Business Classification and Core Functional Areas
Business Classification Criteria
Companies are categorized based on several key factors to better understand their structure and operations:
1. Classification by Purpose
- Profit-seeking: Aimed at generating profit.
- Non-profit: Aimed at a social purpose or managing a surplus (excedente).
2. Classification by Capital Source
- Private: Owned by private individuals or entities (e.g., Jumbo, Falabella, Ripley).
- Public: Owned by the state (e.g., public banks).
- Mixed: Combined ownership (e.g., certain schools or foundations).
3. Classification by Number of Workers
- Micro-enterprise: Fewer than 5 workers.
- Small business: 6 to 50 workers.
- Medium enterprises: 51 to 200 workers.
- Large company: More than 200 workers.
4. Classification by Sales Volume
- Micro-enterprise: Less than 300 million per year.
- Small business: 300 to 350 million per year.
- Medium businesses: 351 to 1,199 million per year.
- Big company: More than 1,199 million per year.
5. Geographic Location
- Local: Activities restricted to one region.
- National: Operates in more than one region.
- International: Operates in more than one country.
- Multinational: Operates in more than one continent.
6. Raw Materials and Economic Sectors
- Primary or Extractive Sector: Focuses on natural resources and delivers products that are not final, but serve as the basis for another company to work with (e.g., livestock, forestry, mining, agriculture).
- Secondary or Manufacturing: This sector receives materials from the primary sector and produces goods through processing.
- Tertiary or Service: Provides intangible benefits such as health, education, and transport.
7. Classification by Technology
- Crafts: Rudimentary procedures and unskilled labor.
- Industrial: Sufficient technology, skilled labor, and mass consumption.
- Advanced: Specialist labor at the vanguard of technology.
8. Classification by Type of Supply
- Products: Tangible goods provided to the public.
- Services: Intangible offerings where the provider and service are inseparable, intended for immediate consumption.
- Product and Service: A combination of both, such as a restaurant (paid service plus a tangible product).
Functional Areas of a Company
The primary goal of these areas is to "meet the needs of customers through a product or service for which the company charges."
- Human Resources (HR): Deals with potential workers to ensure the company takes the best advantage of their skills.
- Commercial Area: Focuses on marketing strategy: What will be the product to sell? What will be the price to be paid? What will be the way to display the product? How will awareness of the product be raised?
- Production Area: Responsible for transforming raw materials into final or intermediate products.
- Financial Area: Manages the flow of money (income and expenses) to maintain an effective financial balance.
- Computer/IT Area: Responsible for establishing and maintaining communication channels.