The enterprise and business on the market economy

The enterprise and business on the market economy Economics problems

Nature of enterprise Function of subsystems: Marketing Production Finance Innovations The personnel Management Purpose of enterprise Objectives of enterprise Production as a system Example

Purpose of enterprise High quality of output High labor productivity Low cost of production Maximum profit in long-term prospect

Objectives of enterprise full and timely satisfaction of requirements of the consumers competitiveness of production on the basis of high quality of output flexible updating of production on the new demands of customers Effectiveness of production Favorable and safety labor conditions Personal trainings

Nature of enterprise The enterprise is a basic primary economic unit in economic system which targeted on making and realizing production process Has subsystems: Production/Operations Finance Marketing

Enterprise Operations function consists of all activities related to producing goods or providing services. directly Organization Finance Production/ Operations Marketing

Business Operations Overlap Production/ Operations Marketing Finance

Production Input Production Output

Factors of Production Factors Resources Economic benefit

Land a factor of production comprising all naturally occurring resources Natural resources are fundamental to the production of all goods, including capital goods. capital good, or simply capital in economics, is a manufactured means of production. Capital goods are acquired by a society by saving wealth which can be invested in the means of production.

Wage labor is the socioeconomic relationship between a worker and an employer, where the worker sells their labor under a formal or informal employment contract

Capital In economics, capital goods, or real capital are those already -produced durable goods that are used in production of goods or services capital is one of the factors of production

Physical Capital Two types Real (fixed) Working-

Types of Operations Goods Producing Examples Farming, mining, construction manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites ,

Manufacturing vs Service Characteristic Manufacturing Service Output Tangible Customer contact Low High Uniformity of input High Low Labor content Low High Uniformity of output High Low Measurement of productivity Easy Difficult Opportunity to correct quality problems High Low High Intangible

Food Processor Inputs Raw Vegetables Metal Sheets Water Energy Labor Building Equipment Processing Outputs Cleaning Making cans Cutting Cooking Packing Labeling Canned vegetables

Hospital Process Inputs Doctors, nurses Hospital Medical Supplies Equipment Laboratories Processing Examination Surgery Monitoring Medication Therapy Outputs Healthy patients

Value-Added • The difference between the cost of inputs and the value or price of outputs. Value added Inputs Outputs Transformation/ Land Goods Conversion Labor Capital Services process Feedback Control Feedback

Operations Interfaces

Function of subsystems Marketing – to come out Finance – to keep and on top on sales of support at necessary production of a certain level all kinds of kind on the market financial resources. Production – to reach the highest labor productivity and the minimum cost price at production of demanded quality.

Function of subsystems Innovations – to win leading positions on input of new kinds of production, using on researches and workings out certain percent of profit. The personnel – to provide the conditions necessary for development of creative potential of workers and increase of their level and interest in work. Management – to define critical areas of administrative influence and the priority problems providing reception of planned results.

General shifts of enterprise The technological unity – means close interrelation of all parts of enterprise which is supplemented with presence of factory services The organizational-economic unity - organization of production on a commercial basis Economic independence – provides a self-sufficiency by real and working capital, independent sale of production, financial report.

Production as a system Departments Shops Sections Workplaces Personal Inventories

Example. OJSC "Glubokoye dairy-canning factory" ОАО «Глубокский МКК» The main production units (milk processing and output of the production), workshops and auxiliary units: canning shop; butter workshop; whole-milk processing shop; workshop of dried milk; can workshop. Auxiliary units include boiler room ammoniac compressor-house; electric shop; machine workshops; motor transport shop; building site; battery-house; electrolytic- house; smithy; laundry Для осуществления производственной деятельности на организованы цеха основного производства (переработка молока и выпуск продукции), цеха и участки вспомогательных производств. Оонсновные производственные подразделения: консервный цех; маслоцех; цельномолочный цех; цех сухого молока; жестянобаночный цех. К вспомогательным подразделениям относятся: котельная; аммиачная компрессорная; электроцех; механические мастерские; автотранспортный цех; ремонтно-строительный участок; аккумуляторная; электролитная; кузница; прачечная. http: //glmkk. by/ru/production/price

Structure of enterprise Production structure Organization structure