Main types of enterprises. What companies are there? What kind of enterprises can there be?
| Parameter name | Meaning |
| Article topic: | Types of companies. |
| Rubric (thematic category) | Production |
Firm in a market economy.
Lectures No. 5. Firm in the system of market relations
Lecture outline:
1. Firm in a market economy
2. Types of companies
3. Joint-stock companies and features of their functioning
In market conditions, an enterprise—a firm—is a primary, independent subject of economic activity. Some own raw materials, others - means of production, others - capital, others - labor resources, and others - have the gift of entrepreneurship.
Firm - ϶ᴛᴏ institutional formation in a market economy, designed to coordinate the decisions of the owners of factors of production or production resources. Coles 1937 posed this question and tried to answer it. In a market economy, coordination between firms is carried out by the market based on the mechanism of supply and demand. The market forces action to achieve the benefit of the entire society. Market coordination does not cost society free, but requires certain transaction costs:
1. Costs of searching for information
2. Negotiation
3. Legal support, contract compliance and protection
Firms are cutting costs. When hiring a person for a job, an employment contract is concluded within the framework of a market economy, on the basis of market relations, but market relations do not operate within the company. The “invisible hand” of the market is being replaced by managerial leadership. Firms arise on the high cost of market relations, and administrative coordination within small, medium-sized firms turns out to be cheaper. Transaction costs also exist within the company - they are primarily associated with the requirement of forecasting, stimulation, control, and as the company grows, these costs increase very quickly. With very rapid growth of a company, the costs of creating a company exceed the profits. The optimal size of a firm is one in which transaction costs will be minimal. If this is not achieved, the company is too small, then administrative coordination is preferable to market coordination. Combine these firms until the optimal point is passed.
The size depends not only on coordination, but also on the owner of the company.
In this regard, all enterprises are divided into the following components:
1. Private commercial enterprises. The main goal is to make a profit.
2. Private non-profit enterprises. Enterprises that do not have profit as their main goal. Making a profit is a related goal. Enterprises do not have the right to distribute profits received among their managers, only for statutory activities. These are usually public organizations, religious, etc. Very often, such enterprises take the form of hospitals and recreation centers.
3. State enterprises. Can be both commercial and non-commercial. As a rule, the activities of such enterprises are determined by political decisions and not by the market. In a market economy, most goods and services are produced by private and commercial enterprises.
Private and commercial enterprises can take the following forms:
A) individual enterprise - created by a citizen without education as a legal entity. B) As a rule, such an entrepreneur is liable with all his property.
C) Full partnership - engaged in entrepreneurial activities and bear joint and several liability.
D) Command partnership is a partnership of faith. He is responsible for losses within the limits of his contribution.
D) Limited liability company - a company with a charter, which is divided into shares. The participants of the company are not liable for its obligations and bear the risk of losses only within the value of their contributions. One of the safest entities of the enterprise.
E) Joint-stock company - the authorized capital is divided into shares and participants (shareholders) bear the risk of losses only within the limits of their contributions.
G) Production cooperative - an association of citizens to conduct economic activities based on their personal action on the pooling of their field contributions.
4. Mixed enterprises (public-private)
Types of companies. - concept and types. Classification and features of the category "Types of companies." 2017, 2018.
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The main economic agent of a market economy is the firm. A company is any organizational and economic unit that carries out business activities, pursues commercial goals and enjoys the rights of a legal entity. In the western... .
Today there are a huge number of types of enterprises. The difficulty in determining the types of enterprises is added by the fact that they cannot be classified according to only one criterion. In this article we will look at the classification, characteristics and types of enterprise. But first, let's figure out what is meant by the word “enterprise”?
Enterprise concept
Any company, which produces and sells its products and provides services, is an independent economic entity. As a rule, it has the status of a legal entity, has its own bank accounts, its own reporting system, and brand. Enterprises are created to make a profit by satisfying the demand for goods and services. The better the market conditions are taken into account when creating an enterprise, the greater its chances of being successful.
Areas of activity of enterprises
At all stages of its development, each enterprise is engaged in various activities. The production activity of an enterprise ultimately aims to obtain maximum profit.
- Marketing. Only studying and understanding the laws of the market will allow an organization to be effective.
- Production. This is the main activity of the enterprise for the production of competitive products.
- Material and technical supplies. Inattention to this activity can result in downtime, untimely mandatory payments, etc.
- Economic activity. Issues of accounting, pricing, and planning are very important, since they form an effective enterprise at the planning stage.
- commercial activity carried out by the enterprise on the market. Issues of selling goods, services, and effective advertising are also very important, since they allow you to get maximum revenue from the sale of manufactured products.
- Service maintenance.
- Scientific and technical activities allows you to keep up with the times, modernize, optimize production.
- Social issues. This area of the enterprise’s activity involves investing in the human factor, and pays off in full in the form of increased labor productivity.
Company structure
The structure of the enterprise is directly related to the scale of production and the complexity of the technological process. A complex, multi-operational technological process requires a more branched structure.
The standard enterprise scheme provides:
- Main workshops. They directly manufacture products intended for sale.
- Auxiliary workshops. These structural divisions serving the main production are engaged in the manufacture and repair of tooling, equipment, storage of purchased components, raw materials, and finished products.
- Functional departments. These include, for example, control and measurement laboratories.
- Governing bodies.
In a market economy, every enterprise must strive to be efficient, in other words, to receive maximum profits with minimal production costs. In addition, it must be financially stable and make mandatory payments at any time. Activities must be planned and carried out in such a way that the enterprise is profitable and profitable.
Types of enterprises
Types of enterprises by type of ownership
There is also a classification of enterprises by type of ownership.
- State. These are enterprises whose capital is fully or partially (more than 50%) owned by the state. These include those enterprises that are controlled by government agencies.
- Private. Independent, separate structures, or included in associations, as their constituent units. These also include an enterprise whose capital is partially in state ownership, but does not exceed fifty percent.
- Mixed. They are based on the principle of combining the property of different owners, and are significantly widespread.
Various cooperative, individual, collective, joint and other types of enterprises are varieties of the above.
Types of enterprises by scale of activity
- Individual. Such a structure belongs to one owner, is managed by him alone, and the income goes to his personal disposal. An individual enterprise has a number of advantages: speed of opening, organization, and liquidation; independent decision making; simple reporting scheme. Disadvantages include the extension of property liability to personal property.
- Collective. The workforce of such an enterprise is its owner, and all profits are at its disposal. The company operates on the principle of full commercial settlement in conditions of complete self-government. Such an enterprise can have any form: plant, factory, workshop.
Types of enterprises by organizational and legal form
In this case, enterprises are distributed according to the form of organization of activity, legally established.
- Business partnerships. These are associations of entrepreneurs who actively participate in the activities of the partnership and have shares in its share capital. The activities of such a society are based on personal relationships of trust. You can be the founder of one partnership.
- Business societies. Participants in a business company are not required to participate in its activities; they simply pool capital. Profit is divided in proportion to shares in capital. Members of a society can participate in several societies through their contributions.
- Unitary state, municipal. Organizations that have the right to economic activity without having ownership rights to the property that is assigned to it by the owner. In fact, unitary organizations are engaged in operational management.
- Cooperatives. It is a collective, autonomous, joint venture created by a group of individuals to meet the needs of funds.
Types of enterprises by industry
Enterprises are divided according to industry
- Industrial.
- Agricultural.
- Transport.
- Construction.
- Telecommunications.
All these sectors of the national economy are very important, and accordingly, the enterprises operating in them are one of the most important components of the entire market as a whole.
Types of enterprise associations
The merger of enterprises usually involves the merger of capital and production facilities in order to increase the efficiency of their activities, capture a larger market segment, and maximize profitability. Some associations have a large share of state capital.
- Associations. They may include, on a voluntary basis, enterprises, scientific organizations, design bureaus, construction enterprises, etc. The main task is coordination of activities.
- Syndicates. Usually created by enterprises in the extractive industries for the purpose of coordinated sales of products.
- Corporations. Associations with central management of economic activities.
- Consortia, are created temporarily to solve specific problems or implement a large project.
- Concerns– associations of enterprises with financial control of one or more entrepreneurs.
An industry is an enterprise with common characteristics, and a country's economy is its industry. Thus, the basis of the country’s economy is enterprises and their economic activities.
There is probably no person who has not encountered such a concept as an organization in his life. Any human activity is carried out in one way or another in organizations. Each of them has its own rules, appearance, discipline, goals, and objectives. They develop dynamically, follow their goals, and use resources efficiently. And vice versa, they cease to exist if they do not cope with the assigned tasks.
Topic: Firm and its types.
Goals: study the economic nature of the company and learn to distinguish some forms of entrepreneurial activity from others based on the main criteria;
To promote the development of economic thinking among students;
To promote awareness of one’s role in the economic life of the country.
DURING THE CLASSES
I . Org moment.
And I want to start the lesson with words.Slide
“The impression of the company is created by the client
on the first phone call to her.”
(Japanese management principle).
I think you guessed what we will talk about in today's lesson.
That's right - “The company and its types.”
This lesson is within the framework of the topic: “Organizational and legal forms of entrepreneurial activity.”
It is advisable to spend any period of time usefully.
Therefore, today's lesson should not be an exception.
Today we will study:
What types of companies are there, how to create a company yourself.
Let's learn to distinguish between types of companies, their advantages and disadvantages.
Let's conduct a business game “Our Company”.
Initially, the word “FIRM” comes from the Italian signature, which meant the trade name of a merchant, businessman. The company has changed significantly over a long period of development of market relations. Today it is….. Slide
Firm – a commercial organization that acquires factors of production for the purpose of creating and selling goods and making a profit on this basis And.
Guys, what do you think firms are for?
You see, your opinions are divided.
It turns out that the answer to the question “Why is a company created?” - depends on who asks it: a buyer, an entrepreneur or an economist.
From point of view buyer, The firm is needed to supply the market with goods that are in demand.
From point of view entrepreneur, the company is created in order to bring him income in the form of profit,increase in turnover, increase in revenue, reduction in costs, increase in market share, improvement in product quality.
The essence of a company can be seen more clearly and distinctly through an analysis of the functions it performs in a market economy.
Slide
Functions of the company.
As we can see from the schematic diagram, the company has several functions:
Accumulation of resources.
Any company, before embarking directly on the process of creating goods, is forced to first purchase the resources necessary for it - factors of production. When choosing resources, the company strives to acquire them at an affordable price, and then to use the resources with maximum efficiency.
Organization of production.
The production organization function includes:
The procedure for the company to select the appropriate technology,
Selection of an effective employee incentive system.
Sales organization.
Manufactured products must be delivered to customers. This process can be organized by the company itself through the creation of its own sales network or transferred to specialized organizations: stores or shopping centers.
Receiving a profit.
Any company aims to make a profit as one of the important criteria for successful activities and sources of investment. However, the company must always be prepared for possible risks, loss of profit, and losses.
Despite the huge variety of operating companies, three main organizational forms of enterprises can be distinguished.
Slide
TYPES OF COMPANIES
Individual companies
Individual companies - private enterprise,
who conducts business at his own expense, is personally involved in management,
makes decisions independently and bears unlimited liability with all his property.
Partnership – commercial organizations with authorized capital divided into shares (contributions) of founders (participants).
Joint stock companies – a commercial organization whose authorized capital is divided into a certain number of shares certifying the obligatory rights of company participants (shareholders) in relation to the company.
OOO - a business company established by one or more legal entities and/or individuals, the authorized capital of which is divided into shares; The participants of the company are not liable for its obligations and bear the risk of losses associated with the activities of the company, within the value of their shares in the authorized capital of the company.
Thus we see that As a rule, the forms of business organization are predetermined by its size. Thus, small and medium-sized enterprises are organized and operate in the form of individual firms or partnerships.
Most giant companies operate in the form of joint stock companies.
Now let's think and say which form of entrepreneurial activity is better.
Each type of company has its own advantages and disadvantages.
I suggest you work in an economic laboratory.
You have forms - tables in the appropriate columns of which you must enter the numbers of characteristics, i.e., the disadvantages and advantages of different types of companies. Slide
“Advantages and disadvantages of different types of firms.”
Type of companyAdvantages
Flaws
Individual company
1, 2, 3,11
4. The owner is his own boss;
4, 5
Partnership
1, 6, 10
1. Simplicity of organization (institution, management, etc.);
2. Specialization in management;
3. Possibility of combining financial resources of several persons;
4, 5
1.Limited financial and material resources (associated both with the lack of funds of the company’s own and with the difficulty of obtaining money from outside);
2.Unlimited liability;
Joint-Stock Company
6, 7, 8, 10
1. Specialization in management;
2.Quick attraction of additional financial resources;
3.Limited liability;
5. Possibility of combining financial resources of several persons;
9, 12, 13
1. Possible abuse as a result of separation of ownership and management functions;
2. You can lose control over the company while remaining its owner;
3. The relative complexity of establishment and registration.
Signs:
1. Simplicity of organization (institution, management, etc.);
2.Freedom of action (there is no need to agree on decision making);
3.Strong economic motivation (receipt of all profits by one person);
4.Limited financial and material resources (associated both with the lack of funds of the company’s own and with the difficulty of obtaining money from outside);
5.Unlimited liability;
6. Specialization in management;
7.Quick attraction of additional financial resources;
8.Limited liability;
9. Possible abuse as a result of separation of ownership and management functions;
10. Possibility of combining financial resources of several persons;
11. The owner is his own master;
12. You can lose control over the company while remaining its owner;
13. Relative complexity of establishment and registration.
So, guys, I hope we work in complete trust, so I propose to do a self-test: compare your result with the result on the screen, and raise your hand if you have the most answers.
Well done! This means that you understand well what advantages and disadvantages this or that type of entrepreneurial activity has, and at this stage of the lesson I am pleased with you.
Slide
III . Consolidation.
Now is the time to put the acquired knowledge into practice.
V.V. Putin, in his address to the Federal Assembly, paid great attention to the development of small and medium-sized businesses. He talked about his problems, including the problems that officials of municipal organizations at various levels and tax authorities create for him. But small and medium-sized businesses help improve the well-being of the country’s population: they provide jobs, taxes, and solve many social problems: drug addiction, alcoholism, etc.
What would you suggest for creating small and medium-sized businesses? What sectors of the economy are waiting for your proposals? Proposals from the younger generation. Our class is divided into teams.
I suggest that each team brainstorm and try to create (theoretically, of course) their own companies.
Working in a team, you will be able to enrich yourself with knowledge from each other, not miss anything, and consolidate your knowledge about creating companies.
And so, ladies and gentlemen! You have the opportunity to create your own company, organize your own business. After all, many sectors of the economy do not require large initial capital (agriculture, services, trade, etc.) Here you can try your hand at it.
But for a company to begin its existence, it needs to obtain a license to carry out its activities.
Slide
License - This is a permit issued by the state for the right to conduct a particular economic activity.
Slide
To obtain a license, you must answer the following licensing questions:
The main purpose of creating a company?
What types of companies do you know?
What are economic resources?
Where can I get initial capital?
Licenses are issued.
For the final answer, you need to fill out the project form and defend the project.
Slide
Project registration form
Company name ______________________________
Legal form of organization of activities ___________________
Field of activity _________________________________________
Formation of initial capital __________________________
Economic resources _____________________________________
Expected Result ____________________
The floor is given to the students.
I V. Result: To summarize our lesson, I think you can now independently navigate the types of entrepreneurial activities. And maybe one of you will become a successful entrepreneur. Moreover, in our region there are all the opportunities for this. These include programs to support young entrepreneurs, preferential taxation, etc.
All projects are valuable to us. I would like them to have their own development.
VI. Reflection.
Is it practically possible to create in our region the companies whose projects we heard today? Slide
V. Homework: § 35.
Optional: write an economic essay “Me and my company” and I think the teacher will appreciate your work.
a) classification of firms in terms of production concentration;
b) classification of firms from an organizational and legal point of view.
3. Production function and its types.
a) production with one variable factor;
b) production with two variable factors.
Question 1. Concept and economic nature of the company.
In the most general form, under A firm is understood as an economic entity that is engaged in production activities and has economic independence (in making decisions about what, how and in what volume to produce, where, to whom and at what price to sell its products).
Firms play a key role in a market economy:
production activities are mainly carried out by firms. The firm converts inputs into final products. It optimizes the volume of production in its own interests, determining the structure and size of the output of finished products;
the firm is the main consumer of resources. It purchases capital resources - raw materials, materials, equipment; land is rented or purchased; workers are hired;
the size and number of firms operating in the industry determines and dictates the structure of the market and the degree of its competitiveness;
The activities of firms largely determine the overall efficiency of a market economy. The degree of efficiency of an economy is determined by the degree of efficiency of firms.
With a certain degree of convention, we can distinguish four main aspects of the nature of a company and, accordingly, four approaches to analyzing its activities.
The company is commercial, i.e. profit-oriented organization. From this point of view, it can be characterized by a definition familiar to us: a firm is an organization that concentrates and uses resources to produce goods and (or) services for the purpose of making a profit.
The company is a team of workers organizationally capable of solving the tasks assigned to it. From this position, the company acts as a system of relationships in which the company's goals are transformed into specific actions of individual employees and entire departments.
The firm is an association of independent market entities pursuing mutually agreed upon goals. From this point of view, the company can be considered as a compromise of the interests of all its participants, from owners and top managers down to ordinary employees.
The firm is a viable market institution. In this regard, the firm manifests itself as a system of contracts that ensures the minimization of transaction costs, i.e. as a form of doing business that is most adapted to market conditions.
In a real firm, all four aspects of its nature coexist and either mutually complement each other or mutually interfere with each other.
A firm in an economy performs a number of functions:
the firm achieves the economies of scale production. In modern conditions, efficient production requires specialized equipment and production buildings, assembly lines and the division of labor into many small operations. This cannot be done spontaneously, without an organization within which specialists will coordinate and ensure the continuity of the production process;
the firm mobilizes resources for large-scale production. In today's private enterprise economy, most of the money needed to carry out production is drawn from corporate profits or from financial markets in the form of loans. Effective private enterprise would be unthinkable if corporations did not find billions of dollars annually for new projects;
Only within the company (hierarchical organization) is it possible to manage the production process. A manager is a person who organizes production, develops new ideas, creates new products and processes, makes business decisions and evaluates business results.
In a certain sense, the firm as a hierarchical organization contradicts the spontaneity of the market. The market presupposes the isolation of the means of production, the firm presupposes their concentration. In market conditions, indirect methods of control dominate; in a company, direct methods prevail. The market excludes dictate; it is based on economic incentives; the company, on the contrary, assumes unity of command and is based on administrative methods of management.
This contradiction was resolved in the theory of R. Coase and O. Williamson, thanks to which in modern neo-institutional theory under a firm is understood as a coalition of owners of production factors interconnected by a network of contracts, as a result of which transaction costs are minimized(transaction costs). The modern company is based on implicit contract (this is a long-term mutually beneficial contract in which informal conditions prevail over formal ones) between the owners interspecific resources (mutually complementary, mutually unique resources that are effective only in a given company) regarding their use.
This interpretation of the nature of the firm allows us to explain the variety of forms of modern firms.
Firm- a production cell, which is a group of enterprises or an enterprise, company, economic organization pursuing commercial goals in its activities.
There are 4 main types of companies:
1. INDIVIDUAL COMPANIES ( The simplest, oldest and most common form of economic organization is a firm owned by one person who bears full responsibility for the results of its activities and has the right to receive all profits).
The owner of the company manages it, manages it himself or hires a manager and has the right to all net profit, i.e. profit after taxes and other obligatory payments. But he also bears full responsibility for the losses.
How a company will act in the market, what its results will be depends not only on the size of the company (the amount of resources used), but also on who in the company makes decisions, what goals it pursues and what responsibility it bears. In this regard, all enterprises in a market economy can be divided into:
a) private commercial enterprises;
b) private non-profit enterprises;
c) state enterprises;
d) mixed (private-state) enterprises.
Private commercial enterprises(organizations) are firms that pursue profit as the main goal of their activities. The activities of such enterprises are determined by the market.
Private non-profit (non-profit) enterprises (organizations)– enterprises that do not pursue profit as the main goal of their activities. The latter does not mean that such enterprises cannot make a profit at all. They are created to satisfy some social needs, and their extraction of profit is interpreted by law, not as the main, but as an accompanying goal. At the same time, unlike commercial firms, non-profit enterprises do not have the right to distribute profits among their founders. Private non-profit enterprises are consumer cooperatives, public and religious organizations, charitable foundations, etc. Often, educational and medical institutions, recreation centers, etc. operate in the form of such enterprises.
State enterprises can be either commercial or non-commercial. Typically, the activities of such enterprises are determined by political decisions rather than by the market.
2.PARTNERSHIP ( A partnership is a company that belongs to several owners who invest their funds (shares) in it, receive profits and bear some degree of responsibility for losses).
There are three types of partnership:
1. General partnership Each member of which is responsible for the obligations of the company with his own property, regardless of the size of the share. General partnerships are primarily common among companies that provide legal, accounting, and other services.
2.Limited liability company (LLC) A partnership in which the personal property of the participants is inviolable, regardless of the financial condition of the company. Its owners in bankruptcy lose only the money that they invested in the capital of the company and are not responsible for its debts with property. This form of business organization involves less risk for participants than a general partnership. It has become widespread in the retail and service industries.
3.Limited partnership (limited partnership) A partnership, some of whose members bear full liability for the obligations of the company, and some - limited liability within the limits of their share. In it, along with the main participants (“general partners”), there are “non-principal” (“investors”), who bear limited liability in the amount of their share.
3.COOPERATIVES AND ARTELS ( They usually unite small producers )
Cooperative-an economic enterprise based on joint activities and mutual assistance of members of the cooperative. The property of the cooperative is divided into shares, but members of the cooperative usually make their personal labor contribution to its activities. Cooperatives are especially common in rural areas. The cooperative belongs to all its members, each of whom has one vote at the meeting of shareholders, where all major issues are resolved. Income is distributed among shareholders based on who donated how much product to the cooperative. The main feature of cooperatives is that decisions are made on the basis of equal voting, regardless of the contribution of each participant to the common cause. The cooperative form is suitable for uniting participants with equal property and labor contributions.)
4. JOINT STOCK COMPANIES OR CORPORATIONS
Joint-Stock Company- a company owned by shareholders. The capital of a joint stock company is formed through the issue and sale of shares - special documents confirming that their owner is one of the owners of the company and has the right to receive part of its profits – dividend(part of the profit that is distributed annually to shareholders).
Thus, the owners of a corporation are all the owners of its shares (shareholders). Becoming a shareholder is simple: just buy at least one share of the corporation, and you will be included in the list of its owners. It is also easy to leave the shareholders: just sell your shares on the market. Each share gives its owner one vote at a meeting of shareholders, except for preferred shares. The owner of such a share does not have the right to vote. But he does not take risks because he is paid a constant amount of income each year, while the owner of an ordinary share takes risks along with the corporation: his dividend depends on its profits. When business is going well, the owner of a common stock receives more than the owner of a preferred stock, but when the company suffers losses, dividends are not paid on common shares, and the same income continues to be paid on preferred shares as before. The number of shares that gives the ability to manage a corporation is called a controlling interest. Controlling stake - the number of shares that gives the opportunity to manage a joint stock company. In addition to shares, joint stock companies issue and sell other securities - bonds(a security that is a debt obligation of a company or the State Treasury). A bond is something like a promissory note printed in large numbers. The owner of the bond is not the owner of the joint stock company and cannot take part in its management, but its creditor: he will receive his money even if the company makes no profit and does not pay dividends. If a company goes bankrupt and its assets are sold, bondholders and other creditors will be paid first, and stockholders will receive money last, and not necessarily. But the owner of the bond has nothing to do with the management of the corporation and cannot claim an amount greater than that indicated on the bond.
