Thomas Duff & Co and the Jute Industry in Calcutta, 1870-1921

: Managing Agents and Firm Strategy

Abstract

This thesis is about the nature of the rapid growth of the jute manufacturing industry in colonial India in the age of the “imperialism of free trade”. It seeks to understand how the managing agents who controlled the jute mill companies in Calcutta internalised a competitive advantage that generated lucrative rents through a case study of the history of the Dundee-based managing agents, Thomas Duff & Co.The thesis argues that the industry experienced a pattern of extensive growth with static technology that led to rising costs and pressure on profits and dividends. Nevertheless, the pattern of entry into the industry indicates the existence of institutional barriers to entry. Managing agents like Thomas Duff & Co were able to take advantage of and shape these barriers through strategic behaviour. They created a company form that allowed the structuring of incentives to reproduce a functional managerial hierarchy and renew their competitive advantage over time.Strategic behaviour by the founding directors of Thomas Duff & Co extended to actively shaping the business environment in which the firm operated by anticipating and neutralising threats to their control of the directorate, intervening in the supply chain to manage costs and cajoling other managing agents to cooperate to manage competition. The success of these strategies led to growth, which entailed the creation of a popular base of shareholdings. This dilution of formal ownership proved to be compatible with retaining control and generating rents while minimising risk.

Date of Award	2015
Original language	English
Awarding Institution	University of Dundee
Sponsors	Leverhulme Trust
Supervisor	Carlo Morelli (Supervisor) & Jim Tomlinson (Supervisor)