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New Corporation System (WIP)

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New Corporation System (WIP)

Post by Hellorp on Sun Nov 10, 2013 10:01 am

Corporations are important to the global economy, producing goods and services to sell to others, driving national economies and increasing prosperity. They have their own complexities that need to be understood in order to run one successfully, explained in detail below.

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Types of Corporations

Corporations are divided into 4 types of economic activities; Primary, Secondary, Tertiary, and Quaternary, defined below -

Primary Corporations: Corporations that work directly with natural resources. Can include such businesses as ore miners (what kind of ore, at least in the shady parts of the world, is up to the contractors to decide)

Primary Corporations:

Primary corporations are those that extract what is termed “Raw Resource,” a collective term for every raw resource that may be gathered, metals, wood, etc. Those resources are simplified into Raw Resource in order to prevent mental breakdowns. The “Raw Resource” is measured in Units, and is sold to Secondary Corporations (or sent to the Secondary activities arm of a mega-conglomerate) in order to be turned into useful products.

In order to acquire the “Raw Resource,” a Primary corporation must construct Resource Extraction Centers, special buildings that extract Raw Resource (RR) and process it into transportable units. A Resource Extraction Center costs 2 PP to construct, has no direct maintenance cost, and is capable of supporting up to 10 thousand workers. Every thousand workers employed at a center extracts 10 units of RR each cycle.

Workers, of course, must be paid. What you pay them depends on what the minimum wage is in a nation. As a corporation, your duty is to make money, therefore it is not advisable to setup a Primary corporation in a highly-developed nation, where minimum wage is likely to be near 1000 kerbits per worker, per cycle. Rather, the less developed a nation is, the less you are required to pay each worker. Now, there are special cases where higher developed nations may lower the minimum wage but generally the best business route is to find a nation with a low wage, for instance those in the 200-400 range.

For comparison, if a corporation built a Resource Extraction Center in a Highly Developed nation with a 1000 kerbits per worker wage, and hires 10 thousand workers to fill the camp, it would look like this -

y = xw
y = 1,000*10,000
y = 10,000,000 or 10 MK

Where y is total labor cost for the cycle, x is the wage per kerbal, and w is the number of workers. Compare that to building an REC in a nation of lower development where wage is 400 kerbits per worker, and hiring 10 thousand workers.

y = xw
y = 400*10,000
y = 4,000,000

That is a savings of 6 million kerbits in the cycle.

Secondary Corporations: Corporations that focus on such things as manufacturing and construction. These corporations are not necessarily corporations in and of themselves, but may be part of a larger conglomerate as the piece of the business that makes the products (products being anything from electronics to fighter jets). Require Raw Resource from Primary economic activities.

Secondary Corproations:

Secondary corporations take the Raw Resource from a Primary corporation (or the Primary activities arm of a mega-conglomerate) and turn it into a usable product. They are also the corporations that can be contracted by nations to construct such things as highway systems and power grids.

Secondary corporations require special buildings called Factories to turn a set amount of Raw Resource into a finished product. Each unit of Raw Resource is sufficient to manufacture the following -

1/5 ship
1 aircraft
10 automobiles
100 consumer appliances (refrigerators/ovens/etc.)
1000 small arms (1000/infantry regiment)
1000 consumer goods (clothes/computers/etc.)

Each factory, like REC’s, employs up to 5000 workers, each thousand being capable of processing 1 unit of RR (Raw Resource) in a day. That is a total of 5 RR’s worth of goods in a day.This means each cycle, a factory with 5000 workers can churn out 35 RR’s worth of goods. That amounts to -

7 ships
35 aircraft (10 per squadron)
350 automobiles (100 per vehicle regiment)
3500 consumer appliances
35000 small arms (1000 per infantry regiment)
35000 consumer goods

A Secondary corporation can only create these goods when it receives a contract from another entity, be it from a nation looking to add 7 ships to its navy, to an electronics conglomerate looking to sell 35 thousand tablets.

Each factory costs 10 PP to construct.

The same rules of wages apply to Secondary corporations as they do to Primary corporations.

Tertiary Corporations: Corporations focused on services and retail. Service corporations would need to acquire a contract from a nation in order to, say, construct a hospital or university. Retail corporations follow different rules, requiring a source of goods to sell to the populace. That source is either a Secondary corporation, or a segment of a company that manages manufacturing.

Tertiary Corporations:

Tertiary corporations are those dedicated to service and retail. They are the corporations that will build and manage such things as schools and hospitals if asked by a government, and will be the ones that sell products to the general market (such as electronics).

Service Corporations: Service corporations are asked by governments to construct such buildings as Schools, Universities, Hospitals, and other normally government-operated facilities, and run them as a business. The corporation pays all of the maintenance and fees for the building. You may be wondering where the corporation would make a profit. The corporation gets its income from the worker income bonus the building would provide.

For instance, if a government tasked a corporation with running an Education system, the corporation would be able to decide what amount of funding the system would receive, and would keep the income bonus that would normally go to be taxed by the nation. If the corporation decided to fully fund the Education system at 100 kerbits per child, it would make 150 kerbits from each child being educated, for a total profit of 20 million kerbits over the cycle.

Retail Corporations: Retail corporations work much like the Primary and Secondary corporations in that it requires the construction of a special building, access to goods to sell, and pays wages to its workers.

A retail corporation looking to sell goods must first construct a Retail Store, a special building that employs up to 500 workers and is capable of selling 1000 units of goods per day (each 100 workers accounts for 200 sales).

Once a retail corporation has constructed 10 retail stores, it can construct a “Retail Chain,” which instantly creates 5 more retails stores and reduces the cost of each successive retail store by 20% for 50 PP. Each million people in a nation can only support 20 retail stores, so one must keep that in mind.

A retail store costs 5 PP to construct, and can only be built in a nation of Median Development or higher.

Retail stores can only sell goods the corporation owns, therefore if the corporation has only 2000 units of goods, and is capable of selling 5000, it must purchase the extra 3000 from a Secondary corporation or it will only sell the 2000 goods. All sales occur at 6 PM Greenwhich Mean Time.

Since retail corporations sell directly to a nation’s populace, it must follow price rules -

When selling a product it has never sold before (such as the latest edition of an electronic product), it can charge up to 40% of the wage in the country it does business in per product. Each successive cycle, the amount it can charge goes down 10% until it is no longer vendable. Therefore, it is important for retail corporations to constantly purchase the right to sell new products developed by Quaternary corporations (although the products themselves they have to purchase from the Secondary corporations that make them).

Wage rules apply to retail stores as they do to Primary and Secondary corporations.

Quaternary Corporations: Corporations focused on research, development, and data management. They are the ones that create the ideas that Secondary corporations turn into products for Tertiary corporations to sell. Can only be based in nations with an active educational system.

Quaternary Corporations:

At the top of the economic chain are the Quaternary corporations, where the designs, innovation, and data management methods are created and sold to other corporations to be produced and sold.

Quaternary corporations have their own special building, the Research and Development Center, that employs up to 400 kerbals, and creates 40 Research Points per cycle(equivalent to PP points, but cannot be used on anything except researching technologies) (each 100 kerbals creates 10 research points). Research and Development Centers may only be built in Upper Development-level nations.

The primary source of income for Quaternary corporations will be the creation of new designs that are sold or given to lower level corporations to be produced and sold, the Quaternary corporation receiving a percentage of the sales. What that percentage is depends on the deal made between the Quaternary corporation and the corporations it sells the design to.
Quaternary corporations follow the same rules of wages as the other corporation types.

A Research and Development Center, besides being tasked with researching technologies, is also tasked with creating the designs that are to be sold off. When creating a new Consumer Good/Appliance (such as a new phone line), it costs 10 RP to develop the first iteration. After the first iteration is developed, it costs 15 RP to develop a successor model. Each successive iteration of the same model costs 5 more RP to develop, as more and more research is needed to develop a better model.

When looking to create a new automobile line, it costs 10 RP to develop the first iteration, plus 2 more RP for each successive model.

New Aircraft/ship lines operate differently. When looking to create a new aircraft/ship, you must first dedicate 50 RP to learn how to make an aircraft/ship effectively. Then, to create a model you can sell and have produced, you will need to expend 30 RP base, and add 5 RP for each unit bonus you would like to include in your aircraft/ship.

When looking to create a new small-arms line, it costs 10 RP to learn how to create them effectively, then 5 RP to create the first model. Each successive model adds 5 RP and an extra 3 RP for each bonus added to the successive model. Each successive model, itself, also adds a 5% combat bonus for a unit equipped with the weaponry. The bonus compounds. Therefore, if a nation equips a regiment with 6th-generation rifles, that regiment will have a 30% damage bonus in combat.

In order to produce things such as phones, the corporation will need to have the technology researched. All technologies the host nation has researched are passed on to the corporation unless explicitly denied by the nation.

Corporations are not limited to one type. A corporation that includes 2 or more corporation types is called a Conglomerate. The only difference between a normal corporation and a conglomerate is that a conglomerate controls more than one sector of corporate activity. For instance, if a Conglomerate was a Secondary and Quaternary corporation, it would be able to develop new products and produce them without selling off the design. If it was Secondary, Tertiary, and Quaternary, it would be able to create a new design, produce it, and sell it without selling the design or depending on royalties for profit. However, doing that requires quite a bit more expenditure in wages, and because of the trend for conglomerates to be transnational, may involve quite a bit more work to ensure compliance with all laws and regulations between nations.

The Journey of a Phone: (Example of corporate production chain)
Spoiler:

There is a phone that wants to get into the hands of a consumer to be used to play the latest version of Angry Words.

It’s journey begins in the R&D center of PhoneCorp Conglomerate, where the researchers are busy researching the “Smartphone” technology. Once they are done, they begin work on creating the first model of the Q-Phone. Ten hours, 10 RP, and 5 MK later, they finish, and send We-Build-It Inc. a contract to create 350 thousand units in exchange for 30 MK.

We-Build-It Inc. accepts the contract, pays 24 MK (20 MK to PhoneCorp, and 4 MK to the national government which has instituted a 20% sales tax), and sets to work. It orders 10 raw resource units from MinerCorp at the current market value of 1 MK/unit. We-Build-It pays 12 MK (10 to MinerCorp and 2 to the national government) and receives the 10 RR.

We-Build-It has 5 factories with 5000 workers each create 25,000 Q-Phones a day for 14 days, or 1 year.

Each day, those 25 thousand are shipped back to PhoneCorp’s retail division to be sold in it’s 20 retail stores across the country.

In the country, the wage is 800 kerbits per kerbal. PhoneCorp has priced the Q-Phone at 320 kerbits per phone, 40% of the national wage. Each day, for 7 days, it sells 20 thousand Q-Phones for 320 kerbits each, for a total income of 6.4 MK per day. Total week income of 44.8 MK.

After 7 days, it has to lower the price due to decreasing demand to 240 kerbits per phone (30% of national wage). For the next 7 days it continues to sell 20 thousand Q-Phones a day, now at 240 kerbits each for a total income of 4.8 MK per day. Total week income of 33.6 MK.

At the end of the second week, the Q-Phone production contract expires as the 350-thousandth Q-Phone is boxed and shipped to PhoneCorp Retail. However, since We-Build-It produced more phones per day than PhoneCorp could sell, there are now 70 thousand extra Q-Phones sitting in PhoneCorp warehouses. PhoneCorp decides to sell them, now at 20% of the national income, at 160 kerbits per phone. Resulting daily income is 3.2 MK, and 4 days later, the last Q-Phone is sold, for a total income that week of 12.8 MK.

In total, PhoneCorp took in 91.2 MK in Q-Phone sales.

PhoneCorp spent 5 MK in research and development, 30 MK in production, for total expenditure of 35 MK.

Profit from the Q-Phone 1 is 56.2 MK, not including wages. Total wages for 3 weeks of running PhoneCorp’s R&D and Retail divisions comes out to 25 MK (24 MK in retail wages from 20 fully-employed stores and 0.96 (round up to 1) MK in R&D wages from 1 fully-employed R&D center).

Total profit for PhoneCorp: 31.2 MK.

Hellorp

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