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Abstract
Built on a unique partnership principally among three families spanning more than 160 years and four generations, Behn Meyer provides fascinating insights for the study of corporate governance and managerial succession. The company was founded in Singapore in 1840 by two young men from Hamburg, a city renowned for its tradition of merchant houses and entrepreneurship. During both world wars, the British colonial administration in Malaya and Singapore imposed severe restrictions on German-owned concerns. Yet Behn Meyer's ‘resurrection’ after both world wars demonstrates the remarkable resilience of the company and the adaptability of its management practices and culture. Trans-generational continuity in managerial succession remains a major factor in the long-run survival of a firm and this case study of a family enterprise that overcame significant business and political risks provides an informed comparative analysis of managerial succession and entrepreneurship.
Acknowledgements
I wish to thank Mark Casson and the three anonymous referees for their useful suggestions. I am particularly grateful to J.H. Friele for his valuable time and insights without which the paper would not have been possible. All errors, however, are mine alone.
Notes
1. Rosa and Balunywa, ‘Habitual Entrepreneurship’.
2. Malaya refers to the Straits Settlements (comprised of Penang (1786), Singapore (1819) and Melaka (1824)) and other states in the Malay Peninsula until 1948 when the Federation of Malaya excluded Singapore. From 1948 Singapore remained a crown colony until the formation of Malaysia in 1963 which included the latter (subsequently expulsed in 1965), Sabah and Sarawak.
3. Amatori, ‘Reflections of Global Business’, 312.
4. Chandler, Scale and Scope, 11–12, 415–19.
5. Howorth, Rose, and Hamilton, ‘Definitions, Diversity and Development’, 226.
6. Ibid., 227.
7. Ibid. see also Hoy and Verser (‘Emerging Business, Emerging Field’) on the transfer of intergenerational strategic thinking.
8. The term, ‘free standing company’ or ‘FSC’, was coined by Wilkins (‘Defining a Firm’, ‘The Free Standing Company’) to refer to a company incorporated with a small headquarters and without any prior business in the home country, but instead handles business activities exclusively in the host country.
9. Chandler, Scale and Scope, 11–12.
10. Anderson and Reeb, ‘Founding Family Ownership and Firm Performance’.
11. ‘Jones, Merchants to Multinationals.
12. Hollander and Elman, ‘Family-Owned Businesses’; Degadt, ‘Business Family and Family Business’.
13. Colli and Rose, ‘Family Firms in Comparative Perspective’, 340.
14. Zahra, ‘Entrepreneurial Risk Taking in Family Firms’.
15. Miller and Le Breton-Miller, ‘Family Governance and Firm Performance’.
16. Chua, Chrisman, and Sharma, ‘Succession and Non-Succession Concerns’; Basco and Pérez Rodríguez, ‘Studying the Family Enterprise Holistically’.
17. Habbershon and Pistrui, ‘Enterprising Families Domain’; Lee and Peterson, ‘Culture, Entrepreneurial Orientation and Global Competitiveness’.
18. Chandler, ‘The Emergence of Managerial Capitalism’, 368; Chandler, Scale and Scope, 236–7.
19. Bogaars, ‘The Effect of the Opening of the Suez Canal’, 111.
20. Amin, ‘Anglo-German Rivalry’.
21. Other important firms include Rautenberg, Schmidt & Co. (1849), which expanded in 1878 by taking over 10 new European agencies; Zapp, Bauer & Co. (1854); Heiber, Katz & Co. (1867), which was re-established in 1878 as Katz Bros., Brinkman, Kumpers & Co. (1867) and E.H. Hinnekindt (1868). Bogaars, ‘The Effect of the Opening of the Suez Canal’, 111, 111n and 114.
22. ‘The Hungry Forties’, The Straits Times, 16 September 1957, 8.
23. Siddique, ‘Early German Commercial Relations to Singapore’, 173.
24. ‘Java Agency of Behn Meyer’, CO 273/421, 1915, Vols. 3–4, The National Archives, Kuala Lumpur (hereafter ANM).
25. Foreign Office, 3 January 1934, CO 848/33, No C11173/5130/18, TNA.
26. ‘Firm of Behn, Meyer & Co’, 13 January 1915, CO 273/420, ANM.
27. Helfferich, Behn Meyer & Co. (Vol. I), 43–4.
28. Campo, Engines of Empire.
29. ‘The Chamber's Oldest Members’, Singapore International Chamber of Commerce Economic Bulletin, 31 October 1973, 55.
30. Other notable German shipping companies include Kingsin Line, German–Australia Steamship Co. and Hamburg–America Steamship Co. Amin, ‘Anglo-German Rivalry’, 72–8.
31. Bogaars ‘Opening of the Suez Canal’, 111–14.
32. ‘Alien Enemies’, The Straits Times, 7 December 1914, 3.
33. Ibid., 3.
34. ‘Riot at Singapore’, 3 March 1915, CO 273/419–20, ANM; see also, ‘Disturbances at Singapore: Conduct of German Prisoners’, 2 March 1915, CO 273/420, ANM.
35. ‘Memories of Singapore Mutiny’, Singapore Daily News, 24 November 1932, 6.
36. ‘Java Agency of Behn Meyer’,
37. ‘The Chamber's Oldest Member’, Singapore International Chamber of Commerce Economic Bulletin, 31 October 1973, 55.
38. Huff, Economic Growth of Singapore, 127.
39. Nasution, More than Merchants, 98.
40. In 1925, the US Supreme Court in Washington ordered that the property of Behn Meyer & Co. in the Philippines be returned to the rightful owners on the grounds that the firm was incorporated in the Straits Settlements. Consequently, the name Behn Meyer & Co. was successfully reinstituted in the US-controlled Philippines and later the Dutch East Indies. In Singapore, however, no such success was achieved. ‘Behn Meyer Property’, The Straits Times, 6 January 1925, 9.
41. ‘Big Singapore Firm May Be Revived’, The Straits Times, 9 August 1936, 15; ‘Notes of the Day’, The Straits Times, 20 April 1936, 10.
42. J.H. Friele, former director and consultant of the Behn Meyer Group, interview with the author, 16 August 2010.
43. Ibid.
44. Drabble and Drake, ‘The British Agency Houses in Malaysia’, 311.
45. Malaysianisation involved two vital aspects: the accumulation of capital on behalf of Bumiputeras and, secondly, the appointment of Bumiputeras at decision-making and managerial levels. Bumiputera or ‘sons of the soils’ refers to the majority Malay and indigenous population in Malaysia.
46. ‘British Investments in Malaysia’, June 1975, FCO 15/2075, FAF 6/1, TNA.
47. Because of the vast control of British companies over the Malaysian economy, the latter became easier targets of Malaysian public agencies.
48. Friele, interview (see note 42).
49. Consultant Report, Behn Meyer & Co. (M) Sdn. Berhad, Kuala Lumpur, 1975. Courtesy Friele.
50. In the 1970s only huge international companies employed management consultant. Letter from Friele to Shakila, 11 May 2011.
51. Ibid.
52. ‘Malayanisation (including employment of expatriates in business)’, 11 March 1966–2 November 1966, DO 189/588, AED 110/30/1, TNA.
53. Firstly, the trainee executives were required to follow an advanced course in the German language at the Goethe Institute while undergoing local training for a year at the Behn Meyer headquarters as well as its subsidiaries such as BM Electrical Bhd. and BM Industries. The trainees were then attached to Arnold Otto Meyer for a year to study the company operations. The trainees were also sent for specialised training at the various offices and factories of Behn Meyer principals. ‘Rosli Completes Intensive Training in Germany’, Warta bm, January–March 1981, 4; ‘MARA Graduates join Behn Meyer’, Warta bm, January–March 1985, 4.
54. Mudambi, ‘Knowledge Management in Multinational Firms’, 2–3.
55. Behn, Meyer & Co. (Pte) Ltd. Singapore, company brochures, 1973 and 1977. Courtesy Friele.
56. Behn Meyer Group in Singapore & Malaysia since 1840; company brochure, 1995.
57. Behn Meyer News, Issue 121, December 2009.
58. P.J. Schoenberg, existing partner and shareholder of Behn Meyer Holding AG & Co. KG. Jas, interview with the author, 23 February 2011.
59. ‘Behn Meyer & Co. 167 Years in Southeast Asia’, in Radtke, Celebrating 50 Years of Malaysian–German Relations, 70.
60. Friele and Schoenberg, interviews (see notes 42 and 58).
61. Howorth, Rose and Hamilton, ‘Definitions, Diversity and Development’, 230.
62. Friele and Schoenberg, interviews (see notes 42 and 58).
63. Rosenblatt et al., The Family in Business; Dumas, ‘Integrating the Daughter into Family Business Management’; Miller, Steier, and Le Breton-Miller, ‘Lost in Time’.
64. J. Kellinghusen is the grandson of Willy Kellinghusen. This demonstrates the patriarchal nature of the business.
65. Schoenberg, interview (see note 58).
66. Friele, interview (see note 42).
67. Ibid.
68. ‘Dr Dieter died September 6, 2008’, Behn Meyer News, Issue 119, December 2008.
69. Schoenberg, interview (see note 58).
70. Ibid.
71. Waetcke joined Arnold Otto Meyer in 1949 at the age of 20 and served Behn Meyer for 36 years until his death in 1985. ‘Obituary Heinz Horst Waetcke’, Warta bm News, January–March 1985, 1.
72. ‘M.G. Schwencke is New Managing Director in Singapore’, Warta bm, April–June 1985, 1.
73. White, British Business in Post-Colonial Malaysia, 215; Jones, Merchants, 225.
74. Friele, interview (see note 42).