>Clash of the corporate titans


For a shortbut significant period of time on 10 August 2011, Apple Inc. was theworld’s largest corporation by market capitalisation. Wresting the top spotfrom Exxon Mobil is no mean feat for a company that flirtedwith bankruptcy only 14 years ago. The ‘top spot’ in the global peckingorder has become increasingly volatile this century, with no less than 14changes in the last decade.

Recently there have been fivemain contenders for the top spot. This century opened with Microsoft in thelead, before being eclipsed by General Electric. GE kept the top spot for fiveyears with the exception of a brief Microsoft renaissance between October 2002and April 2003. Rising oil prices and the commodities boom would then see adecisive shift as Exxon Mobil vied with PetroChina for the top spot for thelast half of the decade.

Although Exxon Mobil occupied number one position for mostof this time, it was temporarily eclipsed by PetroChina’s stunning stockmarketdebut in Shanghai. This saw PetroChinabriefly valued at more than $1,000bn in November 2007 – the world’s firsttrillion dollar corporation.
The list was far more stable in the second half of thetwentieth century. General Motors was by a considerable distance the world’slargest corporation by revenues for much of this period. Fortune500’s list shows GM in the top spot from 1955 to 1980 (with the soleexception of Exxon’s strong performance in 1975), when it was replaced byExxon.

Exxon and General Motors would continue to battle for thetop spot throughout the 80s, with Exxon dominating until 1985 and GM in thelead in the second half of the decade. GM would remain the world’s leadingcorporation by revenuethroughout the 1990sThe picture by market capitalisation then favoured the moreprofitable technology companies, with both General Electric andMicrosoft leading.

Casting the net further back becomes more difficult. Thereare certainly some obvious big names that must have ranked as the most valuableeconomic concerns of their day. The earliest joint stock corporations becamesome of the world’s largest economic concerns, eclipsing even the size of theirhome markets and states.

The Dutch East India Company (Vereenigde Oost-IndischeCompagnie or VOC) dominated the 17th and much of the 18thcenturies, eclipsing its nearest rival, the English East India Company. VOCtrade in Asia during this period equalledthe rest of Europe combined.

British imperial expansion and success in India ensured thatthe VOC’s reign would end by the second half of the 18th century.The VOC would eventually declare bankruptcy in 1799.  Its position was taken by the Honourable EastIndia Company, a megacorporation with a quasi-executive and administrativefunction across the Indian sub-continent. This domination lasted until thecompany’s nationalisation and absorption into the British Empire after thecatastrophic Indian Mutiny of 1857-58.

Just as surely as economic power shifted from the DutchRepublic to the British Empire at the end of the 18th century itwould begin its shift from the old world to the new at the end of the 19thcentury. The history of USA’s corporate dominance begins with the railroads. In1880 the Pennsylvania Railroad was the world’s largest economic concern,dominating transport in the burgeoning eastern seaboard and pushing outwestwards. At one point its budget was larger than the US government’s.

US dominance continued with the age of tycoons and monopolymergers – Carnegie Steel Company was subsumed in the United Steel Corporation (whichwas, on itscreation, the first billion dollar corporation and by far the world’slargest). Standard Oil was so large that its constituent parts on break upwould become Exxon, Mobil, Amoco, Chevron, Marathon Oil and Conoco – all vastconcerns in their own right.

The brief spell at the topby PetroChina demonstrates the next shift in economic power, as Asia reassertsits central position in the world. The shift could, in reality, have already happened.Whilst ExxonMobil is the world’s largest company by market capitalisation it iseclipsed by the private, state-owned petrochemical behemoths in the oilproducing countries. Valuations for Saudi Aramco extend to $7 trillion, whilstRosneft, Gazprom, Sinopec and Petrobras must join it in any list of economictitans.