Business, social and economic essence and organization

Essence of business. External and internal environment of business activity.

Entrepreneurship is an innovation, search of new possibilities and alternatives of economic development, overcoming of old stereotypes and borders.

Entrepreneurship is an economic activity of the subject with a purpose of receiving profit and special creative type of the managing, differing by innovation, finding of more and more effective ways of use of resources, openness to new prospects, readiness to run risks.

Proceeding from the following definitions it is possible to deduce the following specific signs of business:

1. the innovation, assumes introduction of new types of raw materials, advanced technologies, development of new sales markets etc.

2. economic freedom and independence of managing subjects

3. ability and readiness to risk

4. the motivation of business activity, that is the reason which induced to be engaged in this kind of activity.

In economic literature allocate two motives are allocated by which the person guided in founding of business activity: power and money.

One of the main agents of the market relations is the firm. In economic literature concepts "enterprise" and "firm" are used.

The enterprise - the one-profile production organized in the form of factory, a farm, shop which carries out specific functions on production and realization of the goods and services.

The firm - (versatile production) is the organization owning one or several enterprises and using resources for production of the goods and services for the purpose of receiving profit.

There are also such concepts as:"business" and "commerce".

Commerce is a type of business activity which assumes receiving profit by means of purchase and sale of the goods (production of the goods and services in this case it is not meant)

Business includes such concepts as:commerce and business, and also illegal kinds of activity includes concepts.

Economic activity of the enterprises proceeds in the conditions of interaction their internal and external environment.

The internal environment includes the purposes and tasks, the structure, applied technology and people on whom the success of economic activity of the enterprise depends. It is composed from the relations which are forming in the enterprise.

External environment includes interactions with suppliers, consumers, creditors, competitors, the state and public structures etc.

Classification of business activity

Business has the classification by various signs:

1. by the form and appointment:

– production entrepreneurship. These are: innovative, scientific and technical, information entrepreneurship, production of goods, rendering of services, production consumption of the goods, production consumption of services etc.

- commercial entrepreneurship. These are: trading, trading and purchasing business, commodity exchanges.

- financial entrepreneurship. These are: bank, insurance, auditor, leasing entrepreneurship, stock exchanges.

- advisory (consulting) entrepreneurship. These are: general management, administrative, financial management, personnel administration, marketing.

2. on forms of ownership:

- private entrepreneurship

- state entrepreneurship

- municipal entrepreneurship

- property of public organizations

3. by number of owners:

- individual entrepreneurship

- collective entrepreneurship

4.According to organizational and economic forms of business activity:

- the concern is the diversified joint-stock company supervising the enterprise through system of participation. The concern gets the control pact of actions stocks of the affiliated companies

- association - soft firm of voluntary association of economically independent enterprises which can enter at the same time other organizations. The purpose of creation of association is the joint solution of scientific and technical, production, economic, social tasks.

- a consortium is an association of businessmen with a purpose of joint carrying out large financial deal. Such association allows to invest means in a large project.

Syndicate is an association of sale of production by businessmen of one branch for exception competition between them.

Cartel is an association or the agreement between businessmen of one branch about the prices for production, services, the section of sales markets, shares in the general production.

5.According to organizational and legal forms:

1. full associations, being the legal entity, can not have the charter and constituent document for is the contract of founders. Any participant participates in economic circulation on behalf of association, but obligations are distributed for all companions. The capital of this association is joint, it means that at association elimination each of participants can receive the share in a natural form (if there are no debts).

2.T he general partnership includes two types of companions:

- valid member

- member s-investors who make their contribution into property and don't bear liability for debts of this association, and risk only by their contribution. The constituent document is the contract of founders.

3.Joint-stock company: opened and closed. In joint-stock company all authorized capital is divided into a certain number of stocks, in open joint stock companies shares are distributed among an unlimited circle of people. The participant doesn't answer for obligations and bear risk of losses only within cost of his stocks. The supreme body of management is general shareholder meeting.

4.Association with limited responsibility - can have one founder, the number of participants is limited. The authorized capital is distributed on shares, this capital isn't a property of participants, and becomes a society property. The supreme body of management - general meeting of participants. The exit from society is free, each participant can leave society at any time irrespective of a consent of other participants.

5.Society with additional responsibility –is a version of a limited liability company, but differs that the number of participants isn't limited and participants can be involved into addition responsibility for satisfaction of requirements of the credits.

6.The production cooperative is a voluntary association of citizens (not less than 5) for joint economic activity which is based on a personal labor contribution and joining of property contributions. The property is divided on shares of his members, by the time of registration each member should pay 10 % of a share, the rest - within a year. Members of cooperative bear additional liability for debts of cooperative at a shortcoming of public means. Difference of association from cooperative that members of cooperative are obliged to participate by their personal labor in its activity. Each member has the right to vote and doesn't depend on the size of a contribution, and the income of cooperative is distributed between participants in proportion to a labor contribution.

7.State and municipal unitary enterprises. They aren't owners of property which they dispose. Such enterprises can be created with the right of economic maintaining and with the right of an operational management.

8.The consumer cooperative –is a voluntary association on the basis of membership for the purpose of satisfaction of material and other needs of participants by joining shares, it doesn't assume obligatory personal participation in affairs.

9.The public and religious organizations are a voluntary association on the basis of a community of interests for satisfaction of spiritual and other non-material needs. They can be created only by individuals. The individuals participating in creation of these organizations have no liability rights, property benefits.

10.Funds are the organizations which do not have memberships, founded on the basis of voluntary contributions, pursue the socially useful aims. All property which founders transferred to fund at the moment of creation, belongs only to fund therefore founders should be trusted fund governing bodies. Funds are obliged to conduct the activity publicly. They can be created both physical and legal entities. They can be liquidated only in a judicial order.

11.Establishments(institutions) - are created for the purpose of implementation of the administrative, socio-cultural and other functions financed by the founder. Establishments are various bodies of the public and municipal administration. They are in complete financing of the owner, and all expenses on their activity are carried out according to the estimate, founded by the owner.

12.The unions and the associations are organizations created on the contract for protection of common interests and with a aim of coordination. They are created by legal entities, either only commercial, or only noncommercial, their simultaneous participation is forbidden. The enterprises participating in association, do it on a voluntary basis, and the association hasn't the right to interfere in economic activity of the enterprises.

Control questions:

1. What concepts does economy include?

2. What is enterprise or firm?

3. What are the forms of ownership?

4. What is Joint-stock company?

Сабақ 8

Дата добавления: 2015-08-20