hard to imagine the modern world without the presence of its firms.The firm provides an extensive range of services and are one of the main features of the current economy.In this article we will look at what is firm: concept, classification of its features and basic functions.
First we need to understand the conceptual apparatus.In theory, the concept of the company is an independent entity in the economy, which is engaged in the commercial and industrial activity.Companies have their own, separate property.In economic theory, the firm does not have a clear definition, as in one of the concept may be a group of companies engaged in the production of goods or services.We describe several signs that reveal the concept of the company.
Firstly, the company - a unit of economic isolation.Secondly, the company - a legal entity, therefore it is legally independent.The company should have a budget and its own charter.Thirdly, the commercial organization has to perform useful social functions, such as the purchase of resources and the production of social goods based on them, which subsequently entered the market.Fourth, the company itself decides on its own development and other management aspects.The latest sign that reveals the concept of the company, is that the main purpose of any business organization is to minimize costs and the pursuit of profit maximization.
there is competition among the companies, which is implemented through an increase in sales and increase market share in the segment or the decrease in turnover through higher wages, better working conditions and other incentives and motivating staff.Also, companies need to come up with new strategies, especially in economic crisis periods, and create new types of services or goods.Another effective way of competing is to use new technologies.
concept of the company can not be considered without specifying its functions: commercial (marketing, networking with investors and suppliers), production (organization of production), financial (work with the finance company, the increase in profits and minimize costs), accounting (bookkeeping and statistical calculations of various indicators), administrative (control of the production process, business activity, management), social (to meet the demand of consumers, financial incentives and support staff).
in the literature can also find the concept of the enterprise.Firms and companies mean by a same market phenomenon characterizing any commercial organization that meets all of the above features and functions.
By economic activities of commercial companies can be divided into: transportation (international), industry (production of goods), shopping (purchases and sales), insurance and freight forwarding (shipping of goods to customers).
