Understanding Company Classifications, Characteristics, and Resources

Posted on Mar 5, 2025 in Economy

Company Definitions and Classifications

A company is an organization or group performing commercial and industrial activities that provide goods and services to maintain and improve the quality of life for individuals and other commercial entities. These are defined under commercial law as industrial, commercial, service-oriented, or related entities, and are called commercial acts.

Classification of Companies

According to Their Activity:

  • Agriculture: Companies that exploit agricultural and livestock products (e.g., livestock farms).
  • Industrial: Companies that transform or modify raw materials into finished products (e.g., textiles).
  • Business/Commercial: Companies involved in buying and selling finished products (e.g., stores, supermarkets, traders, importers).
  • Services: Companies dedicated to providing a service to the community through professional skills (e.g., health, education, transportation).

According to Their Size:

  • Financial Size: Large, medium, and small, based on the company’s capital and the country’s economic situation.
  • By the Number of Employees: Large (more than 1000 employees), medium (250 to 1000 employees), and small (fewer than 250 employees).
  • According to Production:
    • Large: Technified or systematic production.
    • Medium: Production involving both machinery and labor.
    • Small: Production with less labor and machinery.
  • According to Sales:
    • Large: International sales.
    • Medium: National sales.
    • Small: Local sales.

By Origin of Capital:

  • Public: Businesses that require state contributions for their operation.
  • Private: Companies that operate with contributions from individuals.
  • Mixed: Companies funded by contributions from both the state and the private sector.

Depending on the Number of Owners:

  • Individual: Sole proprietorship or single-owner business.
  • Societies: Composed of two or more owners, named partners.

Company Characteristics:

  • Pay for goods and services they provide.
  • Legal Unit.
  • Operate pursuant to existing laws (fiscal, labor, environmental, and health).
  • Set targets.
  • Economic Unit.
  • Foundation for negotiation, purchase, and sale.
  • Integrate debt and equity.
  • Management uses its own system to operate.
  • Investigate the improvement of its products, processes, and services.

Business Resources:

Human Resources:

This is the group of people connected with the company, including:

  • General Services
  • Operators
  • Clerks
  • Executives
  • Managers

Material Resources:

All tangible property, including:

  • Machinery
  • Tools
  • Real estate
  • Vehicles
  • Raw materials

Financial Resources:

Represents the monetary value of the company, both owned and used for development activities, including:

  • Cash
  • Money in banks
  • Stocks/Shares
  • Credit and investments

Technical Resources:

This is the complement to the performance of other resources, including:

  • Expertise
  • Patents
  • Production systems, information, and marketing

Importance of Enterprise Resources:

Identifying which resources are used by the company for its operation is important because productivity depends largely on the role of these resources and their optimal use.

Company’s Functional Areas:

To achieve business goals, there are various activities that structure and define the organization. All areas are equally important, and failure in one area impacts the functioning of the others.

Production:

Programs and develops strategies for product development. Features include:

  • Inventory management
  • Procurement of materials and supplies
  • Product design
  • Quality control
  • Production scheduling
  • Organization of work areas
  • Safety and maintenance, among others

Finance:

Manages all movement of money and capital used to operate the business.

  • Features: Preparing budgets, fundraising, control and money management, credit and collections, cost analysis, investment, treasury, general accounting, financial relations.

Human Talent:

Determines appropriate means of addressing individual and collective members of a team to contribute to achieving business goals.

  • Functions: Linking personnel, staff development, administrative management, remuneration, industrial relations, and social welfare.

Marketing:

Development of activities related to promotion, sales, and market distribution of goods or services produced by the company to satisfy customer needs.

  • Features: Competitive analysis, marketing planning, sales policies, advertising, market segmentation, selling products and services, trade shows, and after-sales evaluation.