Agency Problems in Early Chartered Companies: The Case of the Hudson’s Bay Company
- 1 December 1990
- journal article
- research article
- Published by Cambridge University Press (CUP) in The Journal of Economic History
- Vol. 50 (4) , 853-875
- https://doi.org/10.1017/s0022050700037852
Abstract
The problem of controlling overseas managers confronts all multilocational firms. Historians have argued that because of the extreme time lags in communication, chartered companies were unable to control managerial behavior. We argue that not only did the Hudson’s Bay Company understand the agency problem but also put into operation strategies designed to attenuate opportunistic behavior. The company used employment contracts and control systems and established a social structure compatible with the company’s aims.Keywords
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