The modern multinational corporation is described as having originated when the owner-managersof nineteenth-century British firms carrying on international trade were replaced by teams ofsalaried managers organized into hierarchies. Increases in the volume of transactions in such firmsare commonly believed to have necessitated this structural change. Nineteenth-century inventionslike the steamship and the telegraph, by facilitating coordination of managerial activities, aredescribed as key factors. Sixteenth-and seventeenth-century chartered trading companies, despitethe international scope of their activities, are usually considered irrelevant to this discussion: thevolume of their transactions is assumed to have been too low and the communications andtransport of their day too primitive to make comparisons with modern multinationals interesting.

In reality, however, early trading companies successfully purchased and outfitted ships, built andoperated offices and warehouses, manufactured trade goods for use abroad, maintained tradingposts and production facilities overseas, procured goods for import, and sold those goods both athome and in other countries. The large volume of transactions associated with these activitiesseems to have necessitated hierarchical management structures well before the advent of moderncommunications and transportation. For example, in the Hudson’s Bay Company, each far-flungtrading outpost was managed by a salaried agent, who carried out the trade with the NativeAmericans, managed day-to-day operations, and oversaw the post’s workers and servants. Onechief agent, answerable to the Court of Directors in London through the correspondencecommittee, was appointed with control over all of the agents on the bay. The early trading companies did differ strikingly from modern multinationals in many respects.They depended heavily on the national governments of their home countries and thuscharacteristically acted abroad to promote national interests. Their top managers were typicallyowners with a substantial minority share, whereas senior managers’ holdings in modernmultinationals are usually insignificant. They operated in a pre-industrial world, grafting a systemof capitalist international trade onto a pre-modern system of artisan and peasant production.Despite these differences, however, early trading companies organized effectively in remarkablymodern ways and merit further study as analogues of more modern structures. The author’s main point is that______ A．modern multinationals originated in the sixtenth and seventeenth centuries with the establishment of chartered trading companies B．the success of early chartered trading companies, like that of modern multinationals, depended primarily on their ability to carry out complex opertions C．early chartered trading companies should be more seriously considered by scholars studying the origins of modern multinationals D．scholars are quite mistaken concerning the origins of modern multinationals E．the management structures of early chartered trading companies are fundamentally the same as those of modern multinationals