Essential Business Fundamentals and Company Structures
Business Fundamentals and the Economic Entity
A company is an economic entity that makes goods and services available to the public.
Core Business Functions and Production Factors
The primary business functions include:
- Coordinating production factors
- Preparing goods and services
- Obtaining financial resources
The production factors are combined within the company to produce and sell goods and services.
The Role of the Employer and Private Enterprise
The objective of a private enterprise is to make profits for its owners. The state promotes what is known as "sustainable growth."
The employer plans, organizes, and controls production while assuming the associated risks.
Understanding Products and Market Dynamics
A product is any good or service designed to satisfy consumer desires. Products are classified as follows:
- According to characteristics: Goods or services.
- According to purpose: Consumer products or industrial products.
The market consists of all buyers and sellers of a product. A market segment consists of the set of consumers who want a product with similar characteristics.
Market size: The number of units sold of a product during a given period in a particular area by all companies in that market.
Classifying Companies by Sector and Ownership
Types of company: According to the sector of activity, companies are categorized into:
- Primary: Obtaining raw materials.
- Secondary: Processing of raw materials.
- Tertiary: The service sector.
Under the ownership of capital, companies are classified as:
- Private, public, or mixed.
Business Planning and Incubators
A business plan is the document which clearly defines the business idea you want to undertake.
Business incubators are spaces that accommodate new business initiatives intended to facilitate their viability in the first months of their commissioning. The company's organizational structure is based on the design and maintenance of an operating system based on the definition of tasks to be developed.
Organizational Structure and Functional Areas
The organizational structure of the company includes several key areas:
- Procurement: Obtaining materials and services from abroad.
- Production: Transforming raw materials into finished products.
- Sales or Marketing: Defining what is to be sold and facilitating distribution.
- Financial: Securing financial resources.
- Human Resources: Organization of staff.
- Accounting: Checking costs and determining economic performance.
- Administration: Relationships with the shareholders of the company, mail, messaging, and so on.
- Direction and Control: Establishing the objectives of the company and applying the factors of production.
Organizational Charts and Classifications
An organizational chart is the graphic representation of the different functional areas of the company and its functions, levels of authority, and channels of information transmission.
Types of Charts:
- According to Purpose: Informative and analysis.
- According to Extension: General and detailed.
- Depending on Content: Structural, functional, and personal.
- According to Form: Horizontal and vertical.
Classification of Organization:
- Functions: Under the company's functional areas.
- Territories: Under the territorial area.
- Types of Products: Office furniture, kitchenware, etc.
- Target Market: Department stores, hypermarkets, etc.