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D. Murali

END of the year is the right time to look back, but here is a book that traverses two hundred years to identify 50 Companies that Changed the World, and profile the organisations, big and small, that shaped the course of modern business. Written by Howard Rothman and published by Jaico Books (www.jaicobooks.com), the candidates who find a place in this volume are those that "found untapped niches, stayed on top of trends, managed progressively, and encouraged creativity."

First comes Microsoft Corporation, "the purveyor of the software that runs 90 per cent of all PCs", and so enjoying a dominance none can match. Yet: "It doesn't set the pace for technical innovations or employee relations. It isn't sexy like a dotcom, seductive like a sports franchise, or alluring like an entertainment concern." Recently, it paid $32 billion to shareholders as part of the largest-ever dividend payment.

AT&T is in the second place, despite suffering many splits, such as the major overhaul in 1995 when the company broke into three, AT&T for long-distance and other telecom services; Lucent Technologies for marketing telephones and other hardware; and NCR Corp, the computer company. Ford Motor Co is third in the hall of fame, and Rothman's essay notes how the company used computers to cut costs and development times for everything from crash simulation ($60,000 apiece in 1985 but only $10 in 2001) to initial car designs (took 12 people 12 weeks earlier, but now a single person does it in three weeks).

The story of Apple with its iMac, the striking translucent computer, raises the question, "Can lighting strike twice in the corporate world?" And about McDonald's Corporation, the fast food giant, you'd learn that Richard and Maurice McDonald brothers were bought out by Albert Kroc for $2.7 million in 1961 because Kroc felt that `Kroc Burger' didn't have the ring that McDonald's name had.

A significant innovation in FedEx, to achieve 99 per cent accuracy, was the early adoption of bar coding to track packages, "a pioneering concept that was picked up from the grocery industry." IBM figures in the 50, after Wal-Mart and General Electric, and you read how Gerstner slashed annual expenses by $9 billion to get the elephant dancing again.

After a series of US companies such as Sears, General Motors, J.P. Morgan, RCA Corp, Nike, Intel, CNN, Boeing, HP, and Standard Oil, comes Sony. There were naysayers in the company who predicted the failure of Walkman, and again of PlayStation, but the latter tallied $7 billion in annual sales and accounted for 9 per cent of Sony's worldwide revenues.

The world's oldest international news agency Agence France-Presse or AFP was "first to announce the deaths of Joseph Stalin, Pope John Paul I, and Indira Gandhi." It also told the world about the car accident that killed Diana. But "it is badly hampered by its quasi-governmental status," writes Rothman. "Its status as a governmental entity now prevents it from raising badly needed public capital."

There is the unmistakable Coke and Disney in the top 50, and somewhere midway is Thyssen Krupp AG. "It is now Germany's fifth-largest company and one of the largest steel producers in the world," but has the stigma of Nazi rub-off. Procter & Gamble is a saga that started with soap and candle manufacture by two immigrants. March 7, 2000 was a black day for P&G: its stock dropped 31 per cent. "The bluest of blue chips, the oldest of the biggest in the Fortune 500, P&G announced a 10 per cent drop in profits after earnings forecasters predicted a 7 to 9 per cent increase." At rank 34 is Toyota that "sells more than $100 billion worth of automobiles, automotive parts, industrial equipment and prefabricated housing every year." When stung by Toyota, automakers in the US "hit back with a page or two from Toyoda's own book", notes the author. "They introduced Japanese-style inventory control, and started programs to increase worker-management unity." In 1990, Fortune magazine acknowledged that Toyota was "the best carmaker in the world."

You may wonder why a sports outfit like National Football League is included in the book, but the author looks at $67,000 that advertisers are willing to pay per second during the Super Bowl, $45.63 that hundreds of thousands are willing to pay on an average to see a game in person, and "tens of millions that are fanatical about parking themselves in front of a TV set every Sunday afternoon" to conclude that "the health of this not-for-profit behemoth seems assured for many years to come". Wish we could say the same of our BCCI.

Among the few non-US companies is The Singer Company of Netherlands. Do you know that in 1851, when consumers balked at the $75 price tag, Singer "originated the world's first instalment plan to make it affordable"? Or, that Mahatma Gandhi called it, "One of the few useful things ever invented."

Unless you're fretting the absence of Indian companies in the list, the book is an interesting read.

BookValue@TheHindu.co.in

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