Structure of Organization and Nature of Corporate Governance of the East India Company
In this chapter, I attempt to analyse how the organization of the administration of the East India Company determined its role in the Indian sub-continent. The East India Company was the first joint-stock company, and being a joint-stock company, it exper
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Structure of Organization and Nature of Corporate Governance of the East India Company
In order to understand the consequences that the economy of the Indian sub-continent, in general, and traditional flexible manufacturing, in particular, experienced during the rule of the East India Company, it is necessary to know its organizational structure. The consequences that the economy of the Indian sub-continent experienced during the rule of the company is described in greater detail in Chap. 4. It is due to its organizational structure, that the company evolved a unique symbiotic relationship with the economy of the sub-continent. Most consequences the economy of the sub-continent experienced can be traced back to the structure of the company’s organization. This is because its organizational structure determined its (i) objectives (vision and the mission), (ii) its work culture, and (iii) the nature of its corporate governance. Hence, it is important to understand the pattern of its organization and the nature of its corporate governance to assess the impact of different kinds of interactions that the East India Company had with the economy of the Indian sub-continent. In the present chapter, an attempt has been made to study the relationship between the organizational structure and nature of corporate governance of the East India Company. The East India Company was the first joint-stock multinational corporation of the world. It had continuous existence as a commercial corporation from c.1600 to c.1833; and as purely an agency of the British Empire from c.1833 to c.1857. Looking at this corporation in historical perspective reveals that it had the capacity to put to shame some of the largest contemporary corporations that are listed in the Fortune 500; in terms of persons © The Author(s) 2018 V.K. Seth, The Story of Indian Manufacturing, DOI 10.1007/978-981-10-5574-4_5
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STRUCTURE OF ORGANIZATION AND NATURE OF CORPORATE. . .
employed, volume of merchandise handled and extent of market power enjoyed by them. Due to its organizational structure, it was perhaps the first business organization that experienced the consequences of separation between ownership (stockholders) and control (managers); this provided scope for opportunistic behaviour on the part of its staff and management. Historical details of the same show that there existed striking similarities between the behaviour of management of the East India Company and management of some of the contemporary corporations. It is also important to mention that some of the acts of omission and commission of the management of the East India Company also provoked similar responses from its contemporary civil society, policymakers and intellectuals, as have been received by contemporary corporations. Despite the fact that the first joint-stock company was registered in Britain, this form of business organization became more prevalent in the United States. Due to this reason, most of the theoretical works to understand the consequences of separation between owne
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