Understanding Enterprise: Concepts, Systems, and Subsystems

Unit 1: Introduction to the Concept of Enterprise

1 - Concepts

Organization: A group of people who have the means and resources, working through a set of rules and procedures established to achieve a particular purpose.

Company: A company is an organization and therefore has all the characteristics of an organization, but its ultimate goal is profit.

Difference between organization and enterprise: The concept of organization is much broader and covers the company. An organization may or may not be for profit; it can devote itself to other purposes, such as humanitarian, educational, or sports activities. While a company must always be oriented towards profit.

2 - The Company as an Open System

A company is an open system because, to be successful, it must take into account the relationships between each of the parties involved and the relationships with the environment in which it is located. The elements are:

The company uses environmental assets and resources, transforming them to give value to products or services marketed, and analyzes the results, which are fed back. This is a cyclical activity and is characterized by equifinality, as a company can achieve results from different initial states and using different transformation processes.

If the synergy is positive, the value of the whole is greater than the sum of its parts.

If the synergy is negative, the value of its separate parts may be greater than the whole.

3 - The Company's Functional Subsystems

• Procurement: Is in charge of decisions affecting purchases and storage of resources.
• Human Resources (HR): Is responsible for the selection of staff and keeping them motivated and trained.
• Finance: Makes financial decisions that relate to the allocation of financial resources, such as resource selection, remuneration, evaluation of investment projects, etc.
• R & D: Is responsible for research and development on materials, processes, or products to improve customers' needs.
• Commercial: Its function is to analyze and connect the company and its clients.