A business is an economic and social structure that brings together the human, material, intangible (service) and financial, which are combined in an organized way to provide goods or services to customers in a competitive environment (the market ) or non-competitive (the monopoly ) with a goal of profitability. A company is usually a legal structure: a society - anonymous , stock , limited liability , cooperative , etc..

Summary 1 The Contractor 2 Type and legal status 2.1 Classification by economic sector (determined by their main activity) 2.2 Classification by size and economic impact 2.3 Classification by branch and sector of activity (INSEE classification) 2.4 Classification by legal 2.5 Other cross-classification 2.6 The legal status in France 2.6.1 The sole proprietorship 2.6.2 The Business Corporations 3 Goals 3.1 General objectives 3.2 Research benefits 3.2.1 Purpose of profits: reward the risk taken by the shareholder 3.2.2 The origin of profit 3.3 Innovation 3.4 Critique and Defense Company 3.5 Taking into account the imperatives of sustainable development 4 Organization and Functioning 4.1 Actors: shareholders, officers, employees 4.1.1 Shareholders 4.1.2 Management 4.1.3 Employees 4.1.4 Actors in cooperation or competition 4.1.5 Corporate Governance 4.2 Organization 4.3 Management 4.3.1 Management Practices 4.3.2 Information Management 5 Other important themes 5.1 Measures of performance 5.2 Competition 5.3 Insolvency 5.4 Other 6 Notes and references 7 See also 7.1 Related articles 7.2 Bibliography 7.3 External Links

/ / The Contractor

The entrepreneur is essentially a person who anticipates a need , assembles and organizes the tools and skills necessary to meet this need. In doing so, he takes the risk that this need does not materialize or that means he has put in place to meet are inadequate.

The term "contractor" uses the concepts of creation and innovation ^{Typology and legal status}

Companies can be classified according to several criteria:

Classification by economic sector (determined by their main activity)

• Primary sector ( agriculture , forestry , fishing , and sometimes mine )
• Secondary sector ( industry , construction and public works )
• Tertiary sector ( services )

Beyond this traditional classification, the authors distinguish a quaternary sector ( research , development and information )

Classification by size and economic impact

As defined by the European Commission in its Recommendation 2003/361/EC of 6 May 2003 , companies are classified as:

• Micro-enterprise : Subcategory of TPE defined in France by a turnover below 76 300 euros for those conducting transactions of purchase and sale and 27 000 for the other (according to Article 35 of Law of ¹ August 2003 Economic Initiative).
• very small businesses (SOHO): Less than 10 employees with either a turnover of less than 2 million euros per year for a total balance of less than 2 million.
• Small Business (MOU) between 10 and 49 salaried employees with either a turnover below 10 million euros per year for a total balance of less than 10 million euros.
• medium enterprise (ME): between 50 and 249 salaried employees with either a turnover below 50 million euros per year for a total balance of less than 43 million euros.
• Large Company: 250 or more employees both a turnover greater than or equal to 50 million euros a year and a total balance greater than or equal to 43 million euros.
• group of companies : includes a parent company and subsidiaries
• extended enterprise (or network, or matrix, or virtual): includes a lead company working with many partner companies - See the list of French companies based on their size.

Classification by branch and sector of activity (classification INSEE )

• Sector: All companies have the same main activity.
• Branch: All production units providing the same product or service.

For INSEE, an enterprise is an economic unit, legally autonomous, organized to produce goods or services for the market and is identified by the SIREN number (when a facility is a unit of individualized production geographically, but legally dependent on the enterprise (SIREN unit), and where exercised all or part of the activity thereof. A facility producing goods or services and is identified by a SIRET number.

Classification by legal

• The Commercial or industrial establishments
• The central government for each of the departments, with their subdivisions where they have separate legal personality (regiments, schools, etc.).
• The local authorities , regions, departments, municipalities, and Com, Dom, Rom (communes, departments and overseas regions);
• The real estate companies and condominiums ;
• The state-owned enterprises , state-run,
• The professional and professional partnerships ,
• The cooperative societies in which the associated direct (employees, consumers, citizens, beneficiaries of the service ...)
• The associations , private companies whose profits must be reinvested,
• The Mutual Company

Other cross-classification

Another form of classification distinguishes three main types of companies ^{The legal status in France}

The fact is undertaken in all countries, framed by a regulation. Most companies therefore operate in a predetermined by the law : the Company Law.

Sole proprietorship

In the context of the capitalist economy , it is possible to have a business as an individual. Then it is a sole proprietorship, that is to say that the contractor directly engaged in its own name and the economy. The contractor is his own employee. The exercise of an activity as a sole proprietorship is typically for very small businesses.

Corporations Corporations

It is also possible to form a corporation as a company. It can group several participants in the capital and is able to make management decisions. The various types of companies vary by country.

It should then distinguish the ownership of the company and the authority to perform management actions on behalf of the company. According to the corporate form, the head of the march of the current company will be called a manager , CEO or Managing Director. The holder of this position may hold shares or stock or be mandated to it by the general meeting of shareholders.

The Company Law French distinguished between articles of limited company (SA), limited liability company (LLC), joint stock company (SAS), civil society (CS), professional partnerships of limited liability (SELARL) and partnership (SNC).

The fact that a company uses a form of corporation does not necessarily imply that these securities are listed on stock exchange (or even that it be considered making a public call for savings ). If so, stock market purchases or tender offers may change majority control of the company, and also lead to changes in its direction.

Aims

General goals

The primary function of a business varies according to the company or even in different points of view within the same company (eg, in terms of the shareholder, employee, union, management. ..). Among the various operational functions usually observed are:

• serve the market , producing and distributing goods and services corresponding to a request solvent. This is his only justification economic , no company can survive without making it his priority, unless protected and off the field of competition (eg for certain public services ), which a purely economic standpoint, may lead it to consume more resources than it has utility.
• make money, that is to say extract financial benefits by "collecting more money than money", especially to attract institutional investors and small shareholders ,
• produce a cash surplus will be invested with greater advantage in business development and other undertakings (as part of a "group").
• maximize, by status, the social utility (to improve the situation of the company) or profit (difference between the sale price and the cost of resources consumed).
• achieve a technical goal: building of a structure ( tunnel , bridge , road ...), producing a manufactured product, design and implementation of a satisfactory service to a customer. This technical goal can itself be extremely varied, included the following:
  • activities that are not, for the entrepreneur, the main issue, but a means to another activity: for example the possession of a press group , production of strategic resources or businesses vectors images (for example the presence of the tobacco industry of ready-to-wear)
  • the cooperatives are agricultural enterprises that aim to make a profit not for themselves but for the cooperative members,
  • the " enterprise integration "are able to make their employees to hold a" normal "work, without attempting in some cases ( workshop site of insertion ) to generate profit.

Some companies may divert primary functions of the company, including:

• cover legal and illegal activities (eg activities such as the Thurs the exchange , car washing, the real estate ... are known to allow the "recycling" or "laundering" of money generated from illegal activities).

Various political views on the functional utility of private enterprise were formalized during the history and development of economic thought:

• its utter uselessness, resulting in its removal and / or its collectivization ,
• at its full value (especially in terms of job creation), leading to its promotion and development of SMEs , the TPE , the company crafts and professions.

Research benefits

Purpose of profits: remunerate the risk taken by the shareholder

Among the different possible goals for a company, the search is an important benefit. The profit of the company (different from the profit) is primarily used to remunerate the capital invested.

In the case of companies called capitalists, if an investor (one of those who finance the company) decides to place it in a business rather than keep it the wish that the money placed in the brings in more business. If a business does not generate sufficient profit distributed as dividends , its tarnished reputation and attract more investors. Its capacity development (generally for capital-intensive - for example - open branches abroad or start new innovation programs) or even its survival are thereby so encumbered, or can be challenged.

For each industry, there is a profit level "normal" expected. Thus, for example, in the pharmaceutical 2000s, the average expected profit was 15% per annum on invested capital. If a company generates less profit, shareholders who have invested their savings (directly or more often indirectly through a bank or pension fund ) are disappointed, eventually lose confidence in the investment and sell their shares: the price of the company (whether or not the stock market) decreases and the remaining investors lose.

A capitalist enterprise whose profits are low for too long has no economic justification: it is generally closed or taken over. In the case of enterprise of the social economy , it lasted if it brings a social utility to society (eg, business rehabilitation) and if it finds a suitable donor to fund potential losses (eg local government). Finally, family businesses - both private and unlisted - can find a balance between high profits and social utility, while succeeding in the long term, especially in size to human scale and proximity of management vis- -vis employees.

The origin of profit

In simplified terms, the profitability of an activity is obtained by selling the highest price for a product or service and as cheaply as possible to produce it.

It differs from the normal income and extraordinary income:

• Revenues are normal products sales and financial transactions on the current year (customer and supplier credits)
• Revenue windfalls are not - by definition - part of routine operations of the company. These may include sale of assets (buildings, machinery, etc..) sales subsidiaries or various accounting transactions (eg, reassessment of the financial value of a stock).

The margin , calculated as the difference between the sale price and the cost of returned goods included in the product sold is the main contribution to profit of the company.

To increase this margin, there are only two levers:

• increase the price of goods or services sold (eg, sell a motor vehicle to 15 000 )
• reduce the cost of production of goods or services sold (ie produce a vehicle with 12 000 ).

The means of action on reducing costs are extremely diverse, including:

• negotiate with suppliers to lower the purchase price of the goods incorporated
• improve the quality to produce less waste,
• improve the productivity of machines,
• improve the productivity of people (improving skills , adjusting the ratio between the compensation fixed and indexed to the results, improving working conditions , audit practices in order to improve, better personnel management, management skills, audit tools)
• reduce taxes and levies on production (taxes on profits, loss of employee contributions from social funds or pension, benefit from exemptions)
• reduce inventories to reduce the capital immobilized
• negotiate terms of settlement faster vis--vis the clients to be under financial expenses.
• use free software to reduce the capital tied up by the software owners pay
• settle near the place of production of raw materials.
• reduce payroll and benefits
• use value analysis (often the most powerful since it can reduce costs in some cases dramatically)

Innovation

The solution to these shifts in global production centers in low added value through the innovation , the creation of high value added activities (eg, Airbus A380, TGV, smart car, microprocessors , new materials, advanced software, biotechnology , armaments, nuclear power , robotic assistance to seniors, smart textiles , high fashion ...) requesting a creative workforce and highly skilled, and the development of local services.

In 2008, services accounted for 70% of GDP in the western world, which confirms the trend of developed countries towards the post-industrial economy ^{Reviews and defense company}

Private enterprise, as an entity to create and share wealth, has been widely criticized. The criticism, coming especially from the ^nineteenth century the thought of socialism and of social Christianity , was more profound in countries growing Catholic (in which the relations of morality with the money are complex) in countries growing Protestant , in which the position and social function of each individual is regarded as the fruit of the will of God (according to the thesis of Max Weber on the Protestant ethic and capitalism).

Private enterprise is considered by some critics as an entity that its paramount interests to the detriment of general interest.

• The socialist critique appeared in the nineteenth ^century was primarily focused on the economic consequences to the issue of the unequal distribution of wealth created by the company the benefit of capitalists (the remuneration of capital ) and to the detriment of employees ( who bring their work ). In particular, it was theorized by Karl Marx.
• Criticism of corporate influence on power politics were added. In theory Marxist , "superstructure" social, which includes political and religious powers serves the "infrastructure" economy. This criticism, the relationship between politicians and firms, even outside the stream of Marxist thinking, is very much alive in the early twenty-first ^century.
• The firms are accused of conducting a game geopolitical own, dictated by their own interests, independent and even contradictory with the national foreign policies and international (eg on the issue of human rights ). Historically, (or) private companies have been accused of having promoted the colonialism and imperialism, western and war. This is for example the criticism of Lenin on Imperialism, the Highest Stage of Capitalism.
• From the late twentieth ^century, companies have been accused of degrading the environment as part of their business.

Other critics have focused on the inner workings of private enterprise. Among these are:

• The critique of exploitation of the employee given the asymmetry of power relations between employers and employees, especially in times of unemployment.
• Critics on the divide of wealth (gains in productivity , and profits ) between those who provide capital and those who provide labor.
• The critique of power in the company that traditionally belongs to the agents provide the capital and not to those who provide their work. Hence attempts to balance through for example the co-management in Germany.
• The critical forms of pressure on the employee and leading to cases of stress , including raised from the end of the ^twentieth century.

Faced with criticism, defenders point out that companies will actually private in the sense of general interest:

• Private enterprise is the most efficient allocation of resources ( capital , labor , raw materials and energy ), particularly given the constraints of profitability.
• Private enterprise is the most efficient engine of economic growth and the innovative technology. Even when not at its source, the company is the vector of application and dissemination of technical innovations.
• The company, guided by concern for its development and profitability, ignores distinctions of nationality , of race or gender to not be based on personal merit. The company is then considered as a factor of peace and international reconciliation and integration of different people.

As regards the internal workings of the company, its proponents add that the company may instead be a place for personal growth. The most advanced cases of this trend are in the business of new technologies , in which entrepreneurs are often young and less formal human relations (the culture of startups cool). The transformation of some companies in living areas, with recreational areas nearby community, was considered by some as an insidious means of control of the employee.

Some large private companies have developed since the ^nineteenth century social and cultural programs for their employees (canteens, homes, courtyards, sporting and cultural activities, holidays ). These practices, sometimes from the social Christianity , have been denounced in the West by the thought socialist as belonging to the paternalism. At the extreme, some companies have given birth, with tenements in real cities (eg France, Anzin or Decazeville ). These practices tend to disappear with the tendency to focus on their business heart of art.

Taking into account the imperatives of sustainable development

Some companies have bothered to re-legitimized their role in society through various vectors, particularly noticeable from the end of the ^twentieth century :

• Reports of sustainable development / A> written by the great society highlight their social and environmental. Communication efforts on the environment has become a major argument in the early twenty-first ^century. In France it is mandated by law on new economic regulations (Article 116).
• The sponsorship (artistic, humanitarian, social, etc.). is both a means of legitimizing the role of corporations that action by corporate communications for the company image.
• In France, the theme of " corporate citizenship ", in vogue in the early 2000s, has advanced the understanding of the role of business in society.

The valuation of the business is done in this case by the rating agency, reports that examine the development to record companies. The socially responsible investment allow firms to move towards the top rated on the societal level.

Thus, a new form of business may emerge, which would take into account the interests long term for all stakeholders of the company, not just the only short-term interest of shareholders alone. Indeed, sustainable development involves not only the market but also the state and civil society.

The mode of corporate governance consistent with sustainable development is called corporate social responsibility.

Organization and Operation

Actors: shareholders, officers, employees

The company works with several types of actors:

• The holders of the capital of the company, if the legal basis for the company is a partnership agreement (shareholders, owners of shares of the company)
• The company management (mandated by the shareholders when any),
• Employees of the company (hired by the management company).

Depending on the size and legal status chosen by the company, these actors are sometimes confused: running a shoe with a single person can either take a craft without capital or employee, or be incorporated, the same person being Once the owner of capital, corporate officer and sole employee.

Larger firms are generally incorporated and these actors are differentiated.

Shareholders

The shareholders hold the capital of the company that bears the company. Their role is to provide the necessary financial basis for the development of the company, selecting officers and verify the proper administration of the business by management. They receive income on the profits of the company, known as dividends.

Management

It is composed of officials responsible for managing the daily affairs of the company and the deployment of corporate strategy validated by the shareholders.

His compensation is generally formed of a salary, and a form of incentive, usually in the form of stock options or bonuses, more or less indexed financial performance of the company.

Employees

They are typically made:

• of managers , responsible for the management and conduct of operations by management of appropriate human resources,
• employee responsible for implementing business processes and production in association with the framework.

They receive a salary in exchange for work provided within the company.

Actors in cooperation or competition

Some approaches to the company based on the principle that the three categories of actors from private enterprise (shareholders, management, employees) are holders of interests and they oppose the interests of employees and those of shareholders.

Other approaches are based on company vision systems more regulated and more cooperation among the three categories of players.

Corporate Governance

The concept of corporate governance (or governance in Franglais) appeared in the late ^nineteenth century to support a reversal of power within the company.

• In the traditional business model as the ^nineteenth century , as in SMEs , the power belongs to the shareholders , who are the owners of the company. Even if they delegate, from the ^nineteenth century , the management of executives and engineers , contacts are frequent and close monitoring.
• The development of the size of companies has led to both an increasing complexity of management functions of large companies, with specializations, and the dispersion of their shareholding. The real power passed into the hands of operational managers of the company, while controlling shareholder has become more distant, sometimes reduced to a single ritual of the general meeting of shareholders. The age of managers has been theorized by James Burnham in 1941 French edition with a foreword by Leon Blum in 1947).
• With the "liberal revolution" of the 1980s and the generalization of the principle of market , it appeared that the interests of managers do not always coincide with those of shareholders. For example, the manager may favor a strategy focused on growth and firm size, while the interest of the shareholder might be to emphasize the profitability of the company and its action. The theme of corporate governance , which emerged in France in mid 1990 with the Vinot, tends to make shareholders a portion of the power they lost. It is expressed in several ways:
  • Regulation was tightened in this direction ( NRE , France), strengthening the obligations of management to report on its work to shareholders.
  • The separation of functions between representation of shareholders (the role of chairman of the board of directors or supervisory board ) and operational management (role of general manager or CEO ) is a form of response.
  • The requirements of return on invested capital ( ROE or ROCE ) indicate the inclusion level of corporate financial objectives in the interest of the shareholder.
  • The policy development stock options , during those same years, is also in the logic of linking the interest of manager with that of the shareholder.

Organization

A company based on a number of vital functions that ensure its operation. Henri Fayol has identified six technical, commercial, financial, security, accounting (informational), administrative (management).

Generally, companies establish a hierarchy among their employees : those located at a lower level (eg, teammates, colleagues, employees ...) respond to those at a higher level ( managers , executives , project managers .. .). This hierarchy can be justified by the existence of transaction costs , justification stems from Coase Theorem and is developed by the work of Oliver Williamson. The ranking is combined with a specialization in activities in the organizational structure of the company. This issue of the organization has been studied in particular by Henry Mintzberg , in his work: Structure and dynamics of organizations.

Firms are generally organized with:

• Operational entities, which tend to focus on business (for example, in 2008, the group Danone is organized into three areas: fresh dairy products, biscuits and cereal products, beverages). Large companies monomtiers can be organized into regional entities (eg, Americas , Europe - Middle East - Africa (or EMEA, grouping common in business at the beginning of XXI ^century),Asia ).
• Horizontal functions, duties "under siege" common to the class, or sometimes decentralized by division or region. Classically, there is the function of general management , financial management (including management , the accounting , the management control ) of human resources , to marketing and communication of research and development , from computer , etc..

The cross-cutting functions can be:

• performed internally by company employees.
• sub-contracted to outside companies service providers (eg, external communication, performing research and development).
• or exercised by a person working alone, usually acting as consultant external (eg quality expert).

Management

Management Methods

A company must be managed as a whole.

It is therefore necessary to apply all the methods of management dedicated to the various components of the company:

• Human resources
• Finance
• Accounting services
• Commercial Services
• Technical Services
• Etc..

Computer Management

There are two types of tools for business management:

• general tools, such as office suites that can produce documents, spreadsheets, business presentations;
• management tools.

These are used to manage each of the functions of the company. Today, most of them opt for Enterprise Resource Planning or ERP, which has the advantage of centralizing data management within a single database.

Formerly reserved for large companies, these tools are becoming more prevalent in SMEs / SMIs.

Other important themes

• Alliances and Partnerships
• Accounting
• Controlling
• Finance
• Taxation
• Quality Management
• Logistics
• Production
• Human Resources
• Restructuring

Performance Measures

• Financial Analysis
• Cash flow (cash flow)
• Turnover
• Competitiveness
• Past actions
• Business Valuation
• Notoriety
• Market Share
• Productivity
• Net income
• Profitability
• Scoreboard
• Value added

Competition

For the competition law , the legal form ( legal entity under private law or public law, society , association ) and purpose (profit or not) of the firm are indifferent. Thus the Community law , "the concept of an undertaking covers any entity engaged in economic activity, regardless of the legal status of the entity and its financing" (Court of Justice (ECJ), Hfner, 1991).

However, not exercising an economic activity, and is no longer a business subject to competition law, the agency that performs an exclusively social function (ECJ Poucet 1993) or whose duties and powers of public authority (ECJ Eurocontrol, 1994).

• Acquisition and transfer of undertakings
• Competition
• Competition Law
• Fusion
• Monopoly
• Oligopoly
• Marketing Plan

Insolvency

• Insolvent
• Bankruptcy
• Bankruptcy
• Receivership
• Subsidies , government assistance and aid banks

Other

• Business context
• Corporate Social Responsibility
• Functioning and organization of the company

References

See also

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