The Dutch East India Company Commerce Essay

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At first glance the Dutch East India Company (hereafter VOC, for "Verenigde Oostindische Company") and the A.P. Møller-Mærsk Group (APM) might not look alike but the VOC was, and Mærsk is one of the biggest of their kind. The VOC (chartered in 1602 and dissolved in 1799) was one of the largest shipping and trading company of its time and was founded to economize on the market. Which was possible due to the large number of recurring transactions, and resulted in high costs (Carlos and Nicholas, 1988). Mærsk, founded in 1904, on the other hand, still exists and the modern multidivisional corporation does not trade in high value commodities such as pepper and sugar but its primary activity is transportation.

However, the main focus of this essay will be on the size of their fleet, history, or their range but it will compare them with regard to their organizational structure, transportation equipment and speed of transport. The first paragraph will enter into details with regard to the organizational structure of the companies, and more importantly, review their differences. The second paragraph will elaborate on the transportation equipment and will illustrate the technological development the world has experienced. Although, the last paragraph, which compares the speed of transport of the VOC and the ACP, might be an even better example of this development. In addition, it will briefly assess the consequences of these changes.

Finally, the conclusion will evaluate all their similarities and pass its final judgment on these parallels.

1 Organizational Structure

1.1 Dutch East India Company

Although the VOC was under sovereign control of the States General (Dutch Parliament), it did allow private ownership, moreover, it was the first company that issued tradable shares (Vergne, 2008). The first hint with regard to its organizational structure is provided by V ("Verenigde", Dutch for united) in VOC: the company was founded after the merger of six small Dutch trading companies, and had as a result a similar number of chambers. These chambers were run by a fixed number of directors, predominantly the largest shareholders, who chose governors from their midst to represent their chamber in the so-called "Heeren XVII". These seventeen governors determined the central policy and where under a double oath, to the Generality of the United Provinces and to the VOC (Karsten, L., 2010). However, the seventeenth governor originated from alternating chambers, that is: from Zeeland, Delft, Rotterdam, Hoorn or Enkhuizen. Thus, not an alternating governor from the chamber of Amsterdam, otherwise they would be able to determine the central policy themselves during this period.

(Gaastra, F.S., 1991, De geschiedenis van de VOC )

Furthermore, the Heeren XVII dealt with urgent matters, otherwise committees could take care of specific duties. In the middle of the seventeenth century the following permanent committees were formed: committee for audit office (accountants, pay office, clearing office and clerk's office), reception committee (supervision of the cashier), warehouse matters (record of import, export, sales and purchases) and the equipage committee (inspection of shipbuilding and equipage of the vessels) (Gaastra, 1991). These four committees differed in size depending on the size of the chambers, however there were five additional committees that prepared the work for the Heeren XVII, the responsibilities of these committees were: annual balance sheet, attending and supervising the auctions, inspecting the books, correspondence, and a war commission. (Gaastra, 1991).

In addition, the States General granted the VOC a patent which gave the company exclusive trading rights for the region between the Cape of Good Hope and Cape Hoorn. Furthermore, the States General also provided them the right to enter into agreements with the locals, to fight wars and install local governments (KITLV, 2010c). The Dutch politicians took all these measures were taken to prevent competition between the Dutch merchants which would have resulted in smaller profit margins (Vergne, 2008).

However, the Dutch East Indies were not governed by the Heeren XVII but by a governor general and the council of the Indies, at least, after the Heeren decided that this would improve the continuity of their policy. Prior to this decision in 1609, the admirals were in charge and could do as they pleased. Nevertheless, the governor general could not make important decisions without consent of the council, therefore he was the primus inter pares (first among equals).

(Karsten, L., 2010)

In addition, the governor general and the council of the Indies directed the local government, that is: the accountant general, the auditor general, the town administrations and the board of justice (Karsten, L., 2010).

These structures were essential because the VOC also decided to participate in the intra-Asiatic trade. As a result of their ever growing presence in the Indies their knowledge of the market dramatically improved, they knew what and where to buy and sell in order to keep the margins as high as possible (Vergne, 2008). In first instance these information flows were handled by the Court of Directors, but they were overwhelmed and they established the correspondence committee. Since they could handle larger information flows, and process it better, it reduced risk and uncertainty (Carlos Nicholas, 1988).

However, the military component of the VOC should not be underestimated, their well trained and disciplined forces not only made it possible to control the Indies but they also defeated the Portuguese army after a struggle for control over the region.

1.2 A.P. Møller-Mærsk Group

The APM is a Danish listed company which is directed by the Board of Directors and the Management Board. However, the APM consists of 1,100 companies (A.P. Møller-Mærsk Group, 2010a.) which are attributed to a number of segments: 'Container shipping and related activities', 'APM Terminal', 'Tankers, offshore and other shipping activities', 'Oil and gas activities', 'Retail activities', 'Shipyards, other industrial companies, interest in Danske Bank A/S, etc.' and last but not least 'Unallocated activities'.

According to the articles of the association the 'Board of Directors', which lays down the general guidelines, consists of four to thirteen members (currently there are twelve) who are elected for a two year period by the annual general meeting. In addition, the board generally meets seven to nine times a year and in order to ensure continuity the board members are eligible for reelection. However, there are other resemblances with the VOC, that is, the board is divided in a number of committees: the Chairmanship, the Audit Committee and the Remuneration Committee.

The chairmanship consists of the chairman of the board of directors and the two vice-chairman, it meets regularly. The Audit Committee currently consists of three (maximum of four) board members, usually meet three times a year and their tasks include reviewing of accounting, auditing, risk and control matters. The Remuneration Committee has the same composition as the Chairmanship and it makes proposals with regard to the annual remuneration and the adjustments of salaries, moreover, they determine and approve the size of the remuneration package (including bonuses and pensions).

(A.P. Møller-Mærsk Group, 2010a. Schepen van de VOC. [electronic print] Available at: <> [Accessed 6 October 2010].)

Whereas the managers of the VOC got bonds, which they would lose if they were fired due to improper behavior, the top executives of the ACP are annually granted share options worth one or two months' pay. Which are exercisable after two years, and thus a long term incentive. Furthermore, the executive board functions as the daily management of the ACP and with the Management Board it is referred to as the management.

Moreover, the ACP has an additional internal audit function, with independent auditors who are being monitored by the audit committee, a function which bears resemblance with the problem scanning body of the VOC. Needless to say that it reviews the internal processes, efficiency of control, risk management and that it reports to the Board of Directors and the Audit Committee (A.P. Møller-Mærsk Group, 2010d).

The ACP and the VOC show more resemblances with regard to the position of their shareholders. At the VOC the largest shareholders were directly responsible for the policy, at ACP the largest shareholder has as similar position. Although Arnold Mærsk Mc-Kinney Møller (born 13 July 1913) is retired, he remains the Senior Partner and ship owner. In addition, all Board Members are obliged to own shares. However, their transactions are strictly monitored to prevent insider trading, they can only trade their shares in the four weeks after the publication of the annual or interim report and they have to report it the stock exchange authority (A.P. Møller-Mærsk Group, 2010d). Besides, communication with the, other, shareholders takes place at the ACP's 'Annual General Meeting' and via their website were additional corporate information is published.

Finally, as one might aspect from a modern (western) company, they do not have a war committee, nor are they under sovereign control of the States General. In addition, the ACP does not have the right to start a war or install local governments.

2 Transportation Equipment

2.1 Dutch East India Company

The VOC fitted out some 4,700 vessels (they owned about 160 vessels) that went to Dutch East India (Balk, Dijk and Kortlang, 2007). The so-called "spiegelretourschip" was the vessel type that was most commonly used. This three-master took five to eight months to build, had an average cargo capacity of 800 tons and its life expectancy was 15 years (KITLV, 2010a.). In addition, the VOC fitted out other, smaller, types of vessels, such as the "Fluit", "Pinas" and the "Hoeker" (Bruijn, Gaastra and Schöffer, 1979a and 1979b). The cargo (predominantly spices, fabrics, porcelain, silk) was stored in the hold (1), wherein one would place the gangplank (2) and store additional cargo on top of it (Stichting Batavia Promotie, 2010b).

(KITLV, 2010a. Schepen van de VOC. [electronic print] Available at: <> [Accessed 9 October 2010].)

However, the vessels of the VOC needed to be protected, especially in the initial period of the company when the Portuguese made energetic efforts to defeat the Dutch (Vergne, 2008). As a result the vessels where equipped with heavy artillery, furthermore, Portuguese vessels were to be destroyed if one would come into contact with them.

2.2 A.P. Møller-Mærsk Group

The APM has various forms of transportation to its disposal, it has over a 1,000 vessels under operation: among them are 535 container vessels, 523, support vessels, 164 tankers, 63 anchor/supply vessels and 36 drilling vessels (appendix 1). However, APM also owns Star Air A/S, which operates a fleet of eleven Boeing 767 freighters (Star Air A/S, 2010), in addition they also own 38,75% of the shares of Höegh Autoliners, who own 70 car carriers (A.P. Møller-Mærsk Group, 2010a,). As a result, the ACP can offer its customers a wide range of options, from the type of transport to the type of commodities they wish to transfer. To specify, the ACP transport dangerous cargo, reefer containers, dry containers, crude oil, gas, hydrocarbon (naphtha), petroleum products, lpg, ammonia and CO2. And for this purpose it is necessary that the ACP has a large variety in transportation equipment, in their case, specially equipped vessels.

Although, the ACP vessels can transport a greater variety in commodities than the VOC, their immense size can create problems: there are only a few ports that can accommodate the largest ACP vessels, thus limiting their movement. The EMMA MÆRSK and her seven sisters, the largest container vessels in the world (Odense Steel Shipyard Ltd., 2006), is the case in point.

3 Speed of Transport

3.1 Dutch East India Company

Because the VOC also participated in the intra-Asiatic trade a journey on a VOC ship normally took 18 months to two years (Carlos and Nicholas, 1988). However, the maximum as well as the average speed of their vessels differed greatly due to the fact that it were sailing vessels, so they depended on the wind-force. Therefore it was almost impossible to predict when it would arrive or return.

On another point, in the seventeenth and eighteenth century the route to Asia was much longer than it is now because the Suez canal (which opened in 1869) was not excavated yet. In addition, their nautical charts were not very accurate and the consequence was that their vessels sailed in a roundabout way (see image below). However, that was not the only cause of these detours, that is, because they depended on wind force they had to sail with the wind.

(Brobbel, B., 2010. De route naar Azië. [electronic print] Available at: <> [Accessed 6 October 2010].)

3.2 A.P. Møller-Mærsk Group

Whereas the VOC only had vessels to its disposal, the ACP has numerous forms of transportation which have different speeds. For example, their eleven Boeing 767 freighters, these airplanes have a capacity of 42 tons and are many times faster than any VOC, or ACP vessel for that matter. Moreover, the great diversity of vessels make almost every comparison subjective. That is, the ACP owns container vessels with capacities between 742 and 14,770 Twenty feet Equivalent Units (TEU), who have different speeds (A.P. Møller-Mærsk Group, 2010e). Thus, they do not own a container vessel that could be compared in terms of speed and tonnage.

However, it is possible to compare them in a different way, that is, propulsion: the vessels of the ACP have a great advantage over those of the VOC because they have diesel engines. As a result, they are not greatly dependant on weather conditions, which makes travels very predictable. In addition, other technological developments improved the speed of transportation even more: satellites, more specifically the Global Positioning system (GPS), provides accurate location and time information which made it possible to map more efficient routes, thus saving valuable time. Furthermore, satellites also saved time by improving communication, when a VOC vessel was on the open sea it could not be contacted and as a result valuable information could not be communicated nor could they receive word to change destination. Moreover, these technological developments allowed the ACP to set up tight schedules for their personnel and vessels.

As mentioned above, the construction of the Suez canal resulted in significant reduction in the travelling time, moreover the excavation of the Panama canal had similar effects.


When comparing the VOC and the ACP with regard to their organizational structure, transportation equipment and transport speed, numerous resemblances and differences emerge, starting with the parallels.

Firstly their organizational structure, this is where the VOC bears the closest resemblance to the ACP: whereas the VOC originated from six companies the ACP also incorporated several companies, shareholders of both maritime companies manage(d) the firm and the VOC as well as the ACP run/ran their business through the help of committees. Moreover, some elements of the companies even performed similar functions, for example: the Heeren XVII and the Board of Directors, the audit committees, and the warehouse committee and 'ACP Terminals'. In addition, both businesses have/had an analogues policy with regard to remuneration and a distinct hierarchical structure.

Secondly the transportation equipment and the speed of transport, here are merely a few faint similarities: besides the fact that the VOC as well as the ACP use(d) vessels to transfer goods and they transfer(ed) a number of similar products there are none. However, there are also many differences between the VOC and the ACP with regard to their organizational structure, transportation equipment and transport speed.

Firstly their organizational structure, although the structures of the companies bears resemblance, there are also considerable differences: whereas the VOC got a distinct military aspect the ACP does not, and as a result it do not have a war committee, the right to start a war nor the right to install local governments. Moreover, the integration companies in the ACP does not resemble the chamber system in any way, whatsoever. On another point, the diffusion of corporate information changed too, websites made this much cheaper and efficient.

Secondly the transportation equipment, technological development is the primary accountable for the differences between the companies in this field: the ACP has a much more elaborate choice than the VOC had, the former has specially equipped vessels to do specific jobs which can transport a manifold of the latter's vessels.

Thirdly the speed of transport, as stated in the introduction, this might be an even better example of the development that the world has experienced in the more than four centuries after the VOC was chartered: whereas a journey to Dutch East India took eighteen months to two years a modern freighter (Boeing 767) will do it in a matter of days. Although it is impossible to compare these companies in terms of speed and tonnage, other developments make it clear that the ACP would be superior to the VOC, for example: the diesel engines in comparison to a sail. Moreover, additional modern technology helped to save even more valuable time: the excavation of the Suez and the Panama canal, GPS and satellite communication.

Although they are outnumbered, the modern multidivisional company ACP does show similarities with the VOC that originates from the sixteen century. In fact, when one analyses the differences one will discover that many of these changes are result of technological developments and are not structural, however, it is not hard to find these either.


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