Company

Synopsis

Definition

One company is the activity of the contractor. By contrast with the simple one project, whose organization is intended to dissolve in its term, the company (rather) is designed in the duration and for the repetition of several similar projects, which implies the perennity of the structures. One uses also the term for single projects but apparently risky or difficult (for example of great voyages).

One as well uses the term for organizations with lucrative goal or nonlucrative goal.

Historically, the contractor is an intermediary, one broker in work: one places to him from the firm controls of goods or of service, it seeks the workmen who will produce each one a part of this order and it is ensured of the good delivery. This in a context where the division of the labour too little is marked, where the workmen work in residence, and have of their tools and even their machines (weaving loom for example). One finds still today this type of organization, for example, in the industry of transport, where beside great groups, of independent are owners of their working tool (truck, barge or barges) and find their clients by the intermédiare brokers.

With industrial revolution, the contractors change, they are equipped with machines and preserve the same workmen a long time, which give rise to the companies with the traditional direction. In the modern economy, where the services took the step on industry, the concept of employee took it also the step on that of workman, and the mobility of work became necessary taking into account a fast transformation of the techniques, needs for consumption and geographical widening of the markets on an often continental or world scale.

A company rests on a certain number of vital functions which ensure its operation.

Generally, the companies found one hierarchy among theirs: those which are located at a lower level obey those located at a higher level.

Forms of the company

The fact of undertaking is in all the countries framed by a regulation. The majority of the companies thus function within a framework predetermined by the law. It is possible to have a company on a purely personal basis (in general a small company). It is also possible to constitute one legal entity in the form of company. This one can group several particpants with sound and is ready to make acts of management. The various shapes of companies vary according to countries'.

It is then advisable to distinguish the effective property from the company and the capacity to achieve acts of managements in the name of the company. According to the social form the person in charge for the current walk of the company will be called one manager, a president (assisted of a director and a board of directors if necessary). The holder of this function can be holder of social shares or actions or to be active.

The fact that a company uses the shape of joint stock company necessarily does not imply that these titles are with dimensions in purse (or even as it is regarded as making public call with the saving). If it is the case, of the purchases out of purse or of public offers can make change the majority of control of the company, and also lead to the change of its direction.

Essential functions of the company

The function first of a company is variable according to the company or even according to the point of view within the same company. Among the various functions really observed one finds

  • to serve the market, by producing and distributing goods and services corresponding to a request. it is its only economic justification. No company can survive without making its priority of it, unless being protected and apart from the field from competition, which can lead it to consume more resource than it does not have utility, often to the detriment of the community.
  • to attract the investors and creators of company, to make him give the most possible money, i.e. to extract some from the financial benefit: "to collect more money than of invested money".
  • to generate "cash-flow", treasury, which will be invests with a greater profit in the development of the activities or another company (within the framework of a "group")
  • to maximize, according to the statute, itsocial utility (to improve the situation of the company) or it profit (difference between the selling price and the cost of the consumed resources).
  • to achieve a technical goal: realization of a work (tunnel, bridge, road...), manufacture of a manufactured good, design and realization of a service giving satisfaction to a customer. This technical goal can itself be extremely varied, one will quote in particular
    • The activities which are not, for the contractor, principal stake, but a means with the service of another activity: for example possession of groups of press, production of strategic resources or companies vectrices of images (with the example of the presence of the cigarettiers in the industry of loan-with-carrying).
    • In the same way, the agricultural cooperatives are companies which aim at releasing a benefit not for themselves, but for the adherent co-operators.
    • the "company of insertion" aim at making ready their employees to occupy a "normal" work, without seeking they-even to generate benefit.
  • to camouflage legal or illegal activities. Certain activities (plays, changes, washings of cars, real estate...) are known to allow "to recycle" or "to bleach" money resulting from the criminal activities.

The functions described here exist in all undertaken but can only be exerted by groups of people in the case of the large companies, be sub-contracted with outside firms or, with the extreme, exerted by a person working. There are no direct relations and automatics between the functions and the structures of companies, so that the real organization of a company can differ largely from the general model describes here; the various services can not be also definitely separate nor also clearly apparent, and can not even exist (corresponding functions being then ensured in another way); moreover the organization can be more flexible and more evolutionary than what is suggested here.

To note finally that the division of the functions inside the companies loses of its direction in the contemporary system, moreover in moreover it running ofwide company, become itself an element ensuring telle(s) or telle(s) function particulière(s) in multiple networks of economic co-operation.

Production

The production relates to the industrial companies as well as those of services. It puts in?uvre means of production and of distribution to manufacture, install and distribute the product or to provide the services according to plans' and specifications defined by Department studies with the equipment, matters, components, supplies and subcontracting provided by Service of the provisioning.

In the industrial companies (which represents hardly than a small part of the economic activity in the developed countries)

  • Department of the production gather several services in contact with Department studies, it Department quality :
  • Service scheduling occupy yourself of planning building site or workshop and management of production ; it envisages the requirements in resources (machines and operators) to ensure output necessary to the realization of workload.
  • store of tools supply, maintains (sharpening..), manages and provides the current tools and products (fluid..) necessary to the production.
  • Service methods establishes them manufacturing ranges (lists ofoperations of machining, assembly, handling...) according to the products to be manufactured or install and determines the tools, apparatuses and machines necessary. It studies each working station by observing the rules ofergonomics to obtain one productivity optimal with safety and working conditions the best.
  • Service forwarding pack and ensures forwarding, the taking out of bond and the transport of the market products.

See: Production

Management

Surrounded of a team of advisers, assistants, helped by a secretary or board of directors simple, it director manage the company for the account of its owner (shareholders, parent company...). It ensures the relations with the thirds such as the tax authorities, the trade-union organizations, the administration, the local communities, the authorities of market...

Management establishes strategy company, of which it control management ensure the translation in operational objectives and the follow-up (see ).

Management must return accounts to shareholders company, on its strategy and its capacity to achieve the laid down goals. In the context of the law on financial safety, LSF (France) and law Sarbanes-Oxley, SOX (the United States of America), governorship of company is a concept which comes to be added to the existing obligations of management with respect to the fascinating parts.

It also represents the company legally speaking.
See: Director - Control management - Control piloting - Internal audit

Commercial

Commercial department, person in charge for sales, ensures the mercatic function (marketing) and organizes itself to answer the questions of customer. It constitutes an important bond between the management of the firm, it Department of the studies, it Department of management, it Department production... and the customer. It deals with the problems of invoicing in collaboration with Department accountancy and maintains a network representatives who prospect and seek new outlets.
The commercial department can be in charge of the formation of the customers to the product and the constitution of the contractual technical dossiers (documentation, notes...).
After-sales service ensure the maintenance of the products or installations sold, the assistance with the customer within or out of the framework of guarantee. It is organized to supply, make realize, maintain in stock and to distribute them spare parts. It makes go up with Department studies and with Department quality complaints of the customers, breakdowns recurring.
See: Sale - Marketing

Studies

Its goal is of:

  • To design the product or the service according to the needs for the market or a particular customer
  • To estimate the cost price of the product to be developed
  • To seek the matters, gross products, components necessary to manufacture
  • To establish list parts, the material, tools and specific installations necessary to manufacture
  • To write them notes of use, them specifications particular with the realization or the use of the product.
  • To draw the plans.
  • To study, in relation to the sales department, the market by observing the competitors, the fashion, the patent fillings, the investigations and studies carried out by the professional and governmental organizations.
  • To make technological survey with for goal to propose with Direction a preliminary draft which can be taken into account by the company, either within the framework of its current activity, or to widen its field of action.
  • Department studies, sometimes called Engineering department gather it Calculation office, it Engineering and design department, it Office of the projects and sometimes one Service general methods responsible for the studies particular toproduction equipment.

Management of quality

It has as a role of:

  • to constitute it file quality product manufactured by including there all the documents relating to the components and matters, manufacturing process, certificates of enabling subcontractors and of qualification of the suppliers, official reports...
  • gèrer the library of specifications and standards of the establishment.
  • to practise internal audits to check the application of the rules and procedures company; organize them external audits in the case of certification of ISO type; draft them reports/ratios of nonconformity noted in the course of manufacture or at the customer...

Department quality use controllers and inspectors of the quality who check conformity of the product with the specifications by measurements, prélévements of samples. The quality control engineers, experts in statistics, study them variations of the processes of manufacture by analyzing measurements and controls carried out by chance; Office of standardization write internal specifications, it is in close connection with Department studies to write the specifications defining the product or the service. It calculates the cost of not-quality and made proposals to reduce it.

Provisioning and purchases

It is concerned with:

  • the search for new suppliers or subcontractors
  • the negotiation of the contracts (price, quantities, times, standard of quality...)
  • the management of the purchases and stocks.

Service purchases employ purchasers who are in contact with sales departments suppliers. They negotiate the prices, establish orders of purchase or orders of subcontracting, follow the realization of the ordered products and the spread of the deliveries, control the purchase invoices. They make sure that the suppliers have all the information and documents necessary to the definition of the parts or ordered matters and are in connection with the controllers of Department quality.

Service of the provisioning is the complement of Service purchases. supplier make sure that all that is necessary to Department production will be available to the time of manufacture. It restocks stocks while emitting requests for purchase and supervises management of the stores while ensuring itself of the good storage of the products.

See: Purchase - Logistics

Accounts Department and management

It manages the accounts and the financial resources of the company while providing the interface with the banks, Administation tax, the customers and suppliers...

  • General accounting department it establishes assessment, it income statement and the appendix like all the obligatory declarations (VAT, INSEE...) and files all the book. It calculates and analyzes them overheadsComptabilise les loads and them products, studies the possibilities of investments, calculates them depreciation and envisages needs for treasury.
  • Analytical accounting department, analyzes the directly affected expenditure with the products manufactured and calculates theirs cost price a posteriori.
  • Accounting department supplier check and pays the invoices relating to the purchases
  • Accounting department customer establishes and sends the invoices to the customers then checks the payments of them.
  • Control management, on the basis of analysis ad hoc, of the results of accountancy, and of exchanges with the other actors of the company, ensures the coherence of the financial results, the objectives of performance, and the strategy of the company.

Staff management

Its essential role is of gèrer the whole of paid depuis l’embauche jusqu’au départ de l’entreprise.

The Department of Human Resources is also charged with recruitment, of the management of the trainees, the distribution of the relation and long-service medals with the Work's council. It generally includes:

  • Service of the Salaries and Salaires whose role is to communicate to the General Accounting department the list of the transfers to be carried out with the title of the wages.
  • the Service Formation
  • the Service HSE which is occupied of the problems related to hygiene, safety and with the environment.
  • the Social service manages the difficulties encountered by the members of the personnel, the housing and the collective transport of the employees...
  • Service Communication who ensures the diffusion of information towards the personnel (communication internal) or towards outside (media, publicity agents). The large companies generally have one Legal service who gathers lawyers and lawyers and treats the dispute.

See: Human stock management

Additional functions

Although indirectly related to the production, they are essential with the good walk of the company.

  • General services supervise or ensure the maintenance of the buildings, the vehicles and the networks (electricity, telephone, data transmission, gases, lanes...) of the establishment.
  • Data processing department can be very important if it has in load the development of the data-processing applications specific to the company. It manages the park of the computers and the safeguard of the data.
  • Service Maintenance can be attached to the production, especially if it has in load only the installation and the maintenance of the working tool.
  • Service Guarding and that of...
  • Hygiene, safety and working conditions :
    • Fire protection ensure a permanent monitoring of the installations.
    • first-aid workers rescuers of work (SST), they are workers trained with first aid and which ensures them first aid in the event of accident or of faintness.
    • Medical department draft the urgencies, identifies them working stations at the risks in collaboration with Service EHS (Environment, Hygiene and Safety), the prevention ensures, takes part in the formation of the SST and tracking them occupational diseases.

Seek benefit

Among the various goals possible for a company, the research of the benefit occupies an important place. The benefit of the company (to be distinguished from the profit) is before all the return on the invested capital.

In the case of the company known as capitalist, if an investor (a person who has money) decides to rather place it in a company than to preserve it, it is that it wishes that the money placed in the company bear to him more. If a company does not generate a sufficient profit, its reputation tarnishes and it does not attract any more the investors. Its capacity of development even its survival can be called into question. For each branch of industry, there is a level of "normal" profit. Thus, for example, in the pharmaceutical sector of the years 2000, the mean level of profit is 15% of the funded capital (it is much). If a company generates less profit, people who placed their economies there (directly or more often via a bank or a pension fund) loses confidence and sells their actions: the price of the company (that it is out of purse or not) decreases, the investors remaining there lose.

A company known as capitalist whose profits are too weak too a long time does not have an economic justification: it must either be closed or to be repurchased. In the case of company ofsocial economy, it will perdura if it brings a social utility to the company.

How are benefit generated?

In a simplified way, the profitability of an activity is obtained while selling as much as possible and while spending the least possible.

One distinguishes from the normal incomes and the exceptional incomes:

  • The normal incomes are the products of the sales and the current financial transactions (appropriations customers and suppliers)
  • The exceptional incomes do not form by definition not part of the current operations of the company. It can be a question of sale of credits (buildings, machines, etc), of sale of subsidiary companies or countable handling (revaluation of a stock).

The margin, calculated by difference between selling and the cost price of the sold goods thus represents the principal contribution for the benefit of the company.

To increase this margin, there are only two levers:

  • to increase the price of the sold goods,
  • to reduce the production cost of the sold goods.

The means of action on the cost are extremely varied:

  • negotiation with the suppliers to lower the purchase prices,
  • improvement of quality to produce less reject,
  • improvement of the productivity of the machines (to make them turn more quickly),
  • improvement of the productivity of the men (reduction of the personnel, improvement of the qualification),
  • to reduce stock to write-off the immobilized capital,
  • to réglement negotiate conditions of more advantageous with respect to the customers

In a part of Europe, as in other developed countries, it is today more profitable for the basic productions automatizable to use a machine than an employee (the cost of little qualified work is higher than the cost of the capital) and this is why much of companies delocalize certain productions towards countries at low costs of hand of?uvre... (see * Interim, Dismissal). The solution passes by the innovation, the creation of activities requiring a creative hand of?uvre and highly technique and the development of services of proximity. The services account for from now on 70% of the economic activity (GDP) what marks the evolution of the countries developed towardspost-industrial economy.

"a multinational firm is a company which produces where the cost of work is the least expensive or the best qualifications (pole of compétence|pôles of competence), sells where the market is broadest and profitable, and declares its benefit there or the TAX DEPARTMENT is the least greedy"...

Classification of the companies

The companies can be classified according to several criteria:

  • According to their activity:
    • Artisanal company: It exerts one activitée manual.
    • Trade undertaking: It buys goods which it resells without transformation.
    • Industrial company: It transforms the raw materials and sells finished products (or semi-finished)
    • Service company : It resells a work without manufacture of physical objects.
    • Group companies: comprise a company-mother and subsidiary companies
    • Wide company (or in network, or matric, or virtual): a pilot firm includes/understands working with many companies partners.
  • According to the branch and branch of industry (classification INSEE) :
    • The sector: Together companies having the same principal activity.
    • The branch: Together of manufacturing units providing the same product or service.
  • According to their legal statute:
    • Capitalist companies,
    • Public companies, managed by the State,
    • Companies co-operatives, in which the associates direct (employees, consumers, inhabitants, recipients of the service...)
    • associations with nonlucrative goal, private companies whose benefit must be completely reinvested,
    • Mutual insurance companies,

Important topics

Measure performances

Compete with

For the right of the competition, the legal form (legal entity of private law or public law,company,association) and drank it (lucrative or not) company are indifferent. Thus for the right communuataire, "the concept of company includes/understands any entity carrying on an economic activity, indépendament legal statute of this entity and its mode of financment" (the Court of Justice of the European Communities (CJCE), Höfner stop, 1991).

Nevertheless, an economic activity does not exert, and is not any more one company subjected to the right of the competition, the organization which fulfills an exclusively social function (CJCE, Poucet 1993) or that which exerts prerogatives of puisssance public (CJCE, Eurocontrole, 1994).

Companies in difficulty

Company and relations with the world

External bonds


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