The concept, types and forms of enterprise

Entrepreneurship is one of the most important mechanisms of a market economy. If you follow the letter of the law, only private individuals and legal entities registered by the state can conduct business. A particularly important role in the economy is played by commercial organizations - enterprises. It is they who produce the bulk of goods and services, create jobs, form the standards of society.

Enterprise as a way of organizing business

Entrepreneurial activity is the activity that business entities carry out at their own risk while maintaining independence. Such activities are aimed at the systematic profit-making from the provision of services, the sale of products, the performance of various types of work, as well as the use of property. The subject of entrepreneurial activity may be a person who is registered in this capacity in accordance with the law. The income received from entrepreneurial activity is called profit.

In Russia, entrepreneurial people are often called businessmen. However, in domestic law this epithet of American origin was not found. Its replacement was the term "entrepreneur."

If a business opens an individual, it becomes an individual entrepreneur. An enterprise (firm, company) will be considered a legal entity conducting business. In any case, the basis of such an activity is the entrepreneurial ability of a person opening his own business. Being an independent participant in market relations, the enterprise acts in economic relations on its own behalf and bears property responsibility for a number of obligations.

Types of enterprises and signs of entrepreneurial activity

Individuals and legal entities are entitled to engage in various types of entrepreneurship. Entrepreneurship may be:

• commercial;

• production;

• innovative;

• financial.

Often in the press you can find various names of legal entities engaged in entrepreneurial activity: a company, a company, an enterprise, an organization, a corporation, etc. It must be remembered that in the most general sense, an enterprise is understood as an independent business entity that produces products, services, and works with the goal of making a profit and satisfying the needs of society.

One of the essential features of the enterprise can be expressed by the concept of “property complex”. This is the name of immovable and movable property, which together form a single whole. This complex should be used for a specific technological or production purpose. Elements of the property complex can be land, buildings and structures, equipment, aircraft, space and sea vessels. Separately, intangible assets are taken into account in the property complex of an enterprise, which may include trademarks, licenses, copyrights, and the like.

In most cases, an enterprise is formed as a commercial organization, although in some cases, non-profit organizations may conduct business. A synonym for the concept of "commercial organization" can serve as the concept of "company", "company", "corporation". The differences between them are determined by the peculiarities of the legislation of individual countries. In most cases, it would be incorrect to name the company a subsidiary or affiliate. And the factory may well be called a company. A corporation is an association of legal entities or individuals, which usually takes the form of a joint stock company and is usually managed by the board of directors.

The role of enterprises in the economy

The enterprise in the modern economy is becoming the main consumer of resources, acquiring raw materials, materials, components, parts, components. Another function of the enterprise, which determines its role in the economy, is that it is a supplier of goods, work, services in the same market.

The primary goal of any business is to make a profit. For this, it is necessary to identify social need, find a way to satisfy it and offer consumers products that can fulfill this task. Engaged in the production and marketing of products, enterprises have to conquer and hold some market share, increase profitability, optimize costs, and take care of building their business reputation. Western business models presuppose that the enterprise has a special mission, which prescribes the meaning of the creation and existence of a commercial organization. The philosophy of an enterprise is usually to bring into the world something that has value and unconditional usefulness.

Functional Subsystems

Product creation is provided by the production unit of the company. Sales and marketing structures of the enterprise are responsible for the sale of finished products on the market. In general, an industrial enterprise has three main subsystems with independent functions. These include:

• supply system;

• production system;

• sales system.

Supply is responsible for acquiring the resources that production needs. The latter, in turn, makes changes to resources so that they turn into finished products. The product is marketed and delivered to the final consumer by the sales organization.

Classification and forms of enterprises

Enterprises operating in a market economy vary in size, by affiliation with the industry, by the features of doing business, as well as by legal form. In Russia, the classification of enterprises in terms of their organization is enshrined in law. However, other forms of classification are quite possible.

According to the objectives of activity, all organizations that have the right to conduct business are divided into:

• commercial;

• non-profit.

In terms of industry affiliation, there are enterprises of labor-intensive industries (for example, in the service sector); enterprises of capital-intensive industries (this includes engineering, mining); knowledge-intensive industries (for example, information technology companies).

Depending on the form of ownership, enterprises are distinguished:

• state;

• individual;

• private

• collective;

• joint.

By the scale of activity, enterprises are traditionally divided into small, medium, large. The largest sustainability and viability are large enterprises that are able to control a significant market share. Transnational corporations enjoy special advantages in the market, many of which have branches in different parts of the world. Small enterprises are more flexible and relatively easy to establish or close. Such firms are easier to adapt to the ever-changing conditions of economic activity; they are much more mobile in terms of management.

The advantage of large enterprises lies in the fact that they have the opportunity to spend money on experimental design and research work, which allows them to obtain special competitive advantages and produce products of better quality. However, these advantages of large-scale enterprises have their own borders, when passing through which the unity of production activity and the production management system may well be violated.