THE LARGEST CORPORATIONS IN THE WORLD IN THE PERIOD

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1 THE LARGEST CORPORATIONS IN THE WORLD IN THE PERIOD CĂTĂLIN GRĂDINARU TEACHING ASSISTANT BUSINESS AND ADMINISTRATION FACULTY, UNIVERSITY OF BUCHAREST, SORIN-GEORGE TOMA PROFESSOR BUSINESS AND ADMINISTRATION FACULTY, UNIVERSITY OF BUCHAREST, Abstract Corporations represent an important pillar in the process of globalization, influencing the way econcomies evolve. The focus of the paper is to analyze the evolution of the first ten corporations in the world in terms of total revenues. The research methodology is quantitative and based on secondary data, whilst the research type is literature review. Despide the constantly shifting economic context, Multinational corporations (MNC s) have managed to thrive in an impressive manner, reaching astonishing figures related to their total revenues, profits and number of employees. It is not a big surprise that amongst the first 10 corporations in the world there have not been many changes. Thus, in the last years, we see a dominance held by the same companies in a trully high proportion. Keywords: Corporation, revenue, profit, Fortune Global 500 Classification JEL : F00, F23 1.Introduction Having a great capacity to concentrate wealth and power (Veldman and Willmott, 2013), corporations managed to lock in their position as an important player in terms of economic development and general welfare within a country. Such companies manifest constant attempts to extend their global reach (Ireland, 2010), thus solidifying their position amongst the top companies in the world. With this goal in mind, these economic actors are trying to take efficient decisions in order to minimize costs and increase economic performance (Dunning, 1981; Vernon 1966). According to different experts, this road to becoming the world s best may sometimes present curious behaviours (Delmestri and Brumana, 2017), some even considering that corporations have become so powerful that they threaten the order of human society (Hertz, 2001). The paper aims to ilustrate and analyse how the world s ten largest corporations in the world by revenue, profit and employees evolved in the period The research methodology is quantitative. Conclusions are found in the final section of the paper. 2. The evolution of the 10 largest corporations in the world in the period The Global 500 is the Fortune Magazine s annual ranking by total revenues of the biggest 500 companies from around the world. Being an integrated part of global welfare development and playing a decisive role in terms of how economies are shaped, corporations have this role backed up by data revealed in the Global 500 rank. The following situation reveals itself: - Regarding the top 10 corporations according to their turnover, in 2016 (table no.1): o Wal-Mart is the first corporation in the world, leading by $ million, a difference that represents more than 50% from the revenue of the second largest company. Once 68

2 again, the biggest retailer in the world defends its position, making big moves in both China and India [1], in an attempt to become more active at an international level. o The United States are dominating the rank, placing 4 companies amongst the top 10, closely followed by their global challenger, China (with 3 companies). Japan, Germany and the Netherlands have a company between the top global players. o The energy sector dominates half of the first ten corporations in the world Table no. 1 The first 10 companies worldwide by total revenues in 2016 NO. COMPANY NAME REVENUE 1. WAL-MART 485, STATE GRID 315, SINOPEC GROUP 267, CHINA NATIONAL PETROLEUM 262, TOYOTA MOTOR 254, VOLKSWAGEN 240, ROYAL DUTCH SHELL 240, BERKSHIRE HATHAWAY 223, APPLE 215, EXXON MOBIL 205,004 Source: Fortune Magazine, The companies mentioned above belong to the following countries (fig. no. 1): Wal-Mart (USA), State Grid (China), Sinopec Group (China), China National Petroleum (China), Toyota Motor (Japan), Volkswagen (Germany), Royal Dutch Shell (The Netherlands), Berkshire Hathaway (USA), Apple (USA), Exxon Mobil (USA). THE NETHERLANDS; 1 GERMANY; 1 USA; 4 JAPAN; 1 CHINA; 3 Figure no. 1 The georgaphical distribution of the ten largest companies (by total revenues) in Regarding the top 10 corporations according to their profit, in 2016 (table no.2): o Apple managed to rank first, even though it is not amongst the first 10 corporations by total revenues. o The US managed to place 5 corporations on this particular leaderboard, whereas China placed 4, starting from the second position up to the fifth one. South Korea grasped the 10 th place through Samsung Electronics, even though the competition is tough especially on the smartphone market. 69

3 o The financials sector is dominating the rank in an overwhelming manner with 7 out of 10 companies running in this field. Amongst these 7 companies, only one is in the insurance industry, whereas the others conduct their operations in banks: commercial and savings. Table no. 2 The first 10 companies worldwide by profit in 2016 NO. COMPANY NAME PROFIT 1. APPLE 45, INDUSTRIAL & COMMERCIAL BANK OF CHINA 41, CHINA CONSTRUCTION BANK 34, AGRICULTURAL BANK OF CHINA 27, BANK OF CHINA 24, JPMORGAN CHASE & COMPANY 24, BERKSHIRE HATHAWAY 24, WELLS FARGO 21, ALPHABET 19, SAMSUNG ELECTRONICS 19,316 Source: Fortune Magazine, The companies mentioned above belong to the following countries (fig. no. 2): Apple (USA), Industrial & Commercial Bank of China (China), China Construction Bank (China), Agricultural Bank of China (China), Bank of China (China), JPMorgan Chase & Company (USA), Berkshire Hathaway (USA), Wells Fargo (USA), Alphabet (USA), Samsung Electronics (South Korea). SOUTH KOREA; 1 CHINA, 4 USA; 5 Figure no. 2 The georgaphical distribution of the ten largest companies (by profit) in Regarding the top 10 corporations according to their turnover, in 2017 (table no.3): o Wal-Mart continues to reprezent the leader by revenue, increasing its profits and managing to exceed the $500,000 million. The Bentonville based retailer surpasses its follower by $151,440 million. There is a notable fierce competition for the second place between State Grid, Sinopec Group, China National Petroleum and Royal Dutch Shell. The same type of competition stands for the last 5 companies in this rank. o The leading countries in the world, the United States of America and China, dispute their supremacy; each has 3 companies placed in the top 10. The London based energy giant, BP, replaced tech titan Apple (in 2017 Apple is on the 11 th position). 70

4 o The energy sector reinstated its dominance with it s 6th company present in the top 10. Table no. 3 The first 10 companies worldwide by total revenues in 2017 NO. COMPANY NAME REVENUE 1. WAL-MART 500, STATE GRID 348, SINOPEC GROUP 326, CHINA NATIONAL PETROLEUM 326, ROYAL DUTCH SHELL 311, TOYOTA MOTOR 265, VOLKSWAGEN 260, BP 244, EXXON MOBIL 244, BERKSHIRE HATHAWAY 242,137 Source: Fortune Magazine, The companies mentioned above belong to the following countries (fig. no. 3): Wal-Mart (USA), State Grid (China), Sinopec Group (China), China National Petroleum (China), Royal Dutch Shell (The Netherlands), Toyota Motor (Japan), Volkswagen (Germany), Bp (Great Britain), Exxon Mobil (USA), Berkshire Hathaway (USA). THE NETHERLANDS; 1 GREAT BRITAIN; 1 USA; 3 GERMANY; 1 JAPAN; 1 CHINA; 3 Figure no. 3 The georgaphical distribution of the ten largest companies (by total revenues) in Regarding the top 10 corporations according to their profit, in 2017 (table no.4): o Apple managed to hold its leading position from 2016 but has a menacing threat in Brittish American Tobacco, the difference between the two companies being quite small. It is interesting that the runner up has not been present in the top 10 before. o Once again, the US and China are rivals, both having four companies in the top 10. o The financials sector is dominating with 5 companies, the rest being distributed as such: 2 in technology, 2 in telecommunications and 1 in food, beverages and tobacco. Table no. 4 The first 10 companies worldwide by profit in

5 NO. COMPANY NAME PROFIT 1. APPLE 48, BRITISH AMERCIAN TOBACCO 48, BERKSHIRE HATHAWAY 44, INDUSTRIAL & COMMECRIAL BANK OF CHINA 42, SAMSUNG ELECTRONICS 36, CHINA CONSTRUCTION BANK 35, VERIZON COMMUNICATIONS 30, AT&T 29, AGRICULTURAL BANK OF CHINA 28, BANK OF CHINA 25,509 Source: Fortune Magazine, The companies mentioned above belong to the following countries (fig. no. 4): Apple (USA), British American Tocabbo (Great Britain), Berkshire Hathaway (USA), Industrial & Commercial Bank of China (China), Samsung Electronics (South Korea), China Construction Bank (China), Verizon Communications (USA), AT&T (USA), Agricultural Bank of China (China), Bank of China (China). GREAT BRITAIN; 1 SOUTH KOREA; 1 USA; 4 CHINA, 4 Figure no. 4 The georgaphical distribution of the ten largest companies (by profit) in 2017 The period can be characterized by consistency, meaning that most companies managed to maintain their presence amongst the top 10 by their total revenues, many even holding on to their position within the Fortune rank. Showing boosts in sales, some leading companies managed to increase their revenues in a substantial manner. In terms of profit, the period emphasizez a similar situation, most companies being present amongst the top 10 in the two years considered in this paper. Comparing the two types of ranks (by total revenues and profit), in 2016 there were only two companies placed within the top ten: Apple (9 th by revenue but 1 st by profit) and Berkshire Hathaway (8 th by revenue and 7 th by profit). In 2017, the only company present in both ranks is Berkshire Hathaway (10 th by revenue but managing to rise up to the 3 rd place by profit). Even though Wal-Mart is by far the biggest company in the world by total revenues it did not manage to be amongst the top 10 in the analyzed period. 72

6 3. Conclusions In the last decades, even though it faced turbulent fluctuations, corporations dominated the world business scene. To prove that they represent key players one could compare their total revenues with the Gross Domestic Product (GDP) of some countries. The paper shows that 9 out of 10 biggest 10 companies in the world by total revenues according to Fortune Global 500 are the same in 2016 and 2017, proving once again how power is concentrated in the hands of particular titans in their industries. A similar situation can be highlighter when inspecting the top 10 companies by profit, where 7 out of 10 companies are present in 2016 as well as in This demonstrates the significant impact these companies can have on the development of particular industries, sectors and economies. 4.Bibliography [1] Delmestri, G., Brumana, M., The Multinational Corporation as a Playing Field of Power: A Bourdieusian Approach, Research in the Sociology of Organizations, vol. 49, 2017, pp , p.326 [2] Dunning, J.H., International production and the multi-national enterprise, 1981, London, Allen & Unwin [3] Hertz, N., The Silent Take-Over, 2001, Heinemann, London [4] Ireland, P., Limited liability, shareholder rights and the problem of corporate irresponsibility, Cambridge Journal of Economics, vol. 34, no.5, pp , p.853 [5] Veldman, J., Willmott, H., What is the corporation and why does it matter?, M@n@gement, 2013, vol. 16, no. 5, pp , p. 607 [6] Vernon, R., International investment and international trade in the product cycle, 1966, Quarterly Journal of Economics, vol. 80, pp [7] *** Fortune Magazine, [8] *** Fortune Magazine, [9] *** 73