Understanding Business Structure and Economic Objectives

The Company: Definition and Objectives

The company is an organized and responsible human activity whose main objective is to obtain economic benefit. The aim of the company is making profits and creating value for its owners.

Core Business Functions

The business functions are common statements that drive the company's economic and administrative controls. These functions include:

• Planning the economic process.
• Managing monetary funds and providing financial resources.
• Managing human employees.

Specific trading market functions involve the commercial production process, which develops research study work systems. The IDI (Research, Technological Development, and Innovation) aims to generate new knowledge.

Elements and Environment

The elements of a company include immaterial and material resources. Internal and external resources encompass technological, economic, political, and social work environments.

The Role of the Entrepreneur

The employer drives the creation and development of companies through management decisions made at risk. The functions of the entrepreneur involve planning, organizing production, consumption, and risk management.

Governing Rules

The rules governing the life of the company are:

1. Legal requirements.
2. Business regulations.
3. Accounting standards.
4. Tax laws.
5. Environmental regulations.

Types of Enterprises

By Type of Activity

Types of companies by type of activity include:

• Primary sector (natural goods).
• Secondary sector (industrial).
• Tertiary sector (trade and services).

By Size

Types of enterprises according to their size are:

• Small-sized (e.g., billing up to 6,000, employing up to 500 workers).
• Large (e.g., billing over 6,100, employing over 500 workers).

Other classifications exist according to local, regional, national, or multinational scope.

By Legal Form

Type according to their individual legal form includes entities where different people decide to work together. Key forms are:

• Commercial entities where there is a separation of personal and business property.
• Voluntary associations of individuals seeking profit.
• Cooperative groupings of partners working on common interests.

Organizational Structure

Business Organization

The business organization is the combination of human and material resources available to achieve an objective.

Organizational Patterns and Departmentalization

The organizational patterns of the company are:

• Linear.
• Staff.
• Committees.

Departamentacion is organizing the structure into departments so they are better coordinated, which increases company performance. A department is a unit organized to manage a specific business function. Organization is the graphic representation of the different departments of the company, showing their functions, authorization levels, and channels of transmission.