Core Principles of Business Structure and Operations

1. The Company

A set of items organized and coordinated by management, oriented towards obtaining a series of objectives and operating under conditions of risk.

2. Company Objectives

Mission and Rationale

The mission is the first level in the hierarchy of objectives, representing the rationale for the company as an economic unit. It expresses the goals the company wishes to achieve in the long term.

Targets

Targets are specific goals the company wants to achieve during a particular period, once the chosen environment has been analyzed.

Sub-objectives

Also known as departmental goals, these help achieve the previously marked objectives and involve the entire workforce.

3. Elements of a Company

• Human Factors: Individuals who have direct ties with the company.
• Material Factors: The economic goods of the company.
• Organization: A set of relations regarding authority, coordination, and communication activities within the human group, defined by the employer or the company.
• Environment: Factors that affect the actions of the employer, ranging from government regulation to customers or suppliers.

4. Core Business Functions

• Commercial Area: Activities needed to bring goods and services to consumers.
• Production Area: Controls the supply of raw materials and manages the production of goods and services.
• Investment and Financing Area: Raises necessary funds for operations and carries out the investment policy.
• Human Resources Department: Selects, contracts, organizes, and manages all staff.

5. The Company as a System

A company is understood as a system—a set of interrelated elements that interact with the global economic system. Everything belongs to a unit related to the environment in which it operates. Key features include:

• Open System: It is related to the environment, which affects and influences its decisions.
• Subsystems and Synergy: It consists of a combination of different elements. All subsystems operate together to achieve higher performance than they would separately; this is called synergy.
• Global System: Any influence received by one part impacts other subsystems and the company as a whole.
• Self-regulation: The system adapts to changes, such as price fluctuations.