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Business Economics - Pokropivny SF

Chapter 2. Fundamentals of business

Key concepts and terms

Entrepreneurship; types of entrepreneurial activity; types of businesses; franchising; enterprise agreement (contract, agreement); partnerships; international Business; joint ventures.

2.1. Entrepreneurship as a modern form of management

Essence, value and organizational-legal forms of implementation. As you know, in the past allocated land, labor and capital as the key factors of production; now they include a new factor - the entrepreneurial potential (the potential of the most effective use of the aggregate of human, material and non-material resources). Formation and use of the building is almost is the essence of the concept of "enterprise", which is considered to be a special sphere of production and business or other activities in order to obtain a certain profit.

Entrepreneurship, commonly referred to as proactive - an independent, economic and commercial activities of certain individuals and entities, focused entirely on the profit (income). Such activities are carried out on their behalf, at your own risk and under the sole financial responsibility of a separate individual - entrepreneur or legal entity - the enterprise (organization).

The main functions of business are: 1) creative - generate and active use of innovative ideas and pilot projects, ready for calculated risks and the ability to take risks in business (entrepreneurship); 2) resource - generation and productive use of equity as well as information, material and labor resources; 3) organization and supporting, t. E. The practical organization of marketing, production, sales, advertising, etc. Economic Affairs. Entrepreneurial activity can be carried out without and with the use of hired labor without a legal entity, or to form itself.

It is important to realize that the business should always be in accordance with evidence-based principles.

These principles include:

• Freedom of choice of activities;
• Involvement Volunteering for entrepreneurial activity and property of legal entities and individuals;
• Creating a Self-program activities, the choice of suppliers and consumers of manufactured products, setting prices in accordance with the law;
• Free hiring employees;
• Recruitment and use of the material - technical, financial, labor and natural and other resources, the use of which is not prohibited or restricted by law;
• Free disposal of the profit remaining after making the payment, established by the legislation;
• Separate implementation of the entrepreneur - legal entity of foreign economic activity, the use of any entrepreneur belonging to him of foreign exchange earnings in its sole discretion.

Entrepreneurship, as a form of predominantly proactive activities can start and operate in all types (industrial and commercial activity, mediation, services, etc.). At the same time always stands out individual and collective forms of business activity that is these types of the latter, as: a) small business (small business), which is based on private ownership or lease of property; b) joint ventures (partnership), based on collective ownership; c) corporate entrepreneurship, the base material of which is stock ownership.

Traditionally, the alternatives are classic and innovative business models. The classical model of business has always focused on the most efficient use of available resources of enterprises (organizations). With this model of action entrepreneur clearly delineated: an analytical assessment of the available resources; identification of the real possibilities of achieving business goals; use precisely the real opportunities that can provide the most effective return cash financial, tangible and intangible resources. Innovative business model includes the active use of predominantly innovative organizational and managerial, technical-technological and socio-economic solutions in the area of ​​multiscale business. Therefore, the practical implementation of this business model should be based on a series of actions carried out by the system: 1) science-based formulation of the main business ideas; 2) a comprehensive assessment of the external market environment in terms of research the feasibility of the proposed business idea; 3) unbiased comparative assessment of their own material and financial resources and the forecasted opportunities; 4) a constructive search for additional external sources of relevant types of resources (if necessary); 5) a deep analysis of the potential competitors in the relevant niche markets; 6) the practical implementation of the innovative nature of the tasks in accordance with the concept of entrepreneurship.

Proper understanding of the nature of business also follows from the definition of its importance for the functioning of an efficient system of management. It (value) consists primarily in the fact that the enterprise: first is the main factor of structural changes in system management; secondly, it creates a life-giving environment for competition and thus become a catalyst for socio-economic development of the country as a whole; Thirdly, it promotes the most efficient use of investment, tangible and intangible resources; Fourth, it provides adequate motivation for highly productive labor.

In Ukraine, the legal support of entrepreneurial activity is determined primarily by the Law of Ukraine "On Entrepreneurship", adopted by the Supreme Council of Ukraine, 1991. Key sections of it are: 1) the general provisions on the enterprise (subjects, freedom, constraint, principles and organizational form); 2) conditions for business (state registration, the right to employment of workers and social security, liability of the order of termination of activity); 3) the ratio of the entrepreneur and the state (the guarantee of rights, government support and regulation of the activities of foreign companies, international treaties).

For the further development of business it is also important the Law of Ukraine "On State Support nalogopredprinimatelstva" adopted by the Verkhovna Rada of Ukraine in 2000. In accordance with the law nalogopredprinimatelstva support should be carried out in the following areas:

• Formation of an infrastructure of support and development of small business, the organization of the state of training, retraining and advanced training for nalogopredprinimatelstva subjects (MP);
• Establishing a system of benefits to subjects of MT;
• The introduction of a simplified system of taxation, accounting and reporting;
• Financial and credit support of MP;
• Attraction MP subjects to perform scientific - technical and socio - economic programs, the implementation of the delivery of goods (works, services) for the state and regional consumers.

An important pre dposylkoy successful entrepreneurship should be considered a variety of organizational - legal form of its implementation, which usually depends on several factors, a measure of responsibility, taxation system, cash requirements, the possibility of a change of ownership, the management capacity of the entrepreneur, etc. There are three basic organizational - legal forms of business: 1) sole proprietorship; 2) Company (partnership); 3) corporations (joint stock company). Characteristics of the advantages and disadvantages of individual organizational entities are shown in the Table. 2.1.

Table. 2.1

An important form of business is a franchise, which in the broadest sense of the term means providing the right production and (or) marketing of products (services), as well as practical assistance in organizing business. Franchising as a special form of management is as follows: an independent firm (franchayzodatel) producing products (providing services), transfers the right to use its trademark to another enterprise (franchayzopoluchatelyu) in exchange for a commitment to produce and sell the products of this independent company (to provide these same services ). For the right to carry on business in the name and under the trademark franchayzodatelya, franchayzopoluchatel pays him a certain percentage of their income as a material (monetary) compensation.

Typology, the environment and activation of entrepreneurship. Practice management confirms the possibility of the two main species (kinds) of business activity - production and mediation. Production entrepreneurship is considered decisive, since it most affects the efficiency of managing the system and the quality of social life. General typology of production and brokering, ie it split into separate structural elements and grouping in certain blocks is shown in Figure 2.1.

Fig. 2.1. Typology of manufacturing and intermediary business activities

Entrepreneurial activity in the direct production of goods must focus on the production of market promotion of traditional or innovative products. Such activities will be more effective if it is carried out using the technical and technological innovations, higher performance products of labor, the new elements of the organization of production processes, etc. In this case we are talking about the production of traditional products using partial innovation. If the production is based entirely on innovation, the result of such an organization is its appearance of a product with fundamentally new properties or areas of use.

Manufacturing business activities may have a primary or auxiliary character. The main types of business activities are in the process of which are created and sold ready-to-end product consumption. Supporting considered types of business that have not only materialized but not objectified character t. E. Engineering, consulting, leasing, marketing, design, factoring and similar activities.

Individuals and legal entities representing the interests of producers and consumers called mediators. Proceeding from this basic purpose of the intermediary business activity is the integration of the economic interests of producers and consumers.

One common form is the mediation agency, it is the form of management, in which the agent (intermediary) is acting on behalf and for the benefit of the consumer or producer respectively (principal). There are several types of agents. The agents (representatives) producers represent the interests of a few producers of similar goods. Authorized sales agents (marketers) cooperate on a contractual basis. Procurement Agents are usually engaged in the selection of necessary consumer goods assortment. And all the agents working with principals on a long-term (permanent) basis.

Estate agent carries out the function of disposable accountant intermediary for the conclusion of agreements, whose main task is to reduce the buyer and seller to help achieve the necessary agreement. Agents can work as wholesalers-picker who independently dispose of the goods, taking it to the commission by the principal (owner of goods). To commission operations also include consignment in which the mediator-exporter sells goods from its own warehouse on the basis of an agency contract.

The subjects of trade and business activities could be: 1) wholesale and retail company (base) directly implements the production of industrial and consumer goods with the use of traditional forms of the sale of goods; 2) trading house, carrying out expert - import operations, including the organization of exhibitions and advertising, with the establishment of representative offices in other countries; 3) The distributor who buys directly from manufacturers and sells (distributes) products to their regular customers; 4) dealer resells the goods on its own behalf and for its own account; 5) a salesman who sells the goods delivered to customers.

Auctions are held in the form of public auction with prior announcement of the starting price (initial price, which starts from the level of bargaining) and Lot (undivided consignment). Regarding intra-auction sale of industrial goods and property and interstate - only specific goods (eg, racehorses, fur raw materials, antiques, tobacco, tea, spices, etc.) and is held variably and intermittently.

The basis of the exchange business is the Exchange (the form of a permanent wholesale market), performing specialized functions: 1) commodities - wholesale trade of bulk commodities with persistent qualitative parameters; 2) stock - purchase and sale of securities; 3) foreign exchange - purchase - sale of gold and other precious metals and foreign currency; 4) labor (mainly in the form of employment centers) - the account of demand and supply of labor, promotion of employment with the organization of retraining. Specific operations performed exchange business is trade: a) futures contracts, ie, contracts for the supply of a specified number of a certain commodity at a fixed price within the specified in the contract; b) Options - contractual obligations to buy or sell commodity (financial rights) at a predetermined price within the agreed period. Options are carried out on specific products, securities, futures contracts.

Besides the two major types of business (manufacturing and mediation), there is a business financial institutions. Business entity financial trends, which on the one hand, are intermediaries, and on the other - the performers of services are specialized companies (funds). Specialized government and commercial banks accumulate contributions of temporarily free funds of individuals and legal entities, provides loans, intermediaries are in mutual payments and settlements between enterprises (organizations) and private individuals. Investment companies and funds carry out constant circuit itself the first and loan capital in forms of investment of existing facilities, new technical and organizational projects at sectoral or regional level.

Formation and functioning of a socially oriented and cost-effective enterprise possible provided that a proper business environment, which is to integrate a favorable socio-economic situation in the country (region), based on the development of market economy with relevant legal and active socio - economic regulators of the market infrastructure. The main parameters of such an environment must be considered: 1) the stability of the national monetary system; 2) stimulating entrepreneurial structures tax system (individual entrepreneurs) government, financial and infrastructural support multiscale and especially small businesses; 4) effective legal protection of intellectual and industrial property; 5) science-based and market-oriented pricing; 6) the existence of collective and individual material incentives; 7) integration of the business into the global economy; 8) is sufficiently attractive image of entrepreneurship.

In Ukraine (taking into account the real parameters of a functioning enterprise) top priority is the creation of the organizational - economic prerequisites for enhancing business activity. Зарубежный опыт и анализ отечественной практики хозяйствования позволяет утверждать, что государственная политика в отношении активизации предпринимательской деятельности должна предусматривать:

• создание экономических, правовых и социальных предпосылок, которые обеспечивали бы развитие эффективного бизнеса (ускорение выхода отечественной экономики их кризисного состояния, стабилизация политической и экономической ситуации; быстрое завершение реальной трансформации отношений собственности; обеспечение государственных гарантий свободы, предпринимательство; укрепление национальной денежной единицы; снижение инфляции до минимальных пределов);
• практическую реализацию государственной системы поддержки всех направлений предпринимательства (завершение формирования надлежащей рыночной инфраструктуры; разработку системы финансовой поддержки предпринимательства, включая формирования стартового капитала и максимально возможной активизации малого предпринимательства; создание условий для внешнеэкономической деятельности; внедрение прогрессивной системы подготовки кадров для современного бизнеса).