Business and businesses

The economic system is made up of people with basic needs that they must satisfy to survive.

A business organization is a firm, a company or a business that makes, buys or sells goods, or provides services, to make a profit.

Big business can refer to large business organisations or to any business activity that makes a lot of money.

Small companies are referred to as small businesses or small firms.

Businesses may be classified according to which industry they are in: for example, construction, oil, banking, food.

All the companies which make goods from raw materials or assemble components into finished products work in the manufacturing sector.

All the companies which provide services in areas such as tourism, banking and finance, communications, wholesale and retail trade work in the service sector.

Privately – owned and – run companies work in the private sector.

State – owned and – run organizations are in the public sector.

In unlimited liability companies the owners are personally and entirely liable for the debts of the company. In a limited liability company the owners are liable only for the amount of money they have invested in the business.

Unlimited liability companies are subdivided into sole traders (a type of business organization owned and run by one person) and partnerships (a firm run by two or more partners). Limited liability companies are subdivided into private limited companies and public limited companies.

There are different relationships companies can have with one another. A group is a number of subsidiary companies operating under one leading company known as the parent company. A subsidiary is a company that is half or wholly owned by another company.

A holding company is one that holds all, or more than half of, the stakes in one or more subsidiaries.

When two or more companies decide to work together, they form a joint venture.

As a rule companies join with or buy other companies in order to have better control of a particular market, to diversify their business. There are two types of takeover: a hostile takeover is a situation in which a company is bought out when the owners do not want to sell. A friendly takeover takes place when a company is willingly bought out.

The structure of organizations varies greatly according to the nature of the business. There are several factors which influence this structure:

s the number of locations and employees

s the economic sector etc

The company is run by a Board of Directors; each Director is in charge of a department. The Chairman of the Board is in overall control and may not be the head of any one department. The Board is responsible for policy decisions and strategy. The Managing Director is the head of the company, who has overall responsibility for the running of the business.

Most companies have Finance, Sales, Marketing, Production, Research and Development (R&D) and Personnel Departments.

Дата добавления: 2015-11-16