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The History and the Foundation

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1. Introduction

The history and the foundation of multinational companies has always been an important field of study for business historians. Nowadays where companies rarely operate in one single country it becomes the obvious to believe that across boarder market activity is the normal. However, there was a time in history when companies operated only regional or countrywide. The time of origin for multinational enterprises (MNEs) is often believed to be at the end of the 19th and beginning of the 20th century. Ann M. Carlos and Stephen Nicholas believe that the roots of MNEs can be traced back to the 16th and 17th century and the foundation of the chartered trading companies (CTCs).

Some historians believe that CTCs can be neglected when analyzing the origins of MNEs as most CTCs extinct over time. Business historians usually focus exclusively on the late 19th century industrial transnational firm as the origin of the modern MNE. In their paper "Giants of an Earlier Capitalism": the Chartered Trading Companies as Modem Multinationals", published in 1988, Ann M. Carlos and Stephen Nicholas provide evidence for their claim that CTCs were the first modem MNEs. This essay is going to summarize Carlos's and Nicholas's position, before giving an overview of confirmative and contrasting opinions lo their claim. The last part describes an overall conclusion and a personal opinion.

2. Summary of the scientific paper

Generally speaking CTCs are often characterized as outliers of transnational operating companies of little historical relevance concerning the origins of MNEs. Carlos and Nicholas (1988) however believe that CTCs must paid attention when analyzing the development of MNEs. Therefore in the first part of their essay, Carlos and Nicholas point out similarities between CTCs and modern M NEs. In the second part of their work they integrate CTCs into the general historical theory on the evolution of the modern MNE (Carlos and Nicholas, 1988).

According to Carlos and Nicholas (1988), there are important similarities



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