We explain what a company is and the different types. In addition, we explain what their characteristics are, their resources and more.
A company is an organization that carries out a commercial activity to make a profit.
What is a company?
A company is a type of commercial organization in which Two or more people join together to develop an economic activity. and achieve a common objective that is to obtain profits or benefits.
A company is a unit producing goods or services. Every company is run by management that directs human resources (people) and manages material resources (inputs, machinery and the physical space in which it is established).
Frequent questions
How is a company formed?
First, you need to have a business idea and draw up a plan. Then, you need to determine the legal form and calculate the financing and resources needed to start the company.
What is the purpose of a company?
The purpose is to make a profit through the production and marketing of goods or services.
How is the success of a company defined?
In addition to generating economic profits, it must mean a positive contribution to the planet, both from a social and environmental perspective.
Types of companies
Some types of companies are:
According to its size:
- Microenterprises. They are those that have less than 10 employees.
- Small companies. These are those that have between 10 and 49 employees.
- Medium-sized companies. These are those that have between 50 and 250 employees.
- Large companies. These are those that have more than 250 employees.
According to its legal form or legal modality:
- Sole proprietorship. They are those that belong to a single owner.
- Commercial society. They are companies that belong to a group of partners. They can be a Public Limited Company (SA), a Limited Liability Company (SRL) or a Limited Company by Shares (SCA).
- Cooperatives. These are companies that are part of community models of social economy.
According to its reach in the market:
- Local companies. They are those that carry out their commercial activity exclusively in the region or town in which the company is located. For example: a neighborhood bakery.
- National companies. They are those that carry out their activity throughout the national territory, regardless of the location of their headquarters or premises. For example: a textile company that makes work clothes and markets in different parts of the country and through electronic commerce.
- Companies multinationals. These are registered in a specific territory and can carry out their commercial activity in different countries. For example: The technology company Microsoft is of American origin but has offices in different countries around the world, and distributes its products and services almost all over the planet.
- Traditional companies. They are those who carry out commercial activities through trades or tasks that require knowledge that is transmitted between families from generation to generation. For example: a craftsman, a toolmaker or a mechanic.
According to the type of economic activity:
- The Economic sectors They are segments or stages of the general productive process of a country. They form a chain of industries that coexist so that each company can develop its commercial activity.
Depending on the sector to which your productive activity belongs, which can be:
- Primary sector. These are companies that are dedicated to the exploitation of natural resources to extract raw materials. For example: oil companies, mining companies or agricultural companies.
- Secondary sector. These are companies that are dedicated to transforming raw materials into finished products or semi-finished products. For example: textile companies, food companies or automotive companies.
- Third sector. They are companies that are dedicated to commercial and operational services, both for other industries and for the end consumer. For example: banks, insurance companies, telephone and internet companies.
- Quaternary sector. They are companies that are dedicated to the commercialization of information and knowledge, that is, they provide services that are based on intellectual work or the knowledge economy. For example: companies dedicated to market research, consulting or media.
Resources of a company
Human resources skills represent added value for companies.
Resources are a set of tangible goods and intangible values that are necessary for the operation and subsistence of an organization.
Some types of company resources are:
- Material resources. They are all the material assets necessary for the company to exist and be able to develop its productive activity. For example: physical space, machines, devices, tools, furniture, raw materials, accessories, among many other goods.
- The human Resources. These are all the people employed by the company to carry out the tasks required for the performance of the activity. For example: the manager, the executives, the team supervisors, the executives, the assistants, the maintenance managers, the cleaning managers, the security managers.
Corporate social responsibility
Corporate Social Responsibility (CSR) is a type of organizational management that seeks to achieve a balance between the impact that commercial activity has on society and the environment, and the achievement of commercial objectives.
Some examples of issues that are taken into account by CSR are:
- Energy efficiency
- Renewable resource sources
- The conscious use of resources
- Protecting biodiversity
- Reuse, repair and recycling of inputs
- Human rights
- Education on gender perspective and legislation
- Healthy working conditions
- Community collaboration tasks
- Anti-corruption policies and measures, among many other issues.
The implementation of CSR management arose from the need to moderate the production and consumption system. Currently, the abuse of the exploitation of natural resources, excess pollution and the lack of treatment of waste and garbage are causing irreversible damage to the planet and living beings.
Organizations that carry out CSR management have a positive impact on the environment and society, but they can also benefit from other advantages promoted by the State, such as: reduction in taxes, ease of access to credit and financing, and improvement in the institutional image.
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References
- UNIDO, United Nations (2022). What is CSR?from: United
- Edmondson, B. (2022). What is Corporate Social Responsibility (CSR)?from: TheBalanceMoney
- Robbins, S.P., & Judge, T.A. (2009). Fundamentals of organizational behavior. 13th Edition. Pearson. Mexico.