Understanding Business Structures, Operations, and Key Elements

Posted on Jan 28, 2025 in Business Administration and Management (BAM)

Business Structures and Operations

Key Concepts

SMEs: Employment creation that meets market needs is often less attractive for large, medium, and small enterprises.

Operation: A system where a group of people work towards a common objective, maximizing their efforts by explaining the reason for its creation and determining a mission.

Company: A socio-economic organization for profit that coordinates working capital and directs production, performing a useful function while requiring the common good.

Entities: Organizations that seek to serve a purpose of a social character, such as foundations and mutual associations.

Integrated Elements of a Company

  • Economic Resources: Capital of the company, capital reserves, bank credits.
  • Assets: Items, materials, rights, and obligations of the company, including products and goods used.
    • Material: Machinery, building materials, tangible assets.
    • Immaterial: Intangible assets like patents, trademarks, and trade names.
  • Sector: Business activity in the marketplace.
  • Personnel: Individuals involved in organizing the company, providing technical services, and managing operations.
  • Providers: Suppliers of goods and services the company needs to ensure its operational activity.
  • Clients: A set of people seeking products or services in return for payment; sales and marketing efforts are directed towards them.

Company Creation

1. According to Activity

  • Industrial: The main activity is the production of goods; processed raw materials are:
    • Extractive: Exploitation of renewable and non-renewable resources (fishing, mining, timber – raw materials).
    • Manufacturing: Transforms raw materials into finished products.
    • Final Consumption: Producing goods to satisfy consumer brands (food, etc.).
    • Output: The final consumer meets machinery and chemicals.
  • Trade: Buying wholesale, retail, commissions.
  • Services: Provides transport services to the community (tourism, financial institutions, education, finance, health).

2. According to Legal Form

  • Sole Proprietorship: Owned by one person.
  • Corporate Business: Consists of several people (e.g., Anonymous Company, Limited Liability Company – SRL).

3. According to Size

  • SMEs: Small, medium, and large businesses.

4. According to Scope

  • Geographical region where the company’s business activity takes place: local, regional, national, multinational.

5. According to Capital Ownership

  • Public, private, and mixed.

6. According to Nationality

  • Domestic, foreign.

7. According to Commercialization Model

  • Through own business headquarters, office, or branch.
  • Achieved through a franchise.
  • Franchising: A production system that exploits the brand of an anonymous company.

Company Organization

  • Employer: Invests capital, is the principal shareholder, builds, and launches the company to the public.
  • General Manager: Guides and manages the integrated power of the company.
  • Head of Sector: Responsible for all departments or sectors.
  • Department Supervisor: Knows all the functions, is responsible for monitoring and enforcing departmental procedures.
  • SME Assistant: Develops the administrative tasks of the company.

Levels of Structure

  • Strategic Level
  • Direction or Planning Level
  • Execution or Operation Level

Enterprise Integration

  • Active Factors: Administration, customers, employees, financial sources, shareholders, suppliers.
  • Passive Factors: Raw materials, transportation, technology, knowledge, financial contacts.
  • Organization: Coordination and order of factors and areas.

Organizational Chart Example

General Manager

  • Production Sector: Logistics, factory, stock.

Financial Administration

  • Treasury, purchases, accounting, personnel, finance.

Marketing

  • Sales, sales management, marketing.

Department Functions

  • Sector: Production
    • Department: Stock or deposit, manufacturing, logistics.
    • Functions: Article encoding, the overall process of the product, product delivery at the destination.
  • Sector: Administration and Finance
    • Department: Purchasing, finance, personnel, treasury, accounting.
    • Duties: Billing, cash control, bank reconciliation, generating and recording in accounting books, hiring employees.
  • Sector: Communication
    • Department: Marketing, sales, sales management.
    • Functions: Advertising, promotions, invoicing, pricing, control of accounts.