The economy is now a central part of our societies where people are employed. The company is also counted among the different units that make up the economy. The term “company” is used to denote a relatively independent unit within the economy.
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Definition of an establishment
If you ask yourself what defines a company, at least three aspects are mentioned:
- The business purpose: Every business has a specific purpose, ie, it usually produces something specific, such as beer (brewery), cars, or computers
- The production factors: Every company has certain production factors, such as machines, raw materials, or personnel
- The transformation process: Every company changes its raw materials into something different
These 3 steps together form the performance of a company. In other words, they describe the process that a company carries out, which consists of giving a certain input, transforming it in the company, and creating a special output from it.
Functional principles of establishments
For a company to function economically, some essential things must be observed:
- Every company must deal with its production factors economically (i.e., not wastefully)
- The company must create new value with its product. The end products must therefore be more valuable than the raw materials.
- A company can only exist in the long term if it makes a profit.
- A company must be liquid, i.e., it must have the necessary money to meet its regular obligations.
From the features described, it follows that a company must be understood as a relatively independent unit that aims to cover needs and is dependent on individual decisions.
Types of operation
Businesses can be of very different types. Classic forms of business are, for example:
- Service companies: Your product is not a thing but a specific service. Examples are trading companies; Transport companies, telecommunications companies; Banks; Insurance companies, and other service companies such as restaurants and hotels, tailors, hairdressers, theaters, cinemas, schools, hospitals, apartment rentals, as well as the liberal professions such as doctors, independent auditors, commissioners, brokers, agents.
- In-kind companies: Here the end product is a definite thing. Examples of this are industrial and craft businesses (e.g., steel construction, mechanical engineering, textile production).
As a rule, companies can also be incorporated in other ways. A distinction is often made according to the size of the company (small and medium-sized companies – large corporations) or according to legal forms (GmbH, UG, AG, etc.).
The business administration
Business administration or business administration is now a special sub-discipline of economics. So it deals with economics in a special (scientific) way.
Doing business is understood as “satisfying human needs through the provision of goods and services.”
In contrast to its neighboring discipline of economics, business administration does not focus on macroeconomic processes but on the economic processes that are decisive from the point of view of a company or company.
- Economics: Economy at the macroeconomic level, e.g., in a state (content focus: full employment, price stability, economic growth, external balance)
- Business administration: Economy at the level of an individual company or company. The reference is always the individual company, taking into account the environment, e.g., supplier-customer relationships and the supply and demand situation in the respective market segments of the company.
Structure of business administration
Business administration can be divided into two broad categories:
- In general business administration (ABWL), facts and problems with general validity are negotiated beyond the specific characteristics of the companies. The aim here is to develop general statements regarding the companies and their structure.
So many so-called practical business administration courses deal with very specific areas of business administration and seek to optimize them. The area of functional business administration includes B .:
- Tax Management
- Management theory
- human Resource
- Production economy
- Technology management,
- Corporate governance,
- Environmental management
In summary, it can be said that the aim of business administration is, on the one hand, of a theoretical nature, namely pursuing the scientific formation of systems, and, on the other hand, of an applied nature, namely to understand and improve specific operational processes.
General information on studying business administration
As part of a bachelor’s degree in business administration, you will usually get an overview of all the special fields of business administration. You can then undertake a real specialization in a master’s degree. As can be seen from the many sub-categories, business administration graduates can choose from a wide range of professions, depending on what they have specialized in during their training or studies.
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