Company – a gateway to the modern world
The Encyclopedia of Management defines a company as an organizational unit that runs a specific business. It is also a separate legally registered organization, having its own office, mission, economy, human resources in the form of employees, as well as material and non-material resources. Every year “Fortune” magazine prepares a ranking of the largest companies in the world. The list is compiled based on the companies’ annual revenue. To make the Global 500 list, a company needs to have an annual income exceeding $100 billion (USD). In 2016 the top ten companies were:
FIRST PLACE – WALMART – $482,130
SECOND PLACE – STATE GIRD – $329,601
THIRD PLACE – CHINA NATIONAL PATROLEUM – $299,271
FOURTH PLACE – SINOPEC GROUP – $294,344
FIFTH PLACE – ROYAL DUTCH SHELL – $272,156
SIXTH PLACE – EXXON MOBIL – $246,204
SEVENTH PLACE – VOLKSWAGEN – $236,600
EIGHTH PLACE – TOYOTA MOTOR – $236,592
NINTH PLACE – APPLE – $233,715
TENTH PLACE – BP – $225,982
However, the very first companies will not be found on the above list and should rather be sought elsewhere in the Asian side of the globe. Kongō Gumi and Hoshi Ryokan are considered by historians to be the oldest companies in history. Both companies represent slightly different industries but their solidity and commitment to work have allowed them to survive continuous centuries, without having to undergo change.
Kongō Gumi based its operational activity on two foundations: mission and tradition. Local legends mention one of the Kongō family ancestors – a Korean who was invited to Japan by Japanese Prince Shotoku and who ordered the construction of the Temple Of Four Heavenly Kings. This marked the beginning of the construction industry. After many prosperous years, it was the financial crisis in the 21st Century that lead to the demise of the Kongō Gumi business. The corporation succumbed to an excessive debt of $350 million (USD) and was sold, ending a 1,428-year run.
Hoshi Ryokan was founded in around 717. In Japanese, Ryokan means a traditional hotel. In Komatsu, a city located on the island of Honsiu, exactly this type of traditional hotel was established. The hotel was founded by Buddhist disciple Garyo Hoshi and it has been run by the same family for 46 generations. At present, Hoshi Ryokan is one of the most prestigious places in the world, providing the highest level of service.
Processes in a company
For Europe and the rest of the world, the 18th Century was a period of major breakthroughs involving the industrial revolution and the notion of an industrial society that was consequently formed. During that time, vigorous technological, economic and cultural changes took place. The economy of the strongest states was no longer built on the basis of agriculture and small artisanal factories but rather on the basis of mass production. Citizens who had to adapt quickly to the new realities created a new group – the industrial society. People who belonged to this society inhabited developing and newly-established cities and they worked in factories. These workers were often uneducated people and their tasks were mainly based on physical labor. The first managers of companies organized the operations based on function. There was a distinct hierarchy in each company and a strict division of tasks. Employees on the lowest levels (of the executive career ladder) had managers who coordinated the tasks they performed.
Today, scholars such as Manuel Castells agreeably claim that the industrial society era has gone down in history. We are witnessing a third industrial revolution (of science and technology) which began just after the Second World War. Modern people are referred to as the information society, which is characterized by:
With the emergence of globalization and new technologies, businesses can easily grow not only in local but also in international markets. This type of work requires a way of company management which differs from the one that was employed locally. Managers need to organize flexible and dynamic structures that will allow for information to be exchanged at a fast pace.
The modern employee is focused on the implementation of processes that take place in a company. T.H. Davenport reminds us that the notion of a process should not be confused with words of similar meaning, such as: action, task or procedure. The professor defines a process as: “structured and measurable actions designed to produce a specific product for a particular customer or market” (1993). A similar approach to the definition of a process is held by creators of re-engineering M. Hammer and J. Champy by defining the issue as “a set of activities that has one or more types of input and transforms them into outputs that represent value to the customer” (1994). Both definitions bottle down to the needs of the customer and creation of a product or service.