Megacorporations

[JKH1232]

Just how do they work, anyway?

It strikes me (And some friends of mine) that these large, multiple Domain entities seem unwieldy. Given the realities of travel- and information flow- in the Traveller universe, just how do you run a company?

If you divide it up into smaller, geographically based entities, then how do you avoid the problem of having a smaller, leaner, more focused group (Without the overhead of a big inter-sector administration) whipping your tail up and down the mains? How do you avoid losing money in sectors where you have a bad run of years, and sucking cash away from profitable sectors?

And worse, how do you avoid becoming Fuchi- to borrow from Shadowrun, with it's own megacorps- that is to say, having different parts of the company essentially going to war with each other for resources, personnel, programs, having various VPs and Directors carving up the company into fiefdoms, and sabatoging the whole thing until it either spins off into seperate entities or burns?

There are obviously some benefits- having the Irridium Throne as a shareholder comes to mind. Also, Turkera Lines can more easily afford the big, cost effective freighters, and other Megas can absorb losses more easily- and there's always, "If you can't beat 'em, buy 'em." But it seems to me that some companies, like Ling or GasBag, or worse Hortalez et Cie, are somewhere in that funny zone where friction, overly costly administration, and info lag just might kill you.

Or do they just decentralize the whole thing, execpt for the board that has the megacredits dumped into a big pool for lap swimming?

 

[Supplement Four]

If you divide it up into smaller, geographically based entities, then how do you avoid the problem of having a smaller, leaner, more focused group (Without the overhead of a big inter-sector administration) whipping your tail up and down the mains?

Don't forget, the oldest megacorps are vilani companies using the vilani-buracracy-is-good concept of management.

 

[atpollard]

Just how do they work, anyway?

One thing that always impressed me was the link between Cleon I (the first Emperor of the Third Imperium) and Fusion+. The Emperor started out running a business - one which held (and holds) a monopoly on the high efficiency Fusion power plants that are the backbone of the Imperium.

Using the CT Book 5 TL 15 (1 EP per dTon) Fusion power plants as a starting point, imagine a company that has a monopoly on the secret of how to build it. Any independent company of TL 13+ can build a ship using a 1/2 EP per dTon Fusion Power Plant, but if you want a B5-TL15 PP then there is only one source. MEGACORP-1 in the Core Sector.

At first, MEGACORP-1 ships from its one factory throughout the sector. Then it expands production and sells to the adjacent sectors. Customers start to complain about long shipping times and perpetual shortages, so MEGACORP-1 builds a second factory near its most remote major market. MEGACORP-1 Factory-2 ships throughout its sector and to the adjacent sectors. The process repeats.

What holds MEGACORP-1 together and on top is a monopoly on a critical technology. This same synergy of monopoly and superior technology also means that every shipyard carries MEGACORP-1 compatible replacement parts to service your Power Plant - other brands are 'special order'.

 

[Renaissance Man]

A megacorp in the 3I is an interesting conceptual challenge.

I would think, as a feudal government, the Third Imperium works as a coherent entity based on patronage and loyalty. In government, the mafia, etc., you have to prize loyalty and consistency over merit. Especially with interstellar distances involved, you have to be able to trust that Duke so-and-so will follow orders, even when they aren't in his immediate interest, out of loyalty alone.

But corporations work on the principle of the bottom line, using governments to enforce the contracts that make profitable business possible. They motivate people through cash, and they supply that reward in order to get things done. Efficiency and loyalty often run at cross purposes.

As JKH1232 notes:

And worse, how do you avoid becoming Fuchi- to borrow from Shadowrun, with it's own megacorps- that is to say, having different parts of the company essentially going to war with each other for resources, personnel, programs, having various VPs and Directors carving up the company into fiefdoms, and sabatoging the whole thing until it either spins off into seperate entities or burns?

The answer? Megacorps in the 3I have to be loyalty-based organizations - essentially entities that compete to become the economic arms of interstellar government. Because Imperium infrastructure is so clearly necessary for a corporation with domain-level reach, there is no way for them to be effectively independent from government. Trade could be strictly regulated by the Imperium through tariffs alone - making a megacorp's success based on its level of interpenetration with the Imperial government.

Thus Megacorps are not really the tidy market-capitalist institutions we have here today. They are more akin to the mercantilist operations of the early modern period (i.e. the Dutch East India Company or Hudsons Bay Company.)

Hence, we have atpollards observation,

One thing that always impressed me was the link between Cleon I (the first Emperor of the Third Imperium) and Fusion+. The Emperor started out running a business - one which held (and holds) a monopoly on the high efficiency Fusion power plants that are the backbone of the Imperium.

To be a noble with traction in the 3I means having some involvement with megacorps. At the top, that means by owning or even running one - like our friend Cleon I.

 

[JKH1232]

Don't forget, the oldest megacorps are vilani companies using the vilani-buracracy-is-good concept of management.

So?

Remember how the Vilani Empire fell? How does that management style survive a more open competition? Just because the Vilani did it that way doesn't make for good business practices Imperium wide, especially since beaurucracy in the company costs D-Tons of straight cash (homey). VPs of Manufacturing Widgets for Regina sector demand pay commisurate with their position.

In other words, there *must* be something keeping them afloat other than "We've been doing business since the First Star Empire!" Unless they're statisfied just working out of Vland and using that as their base of operations, and accepting that they don't hold much sway in Spinward, Antares or the Solomani Rim.

 

[JKH1232]

What holds MEGACORP-1 together and on top is a monopoly on a critical technology. This same synergy of monopoly and superior technology also means that every shipyard carries MEGACORP-1 compatible replacement parts to service your Power Plant - other brands are 'special order'.

This works right up until someone figures out how to do your thing. Better. Faster. Cheaper. Technological strangleholds don't last, especially on something as vital and world changing as Jump Drives, Fusion Plants or Superdense. Now, you have the advantage of capital over them, perhaps. Until they run you out of town.

Or perhaps you have some sort of legal enforcement- but, the Empire is *huge*, and it would be an Impediment to Trade (In the Captial Letters Sense) to have that important a technology in the hands of just one entity in one place. And I don't see any Canon evidence that someone holds a monopoly on technology outside of Mileu 0, but I haven't memorized every JTAS yet.

Now, there's something to be said for being the Industry Standard whatever, but then again, are you a Megacorp if you don't make it, but just design it?

What the hell's a mega anyway? Is it just scope and reach, or number of things you do and size?

 

[JKH1232]

The answer? Megacorps in the 3I have to be loyalty-based organizations

So, in a sense, you create a corporate culture that's supposed to mimic the culture of the Imperial Nobility- service before self, thing of the big over the small, etc. It's not that hard to build, really- you'd be selecting people who exhibited those traits and promoting, them, and eventually employees would self select into megas over starting their own business because they are rewarded more for loyalty and hard work than for raw, unadulterated numbers.

This leaves an interesting question, though? Where does this leave your more cuthroat, get money kind of people? Or do you thing that the 3I's culture doesn't produce entrepenuers the way that a more pure market-captialist culture would?

 

[atpollard]

This works right up until someone figures out how to do your thing. Better. Faster. Cheaper. Technological strangleholds don't last, especially on something as vital and world changing as Jump Drives, Fusion Plants or Superdense. Now, you have the advantage of capital over them, perhaps. Until they run you out of town.

Or perhaps you have some sort of legal enforcement- but, the Empire is *huge*, and it would be an Impediment to Trade (In the Captial Letters Sense) to have that important a technology in the hands of just one entity in one place. And I don't see any Canon evidence that someone holds a monopoly on technology outside of Mileu 0, but I haven't memorized every JTAS yet.

Now, there's something to be said for being the Industry Standard whatever, but then again, are you a Megacorp if you don't make it, but just design it?

What the hell's a mega anyway? Is it just scope and reach, or number of things you do and size?

I was under the impression (right or wrong) that the Moot/Nobility were all members of the board of directors for the Imperial Megacorporations and that they all held significant minority holdings in each other's companies.

Standard Oil and Bell Telephone both held long standing, stable and profitable monopolies until they were broken up by the government. Imagine a world in which the government was composed exclusively of the majority stockholders of the Fortune 500 companies. A startup manufacturer of lower cost IBM clones (in violation of a corporation's Imperial charter) could find itself facing the full fury of the Government Military Establishment!

Where is the new Windows to unseat Microsoft?
It required a consortium of government funded companies to challenge Boeing, who could have succeeded without the full might of the EU?

Establishing a molopoly is hard, maintaining it is much easier. You have 90% of the market. You have 90% of the new research. You can purchase any new innovation from the remaining 10% and incorporate it in your product.

 

[boomslang]

I was under the impression (right or wrong) that the Moot/Nobility were all members of the board of directors for the Imperial Megacorporations and that they all held significant minority holdings in each other's companies.

Indeed.

To be blunt about it: the IN holds the megacorporations together; viewed objectively and dispassionately, the entire Third Imperium is a vertically-integrated, extended-family-owned, market cartel system designed primarily to perpetuate itself in the face of any threat -- internal or external, military, economic, or political. Oh, when convenient, it also pays the occasional lip service to promoting sophont rights, scientific and cultural advancement, yadda yadda yadda, but at the end of the day, it all comes down to keeping the Soc C+ set in money and power... everything else is a sidelight.

That's feudalism for you...

 

[Renaissance Man]

This leaves an interesting question, though? Where does this leave your more cuthroat, get money kind of people? Or do you thing that the 3I's culture doesn't produce entrepenuers the way that a more pure market-captialist culture would?

Oh, they produce entreprenuers alright, but they aren't going to make past the junior levels of the megacorps. A certain amount of corruption is probably built into the system, but mostly, noble culture has to be trusted to keep far-flung executives in line with the central office. On the same planet, or the same star system, a CEO can find out what her people are doing with a phone call. In a subsector, it takes two weeks at least. And across a region of space, months. How else can you ensure the company isn't leaking cash all over the place without an expectation that failure means falling on the sword? Atpollard hits it on the nose:

I was under the impression (right or wrong) that the Moot/Nobility were all members of the board of directors for the Imperial Megacorporations and that they all held significant minority holdings in each other's companies.

The 3I government IS the megacorps. The megacorps ARE the 3I government. The megacorps are probably in many cases also the first thing a new world sees after the ISS, the second wave of the Imperial invasion. The megacorps carry the Imperial flag to new worlds, ready to enrich the local elites while making the most of the new markets, cheap labour and resources they provide. Behind them, the Imperial navy. And running the whole show, the same people - nobles.

The British went to war twice with China in the 19th century because the Chinese emperor sought to ban opium sales by the British East India Company. The demand of the British during both these wars: greater trade access. The British East India Company, her profits, and her interests, were intertwined with the fate of the British Empire as a whole. I'd expect the same from Ling Standard.

 

[atpollard]

I knew that I saw it somewhere:

Only a few firms (a total of 13) are truly Imperial in scope; they are megacorporations. Staggering in size, these organizations are so large that no one person can know everything they are concerned with at any given moment. Total shares of stock, annual profits, number of employees are all astronomical. Many organizations are so large that different divisions of the same megacorporation may actually be working at cross-purposes. In most regions, megacorporations merely own the land their installations are on, but in some areas they control entire planets, either directly or indirectly.

Most megacorporations are organized very much like smaller companies (with a board of directors, a president, and vice-presidents), but the board and the higher level executive officers of the company are largely out of contact with the day-today (or even year-to-year) functioning of the company. These upper-level executives plan only general policy and a few long-distance actions. The most important executives, in terms of personal power, are the various regional managers (by whatever name they may be called) A regional manager may control only a small portion of a megacorporation’s total assets, but many hold more power in some regions than the local representatives of the Imperial government.

Delgado Trading, LIC Stock Ownership:
Imperial family, 5 percent;
Delgado family, 47 percent,
noble families, 27 percent,
private ownership, 21 percent.

General Products, LIC Stock Ownership:
Imperial family, 5 percent;
Hortalez et Cie, 26 percent,
noble families, 35 percent;
private ownership, 12 percent;
Antares Holdings, LIC, 12 percent,
other, 10 percent.

GsbAG Stock Ownership:
Hortalez et Cie, 19 percent,
Imperial family, 4 percent,
noble families, 44 percent;
Sharurshid, 4 percent;
Instellarms, 3 percent;
Tukera Lines, 3 percent;
SuSAG, 3 percent;
private investors, 4 percent;
other, 16 percent.

Hortalez et Cie, LIC Stock Ownership:
Hortalez family, 74 percent;
Zirunkarish, 5 percent;
Naasirka, 7 percent;
Makhidkarun, 3 percent;
Imperial family, 5 percent;
other, 6 percent

Instellarms, LIC Stock Ownership:
Murdoch Holdings, LIC, 32 percent;
Hortalez et Cie, 30 percent;
noble families, 8 percent;
Ling Standard Products, 6 percent,
lchiban Interstellar, LIC. 5 percent;
GSbAG, 5 percent;
Sternmetal Horizons, LIC, 8 percent;
other, 6 percent.

Ling Standard Products Stock Ownership:
Imperial family, 8 percent;
Hortalez et Cie, 26 percent,
GSbAG, 23 percent,
noble families, 8 percent;
Murdoch Holdings, LIC, 8 percent;
other, 27 percent

Makhidkarun Stock Ownership:
Imperial family, 5 percent,
noble families, 28 percent;
Hortalez et Cie, 28 percent;
investment trusts, 25 percent;
private ownership, 14 percent

Naasirka Stock Ownershrp:
Imperial family, 4 percent;
Investment trusts, 24 percent,
noble families, 23 percent;
Hortalez et Cie, 11 percent;
Sternmetal Horizons, 6 percent,
LSP, 4 percent;
General Products, 3 percent;
lgsiirdi family, 13 percent,
private ownership, 11 percent.

SuSAG, LIC Stock Ownership:
Schunamann family, 52 percent;
Imperial family, 2.5 percent;
Hortalez et Cie, 9 percent;
other corporations, 23.5 percent;
private ownership, 7 percent;
other, 6 percent.

Sharurshid Stock Ownership.
Sharurshid trust, 46 percent;
Imperial family, 3 percent;
other corporations, 14 percent;
Zirunkariish, 13 percent,
Hortalez et Cie, 14 percent;
private ownership, 10 percent.

Sternmetal Horizons, LIC Stock Ownership:
Imperial family, 2 percent;
Hortalez et Cie, 29 percent;
investment trusts, 32 percent;
noble families, 18 percent;
Antares Holdings, LIC, 19 percent.

Tukera Lines, LIC Stock Ownership:
Tukera family, 29 percent;
Imperial family, 3 percent;
Sternmetal Horizons, 2 percent;
SuSAG, 5 percent;
General Products, 2 percent,
private ownership, 31 percent;
investment trusts, 28 percent

Zirunkariish Stock Ownership:
Shiishuginsa family, 29 percent;
Imperial family, 18 percent;
Sharurshid trust, 17 percent;
Hortalez et Cie, 7 percent;
noble families, 12 percent;
investment trusts, 8 percent;
private ownership, 9 percent.

I imagine that the Hortalez family has the Emperor and every Arch-Duke on speed-dial just in case a significant threat arises to one of the Megacorporations. And how long before they could gain the support of all of the others in voicing concern over this new threat to the stability of the Imperium.

 

[Ishmael]

I just treat it as an entire polity with its own 'laws' etc. that overlaps the Imperium. territory-wise, and relations and diplomacy with other corps and the moot. Wars are not open for public relations reasons, but as everyone knows, wars can bring profits in some sectors at the expense of others ( sectors of manufacture..not sectors in the way mapping uses it ).

I also agree that different branches fight wars/engage in diplomacy with other branches of the same megacorp for resources and budget....cold war mentalities and cutting deals on the sly.

It all makes sense to someone, but noone knows everything about it and the man-of-the-street doesn't care so long as food and entertainment/goods can be bought.

actually, they're just plot devices, eh?

 

[JKH1232]

So, then would it be fair to claim that the Megacorps are a way of controlling and making predictable trade, simplifying tax collection and providing an extention of noble, and through this, Imperial power?

Or, to put another way, megacoroprations exist because of Imperial backing, the Empire backs them because this 1) Provides economic control, 2) makes assessing and collecting tax easier, 3) helps create, enforce and develop Imperial cultures of loyalty to the Imperium through the Megacorp, and 4) Reinforces noble control by restricting unpredicability and the gathering of wealth by the lower classes.

I actually, they're just plot devices, eh?

Yeah, in game terms. But some of us are trying to desgin sci-fi universes of our own.

 

[Ishmael]

Yeah, in game terms. But some of us are trying to desgin sci-fi universes of our own.

As am I.
Except that 11,000 worlds is too much work, so I focus on 2 sector or two like "Islands" while the OTU stuff is "over there across the rift" in case I want the main characters to visit italthough mine is nothing like canon. IMTU, business controls government just as much as government controls business. Several polities acting on the same volume of space, interacting with each other through diplomacy, etc...what are lobbyists, but diplomats between gov and business?

In such an arrangement, gov troops and military power mean nothing as the gov can't attack those who are also its citizens without blatant provocation. Governemtn uses legal and police forces for armed combat...corps use their own security forces and industrial spies/troubleshooters. PR deptments and ad-men spin events that become public. Nothing more is said so long as actions are not significant enough to cause government to use the military to back up police. Wheeling and dealing and buying power and politicians are the norm where everyone in power ( political and CEO's ) is working to maintain and increase that power, which also means wealth. Thus trade wars and industrial spies/espionage are common if hidden.

Internally, boardroom power plays and office politics abound are are at least as devious and convoluted as those in the Imperial Court. Different departments, branches and even franchises vie for influence and expanded budgets within the company by a better bottom line or by hook/crook.

Considering how corps work internally like that. Just think how ruthless they'd be against a rival company.

I guess I've been influenced a bit by visions of "Bladerunner" and "Ghost in the Shell"

 

[Renaissance Man]

Or, to put another way, megacoroprations exist because of Imperial backing, the Empire backs them because this 1) Provides economic control, 2) makes assessing and collecting tax easier, 3) helps create, enforce and develop Imperial cultures of loyalty to the Imperium through the Megacorp, and 4) Reinforces noble control by restricting unpredicability and the gathering of wealth by the lower classes.

Elegantly summed up I think

 

[Golan2072]

The 3I government IS the megacorps. The megacorps ARE the 3I government. The megacorps are probably in many cases also the first thing a new world sees after the ISS, the second wave of the Imperial invasion. The megacorps carry the Imperial flag to new worlds, ready to enrich the local elites while making the most of the new markets, cheap labour and resources they provide. Behind them, the Imperial navy. And running the whole show, the same people - nobles.

Quoted for truth.

While the Imperium might have taken a feudal political form for various reasons, its economy is that of highly monopolist capitalism rather than feudalism. This is the government of the big corporate stockholders, by the big corporate stockholders, for the big corporate stockholders, assuming some feudal manners for three main reasons: 1) making inter-corp relations more stable by political marriage; 2) making management easier over long interstellar distances; 3) the original corps were probably similar to zaibetsus in terms of internal culture. Think of how Japan might have looked if the zaibetsus would have overthrown the government and put their CEOs in power instead.

This is the "wheels within wheels" concept at work: at first, you see the Imperium as a feudal system in which most nobles follow a "noblesse oblige" attitude. When you explore its political system to the depth, you'll find up that the nobles are really just old-money families holding large amounts of megacorp shares. And only if you look deeper into the Imperial system you'll find out that some nobles are still interested in "noblesse oblige" rather than business and profit.

 

[pendragonman]

I treat megacorps in MTU like the East India Company of 17th century England. Centrally controlled for the most part, but with some local autonomy.

 

[Magnus von Thornwood]

MMMm trade wars.

Remember to that ye old trade war keeps the Megas (and over eager managers) on their toes, and sometimes reminds them to toe the party line. Nobles who seem to have Naval Service or Connections and Shares in a MegaCorp is can find themselves in an interesting situation.

 

[rancke]

The 3I government IS the megacorps. The megacorps ARE the 3I government. The megacorps are probably in many cases also the first thing a new world sees after the ISS, the second wave of the Imperial invasion. The megacorps carry the Imperial flag to new worlds, ready to enrich the local elites while making the most of the new markets, cheap labour and resources they provide. Behind them, the Imperial navy. And running the whole show, the same people - nobles.

One little problem there: If the Classic Traveler view of the extent of interstellar commerce in the Traveller Universe is correct, the economic activity of the 13 megacorps put together doesn't even come close to matching that of a single high-tech, high-population world. Of which the Imperium have several hundred. Compared to the big member worlds, the megacorporations should logically be practically insignificant. Any significance a corporation might have would be through the interest and patronage of nobles who are powerful because they are high in the affairs of powerful worlds, rather than because they dabble in interstellar trade.

Note that I'm not saying that canonical material doesn't portray the megacorporations as powerful. I'm saying there's a discrepancy between how powerful they're portrayed and how much trade they appear to conduct.

Mind you, I'm in favor of revising that Classic Traveller portrayal of interstellar traffic, but I know not everybody agree with me :devil:.

Also, I know that the available evidence is very scanty.



Hans

 

[aramis]

To put RM's claim to a corollary:

The 3I is its nobility and the Megacorps: the MegaCorps are run by the Nobility, as is the Government; the Government and the MegaCorps exist to keep the Nobility in power.

We also know, however, the Nobility are not all in charge of local governments.