Fur Trade

Management by Canoeing Around

Chief Trader Archibald McDonald Descending the Fraser, 1828 by Adam Sherriff Scott, ca. 1942

Sharing information has always been of utmost importance if a company is to succeed. In our information-oriented society, Knowledge Management has become a buzzword everyone knows to describe just that. Knowledge Management is not anything new, however: Hbc has been making the communication of its information a priority in its internal affairs since day one, as we learn in the spring-summer 2001 issue of Knowledge Directions, the Journal of the Institute for Knowledge Management.

The article, an abridged excerpt from an upcoming MIT book, looks at Hbc management style in its first 200 years as a window on how today's fragmented businesses face issues that are not much different that those faced by Hbc during these years. The Company was based in London, England, thousands of miles from North America where its core business operated. From the start, the London Committee had to establish means of controlling operations from afar. Each year, a letter came from the Committee to each factor, and the factors reciprocated by sending back a letter conveying the highlights of the trading year as well as their daily journals and financial account books.

Title page from the York Factory journal, 1714 HBCA B.239-a-1 fo.2

Receiving information on a yearly basis could not possibly allow the Committee to be involved in the management of the daily affairs, therefore considerable freedom was entrusted to the men in charge of the trading posts. For the Company to thrive, these men had to be totally committed to their duties. Originally, the Company hired young lads from London, but it soon became clear that they were not fit for the loneliness and climate of the shores of Hudson Bay. Scots from the Orkneys soon made up 75% of all men sent overseas: they were used to a rougher climate, and once they started seeing the Company as their "clan", their commitment was ensured. Always Hbc made sure that its employees had much to gain from a long term - read: life-long - commitment, such as promotions from within, even a retirement plan!

In the early years, then, the personnel of the Company was really one large extended family. The Committeemen in London relied heavily on their officers on this side of the Ocean, men who earned their position and trust. The inland expansion of the trading activities that started towards the end of the 18th century, and the heavy competition in the fur trading industry, emphasized the strength of Hbc management style. The Committee provided general direction and kept a close watch on the European markets, while the North American officers decided on the area where new posts would be established and dealt with the local native trappers.

In conclusion, the article points that Hbc was a successful global company in a very competitive market well before air travel and email by striking the right balance between central control of its activities and appropriate information sharing with local direction.