Corporations problem

[Raider]

I know there is another thread here that is discussing corporations and inflation, but I chose to make a different thread since my point is somewhat different.

The other thread only discusses the cost of the corporations being too high. I think the feature as a whole is broken and not well thought-through.

First and foremost, of course, IS the cost issue. Right now everything else corporation does, such as its benefits, is overshadowed by insane costs, to the point where your focus becomes worrying about how to NOT have corporations in your cities rather than how to put them to a good use. The fact that corporation upkeep can make up 70%+ of a country's expenses is just absurd.

But the cost issue is just a side-effect of the broken way in which the feature functions. The main problem is that corporations cost the government (you) money and has the potential to bankrupt your (or any other) nation. This does not make any sense what so ever--that is just not how corporations work in real life. Microsoft is not bankrupting Europe by selling Windows there, and no matter how many restaurants McDonald's opens in Russia, Russia isn't going bankrupt. Foreign company franchises and offices provide jobs, services, and tax revenue to the host nation. They do not suck on their treasury, costing many times more than all social projects and military upkeep that country is incurring.

Moreover, most countries WANT foreign corporations to come in and provide services and jobs. You can bet Russia wants McDonald's there, and Europe would go nuts if Microsoft stopped selling Windows there. Having a corporation in your nation should be highly desirable due to the benefit its presence generates and having a corporate location in your city should be a very good thing. It should not be something feared to the point switching government types to avoid foreign corporations doing business in your cities.

I just don't see how Firaxis' take on corporations makes any sense.

Anyone else agree with me, or am I way off here?

 

[werdna]

very well put. I feel the same thing.

 

[hotstuffjsn]

I couldn't agree with you more. In fact, this corportations deal is turning me away from the idea of even wanting to purchase BTS; which is kinda disapointing because I wanted to try the new civliaztions and the espionage. But yes, corporations should bring money in, as well as the benefits they provide to the public. All I can say is that through the entire game if we have to worry more about going bankrupt because of these corporations, how will we have any fun if we have to overlook other game aspects to compete with the draining treasury. This is just my 2 cents from what i've gathered from people around here. I hope Firaxis puts up a patch and then if things are ok i'll buy it.

 

[sneaky]

You could claim that foreign corporations are competing with smaller local business and therefore creating all sorts of economic problems in that country because they destroy those smaller businesses, while the HQ nation reaps all the rewards.

This a bit stretch I admit.

But in the real world I don't see Shell or some big corporation helping the third world countries they are situated in either.

 

[largedarryl]

How does microsoft not take money away from europe? If microsoft sells a copy of windows in europe, that money goes back to the US.

Well it seems pretty simple to me, as that is exactly how corporations work in RL.

For Civ, I think that the maintenance costs for corps just need to be removed from the inflation costs, IMHO.

 

[hotstuffjsn]

Microsoft can't just sell stuff in Europe without the permission of the country I presume? I mean i'm sure Microsoft is paying someone money to sell copies in Europe right?

 

[largedarryl]

If the entire world is truly running a "Free Trade" market, then Microsoft wouldn't be paying anybody to import goods. And if you are referring to Microsoft paying employees to sell their goods (not really a good example to use Msoft here, but we will pretend they hire employees to sell goods), the money made to pay employees would be covered by selling copies of Windows, with the profit going back to the HQ.

Basically I would think that the initial attempt at corperations in BtS is pretty good. Corperations should basically import money into the HQ country, but there should be a little bit of "leakage" money that goes missing (to model capitalist gains to individuals running the company, shareholders pulling in profit, etc.)

 

[mrt144]

You could claim that foreign corporations are competing with smaller local business and therefore creating all sorts of economic problems in that country because they destroy those smaller businesses, while the HQ nation reaps all the rewards.

This a bit stretch I admit.

But in the real world I don't see Shell or some big corporation helping the third world countries they are situated in either.

but they certainly aren't bankrupting saudi arabia

 

[potto]

Moreover, most countries WANT foreign corporations to come in and provide services and jobs. You can bet Russia wants McDonald's there, and Europe would go nuts if Microsoft stopped selling Windows there. Having a corporation in your nation should be highly desirable due to the benefit its presence generates and having a corporate location in your city should be a very good thing. It should not be something feared to the point switching government types to avoid foreign corporations doing business in your cities.

I just don't see how Firaxis' take on corporations makes any sense.

Anyone else agree with me, or am I way off here?

Of course the other side of the arguement is that corporations are parasitic creatures that use force to extract wealth. Corporations are funded by shareholders not governement and that is where the money flows, they also require constant expansion to remain attractive to shareholders. They are also pretty closed systems in that not everyone can get in and share the rewards. The pancea of 'Inward investment' can also be a very limited spin on the reality of low skilled jobs, diminishing local run businesses and strain on the local environment.

So yes there are benefits, taxes, employment and infrastructure investment but it isnt quite as glowing as you seem to think it should be.

 

[mrt144]

First and foremost, of course, IS the cost issue. Right now everything else corporation does, such as its benefits, is overshadowed by insane costs, to the point where your focus becomes worrying about how to NOT have corporations in your cities rather than how to put them to a good use. The fact that corporation upkeep can make up 70%+ of a country's expenses is just absurd.

this is actually an interesting point. the focus of corporations shouldn't be what it is: "How do I avoid getting screwed on corporations." It should be : "How should I best use corps in my cities?"

the answer to both questions as it is now : "Have few to none in my own cities"
if changed it could be "to have the right mix of corps in my cities and allow foreign ones in where it will benefit me"

in fact thats something that grates me. the penalty of cost of having a foreign civ in your city outweighs the production via other means and civics. you shoud want your own corps in your cities but it shouldnt be awful and paralyzing to let other ones in. it should be costly, but thats the price you pay for not supporting your domestic ones. right now you get hosed one way, and screwed another.

what happened to the designers? i thought civ iv was a game about making things not have too bad a negative consequence but having a bonus over another thing.

 

[LlamaCat]

I agree with the original post, although if we start using Microsoft as an example we might get into trouble and lose our argument. especially as it relates to Europe, if you follow corporate news and law. let's pick a better example

 

[largedarryl]

Well we can use many real world examples that better model corperate expansion. I think automaker companies would be very good examples of how this works. Since we do have competing international companies it would be a good example.

 

[Raider]

You could claim that foreign corporations are competing with smaller local business and therefore creating all sorts of economic problems in that country because they destroy those smaller businesses, while the HQ nation reaps all the rewards.

This a bit stretch I admit.

But in the real world I don't see Shell or some big corporation helping the third world countries they are situated in either.

In real world Shell franchises provide the country they are in with gasoline refueling stations, jobs for people who work at the gas stations, and tax revenue for the government. It is not costing those countries' governments money.

My main issue is that it seems that the main goal is to NOT allow other countries to found corporate offices in your cities because it hurts you more than it helps.

I think it would make a lot more sense if corporations worked on a pull rather than a push system, meaning other countries would want them to come into their cities and provide services. Right now it's a push. The founder of the corporation wants to spread it to other countries because it hurts them due to having to pay upkeep costs (while giving only minimal benefit in comparison). It's used almost like an offensive weapon, and it is not driven by demand for its services. Instead its driven by your desire to screw over your opponent by forcing your corporation onto him.

In a pull system, the services corporations provide would be so desirable that countries would agree to pay money to have those corporations come into those cities and provide services.

Say for example Aluminum Co. Say you are playing as the Greeks and have no aluminum. But the Russians built Aluminum Co. So you go to corporations screen or something and ask Aluminum Co. to build an office in one of your main production cities. You pay that corporation money each turn to provide that city with aluminum (you can set amount based on corporation and make sure it's high enough/low enough based on the benefits of the corporation). The nation that hosts the HQ gets tax revenue for that (say the same 5 gold that it is now).

This would solve the nonsense system of using corporations to try to bankrupt other countries, while corporations' benefits are reduced to random side effect. The system that results would be driven by demand for the corporation's goods and services, just as it is in the real world. And the nation that is host to the corporate headquarters would benefit in form of tax revenue.

The suggested system would also get rid of the problem of "omg corporations are coming, have to switch to state property!!!" that makes any other civic not really viable in the later stages of the game.

So in summary, under this system:
1. The spread of the corporations is dictated by the need for their goods and services rather than pushed on a rival in some perverse effort of bankrupting them by selling them sushi.
2. The nation that choses to have a corporation found a franchise in its city has to pay the upkeep for that franchise to provide its benefit (and that can be high if the benefit is good). You could argue that the problem now is not that it costs too much to have a corporate office in a city but that you are forced to have corporations in all your cities whether you want it or not, which causes the costs to skyrocket by selling the goods where there is no demand (who needs an industrial aluminum supplier in a great person farm say? a sushi company that brings extra food would be welcome though).
3. The nation that hosts the corporate headquarters reaps the benefits of success of its corporation by taxing the company profits, effectively taking a portion of the amount paid by another player to use that corporations services.
4. Since the choice of using corporate services rests with the buyer, this would eliminate the forced switching to State Property that the current system forces.

People may disagree with me, but I really believe that some system along the lines of the one I outlined would make a lot more sense than the way corporations are implemented now. Just as in case of religions, the system I propose would benefit both the supplier and the buyer (and you can edit costs and benefits to control who benefits more if the buyer does chose to buy the corporation's service).

It is not often that a I mind one feature so much that it affects my gaming experience, but the case with corporations is one such instance.

 

[largedarryl]

I am going to use a company like GM and Toyota as examples as to how world corporate models work (I'm no expert, but would like to think I have some knowledge in the area).

In the US, GM sold and produced vehicles in the US. Now this economic model doesn't work very well because money basically gets recycled in the same system, with GM taking small amounts of profit leaving the general amount of money in the US. So GM starts manufacturing and selling vehicles in Canada. Now this will stimulate the economy in Canada by creating jobs. This will result in a type of benefit to the cities/country that GM is operating in, but the company of GM will be taking the profit margins from Canada and moving them back to the US HQ. This would result in basically a small loss of money from local corporation expansion, but results in money coming in from foreign expansion.

Now Toyota starts selling vehicles in the US. This company will start competing directly with GM for profit margins. The local effect of the corporation will be the same (people are still getting vehicles and are being employed by manufacturing plants). The only difference between these 2 is where the profits go. So if Toyota is dominant, they will take the profit out of the US.

Now I admit the real economic model is far more complex then this, but the general idea is still there.

 

[KrikkitTwo]

Well the basic model is good, corporations give benefits (both to the city they are in and to the founder) and have costs (to the city they operate in)

However, because of Inflation, and other Factors, the 'Values' of the costs outweigh the benefits (even to the founder's cities)

As a simple model that might work, I would suggest
1. change Inflation so that it is back to the 0-100% range
2. change the corporate maintenance so that it is
15 m for being in a city +2 m per resource used
with a Courthouse +100% Inflation
that means it costs the treasury 15 gold +2 gold per resource used [assuming Mercantilism]

Of course the corporation gives a benefit to the founder of 10-15 gold (15 if founded in Wall Street) and it gives a benefit of
0.5-1 hammer/0.5-0.75 food/1 Gold/2-3 research
The 1 Gold (if Banks are present) gets boosted to 2 gold, and
0.5 or 1 Hammers-> 1 or 2 Wealth Gold w Power Factories (also equivalent of 3 or 6 Rush Gold)
0.5 or 0.75 Food->1.5 or 2.25 Merchant Gold (with Banks)
2-3 Research->4-6 Gold (through slider action)

So they can just about pay for themselves completely if you are only spreading Domestic Corporations (and Free Market will make Domestic Corporations breakeven at 100% Inflation even if turning all the benefits back to Gold)

So Foreign Corporations would still be money losers... although if their benefits (Food, Hammers, Culture, Research, Resources) are more needed than gold they will be a good idea

The key thing is getting that point... the cost/benefit should be at a point where to the Foreign player, Corporations may be beneficial or costly... if a Foreign player thinks corporations benefit them, they will switch to Free Market/Open Borders with Founder, and possibly even spread the corporation some themselves. If the Foreign player thinks the Corporations will be costly to them, then they need to go Mercantilism or SP (or no Open Borders with the Corporate founder.)

The Corporate Founder should almost always be in the benefit category (at least if the Corporate HQ is at Wall Street) so they will spread it to their own cities.

Currently the cost/benefit side is too far on the cost side even for the Founding Player.

 

[largedarryl]

@Krikkitone, I agree with you about how they do need to be balanced so that with an ideal setup, a domestic corperation should cost very little, but should cost something for a foreign company.

I think if they basically removed the corperate maintenance from the inflation cost would work.

Another alternative could be a gold/resource consumed figure. Something that would simulate a benefit to import resources from out of country. Possibly a gold/imported resource number. I'm thinking that a city with a corp should produce something like:
For domestic resources:
gold from each resource = (1 * number of consumed resources * economic civic modifier * inflation)
For imported resources:
gold from each resource = (10 * number of consumed imported resources * economic civic modifier * inflation)

This idea could be thought out a little more, but that could also help offset the costs that deal with corporations, and maybe try and stimulate more international trade. Possibly creating more import/exports for countries, prompting a more realistic modern civ game.

 

[Nikis-Knight]

The only difference between these 2 is where the profits go. So if Toyota is dominant, they will take the profit out of the US.

But if Toyota is dominant, then American car companies are making cars ineffeciently, and that labor should be put to other uses anyway.
In a free market, wealth is created with every transaction, because what both parties recieve is more valuable (to them) than what they part with. Due to specialization and economies of scale, wealth is created. (But then, we kinda had this conversation in the "Huge Inflation" thread, and I don't want to repeat myself.)

 

[mrt144]

the only thing i dont like about removing corp maitenance from inflation is that nearly all maintenance costs under a totally liberal society using corps is from corps/units where as the maintenance costs under SP and synergies are mostly derived from civic upkeep. the net effect is one of rewarding free market way more than ever in the releases.
free market was good in past because it made you more money with static costs where as SP was good because it made a similar amount (compared to another civic besides free market) but with greatly reduced costs.

now its free market makes you more money with increasing costs
and SP makes you similar to normal with the reduced costs.

 

[largedarryl]

But if Toyota is dominant, then American car companies are making cars ineffeciently, and that labor should be put to other uses anyway.
In a free market, wealth is created with every transaction, because what both parties recieve is more valuable (to them) than what they part with. Due to specialization and economies of scale, wealth is created. (But then, we kinda had this conversation in the "Huge Inflation" thread, and I don't want to repeat myself.)

As I mentioned, the actual economic model is a little more complex. Things like resources, manufacturing, RND, etc. have huge affects on where money goes.

I am simply trying to relate the ingame corp. So I am relating the production of vehicles (say hammers/food/culture ingame) and the profit (gold back to HQ).

 

[andrewlt]

I am going to use a company like GM and Toyota as examples as to how world corporate models work (I'm no expert, but would like to think I have some knowledge in the area).

In the US, GM sold and produced vehicles in the US. Now this economic model doesn't work very well because money basically gets recycled in the same system, with GM taking small amounts of profit leaving the general amount of money in the US. So GM starts manufacturing and selling vehicles in Canada. Now this will stimulate the economy in Canada by creating jobs. This will result in a type of benefit to the cities/country that GM is operating in, but the company of GM will be taking the profit margins from Canada and moving them back to the US HQ. This would result in basically a small loss of money from local corporation expansion, but results in money coming in from foreign expansion.

Now Toyota starts selling vehicles in the US. This company will start competing directly with GM for profit margins. The local effect of the corporation will be the same (people are still getting vehicles and are being employed by manufacturing plants). The only difference between these 2 is where the profits go. So if Toyota is dominant, they will take the profit out of the US.

Now I admit the real economic model is far more complex then this, but the general idea is still there.

Except that the U.S. still benefit from having Toyota here. If the BTS model is true, the U.S. should ban Toyota from selling vehicles here.

The problem is that in the real world, corporations are a win-win situation. If that isn't true, there would be no country that would allow any foreign corporations to operate inside their border. Both the U.S. and Japan benefit from Toyota operating in the U.S. In BTS, countries don't even benefit from their own corporations spreading inside their border. If the BTS model is true for the real world, the U.S. government would tell Wal-Mart to close all their stores inside the U.S. but give them money to expand inside Iran.