Diversification Strategies of British Trading Companies: Harrisons & Crosfield c1900-c1980

This article examines the diversification strategies and organisational competencies of Harrisons & Crosfield, a British-based multinational, between 1900 and 1980. There is an accumulating body of case study evidence on the historical evolution of British multinationals, but most of these firms were in the manufacturing sector. Harrisons & Crosfield provides a new dimension in that the firm began the period as an international trading company, evolved into a natural resource producer as well as trader, and ended the twentieth century as a manufacturer. This evolutionary diversification into different activities, the ability to survive external shocks such as the world wars, Great Depression and decolonisation, combined with its long-term financial performance was quite impressive, at least in so far as valid comparisons can be made. The article explains how Harrisons & Crosfield identified new opportunities and exploited them. Emphasis is given to the evolutionary and tacit nature of the firm's competencies. Knowledge and information were accumulated within the firm and used as the basis for incremental diversification. The firm also developed routines and competencies which permitted it to absorb or work with other firms. The employment of network forms of organisation added to flexibility until the advent of strong indigenous business groups in Southeast Asia made it a threat to the firm's survival.