Business Structures and Economic Efficiency: A Comprehensive Guide
Company
A company is an economic unit that combines factors of production (land, labor, capital) to obtain goods and services offered to consumers for profit.
Value Creation
Value creation is the transformation of inputs into outputs, generating business value in the final product or service and creating shareholder value.
Business Structures
Sole Trader
An individual with legal capacity who exercises a business independently, operating under a special Social Security regime.
Mercantile Society
A contract where two or more people pool resources (money, property, or industry) to conduct a business for profit, which is split between them.
Corporation
A commercial corporation with a minimum share capital of €60,101.21, divided into shares belonging to the partners. Partners are not liable for company debts. Regulated by the Corporations Act.
Limited Liability Company
A mercantile society with a minimum share capital of €3,005.06, divided into shares belonging to the partners. Partners are not liable for company debts. Regulated by the Limited Liability Companies Act.
Worker Societies
Limited liability or limited liability companies where at least 51% of equity is owned by its indefinitely hired workers. Requires a minimum of three founding partners.
Cooperative Company
A company formed by people grouped around economic activities, characterized by democratic functioning in decision-making (one member, one vote) and benefit distribution (based on social order participation).
Registry Office
A state agency under the Ministry of Justice where acts relating to individual entrepreneurs and trading companies are enrolled for public knowledge and consultation.
Social and Environmental Responsibility
The voluntary integration of social, labor, environmental, and human rights concerns into company management, taking responsibility for the consequences and impacts of its actions.
SMEs
Small and medium-sized enterprises. The EU defines a small business as one with fewer than 50 employees and a turnover not exceeding €10 million, and a medium enterprise as one with 50-250 employees and a turnover between €10 and €50 million.
Economic Globalization
The increasing internationalization of economic relations, driven by the liberalization of financial markets and the elimination of customs barriers. Intensified by the transport revolution and ICT development, especially the Internet.
ICT
Information and Communication Technologies: elements and techniques used in information processing and transmission, primarily computers, the Internet, and telecommunications.
Multinational Enterprise
A company operating beyond the geographical boundaries of one country, comprising a parent company (setting business and brand guidelines) and downstream companies operating in other countries.
Organizational Structure
Organizational Chart
A graphical representation of functional interrelationships between company departments and their components, showing the organizational structure and connections between positions.
Linear Organizational Structure
Based on the unity of command principle, where each leader commands, directs, and controls subordinates, who receive orders from one person, creating a hierarchical system.
Line and Staff Structure
Combines direct authority relationships (linear structure) with consultation and advisory relationships (staff) providing technical support.
Formal and Informal Organization
Formal: Formally established by company management, usually a hierarchical departmental structure with explicit functions. Informal: Arises spontaneously from communication and leadership, and can be used by management in various ways.
Strategic Planning
The first level of business planning, setting overall objectives and determining actions and resource allocation. Long-term, planning for future years.
Labor
Labor Contract
An agreement where a person provides services to another person or entity under their direction and contract conditions, in exchange for remuneration.
Collective Bargaining
The process of reaching an agreement between workers and employers on working conditions.
Collective Agreement
The agreement between employee representatives and employers determining working conditions and productivity in a workplace.
Efficiency
Technical Efficiency
Achieved when one or more production technologies can achieve the same output with fewer inputs, or greater output with the same inputs.
Economic Efficiency
A technique is economically efficient if it implies a lower cost.
Global Enterprise Productivity
The ratio of total production value to the total value of factors used. Indicates overall company efficiency and diagnoses the combination of factors used.
Product of a Factor
The relationship between production and the amount consumed of a production factor, expressed in physical units per unit of production factor used.
R&D&I
Research: Planned search for new scientific and technological knowledge. Development: Application of research results to produce materials, devices, or procedures. Innovation: Implementation of new technology, driving production progress.
Patent
Exclusive rights granted by a state to an inventor for a limited time, in exchange for disclosing an invention.
Costs
Fixed Costs
Costs a company must face regardless of production volume.
Variable Costs
Costs that depend on production volume.
Breakeven Point
The production volume where profit is zero (Total Revenue = Total Cost). Above this point, the company makes profits; below, it incurs losses.
Direct Costs
Costs directly incorporated into the final product (e.g., raw materials).
Overhead Costs
Costs not directly attributable to a specific product, affecting the overall production process and common to several products. Assigned based on criteria set by the company (e.g., electricity).