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Engineers in Public vs Private Companies

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(@cruzdonato)
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This lecture discussed the differences behind public and private companies with one being owned by a slew of shareholders and the other owned by select individuals respectively. While both value the opinions and financial goals of their shareholders, private companies do not have to publicly report financial data while public companies do. Operating costs make up a good portion of that reported financial data which much of it is accrued by engineers, R&D, quality, etc. 

How does thinking about a project shift from working in a public company versus working in a private company as an engineer? Should engineers be more concerned with shareholder opinions, even if they are non-managing, or the project at hand despite necessary costs? Also thinking about the rewards offered between public and private companies, would engineers be more motivated working at a private company than a public one?

 
Posted : 06/10/2021 11:09 am
(@ridmehta)
Posts: 79
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I think this is a great question. As a current engineer working in the field at an entry level position, I would have to say that my day to day tasks do not involve with being concerned with shareholder opinions as I feel it comes more in direct contact with upper level management. By the time it comes down to me, a budget has already been decided that meets the needs and goals of individuals at my level and those of shareholders. I think overall shareholder opinions are important to take into consideration for the benefit of the company but it terms of day to day work, the project at hand is more directly tied to engineers like myself. 

In terms of which company people would be more motivated to work at, I think it depends on the individual and their career goals. If someone wants more benefits and job opportunities a public company would be great for them. But if someone doesn't care as much about stock involvement and is in it for the satisfaction of completing the work with less constraints then a private company would be better. 

 
Posted : 06/10/2021 11:48 am
(@sheila-sarathy)
Posts: 40
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Great question, Cruz. I think a lot of the business scheme in the engineering world is lost when working as a field tech or most entry level positions. I doubt they have to be concerned with the opinions of shareholders because that is so much larger scale than the laboring engineers. All the engineers really have to be concerned with is their immediate supervisors, directors, and the customers, clientele, and hospital staff (should they work with them). These are people they would come into immediate contact with on a daily basis. Yes it could be beneficial for the company, for the engineer to know the scope of the shareholders. However that's not really in their place to be concerned about. It isn't like any changes they could make would be enough to be acknowledged, especially if its unwarranted from their direct supervisor or if they're not in the know about the engineer planning to make potentially larger scale changes to save or improve the company. There are already people put in place to make those types of decisions, and taking it into your own hands to adjust work processes seems like it could only be problematic and only damage reputations. 

 
Posted : 09/10/2021 8:17 am
(@srp98)
Posts: 78
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I do not think engineers need to be too concerned with shareholder opinions unless it is directly impacting the project at hand. As stated in a previous reply, a budget is commonly decided very well beforehand anyways. Now in the case that the project is going to exceed the budget, then I believe that it is important for the engineers to become more involved with the shareholders to justify their reasoning for the additional expenses. While occasional meetings to update the shareholders are important, engineers shouldn't have to be too concerned with their opinions as long as they are within the pre determined budget. 

While it may be more rewarding to work at a private company, the stability provided by public companies is just more appealing. As a younger person entering the workforce, a private company does sound extremely fun as the pay might be better, however, it would be ideal to have stability when getting older. A more stable job can be found in public companies.

 
Posted : 09/10/2021 9:35 pm
(@anthonynjit)
Posts: 78
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I believe your average engineer does not need to worry about a company being either public or private in their work. In theory, much of the work at both types of companies would be the same. While their scale, funding and goals may be slightly different the fundamental role of an engineer does not change based on the fiscal decisions of a company. As you mention in the later portion of your question, an engineer should generally only worry about the factors within a company that affect them such as pay, stock options, upward mobility and job security. Public companies often pay more and are more stable financially. However, in the United States there are far less public companies than there are private so availability of said positions should be a factor when deciding as well.

 
Posted : 10/10/2021 5:50 pm
(@ps689)
Posts: 49
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As the posts before me have stated, I don’t think that engineers have to actively worry about the shareholder’s opinions. From personal experience, that is definitely not something I have really concerned myself with in my projects. By the time projects have been handed down to the engineers and associates, the managers and directors have already taken into consideration the shareholders’ opinions and have given us the budget and resources we could use in order to complete the project. I think preference between a public and private company is dependent on the individual’s ambitions. For a recent graduate who may only be looking into gaining a few years’ experience and not a long term role/position in a company, it might not matter so much if the company is public or private as they will most likely not stay with the first company they ever work for.  

 
Posted : 10/10/2021 6:07 pm
(@mrela13)
Posts: 36
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In working for a publicly owned company, engineers are not that involved with the opinions of shareholders unless their project holds a lot of weight for the company. For example, if there is a new project launch that the company is expecting to boosts sales and inflate the bottom line, there will be a lot of pressure from shareholders and upper management for the project to be completed on time with good results. Because of this, upper management and shareholders may be more favorable to increase the resources if they are needed to complete the project on time. If the project you are working on is an internal remediation project or a cost savings project that really doesn't draw a lot of appeal, I doubt many people from upper management will have interest in your project and shareholders will most likely not know what you are working on. A lot of times everything is financially driven, so if it doesn't affect the bottom line, it really isn't that important.

In private companies it may be similar, but a lot of the times the owner of the company takes interest in most projects and doesn't always care about the bottom line as much as a publicly traded company. My brother worked for a private company and he said that the owner cared more about the projects getting done correctly and being well established then rushing them to meet deadlines. This is a totally different atmosphere than what I am used to at my work.

 
Posted : 09/12/2021 10:24 pm
(@ej851996)
Posts: 78
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I think the shareholder's opinion doesn't relate too much to a primary engineer. The responsibility of an engineer is to focus on the project at hand. The manager and superior supposed already concluded all customer and shareholder's opinions. The engineer can't listen to hundreds of opinions and work on the project simultaneously. The only point that engineers should be concerned about is finishing the project on time, whether working for a public or private company. I believe this is the best way to raise the output of employees. Although it's a good thing that knows what superiors are thinking, finishing the work at hand would be tough enough for new engineers.

 
Posted : 13/10/2022 10:54 am
(@veron_perez)
Posts: 78
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Mentioned previously, that for private companies that financial data is not presented to the public I think that would affect how engineers work on projects. There may be a difference between budgets of a public and private company. Budgets probably work a different way because private companies cannot publicly share stocks so some percentage of the  means must be dealt with differently. Concerning the shareholders opinions, depending on which type of company they are working for depends on how much regard the engineers should take concerning it. Both types of companies' motivation is to please the shareholders but in a public company, there are multiple shareholders while in private companies it is only owned by a few individuals. The difference in numbers also shows the power they have in the company, when there is less, their word holds more authority so in private companies their opinion matters more.

On rewards offered, Private companies have profit sharing and stock appreciation rights while public companies have stock options/grants and bonuses. It depends on the individual and how they prefer to work but it seems that working for a public company would be better due to the rewards offered and project management. 

 
Posted : 13/10/2022 5:32 pm
(@ms2768)
Posts: 76
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I think the difference between public and private corporations is not as grand from an employee point of view because as mentioned in the lectures, both types of companies can provide employees with profit sharing through stock rights (although public companies have grants and stock options as well). From my experience in the industry, unless youre a higher up engineer or involved in the business side, you're not as concerned about pleasing the shareholders as you are with pleasing your team or leaders. However, if you get stock options or rights, then of course you are technically also a shareholder and want the company to do well. Essentially, I do agree with RidMehta in terms of the individual working at company that reflects their personal goals rather than being public or private, cause the effect of this difference on the engineer themself is very minimal. 

 
Posted : 13/10/2022 7:11 pm
(@gdecarvalho22)
Posts: 75
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We learned in these week’s lectures that the motivation of both private and public companies is to please their shareholders. However, private companies may have fewer shareholders and are not required to report financial data. As @ridmehta stated above, I don’t think that lower level engineers need to focus too much on shareholder opinions because that’s the task of upper level management. However, lower level engineers do need to focus on pleasing their direct superiors, which in turn indirectly pleases shareholders. Although the quality of work should be equally great in both private and public companies, due to the higher number of shareholders in public companies, the opinions of these shareholders should play a significant role in the formatting of work procedures and deliverables (a greater emphasis than in private companies). However, as mentioned previously, upper level management should worry about this and not lower level engineers whose main focus is to develop products with optimal quality. 

It’s hard to say whether private or public companies motivate their employees more in regards to reward offerings. Motivation to work varies between person to person, and although rewards do help increase motivation and productivity, the quality of work an employee produces depends on his/her work ethic. Therefore, the type of reward offered also impacts productivity in varying ways from person to person. An employee’s preference for a particular reward is the main factor in increasing his/her motivation to work. I would love to hear more about what others think about the impact of rewards on employee performance.

 
Posted : 15/10/2022 9:40 am
(@sandra-raju)
Posts: 38
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In most situations, especially for entry-level positions, most field engineers do not need to worry about the opinions of shareholders of the company they are working at. Concerns of the shareholders would be directed towards those in much higher-level positions in the company such as those from the company board. At the majority of companies, I would expect that engineers would only need to concern themselves with more of the hard-skilled tasks. However, I think @veron_perez made a good point that

Posted by: @veron_perez

depending on which type of company they are working for depends on how much regard the engineers should take concerning it.

For most  private companies, there are only a few people owning it so their opinions and concerns have more weight compared to that of public companies who have many shareholders. Also as mentioned in the lecture, private companies motivation is to please the shareholders so they may encourage all members, including engineers, of the company to be aware of stakeholder opinion. While public companies are also of course motivated by stakeholder opinions, they may not be as concerned with having engineers or other members of the company concerned with them, and likely just the board members.

 
Posted : 15/10/2022 3:08 pm
 amm7
(@amm7)
Posts: 39
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In a public company, there is more pressure to deliver short-term financial results to reach quarterly goals set by shareholders. To meet these goals, management may place more constraints on engineers  spending for R&D, quality, and other operational costs. This often leads  to prioritizing cost-efficiency and timely delivery over long-term innovation. In a private company, engineers can have more freedom to focus on the project itself since management is less concerned about short-term financial reports and shareholder opinions. Private companies often have a more long-term perspective, potentially allowing engineers to take more risks and explore innovative solutions. Engineers in private companies may feel more motivated to deliver if they have a closer relationship with leadership or if profit-sharing/equity incentives are offered. In public companies, motivation can be wrapped around the pressure for short-term results, sometimes stifling creativity or innovation. 

 
 
Posted : 11/10/2024 1:52 pm
(@mjc22)
Posts: 34
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There are many differences between working at a public or private company as an engineer. In public companies, there is pressure from shareholders and financial reporting. These factors can influence engineers' work because they may be under pressure to cut costs or prioritize higher earning projects. Public companies may short-change R&D and long-term growth, giving into the pressure for short term financial gain. In private companies, the engineers are not under as much scrutiny when it comes to finance, so they are freer to pursue projects that may come with long term growth. While private companies still have owners or select investors, they are often more closely aligned with the company’s long-term growth rather than immediate returns, allowing engineers to focus on the project itself more than appeasing outside investors.

Engineers in private versus public companies may also have different sources of motivation. In a public company, engineers may be motivated by stock options, which give them a direct connection to the financial state of the company. In public companies, there is also typically a clearer path for career advancement, which can motivate young engineers looking for opportunity to grow. In a private company, engineers may feel motivated by having a bigger impact on the company. Engineers in small companies can see that their results have direct correlation to the success of the company, which gives them a more personal motivation to succeed. For engineers who thrive on detailed research and problem solving, working in a private company may bring higher motivation because they do not have the same pressure from outside shareholders forcing them into strict timelines. 

In the end, there are many pros and cons to weigh out when considering working at a private versus a public company. The best decision ultimately depends on where an engineer is at in their career and which factors are the most motivating to them. 

 
Posted : 12/10/2024 6:53 pm
(@bsk32)
Posts: 39
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In public companies, shareholders and investors motivate a large portion of the direction that Engineering goes to. In private companies, the management is the main motivation of Engineering and research. You'll see that in many private companies, such as Space X, the CEO is often independent in their decisions to run their company, and doesn't want any outside influence at all that could change the direction of the company's research and goals. This provides more freedom to the Engineering department for their projects. Many times, an inventor would want to start a private company because their goal is to manufacture their new design, and prove its effectiveness and value to the industry. This is a powerful way of building a big company down the road because if their product is successful, it shows to other investors that their company has a large ground in the industry. This is why many companies start off as either Sole Proprietor or Private, and then convert to Public. A new company that's public will often get pushed around by investors, become motivated by money, and become very limited in the type of projects Engineers will have.

 
Posted : 13/10/2024 9:07 pm
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