Social capital in maritime joint ventures: the case of Lyttelton Stevedoring Co., 1977-1989
During the late 1970s a new type of firm developed in New Zealand’s stevedoring industry that was replete with social capital. These new companies were joint ventures that included port trade unions as partners. This essay uses one of these ventures, the Lyttelton Stevedoring Company (LSC), as a case study to explore the role of social capital in the formation and success of maritime joint ventures. Small in size, the LSC was founded during a period of intense technological change. Containerization was proceeding apace, and the attendant economies of scale favoured larger enterprises in stevedoring. Yet the LSC operated for more than a decade in this environment, with heightened competitive rivalry among increasingly capital-intensive firms. The LSC was profitable in seven of its twelve years but operated on a shoestring for much of that time. A consultant’s report commissioned in 1987 by one of the partners was damning, noting that the LSC had “weak management,” exhibiting both a “lack of professionalism” and a “lack of costing procedures [and] financial reporting.”1 What makes the LSC interesting therefore is not its financial or managerial performance, each of which was unremarkable if not sometimes dire, but that it remained in business for twelve years despite these failings. Operating with poor management in a turbulent environment, the LSC survived only because of the social capital possessed by its venture partners.