Managing Business

One looks at the business landscape and broadly finds three types of companies . The first one is established big companies with large turnover. According to Fortune List Top 5 companies in terms of Revenue are Walmart(Retail- $514 billion) from US , Sinopec Group (Petroleum-$ 415billion ) from China,Royal Dutch Shell ( Petroleum- $397 billion) from Netherlands,China National Petroleum ( Petroleum-$393 billion) from china, State Grid ( Energy- $387 billion) from China. When we see the list of top ten companies, energy and petroleum companies dominate. The exceptions are Walmart, Volkswagen and Toyota in the list.

Managing these companies require different skills, Strategy and Operations become extremely important to keep things going. MBAs normally will feel comfortable in these organizations which have well defined systems and processes and a corporate ladder to climb.Economic concepts also explain their behaviour.

In the second list , when we see top 5 companies in terms of market valuation, the picture changes. Top 5 companies in terms of market valuation are Apple ( $921 billion), Amazon($765 billion), Alphabet ( $750 billion), Microsoft( $746 billion) and Facebook ($531 billion). These figures are based on last year's fortune . Market valuation would have increased by now. These companies are futuristic which market and investors are betting on. The management of these companies are far more entrepreneurial. Their revenue compared to their market valuation is small. Facebook has revenue around $50 billion. These companies need to innovate and keep upping their game to get higher market valuation. Apple is an exception which has got revenue of $ 220 billion and it is also very profitable company in the world. These companies have done lot of new experiments related to management practices and principles. Alphabet's Experiments in HR processes such as OKRs, giving time and opportunity to their employees to pursue own projects have redefined management practices. We need different set of training and mindset to thrive in such organizations. Entrepreneurial and creative mindset would be required within broad corporate framework.The controlled creativity and entrepreneurship will help executives to thrive. These companies are light in physical assets and but high on intellectual asset. They need to be aggressive to increase revenue.They outsource whole range of activities and coordinate with many small companies. They also acquire companies if they see value more than the normal ones. Technological innovation becomes the dominant logic.

The third set of companies are start ups as which are not part of fortune list or have joined recently at the bottom or in the middle level.But they are future superstars. These are Netflix, Airbnb,Uber, Tesla ,Nvidia,Paytm, Byju, OyoRooms and Flipkarts of the world. These companies are new, aggressive and break new ground . They want employees who can deliver much above the average. Netflix HR policy says that average performance calls for severance. These companies are meritocratic and stressful to work. They require people with entrepreneurial and creative mindset who are comfortable with risk and uncertainty. When company succeeds, the rewards are very high but if it fails the cost is also high for employees and management.

Management Education was developed for first set of companies. Big companies with huge physical assets and increasing profit. Management Education will be redefined by second and third set of companies where different kind of managers are required. Managing business is same but the approach is vastly different in different kinds of companies . We need new curriculum, concepts and frameworks which can cater to managers of new and futuristic companies.