RANKING COMPANIES

Perhaps you've heard someone boast about working for "a Fortune 500 company." But are you aware of precisely what that means? Fortune magazine is one of several publications¹ that produce ranked² lists of different American and international companies each year. There are several reasons why business publishers make these lists. One is that companies are always eager³ for an overview of their industry and where they stand in it. Investors and lenders also use the lists to evaluate the risk of doing business with various companies. And consumers and workers use the rankings to learn about companies' reputations when making purchases and looking for jobs.

Among all the rankings, the most trusted and well-known are done by Fortune and Forbes magazines. Fortune magazine publishes numerous company rankings every year, including the Fortune 500, 100 Best Companies to Work For, World's Most Admired Companies, and Global 500. The important lists published by Forbes include the World's Largest Companies, the World's Most Innovative⁴ Companies, and America's Best Large Employers.

The methodology used to compile a list depends on the type of list. Companies' sheer size is the criterions⁵ in many rankings, such as the Fortune 500 (the 500 biggest companies in the world). There are two types of measurements for a company's size, the first being performance in terms of sales and revenue⁶. The second type of size measurement used in ranking is a company's market performance. This includes their market value, market share⁷, and number of employees. Some rankings use only one of the two types of measurement as the basis for their lists; for example, the Fortune 500 is based simply on gross revenue. Others, such as Forbes's World's Largest Companies, use both types.

The other major category of rankings is more qualitative. These lists rely on the results of surveys sent by the publishers to executives, company employees, and analysts⁸. The publishers' surveys present detailed statistical and analytical data on the companies that they rank. For example, in order to list the World's Most Admired Companies, Fortune magazine starts with the ten largest companies by revenue in sixty-six industries. It surveys thousands of executives, directors, and securities⁹ analysts related to those companies. They rate the various firms in their industry based on certain criteria. For the most admired companies, the survey respondents were asked to select the ten companies in any industry that they admired most. Apple was the winner of this list's number-one spot in 2021.

Another popular example is Forbes magazine's America's Best Large Employers ranking. To determine which 500 names should go on the list and in what order, the publisher sends surveys to over 20,000 workers at large American companies, non-profit organizations such as hospitals, and US divisions of multinational firms. The survey asks, "On a scale of 0-10, how likely would you be to recommend your employer to someone else?" Then it asks the same question about other employers in the same industry. In 2021, the University of Alabama topped this list. The Mayo Clinic, Yale, and PayPal made the top ten.

Of course, only huge corporations are even considered for inclusion on any of these lists, so they leave out plenty of excellent but obscure businesses. And it's difficult to know exactly how precise and accurate they are. But all ambitious entrepreneurs¹⁰ dream of seeing their company's name on one of these rankings someday. If nothing else, they provide something to shoot for¹¹.

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• Most Admired Companies
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What Makes a Company Great to Work For?

In business publications, lists like "The Best Companies to Work For" always attract a lot of attention. People enjoy reading these lists because they want to know how their own company compares to others. Or they want to clarify the reasons they like—or dislike—their own workplaces.

What makes a company attractive to employees? Surveys show that the companies high on lists of the best employers have a few things in common apart from good salaries and generous benefits. One is that they allow their employees to work with colleagues that they like and get along with. Great employers don't just hire the most talented people; they make sure that their employees are also professional, courteous, and cooperative. This is important because it only takes one team member with an unpleasant personality to make life miserable for everyone in the office.

Great employers also constantly create chances for their people to excel. This requires managers who are good at observing and communicating with their staff. Such individual attention is necessary in order to match workers with projects that will use their skills while also providing challenges.

But the most important aspect of a great employer is a little harder to define it is a strong and positive corporate culture. The culture includes ethics. People want to work for a company that values excellence, honesty, and fairness, from the CEO down. Another part of a strong culture is an atmosphere of support; employees must feel that management cares about them and wants them to succeed.