Business Systems and Organizational Functions

Core Business Concepts and Economic Impact

Economic and financial issues: The company performs the function of creating wealth to reward the productive factors contributing to the economic development of society.

Legal and commercial aspect: The company is comprised of a heritage assigned to a commercial profit-seeking end and generates contractual relations with external and internal stakeholders, including shareholders, employees, customers, banks, and public administration.

Technology and production appearance: The company combines factors of production to obtain property or services demanded by society or the market.

The Functioning of a Modern Company

The company should be considered as a global system itself, made up of several subsystems that make up its structure. When these are duly organized and coordinated—obtained through both individual operation and as a whole—they allow the company to develop the activity for which it was created: the production of goods and/or the provision of services. For an industrial company to achieve final production, it must perform various functions, such as purchasing materials, processing them in a production process, and hiring labor. As we see, a company has a great diversity of functions.

Key Functional Areas of an Organization

• Area of supply and production: Its primary function is to be responsible for providing raw materials in the most advantageous way possible for the company, in both physical and economic conditions.
• Financial area: The people responsible for this area deal with the procurement and financial management of the resources the company needs to develop its business, as well as study, selection, and investment.
• Administrative area: This area deals mainly with the management of all administrative documents that allow the proper functioning of the institution in the development of the procedures required for its activity.
• Area of personnel or human resources: Its role covers all aspects of the people working in the company, managing available human resources in the most convenient way, avoiding possible disputes, and fostering motivation.
• Commercial area: This area focuses on both the study of market needs and selecting the most appropriate ways of introducing and selling the product or service, implementing the right marketing policies, and more.