boulding, The Image, 64.
33 Penrose, Theory, 217.
34 Penrose, “International Economic Relations and the Large International Firm,” 109.
35 Penrose, Theory, 109.
36 Meyer and Rowan, “Institutionalized Organizations,” 340–63. Also see Ashforth and Gibbs, “The Double Edge of Legitimation,” 177–194.
37 Zucker, “Institutional Theories of Organization,” 443–464.
38 DiMaggio and Powell, “The Iron Cage Revisited,” 147–160.
39 Kor and Mahoney, “Penrose's Resource-based Approach,” 109–139.
40 Cambridge University Library, Jardine Matheson Archives (hereinafter JMA), Letter Books, B6/5/164, Fergusson & Co. to Charles Magniac & Co., 14 April 1825.
41 Ibid., C5/1, James Matheson, 25 April 1832.
42 Greenberg, British Trade and the Opening of China, 171. Cost is about £4286.
43 Ibid., C/1, James Matheson to Hugh Matheson, 21 Feb. 1832.
44 Keswick, ed., The Thistle and the Jade, 138–9. The story of the early Jardine Matheson's shipping business has also been told by Blake in Jardine Matheson: Traders of the Far East and by Jones in Merchants to Multinationals.
45 JMA, Letter Books, C5/2, James Matheson to Charles Thomas, 30 Sept. 1832.
46 Ibid., C5/1, James Matheson to Hugh Matheson, 4 Nov. 1832.
47 Ibid., James Matheson to Hugh Matheson, 9 May 1832.
48 Ibid., James Matheson to De Vitre & Co., 24 July 1832.
49 Chapman, Merchant Enterprise in Britain, 291.
50 Canton Register, 2 Aug. 1828. This bi-weekly newspaper was started by James Matheson in 1828 and ended in 1843. It is available on microfilm.
51 Ibid., 26 Aug. 1829.
52 Ibid., 24 Dec. 1830.
53 JMA, Letter Books, C4/1, William Jardine, 29 Feb. 1832.
54 Matheson, Present Position, 15–16.
55 Ibid., 32.
56 Ibid., 32–3, quoting Vattel, prelim. note 7.
57 Ibid., 30.
58 Ibid., 34.
59 Ibid., 34, quoting Vattel, The Law of Nations, Book II, Chapter 2, Section 21.
60 Ibid., 68.
61 Ibid., 38, footnote referencing Vattel, Prelim. Section 1.
62 Ibid., 37.
63 Ibid., 42.
64 Ibid., 44.
65 Ibid., 49, quoting Vattel, The Law of Nations, Preface, xvi.
66 Ibid., 55.
67 Ibid., 66.
68 Ibid., 67. Matheson references Vattel, Law of Nations, Book II, Chapter 18, 343; Grotius, De Jure Belli ac Pacis, Book II, Chapter 2, 4–5).
69 Ibid., 68.
70 Ibid., 72.
71 The author is currently working on another paper about the influence of Emmerich de Vattel on American political thinking and policy.
72 JMA, Letter Books, C4/1, William Jardine to Thomas Weeding, 3 Nov. 1835.
73 LeFevour, Western Enterprise in Late Ch'ing China, 65–66.
74 Wilkins, “The Free-Standing Company,” 259–282.