Enterprise
The general terms for the
organizations that produce and sell goods and services are business, enterprise,
company, firm (US corporation). The word concern
is used mainly to refer to a large
organization.
An
enterprise is a property complex used for performing
entrepreneurial activity. It comprises
all types of property used for this activity
including:
1.
plots of land
2.
buildings and constructions,
highway transportation facilities and rail facilities
3.
equipment
4.
inventory
5.
raw materials
6.
products
7.
debts
8.
incorporeal rights (company name, trademark,
service mark).
The enterprise is an independent
economic entity based on professionally organized workforce,
capable of manufacturing products demanded by consumers using capital goods available.
So, it uses economic resources for producing goods and
rendering services for the purpose of
satisfying social needs. The enterprise is an institution which creates the
wealth of a country and from which this
wealth is distributed among all people in a society.
Regardless of its size, an enterprise, after it is registered by the state
authorities, opens an account with a bank and becomes legally
autonomous. Like people, enterprises bear certain names. Usually enterprises
are named after their owners ("Ford", "Christian Dior",
"Nina Ricci") or their names reflect the type of their economic
activity ("Molded!", "Gazprom", "General
Motors").
An immense amount of enterprises
in each country implies their classification according to the following
criteria:
1)
By type of primary profit-generating
activity enterprises are classified into: industrial,
agricultural, commercial, service, investment, insurance enterprises and others,
2) By the
source of origin of the registered capital enterprises are class! lied into:
a)
public enterprises - they are
owned by the government. They don't have the title to the property available,
but only exercise the control right;
b) private
enterprises - they belong to private individuals;
c)
mixed enterprises - they
contain both public and private capital. Here the government assigns the
patrimony to the enterprise which has the title to the property. The government
cannot freely dispose of the enterprise's property, it has the right to dispose
of the shares that belong to it in the enterprise;
d)
enterprises with foreign
investments - they can either belong entirely to a foreign
investor or have a mixed capital invested both by a foreigner and a national.
3) By number of employees enterprises are
classified into:
a)
small enterprises - they have
less than 100 employees;
b)
medium-sized enterprises - between 100
and 500 employees;
c)
large-scale enterprises - their staff
exceeds 500 employees.
This
classification differs from country to country: in our Republic, for example,
there are microenterprises (they employ less than 20 people),
small enterprises (they have 20 - 75 employees) and
large-scale enterprises (the number of their employees
exceeds 75 people).
4) By form of business ownership enterprises
may be:
a) sole
proprietorships;
b) partnerships;
c)
corporations.
5) By the objective of the
company's activity there are:
a)
commercial enterprises - these are
for-profit organizations which exist to earn and redistribute taxable wealth to
employees and shareholders. They are run for the benefit of their owners.
b)
non-commercial enterprises - these are
non-profit organizations (abbreviated as NPOs, also known as a not-for-profit
organizations). They do not distribute their surplus funds to owners or
shareholders, but instead use them to help pursue their goals. Examples of NPOs
include charities, trade unions, and educational and public arts organizations.
They are in most countries exempt from income and property taxation and exist
solely to provide programs and services that are of self-benefit.
Medium-sized
and large-scale enterprises usually have headquarters, branch offices and
subsidiary enterprises.
Headquarters
or head office is the location of the central administrative office of the
company or enterprise. It is an office where top management of the enterprise,
board of directors, secretariat and other important management departments are
located. The head office of a company deals with coordinating the regional
offices and developing the global strategy for running the business.
Branch
office (from Latin filialis) is an
economically autonomous subdivision of a legal entity which is situated
somewhere other than the firm's main office location and exercises all or any
part of the main office's functions including the functions of the regional
offices. Branch offices are not legal entities. They are vested by the legal
entities that have founded them, and operate on the basis
of the adopted regulations. Branch managers are appointed by the legal entity
and act on the power of attorney basis,
Subsidiary enterprise is an
enterprise set up as a legal entity by another enterprise called holding (the parent company or promoter) by means of transferring
part, of its property under the operating control of
the former. The promoter of the subsidiary enterprise
adopts the organization charter, appoints its manager and exercises another
kind of proprietary rights in relation to this subsidiary. So, the holding
is a "parent company" and subsidiaries are "sister
companies" to each other. Together, the holding and its subsidiaries
form a group (e.g. a newspaper
group). A large group is called a giant.
Generally, a
firm starts by producing one good or service, called core
business. As the company gets bigger, it also produces other different
products. A group containing a lot of different
companies in different businesses is a conglomerate (e.g. a media
conglomerate). As companies grow, they may also expand geographically. At
present, many companies are multinational with manufacturing plants and trading
locations in several countries
worldwide.
