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Questions and Answers
What does 'capital intellectual' include within a company?
What does 'capital intellectual' include within a company?
Which of the following is considered a factor organizativo in a company?
Which of the following is considered a factor organizativo in a company?
What role do gerentes or administrators play in a company?
What role do gerentes or administrators play in a company?
Which type of company has capital ownership that is managed independently?
Which type of company has capital ownership that is managed independently?
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What is primarily focused on human interactions and behaviors within a company?
What is primarily focused on human interactions and behaviors within a company?
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In terms of active factors, who contributes to the daily operations of a company?
In terms of active factors, who contributes to the daily operations of a company?
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Which of the following is not classified as a material or good for production?
Which of the following is not classified as a material or good for production?
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What do accionistas with control interest in a company primarily influence?
What do accionistas with control interest in a company primarily influence?
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What characterizes a Mixed Company?
What characterizes a Mixed Company?
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Which classification fits a company with 30 employees and 8 million euros in assets?
Which classification fits a company with 30 employees and 8 million euros in assets?
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What defines Industrial Companies?
What defines Industrial Companies?
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What is an example of a Final Consumer Product?
What is an example of a Final Consumer Product?
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Which type of company is primarily engaged in wholesale activities?
Which type of company is primarily engaged in wholesale activities?
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How are Transnational Companies defined?
How are Transnational Companies defined?
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Which of the following best describes a Large Company?
Which of the following best describes a Large Company?
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What is a characteristic of Service Companies?
What is a characteristic of Service Companies?
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What is one of the primary advantages of vertical integration?
What is one of the primary advantages of vertical integration?
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Which of the following is considered a disadvantage of vertical integration?
Which of the following is considered a disadvantage of vertical integration?
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What is a primary feature of a multinational corporation (MNC)?
What is a primary feature of a multinational corporation (MNC)?
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Which benefit is associated with internationalization?
Which benefit is associated with internationalization?
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What is one disadvantage faced by companies when they expand internationally?
What is one disadvantage faced by companies when they expand internationally?
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What characterizes an international company?
What characterizes an international company?
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Which of the following is a common challenge associated with cultural diversity in multinational corporations?
Which of the following is a common challenge associated with cultural diversity in multinational corporations?
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Which of the following strategies is NOT an advantage of internationalization?
Which of the following strategies is NOT an advantage of internationalization?
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What does the ecological dimension of the environment primarily relate to?
What does the ecological dimension of the environment primarily relate to?
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Which model is primarily used to analyze the structure and attractiveness of a sector?
Which model is primarily used to analyze the structure and attractiveness of a sector?
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What is the main function of an entrepreneur in a business context?
What is the main function of an entrepreneur in a business context?
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How does corporate governance relate to the difference in interests between owners and management?
How does corporate governance relate to the difference in interests between owners and management?
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What role does the board of directors play in a company?
What role does the board of directors play in a company?
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Which statement accurately reflects the relationship between owners and managers in large companies?
Which statement accurately reflects the relationship between owners and managers in large companies?
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In what way can owners influence management decisions?
In what way can owners influence management decisions?
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What distinguishes a manager from an entrepreneur?
What distinguishes a manager from an entrepreneur?
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What is the primary motivation behind ideas generated by necessity?
What is the primary motivation behind ideas generated by necessity?
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What best describes business process mapping?
What best describes business process mapping?
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What is the function of a business plan?
What is the function of a business plan?
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Which step is necessary for incorporating a company?
Which step is necessary for incorporating a company?
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What is one of the traditional functions of management?
What is one of the traditional functions of management?
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How does management contribute to a company's success?
How does management contribute to a company's success?
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Which of the following elements is NOT typically included in a business plan?
Which of the following elements is NOT typically included in a business plan?
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What role does organization play in management?
What role does organization play in management?
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What is a disadvantage of business specialization?
What is a disadvantage of business specialization?
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Which statement accurately describes unrelated diversification?
Which statement accurately describes unrelated diversification?
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What is a key characteristic of vertical integration?
What is a key characteristic of vertical integration?
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Which of the following is an advantage of related diversification?
Which of the following is an advantage of related diversification?
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Why has there been a trend towards less business specialization recently?
Why has there been a trend towards less business specialization recently?
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What is the main focus of the contractual approach in a business context?
What is the main focus of the contractual approach in a business context?
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Which of the following describes a key characteristic of open systems in the systemic approach to business?
Which of the following describes a key characteristic of open systems in the systemic approach to business?
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What is one of the difficulties within the contractual approach related to productivity?
What is one of the difficulties within the contractual approach related to productivity?
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In the systemic approach, what are passive factors primarily responsible for?
In the systemic approach, what are passive factors primarily responsible for?
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Which of the following types of capital is categorized as tangible capital within the organizational structure?
Which of the following types of capital is categorized as tangible capital within the organizational structure?
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What is a significant advantage of applying the systemic approach to understanding a company’s behavior?
What is a significant advantage of applying the systemic approach to understanding a company’s behavior?
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How does the contractual approach contribute to transaction costs within a company?
How does the contractual approach contribute to transaction costs within a company?
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In what way does the systemic approach categorize the elements of a company?
In what way does the systemic approach categorize the elements of a company?
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What aspect does 'capital intelectual' primarily encompass within a company?
What aspect does 'capital intelectual' primarily encompass within a company?
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Which statement best describes the function of 'factores activos' in a company?
Which statement best describes the function of 'factores activos' in a company?
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Which of the following best illustrates 'elementos estructurales' in an organization?
Which of the following best illustrates 'elementos estructurales' in an organization?
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What does the term 'factor organizativo' specifically include?
What does the term 'factor organizativo' specifically include?
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How do 'elementos de comportamiento' within a company influence operations?
How do 'elementos de comportamiento' within a company influence operations?
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What distinguishes 'empresas privadas' from other types of companies?
What distinguishes 'empresas privadas' from other types of companies?
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Which of the following accurately describes the role of gerentes or managers in an organization?
Which of the following accurately describes the role of gerentes or managers in an organization?
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Which statement reflects the importance of a well-defined 'estructura organizativa'?
Which statement reflects the importance of a well-defined 'estructura organizativa'?
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What is a key characteristic of 'capital humano' within a company?
What is a key characteristic of 'capital humano' within a company?
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Which element plays a crucial role in integrating all factors within a business?
Which element plays a crucial role in integrating all factors within a business?
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Which aspect is essential for the success of a strategy within a company?
Which aspect is essential for the success of a strategy within a company?
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What is a potential outcome when objectives require developing new internal strengths?
What is a potential outcome when objectives require developing new internal strengths?
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Which level of managerial strategy is primarily concerned with overall direction and growth opportunities?
Which level of managerial strategy is primarily concerned with overall direction and growth opportunities?
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Which of the following statements is true regarding the levels of managerial strategy?
Which of the following statements is true regarding the levels of managerial strategy?
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What is crucial when assessing internal strengths as part of strategic formulation?
What is crucial when assessing internal strengths as part of strategic formulation?
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When developing a strategy, why is knowledge of the competitive environment crucial?
When developing a strategy, why is knowledge of the competitive environment crucial?
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Which of the following defines how strategies should be executed effectively within a company?
Which of the following defines how strategies should be executed effectively within a company?
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What role do long-term coherent objectives play in the overall strategy of a company?
What role do long-term coherent objectives play in the overall strategy of a company?
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Why might companies with diverse activities require multiple strategies?
Why might companies with diverse activities require multiple strategies?
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What is the primary purpose of the corporate strategy within a company?
What is the primary purpose of the corporate strategy within a company?
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What is the primary focus of the Board of Directors in a company?
What is the primary focus of the Board of Directors in a company?
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Which of the following describes the risk-entrepreneur approach?
Which of the following describes the risk-entrepreneur approach?
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What is NOT a key part of the entrepreneur's profile?
What is NOT a key part of the entrepreneur's profile?
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Which statement best explains the relationship between an entrepreneur and market opportunities?
Which statement best explains the relationship between an entrepreneur and market opportunities?
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What is one of the initial steps in creating a company?
What is one of the initial steps in creating a company?
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Which of the following best represents a failure in the entrepreneur's role?
Which of the following best represents a failure in the entrepreneur's role?
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Which function of the Board of Directors involves interaction with investors?
Which function of the Board of Directors involves interaction with investors?
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Which approach suggests that the entrepreneur and capitalist are the same person?
Which approach suggests that the entrepreneur and capitalist are the same person?
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What does the response capacity of an entrepreneur entail?
What does the response capacity of an entrepreneur entail?
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Which aspect is crucial for determining a business opportunity?
Which aspect is crucial for determining a business opportunity?
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Study Notes
Company Resources
- Materials and Goods: These are the raw materials, finished products, and components required for the production process.
- Intangible: This includes intellectual property such as patents, technology like software programs, and the company's knowledge and experience.
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Active Factors: These are the human and organizational resources that drive and manage the company's activities.
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Labor Force (Human Capital):
- Employees or Workers: Individuals who perform daily tasks and contribute to the production of goods or services.
- Managers or Administrators: Individuals who make decisions, lead, and manage the company to ensure its success and efficient operation.
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Company Capital Owners:
- Controlling Shareholders: Owners who have sufficient stock to influence or control company decisions.
- Simple Financial Investors: Individuals who own company shares but do not actively participate in its management.
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Labor Force (Human Capital):
- Organizational Factor: This integrates and coordinates all the previous elements. It refers to the organizational structure, rules, procedures, and culture that allow the company to function effectively and efficiently.
Company Types
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According to Ownership:
- Private Companies: Capital is held by private individuals or entities, ensuring independent control and management.
- Public Companies: Capital belongs to the public sector, with government control and a focus on public interest.
- Mixed Companies: Capital is shared between the private and public sectors, combining the interests and management of both.
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According to Size:
- Microenterprises: Less than 10 employees and less than €2 million in turnover or assets.
- Small Businesses: Between 10 and 49 employees, and less than €10 million in turnover or assets.
- Medium Businesses: Between 50 and 249 employees, and less than €50 million in turnover or assets.
- Large Businesses: More than 250 employees and more than €50 million in turnover or assets.
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According to the Nature of the Economic Activity:
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Industrial Companies: Dedicate themselves to the production of goods, further categorized into:
- Extractive: Focus on extracting natural resources (e.g., mining, oil companies).
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Transforming: Transform raw materials into finished products.
- Consumer Goods: Produce goods directly used by consumers (clothing, food).
- Production Goods: Produce goods used by other companies to manufacture their products (machinery, construction materials).
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Commercial Companies: Focus on buying and selling goods, further categorized into:
- Wholesalers: Purchase large quantities of goods from manufacturers and sell them in smaller amounts to retailers or businesses.
- Retailers: Sell products directly to end consumers.
- Trading Agents: Act as intermediaries in buying and selling, connecting buyers and sellers.
- Service Companies: Offer intangible services instead of physical products, covering a wide range of sectors.
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Industrial Companies: Dedicate themselves to the production of goods, further categorized into:
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According to the Field of Action:
- Local: Operates in a specific region.
- National: Operates throughout a country.
- Multinational: Operates in multiple countries.
Specific Environment
- Analysis of the specific or competitive environment: This complements the study of external factors that affect or can affect the activity and results of a company.
- Attractiveness: Determines how profitable a company can be in its current sector, influenced by the opportunities and threats faced by businesses operating in that environment.
- Porter's Five Forces Framework: A widely used tool for analyzing the structure of a sector and its attractiveness.
Entrepreneurship
- Entrepreneur: An individual who identifies and creates a business opportunity. They develop new services or products in the face of uncertainty.
- Owner: An individual who possesses the necessary resources to start a new company. This role may be filled by someone else, as entrepreneurs do not always have the necessary means.
- Manager: An individual, or group of individuals, who hold the authority to set company objectives and make decisions to achieve them.
- Entrepreneur vs. Manager: Entrepreneurs are considered agents of change, creating resources, while managers oversee the process and control the staff.
Company Management
- Management: Responsible for coordinating and integrating the productive factors of the company, especially human resources.
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Managerial Functions:
- Planning: Deciding future actions and establishing the necessary means to achieve them.
- Organizing: Designing a stable set of relationships between company members to ensure everyone understands their role in achieving objectives.
Vertical Integration
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Vertical Integration: When a company controls multiple stages of the supply chain, from raw materials to distribution.
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Advantages:
- Easier Coordination and Planning: Reduces inefficiencies and delays.
- Reduced Dependency: Minimizes reliance on third parties.
- Improved Competitive Positioning: Adds value to products, leading to a competitive advantage.
- Protection of Information: Protects knowledge about technology or new products.
- Greater Control over the End Market: Allows the company to directly influence the final market offering.
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Disadvantages:
- Increased Risk: Makes companies more vulnerable to changes.
- Reduced Flexibility: Makes companies more difficult to adapt to market changes.
- Higher Administrative Costs: Increases the cost of managing multiple stages of the supply chain.
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Advantages:
Internationalization
- Internationalization: Expansion of a company's operations to other countries to access new markets.
- Multinational Corporation (MNC): Operates in multiple countries with a large volume of activity in each.
- Factors Influencing Internationalization: The factors that influence a company to expand outside of its home country.
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Entry Strategy: Determining how a company will enter a new market.
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Advantages:
- Economies of Scale: Lowering production costs by increasing volume.
- Economies of Scope: Producing different products using the same resources.
- Market Expansion: Increased reach and potential customers.
- Location Economies: Utilizing cheaper labor or resources in other regions.
- Access to Resources: Obtaining resources unavailable in the home country.
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Disadvantages:
- Higher Risk: Exposure to new market conditions and regulations.
- Cultural Diversity: Challenges in managing different cultures and workstyles.
- Bureaucracy: Challenges in navigating international laws and regulations.
- Distribution Costs: Increased costs associated with transportation and logistics.
- Trade Barriers: Restrictions on international trade that hinder business operations.
-
Advantages:
Internationalization Process
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Process:
- Export: Initial entry by selling products or services to foreign markets.
- Foreign Direct Investment (FDI): Investing directly in foreign companies or establishing new operations abroad.
- Joint Venture: Sharing resources, risks, and profits with a foreign partner.
- Acquisition: Purchasing an existing foreign company to gain market access and resources.
- Greenfield Investment: Establishing completely new operations in a foreign country.
Multinational Companies
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Main Features:
- Efficiency: Operational excellence and cost control.
- Strong Investment in R&D: Focus on innovation and technological advancements.
- Environmental Adaptation: Adjusting operations to local market conditions.
- Operating in Multiple Markets: Presence in various countries.
- Tendency to Grow Indefinitely: Continuous expansion and development.
Types of Multinational Companies
- International Company: Most decision-making and technological development remains within the parent company.
- Multinational Company: More decentralized operations with greater autonomy for subsidiaries in different regions.
- Global Company: Standardized products and services with a global focus on efficiency.
- Transnational Company: Seamless integration of operations across global locations with decentralized decision-making and shared resources.
Contractual Approach
- Defines a company as a collection of contracts, where a transaction is an exchange of a good or service between two independent units.
- Focuses on relationships: companies are formed by contracts that can involve relationships of authority or agencies.
- It doesn't focus solely on internal authority, but on economic agreements between the parties involved in production.
- It considers the difficulties that arise when measuring productivity and setting prices and rewards within the company.
- The company is viewed as a "nexus of contracts" that allows for coordination of activities and reduces transaction costs.
Systemic Approach
- Views the company as a system, a set of interrelated elements that transform inputs into products or services (outputs).
- Companies are open systems, interacting with and adapting to their environment, using the principles of general systems theory to explain how the company relates to and adapts to external change.
- It simplifies the company's composition to understand its behavior and facilitates control and adaptation processes to its environment.
- It divides the elements of a company into passive factors and active factors, both of which play a fundamental role in its operation and development.
Passive Factors
- These are the resources that the company possesses and uses to operate, but they do not act autonomously.
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Classical Economic Resources include land and capital.
- Land includes the physical space where the company operates (offices, factories, land, etc.).
- Capital includes the financial and technical resources that the company uses to carry out its activities.
Types of Capital
- Financial Capital includes liquid financial resources, such as cash, bank accounts, investments, etc.
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Technical Capital includes tangible and intangible assets.
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Tangible technical capital includes:
- Investment technology or capital equipment: Machinery, tools, IT equipment, and anything the company uses to produce.
- Materials and goods: raw materials, finished products, and components necessary for production.
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Intangible technical capital includes:
- Technology and software: Computer programs and technology used in the company's operations.
- Intellectual Capital: Includes knowledge, patents, ideas, experience, and intellectual property that the company possesses.
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Tangible technical capital includes:
Active Factors
- These are the human and organizational resources that drive and manage the company's activities.
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Labor Force (human capital) includes:
- Employees or workers: The people who perform daily work and contribute to the production of goods or services.
- Managers or administrators: Those who make decisions, lead, and manage the company to ensure its success and efficient operation.
Owners of the Company's Capital
- Controlling Shareholders: Owners who have enough shares to influence or control the company's decisions.
- Simple Financial Investors: Those who own shares in the company but do not have a direct role in its management.
Organizational Factor
- This factor integrates and coordinates all the previous elements.
- It refers to the organizational structure, rules, procedures, and culture that allow the company to operate effectively and efficiently.
Structural Elements
- Refer to the physical and hierarchical organization of the company, including the organizational structure, departments, chain of command, and information systems.
Behavioral Elements
- Focus on human interactions and behavior within the company, including organizational culture, motivation, communication, teamwork, and professional development.
Types of Companies
-
According to Ownership or Ownership of Capital:
- Private Companies: Capital is in the hands of individuals or private entities, with independent control and management.
- Public Companies: Capital is in the hands of the government or public entities.
The Entrepreneur
- Is the central productive factor, as they negotiate with the other factors and establish relationships with the environment.
- The figure is not theoretically studied as a central point, and the people who have studied it haven't concluded their role in the firm.
- There are 4 approaches to their figure and functions:
Risk-Entrepreneur
- Refers to the idea that the entrepreneur takes risks as part of their role in the economy.
- Ideas of three important economists:
- Knight: Entrepreneur is a risk-taking individual who faces uncertainty and has a higher level of risk tolerance than other economic actors.
- Schumpeter: Entrepreneurs are innovators who create change and disruption in the economy by introducing new products, processes, and business models.
- Hayek: Entrepreneurs are information brokers who gather and coordinate dispersed knowledge in the economy.
Control-Entrepreneur
- Refers to the role of the entrepreneur as a figure of control and direction within the company.
- Ideas of three economists:
- Coase: Entrepreneurs play a central role in reducing transaction costs and coordinating activities within the economy.
- Chandler: Entrepreneurs are the driving force behind the growth and development of large corporations.
- Nelson: Entrepreneurs are innovators who create new knowledge and intellectual property.
Capitalist-Entrepreneur
- A vision in which the entrepreneur and the capitalist are the same person.
- Ideas of several economists:
- Marx: The capitalist is the owner of the means of production, and the entrepreneur is the one who takes risks and manages the business.
- Veblen: Entrepreneurs are agents of the capitalist system who seek to maximize profits.
- Galbraith: Entrepreneurs are no longer independent operators, but are subject to the constraints of large corporations and the market.
Opportunity-Entrepreneur
- An entrepreneur characterized by their ability to discover and take advantage of opportunities in the market.
- Ideas of three economists:
- Kirzner: Entrepreneurial alertness is the ability to identify and seize opportunities that others have missed.
- Baumol: Entrepreneurs can be either productive or unproductive, depending on whether they create wealth or simply seek to redistribute it.
- Rumelt: Entrepreneurial skills are important for creating and sustaining competitive advantage in a dynamic environment.
Entrepreneur Profile
- In three key parts:
- Technical Knowledge: Requires specific training and technical knowledge to create and manage a company.
- Personal Skills: The entrepreneur must have personal skills that allow them to excel in their activity, such as leadership.
- Response Capacity: Ability to take advantage of opportunities, solve problems, and make decisions quickly and effectively, adapting to challenges in the market.
Company Creation
- Involves addressing the following issues:
- Having an idea.
- Drawing up a business plan.
- Incorporating the company.
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Idea and Opportunity
- Having an idea, but it must be a business opportunity,
- Seeking business opportunities and then refining the idea.
Elements to Consider
- Simple, coherent, and long-term objectives: Strategy is a decision that affects the company for a long time.
- Knowledge of the competitive environment: It is necessary to identify opportunities to take advantage of, and also take into account dangers to avoid.
- Assessment of internal strengths: Each company has internal qualities that differentiate it which can be the basis of success.
- Effective implementation: The strategies must be translated into a concrete action plan. It is also necessary to establish control systems that identify problems in its implementation and allow changes to be introduced.
Implementation of the Strategy
- The 4 elements mentioned form the definition of strategy and the success of the strategy depends on the compatibility and alignment of all of them.
- It is necessary to know which of the internal elements are the most appropriate (to compete in their specific environment) in the competitive environment where they are found, and at the same time reflect this in the objectives.
- Objectives must be designed to fit the capabilities and environment of the company.
- There are times when the objectives set imply developing new internal strengths, as the company lacks them.
- There are objectives that require a change in the competitive environment.
- Companies with greater internal diversity of activities and businesses cannot just have one strategy for all.
- There are three levels of strategy:
Levels of Managerial Strategy
- These three different levels of strategy generally have a hierarchy that corresponds to that of the organization (Top management, middle management, first-line management, in that same order).
- However, the division of the company into these three levels does not always occur.
- In companies that develop related activities around the same product or market, the first two levels overlap.
- In small companies it is possible to find only one level of strategy that addresses the decision of all three.
Corporate
- Sets the basic orientation of the entire company.
- The strategy is oriented towards decision-making related to the identification of the businesses in which the company wants to enter, and the growth forms that the company can have.
- The horizontal scope of the company is determined by the variety of products, by the heterogeneity of products offered, with anoption:
- Specialization
- Diversification
Specialization
- Some companies focus on one type of product, offering multiple items that meet similar customer needs.
- By staying in a familiar area, they aim to strengthen their market position and grow sales.
- This can be done by increasing the use of current products, attracting new customers or those from competitors, and replacing older products with newer ones
- It's a low-risk strategy since the company can continue using the same sales channels, raw materials, and production processes.
- However, it doesn't work in all sectors. In industries with strong competition or where launching new products is difficult, increasing sales is challenging. Similarly, in markets with uniform customer needs, adapting products to increase sales is harder.
- Recently, there has been a trend toward less business specialization
Diversification
- Involves companies offering a wide range of products.
- It doesn't always require new resources, as it can create synergies by using underutilized resources and capabilities.
- Related Diversification occurs when a company expands using existing resources and capabilities.
- Unrelated Diversification happens when the new products are very different, and the company can't leverage existing resources.
Advantages of Related Diversification
- Improves competitive positioning by sharing costs across businesses.
- Allows entry into attractive sectors with favorable market conditions.
Disadvantages of Diversification
- It doesn't always boost profitability.
- Synergies require strong coordination and effort.
- Can lead to less flexibility.
- Unrelated diversification is often unprofitable due to large differences in resource and capability needs across businesses.
Vertical Integration
- Refers to a business strategy where a company controls multiple stages of the production or supply chain.
- These stages can range from sourcing raw materials to manufacturing and delivering the finished product to consumers.
- When a company engages in multiple stages of this process internally, without relying on external suppliers or buyers, it is considered vertically integrated.
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Description
This quiz covers the essential resources a company utilizes for its operations, including materials, intangible assets, and human capital. It delves into the roles of employees, managers, and capital owners within the corporate structure. Test your understanding of how these elements contribute to a company's success.
