How Companies Work

SPACE SETTLEMENT DESIGN COMPETITION

HOW COMPANIES WORK

Projects as huge as the space settlement being designed for this competition are excellent examples of how large companies came into being.

For most of human experience, the things that people used could be produced by individual people, or by small groups of people. Technology was simple enough that if a product was required in a place, someone could be found nearby to replicate it. Exceptions were large public works projects: government buildings, aqueducts, roads, city walls, bridges, cathedrals, temples, and tombs. Construction of these structures was controlled through government or church bureaucracies.

Advances in technology changed all of this. Machines were developed that could do work better and more quickly than muscle, and achieve more consistent quality. Complex machines could not be replicated by someone in the local area, so demand for the products meant that the suppliers were encouraged to grow to meet the needs of their customers. Giant corporations evolved that could complete huge projects. When companies do not have all the people or facilities required to do a task, they subcontract or team up with other companies and combine resources.

As organizations grew, they had to adopt new ways of doing business. The organizational structures they adopted resembled military patterns that had been used for millennia to coordinate the efforts of huge numbers of people. This worked reasonably well in early corporations where the intelligence to run the business resided at the top, and other folks could do their jobs adequately by just following orders.

In only the last century the nature of the products produced by large corporations has been changing, and their organizations have been evolving to adapt. To stay in business corporations must now rely on the intelligence of the employees at all levels – not just at the top. Employees determine the very nature of the products that can be offered by the corporation.

The whole science of management is changing to accommodate this new type of employee. It includes recognition that communication is the lifeblood of the organization; each individual employee has unique skills to offer; employees at all levels are more productive if they enjoy their work; and employees enjoy their work best when they feel it is important and that they are making a contribution.

Communication is the greatest challenge faced by top management. The sheer size of some organizations illustrates the problem; employment of 10,000 to 20,000 individuals at one plant is not uncommon. Some corporations have dozens of divisions world-wide, and employ hundreds of thousands of people. Effective operation of the corporation requires, however, that people working on different parts of a project share information about it. Sometimes a problem on one project can be solved by a person who has had a similar experience on another project.

Professional and skilled people are also expensive. Typically a company pays $150,000 to $200,000 each year for the salary, benefits, floor space, furniture, supplies, photocopiers, computers, utilities, telephone service, and other overhead to support one engineer. “Overhead” includes the cost of secretaries, janitors, security guards, fire protection, first aid and medical support, and equipment and facility maintenance.

This all seems very intimidating to the individual who has just accepted a first job in a huge corporation. Your first work assignments will be relatively straightforward tasks you were hired to do. If you get stuck, you will find lots of other people in your group, including your manager, who will help you to accomplish your tasks. After two to five years, your performance on projects will lead to your establishing your niche in the organization, and in four to ten years you could become an expert in your field. In all of your work, you will become more valuable as you know and are known by more people with other special skills or knowledge.

You will experience many of these organizational challenges during your work at the SSDC this weekend – you will be simulating the experience of an engineer in a very large corporation.