Core Concepts of Business and Enterprise Management
Elements of a Company
An Organization is a collective unit (e.g., corporation, institution) or a single entity formed by one person (usually the owner).
Human Elements refer to the individuals who work for and/or invest in the company’s development.
Material Goods are all tangible assets owned by the company, such as facilities, offices, and furniture.
The Land, composed of natural assets, refers to the natural resources utilized in the production of goods or services by a specific company.
Work consists of professional services performed by individuals within the company, ranging from management and administration to direct product manufacturing.
Capital consists of financial resources and tangible property, including both movable assets (e.g., tools, machinery) and fixed assets (e.g., buildings, premises, land). This also encompasses the technology employed.
Types of Businesses
By Purpose
- Private Company: Capital is held by private shareholders (e.g., family businesses).
- Public Company: Capital and control are primarily held by the state.
- Joint Venture: Capital or control is shared between state, private, or community entities.
By Business Activity
Industrial Businesses
Their primary activity involves the production of goods through the transformation of raw materials or extraction of natural resources.
Manufacturing
Companies that transform raw materials into finished products.
Commercial Businesses
These businesses act as intermediaries between producers and consumers, with their primary function being the purchase and sale of finished products. They can be classified into:
- Wholesalers: Sell products on a large scale to other businesses.
- Retailers: Sell products directly to the end consumer.
- Brokers: Facilitate sales of goods they do not own, often on consignment.
Service Businesses
These businesses provide services to the community and can be classified as:
- Transportation
- Tourism
- Financial Institutions
- Utilities (energy, water, communications)
- Private services (consulting, sales, advertising, accounting, administrative)
By Legal Form
Common legal forms include: Companies, Corporations, Foundations, and Limited Liability Companies.
The Entrepreneur
An entrepreneur refers to an individual or a group who sets goals, makes strategic decisions regarding the objectives, resources, management, and control of commercial enterprises, and assumes legal responsibility towards stakeholders and those affected by their operations.
Mission, Vision, and Business Objectives
Vision
The vision defines the company’s desired future state. It is a viable, realistic, and measurable aspiration that provides a clear picture of the desired future, inspiring organizational members to achieve it.
Mission
The mission defines the company’s present purpose and its fundamental reason for existence as an organization.
Objectives
These are guiding principles that provide direction to the company, describing desired future outcomes. They are closely related to the organization’s vision.
Foresight and Planning
Foresight involves anticipating the future and preparing for it. This includes developing collaborative action programs.
General Business Principles
Predictability
- Apply appropriate methods for determining relevant factors.
- Conduct an analytical study of each factor to anticipate future developments.
- Utilize research tools consistent with the phenomenon under investigation.
Objectivity
Maintain objectivity when making findings on research elements.
Measurement
The more information available, the higher the likelihood of accuracy. Statistical studies provide a technical and scientific basis, allowing for the mathematical determination of trends.