Business Structures and Organizational Dynamics
Trading Companies and Social Interest Societies
Trading companies are formed by several people who share a common heritage to collaborate in operating a business, aiming to obtain a profit and participate in the distribution of profits. Social interest societies seek to obtain benefits while also satisfying the common needs of their members. Cooperative societies are a popular example of this group.
Liability: Unlimited and Limited
Unlimited liability occurs when the employer, an individual in a society, is responsible for meeting their debts with all their present and future personal assets. Limited liability is when a company’s shareholders are responsible for meeting their debts to third parties only with the capital contributed or invested.
Stakes and Actions
Stakes are equal, cumulative, and indivisible parts of a limited liability company’s capital. They cannot be represented by negotiable titles. Their transmission is restricted and they cannot be called actions. Actions are equal parts of a corporation’s capital. They are usually documented in nominative or bearer securities and are negotiable.
Company Management
Running a company involves performing governmental functions, giving instructions, and establishing appropriate criteria to achieve objectives. Management functions include planning, organizing, managing, and controlling all factors at its disposal.
Planning
Planning is the study and establishment of objectives relating to the enterprise system and each of its subsystems (departments or sections). Plans can be classified as:
- Goals
- Objectives
- Policies
- Procedures
- Rules
- Budgets
Organizing, Managing, and Controlling
Organizing is designing a structure in which all functions are defined to be performed by each person in the company, along with their responsibility and authority. Managing is trying to ensure that the people in the company perform the tasks necessary to achieve the objectives. Controlling is verifying that everything goes as planned.
McGregor’s Theories
McGregor’s theories are used to study different leadership styles, categorizing employees under a manager’s control.
Formal and Informal Organization
The formal organization structure is intentionally defined and identified, placing each element (employees, departments) in the company, ensuring they are always in the right place. The organizational structure is defined in a way that is understandable to everyone in the company.
Audit
An audit is a control method that checks both the planning in relation to the financial statements and the profitability of assets or the overall management of the company, while making recommendations for improvement.
Company Communication
Company communication is the interaction process between two or more persons, involving the passage of information through a channel, which may be oral or written. This communication may be upward, downward, or horizontal.
Teamwork
A team is a group of people who have a common goal, while maintaining their own identity, and working in a coordinated manner.
Organizational Structure and Chart
The organizational structure is defined in a way understandable to everyone in the company. Types of structure models include linear or hierarchical, functional, advisory, committee, and matrix. The chart is the graphical representation of the organizational structure, a schematic and synthetic representation.
Informal Organization
The informal organization is the set of personal and social relationships that are not predetermined by the management and organization of the company but arise spontaneously when people associate with each other.
Corporations and Cooperative Societies
Corporation
A corporation is a purely capitalist society where the only important element is capital.
Specifications
- Number of partners: Partners’ liability is limited to the capital contributed.
- Capital is divided into equal parts called shares.
- These companies are taxed by the tax authorities.
Bodies
- The General Meeting: A meeting of shareholders where decisions are made by majority.
- Shareholders Administrators: They own one or more shares and have rights as both employers and owners.
Cooperative Society
A cooperative society is an association of individuals or companies with common interests and needs that form a business.
Features
- Cooperatives may be of the first, second, or further degree.
- Responsibility for debts of cooperative partners is limited to the nominal amount of their respective social contributions.
- The minimum capital for each cooperative is fixed in the statutes and varies depending on the number of partners.
Bodies
- The General Assembly
- The Governing Body
- The Committee of Resources
- Auditors
Members
Members have a number of rights, such as participating in the activities of the cooperative.