It is difficult to imagine the modern world without the presence of firms in it. Firms provide a huge range of services and are one of the main features of the current economy. In this article we will examine what a firm is: a concept, a classification of its attributes, and basic functions.
First you need to understand the conceptual apparatus. In theory, the concept of a company means an independent entity in the economy, which is engaged in commercial as well as manufacturing activities. Firms have their own, separate property. In economic theory, a firm does not have one clear definition, since within the framework of one concept there may be a group of enterprises engaged in the production of goods or services. We describe several features that reveal the concept of a company.
First, a firm is an economically isolated unit. Secondly, the company is a legal entity, therefore it is legally independent. The company must have a budget and its own charter. Thirdly, a commercial organization must perform useful social functions, such as the purchase of resources and the production of social goods based on them, which subsequently enter the market.
Fourthly, the enterprise itself decides on its own development and other managerial aspects. The last sign that reveals the concept of a company is that the main goal of any commercial organization is to minimize costs and the desire to maximize profits.
There is competition among firms that occurs through increasing sales or increasing market share or reducing employee turnover through higher salaries, better working conditions and other methods of stimulating and motivating staff. Firms also need to come up with new strategies, especially in times of economic crisis, and create new types of services or products. Another effective way to compete is to use new technologies.
The concept of a company cannot be considered without indicating its functions: commercial (marketing, establishing relationships with investors and suppliers), production (organization of the production process), financial (working with the company's finances, increasing profits and minimizing costs), counting (accounting and statistical calculations of various indicators), administrative (control over the production process, commercial activity, management), social (satisfaction of consumer demand, material incentives and support rsonala).
In the literature, one can also find the concept of enterprise. Firms and enterprises imply the same market phenomenon that characterizes any commercial organization that satisfies all of the above signs and functions.
By economic activity, commercial companies can be divided into: transport (international transportation), industrial (production of goods), trade (purchase and sale), insurance and freight forwarding (delivery of goods to customers).
