Captains in the Dutch United East India Company: The Effects of External Hiring and Internal Promotion on Performance

Katrina Q. Wang, University of Wisconsin-Madison

Filling vacant positions through external hiring or internal promotion has important and varying degrees of performance impact on the organization. This article uses the personnel administrative files preserved by the Dutch United East India Company in the Dutch National Archives to analyze the internal and external resources of captains who were responsible for leading ships between Europe and Asia between 1700 and 1795. The main results showed that the technical performance of those externally hired performed worse than those internally promoted during the first voyage, while organizational performance and financial performance were the opposite. After acquiring VOC-specific knowledge and skills, during the second and subsequent voyages, the performance gap between the two groups became insignificant. In order to explore the mechanism of specialization, this article added the interaction terms of external hiring and the pre-1742 period. It was found that after the VOC carried out professional reforms in skills and management in 1742, the company paid more attention to internal training, thus VOC-specific knowledge and skills become more important, and the internally promoted captain became particularly important. In order to explore the mechanism of loyalty, this article added the interactive terms of external employment and whether the hometown is from the sponsor chamber of the voyage, and found that VOC companies paid more attention to professional skills, and loyalty was not important. In order to explore the promotion mechanism, this article proposes that if the performance gap between the externally hired and internally promoted captains on the first voyage is caused by the VOC-specific knowledge and skills, for those internally hired captains who had a longer term or had more differences with other VOC employees, people with more social connections and other traits would be promoted more easily than those without these traits.

No extended abstract or paper available

 Presented in Session 160. The Politics of Training and Hiring Practices