Universum Global Top 50: the World's Most Attractive Employers

Recently we published our very first “Global Ranking”. We surveyed over 100,000 students from the 11 largest economies in the world which companies they find attractive. These rankings receive much attention – often because people disagree with it. I’m sure a lot of people have been surprised to find that their company is not on the list.

Business			Engineering
Google	1		Google
PricewaterhouseCoopers	2		Microsoft
Microsoft	3		IBM
Goldman Sachs	4		BMW
Ernst & Young	5		Intel
Procter & Gamble	6		General Electric
J.P. Morgan	7		Sony
KPMG	8		Siemens
McKinsey & Company	9		Shell
Deloitte	10		Procter & Gamble
The Boston Consulting Group	11		Johnson & Johnson
BMW	12		Hewlett-Packard
Coca-Cola	13		Cisco
L'Oréal	14		Esso/ExxonMobil
Morgan Stanley	15		McKinsey & Company
Sony	16		Schlumberger
IBM	17		BP
Johnson & Johnson	18		L'Oréal
Deutsche Bank	19		Nokia
General Electric	20		Accenture
Citigroup	21		Coca-Cola
HSBC	22		Philips
Accenture	23		Goldman Sachs
Nestlé	24		Nestlé
Credit Suisse	25		Pfizer
Bain & Company	26		Bosch
Unilever	27		The Boston Consulting Group
UBS	28		J.P. Morgan
Nokia	29		Deloitte
Intel	30		Morgan Stanley
Esso/ExxonMobil	31		GlaxoSmithKline
Kraft Foods	32		Ericsson
Shell	33		Ernst & Young
Hewlett-Packard	34		ABB
Mars (Masterfoods)	35		Bayer
Pfizer	36		Unilever
Siemens	37		PricewaterhouseCoopers
Philips	38		Deutsche Bank
Oracle	39		HSBC
Bayer	40		Kraft Foods
Philip Morris	41		Bain & Company
DHL	42		Citigroup
BP	43		Alcatel-Lucent
Bosch	44		Daimler
Cisco	45		Novartis
Daimler	46		Mars (Masterfoods)
Ericsson	47		KPMG
ABB	48		Credit Suisse
Novartis	49		DHL
Schlumberger	50		UBS

These companies have clearly succeeded in their work with employer branding – this is not to say that companies not included in the list have not, but what does these companies have in common?

First of all, they have a global strategy for their employer brand that supersedes geographical borders. 

Furthermore, their work is focused and long term.

And at last, the work is spread across many different departments; HR, marketing, communications and the top management are all involved.

In three years we will have three people leaving the job market for every one person entering it - is your company ready for such a battle?

Is Porter wrong?

In the 1980s, Michael Porter presented the “generic strategies” – which consist of three basic strategies of cost leadership, differentiation strategy and niche strategy. He argued that these three strategies were the only fundamental strategies that any organisation could undertake (thereafter the term “generic strategies”).

However, as discussed earlier in this blog, Porter has been challenged in his view in the later years and I came to think about these generic strategies as I am currently analysing a Polish real estate company as a part of a strategy course at the university.

As the organisations are using standardized material producing standardized products, organisations are finding it difficult to differentiate themselves from each other. Furthermore, apart from the building process itself, the largest share of their costs come from acquiring building locations.

Acquiring prime locations is also identified as a key success factor in this industry, meaning that companies buying less expensive land (less attractive locations) will not be able to sell their products at the average price of the market – meaning a low-cost leadership is close to impossible.

At last, the buyers (in this case Property Investment Funds) are only looking for investment opportunities which will give them a predictable return of investment at a low risk, so where are the niche markets?

Before writing this post I read even more about Porter’s generic strategies, and I always end up with the same conclusion: Generic strategies are more suited for B2C markets than B2B markets.

Porter (left): "By making the buildings smaller, real estate 

companies could gain low-cost leadership"

What is the principal source of profits – Part Two

Continuing from my last post is the never-ending discussion of which factors drives organizational profitability. As mentioned earlier, the relative importance of industry in this context has been challenged by a series of studies in the later years.

For the sake of clarity: Such empirical studies take a large sample of firms and compare the extent to which variance in profitability is due to firms or industry (controlling for other effects). If firms within the same industry tend to bunch together in terms of profitability, it is industry that is accounting for the greater proportion of profitability and an external approach to strategy is therefore supported. The chief advocate of such an external approach is of course the well-known Michael Porter.

If firms within the same industry vary widely in terms of profitability, it is the specific skills and resources of the firms that matter most, and naturally an internal approach is most appropriate. An influential study of this was done by Richard Rumelt in 1991, and since world-famous strategists and researchers still haven’t come to some sort of conclusion, I am going to keep it all simple by comparing the two important studies done by Rumelt and Porter & McGahan.

As we can see, the two most important studies find that more of the variance in organizational profitability is due to firms rather than industries; in Rumelt’s study the organization’s resources, capabilities, structure and so on, counts for 47 % while Porter & McGagan suggest that the firm accounts for 31 %, but with higher industry effect as well (19 per cent)

It should also be noted that Roquebert, Phillips and Westfall published a meta anslysis where they compared Rumelt’s analysis up against Richard Schmalensee’s analysis from 1985. Their research does not only confirm most of Rumelt’s findings, but also suggest the existence of a corporate effect. If you have access to the Strategic Management Journal, it is a highly recommended read (Vol 17, pp. 653-664 (1996))

Such discussions will probably go on, but it will be interesting to see how the environmental changes in recent years (especially technology development, shorter life cycles and so on) will affect these factors in the future.