The atmosphere in which the modern business organization

The atmosphere in which the modern business organization operates is something which can change in no time at all.  In comparing Fortune Magazine’s “Most Admired Companies” from 2007, and in retrospect, 1987, some interesting facts emerge.  First, the two lists are compared as follows:

2007                                                 1987

1. General Electric                                             General Motors

2. Starbucks                                                        Exxon
3. Toyota Motor                                                 Ford
4. Berkshire Hathaway                                       IBM
5. Southwest Airlines                                         Mobil
6. FedEx                                                             General Electric
7. Apple                                                              ATT
8. Google                                                            Texaco
9. Johnson & Johnson                                         Dupont
10. Proctor & Gamble                                         Chevron

These two lists are characterized by a few common elements; first, the issue of profitability is something that is universal in the lists, even thought they are separated by a decade of time.  The companies that are in the lists, upon further research, are all companies which, while not constant, have been profitable overall.  In fact, some of these companies, such as Ford and Exxon, have fallen upon hard times occasionally, and their positive position in the mind of the public has allowed them to recover from some major catastrophes, such as Ford’s plant closings and Exxon’s Valdez disaster, which almost destroyed the company.  Interestingly, in the 2007 list, a new type of company, Starbuck’s appears.  It can be said that the company is different because much of what they sell is image, and not the tangibles offered by automotive manufacturers as a quick example.

How much of the evaluation is dominated by the profitability of the company?

In the present day evaluations, profitability of the company, of course is a key element as it has always been; however, the companies of today are evaluated more so on net income after taxes as a percentage of sales for a few key reasons.  First, some of the companies that are rated as top companies are those which offer non-durable products such as Starbuck’s, for which a measure such as return on assets is not the best evaluative tool.

How many of these companies currently on the ‘Most Admired’ list also appear on Fortune’s current list of “The 100 Best Companies to Work For”?

As a matter of fact, three of the companies currently on the ‘Most Admired’ list also appear on Fortune’s current list of ‘The 100 Best Companies to Work For’; specifically, the companies are Google, Johnson & Johnson and Starbucks.  Based on this finding, there are several possible theories for the relationship between companies being ranked on both lists simultaneously.  Obviously, companies that are among the best to work for will generate a level of admiration.  Moreover, it is also likely that companies that are so admired will attract the kinds of talented and qualified people as employees who would be likely to speak well of companies.  Conversely, companies that are not good to work for are unlikely to be admired.

Conclusion

In conclusion, what can be seen in comparing popular companies from present and past is that some firms have great longevity, some do not, but all achieve greatness at one time or another.