Organizational economics: concept, forms and functions

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43

Economy is a sphere of human activity that allows satisfying the needs of individuals. At the same time, it is an object of several scientific disciplines: applied and theoretical. The goal of the economy is consumption, but it is impossible without production, the development of which is the foundation for the functioning of the market, since it is the source of the entire mass of products, goods.

Economics of an organization is a discipline that considers various aspects of entrepreneurial activity. Its main sections are production, description of processes, explanation of the essence of what is happening at the enterprise. The patterns of the production process, being understood, are used to form new methods and approaches to translate the intended result into reality, to achieve the goal.

Reciprocal connections and differences

Economics of an organization is a scientific discipline that considers an enterprise within the economic field as a whole. The analysis is realized through production factors and sales market. EconomyThe enterprise obliges to study the interaction of the company and the market, as well as the mutual influence of firms on each other. The object of study of science is the process of managing as a whole and as a complex of interrelated phenomena, the interests of a legal entity.

The economics of an organization depends on the economics of the micro-level, the macro-level, affects them, but is not an identical concept. Conducting analysis at the micro level obliges to investigate the influence of the market on the firm, while equally attention is paid to both demand and supply. But the economics of the enterprise primarily uses demand as a conditional unit, set initially.

Regarding the economic macro level, the economics of the organization considers certain factors as given parameters that need to be remembered and taken into account. This includes pricing, income, which for the macro-level of science are problems that are analyzed and need to be addressed. Changing aspects of the national economy, changing consumer structure, changes in demographics or average per capita income, advances in technology - all these are factors that macroeconomics can manipulate, but for the economy of a company these are just aspects that need to be taken into account when calculating your own situation, its prospects and development opportunities.

Independence as a basic condition

The economics of an organization explores some objects that for the micro-, macro-level represent given values that are subject to accounting, but not corrected. Among these are,for example, production costs.

The objects of the organization's economy are the enterprise, aspects of its activities, the production process, decisions to which the company's management is subject. It is a discipline in its own right and is in no way less important than similar fields.

Objects: more details

Considering the concept of the economics of an organization, it is important to pay special attention to those objects that are studied by this scientific discipline. These include:

• features of the organization of the management process;
• shaping strategy, production and sales plans;
• production structure of the legal entity;
• production types;
• organization of the industrial work cycle;
• capital;
• technical capacity, resources, material support, supplies, reserves, infrastructure;
• production costs, cost, pricing;
• fin. the possibilities of the legal entity, the efficiency of households. activities, risk assessments;
• innovation, quality aspects, investment;
• personnel work, organizational aspects, remuneration, stimulation of growth in the efficiency of work processes;
• foreign economic households. activity.

Scientific methods

Economics of the development of an organization is a science that has its own methods of research, analysis, accumulation of information. The discipline is applied, it applies research approaches that have long been used in other applied areas related to economics. Of particular importance are statisticalrules and laws to monitor the development of the situation. Comparative analysis is equally important. Using such approaches, it is possible to accumulate useful information, calculate and compare indicators, conduct a correct analysis of changes, compare current results and those characteristic of past stages. It is equally important to conduct regular comparisons with other business entities in order to understand who achieves the best results, for what reason.

Theoretical, applied analytical problems, examples in the economy of the organization are solved using modeling, graphic representation. Such methods simplify the perception of information, allow you to more correctly assess the relationship of parameters, characteristics, and also analyze what trends of change are characteristic of indicators, what affects them to a greater extent. Economic, mathematical modeling is performed with two tolerance conditions:

• the enterprise is interested in bringing profits to the maximum possible;
• The market environment is active, affecting all subjects.

You can't even catch a fish from a pond without effort

Only such an entrepreneur can achieve success, which adequately assesses the role of the organization's economy in the success of the enterprise. At present, it is possible to achieve a positive financial result by actively applying popular and effective scientific methods and strategies. It is important to navigate the general economic theory and have practical skills and knowledge. An entrepreneur who is able to apply quantitative methods for making calculations, predicting the situation,will be able to build an adequate line of development of the company without losses.

The fundamentals of organizational economics are closely related to marketing approaches and entrepreneurial economics as a scientific discipline. In order to delve into the essence of science in more detail, it is important to navigate the rules and laws of accounting, industrial finance, and statistical research. Theory and practice are closely interrelated, and one who is ready to make efforts to master both of these sides of the direction can count on success. We will have to study the activities of the company, to delve into the patterns that govern decision-making. Comparative analysis is no less important than the calculation of probabilities, the ability to correctly formulate a forecast. Organizational economics is a scientific discipline that allows you to master knowledge, skills related to economic laws, as well as apply them in real life.

Organization on a nationwide scale

The economics of an organization in market relations is an analysis of the primary economic link. The effectiveness of its work directly determines the quality and effectiveness of the state-level economy, the level of financial well-being of the country's population. An enterprise is an object that supplies products, services, work to those in need, and therefore ensures the livelihoods of the broad masses.

The economics of an organization in a market system involves the assessment of a single person as a basic element of the economic system. This is due to the fact that the legal entity not only produces a product that is in demand on the market, butforms places for employment of the population. This increases the employment rate. The legal entity pays for labor and is responsible for a number of other operations. It is important for an enterprise to solve various issues related to production tasks: determine the required output volumes, adjust the range of products, select suppliers of raw materials and look for buyers, set price trends, use resources and personnel wisely, introduce efficient equipment, modern technologies.

The economy of a modern organization is a set of requirements, rules, laws and ratios, the correct application of which in practice allows you to create multi-level budgets successfully, with the benefit of all stakeholders. The company is responsible for paying taxes, which means it contributes to providing resources to government agencies and social programs.

That is…

Economy and organization of production is a solution to the problem of finding, forming an individual, unique development path for each legal entity operating within the market. The company must not only maintain a balance, but also develop, and to do this, improve its own economic situation. This is possible if there is a balance between profit and expenses. To increase efficiency, you need to be able to find new ways and methods of using capital, attracting a client. Successful product policy, sourcing and other operational aspects are all considered within the framework of enterprise economics as a scientific discipline that allows you to get solutions that can be applied in practice.

General provisions of science

The economics of organization, production is a scientific field recognized by everyone, but there is no generally accepted interpretation of the term itself, therefore, in each specific variant, the interpretation remains at the discretion of the specialist analyzing the topic. The basic science here is economics, that is, the discipline that studies how limited resources can be used to produce useful services, goods that are distributed among the masses. At the firm level, economics is a discipline that analyzes such processes within a particular legal entity.

The economics of an organization is management, considered from a scientific point of view and based on a combination of production, non-production nuances. The analysis takes into account funds, stocks, products, income associated with the sale of goods, the provision of services.

Economics of an enterprise explores the structure of a legal entity (organizational, production), as well as all management processes and their features. An important aspect is restructuring, that is, the division, absorption, merger of firms.

Objects of scientific research

The following are considered as objects of economics and organization management:

• marketing analytical work that allows you to plan the activity of the company;
• formation, practical application of labor, financial, property resources;
• creating costs, costing, product prices;
• control of financial resources, generation of results;
• budget;
• investments;
• innovation;
• competitive control;
• certification, standardization.

As well as ways to improve the quality level of the product.

Science: important aspects

Economics of an enterprise as a scientific discipline involves studying the essence of a legal entity, its funds and working capital, personnel, investments. Relationships between these objects are subject to analysis in order to improve the financial results of the enterprise. Economists responsible for this should be able to describe individual industries, find ways to optimize work processes, reduce risks, change the management system to improve the company's results. Environmental, technical aspects are subject to accounting, and not just those related to the economy.

To achieve the goals, scientific approaches should be used. Research methods involve obtaining a solution to the formed problem through techniques, calculations, theoretical, practical approaches.

Studying the economy of financial organizations, industrial, commercial (and other types) is a rather difficult cognitive task. First, you need to formulate and justify the chosen topic, then define the task of the work, designate a hypothesis, select a list of objects for analysis, and draw up a program for working with them. The researcher collects useful information, accumulates data, generalizes them, on the basis of which he develops ways to apply the patterns obtained in practice.

Scientific methodology

Methodology is a basic approach to the construction of knowledge, the forms of this process and the methods applicable to it. For any research, the methodological, theoretical basis is scientific works written by eminent figures (foreign and domestic), as well as achievements already made in the chosen field of science. The basis of the methodology is the methods applicable to this area, that is, research (their content, sequence), ways of presenting data, ways of applying the results obtained. It is important to take into account the methods that determine the scientific nature of the study, allowing it to be called productive.

For the scientific analysis of the organization's economy, the didactic method is actively used, forcing the object to be evaluated as something changing. Start with the simple, gradually move on to the complex. No less important for understanding the essence of the structure of the organization's economy will be the use of specific methods, as well as those common to all economic sciences.

General scientific approaches:

• abstraction;
• induction;
• deduction;
• comparison;
• experiment.

Specific economic scientific methods:

• statistics;
• monograph;
• balance;
• math;
• constructive.

Organization: what is it?

The center of the economy is production, that is, the formation of a certain product. Production is the basic condition that makes consumption possible. The firm produces a product, performs services, based onwhat nat. we alth can gradually increase. The performance of an individual, the financial condition of companies are factors that affect the economic situation within the state, the power of the country as an economic unit.

Enterprise - an independent subject, leading households. an activity that produces a product, performs work, provides a service to meet the needs of society, to make a profit. In our country, the definition, forms of organization in the economy are regulated by the Civil Code, namely the 48th article, which indicates the factors that make it possible to classify a certain object as an organization. These conditions are:

• the presence of separate property and the ability to meet obligations in relation to it;
• ability to buy, exercise rights (property, non-property);
• opportunity to act in court as a defendant, plaintiff;
• duty.

To become a legal entity, you need to have a balance, an estimate. The starting point in the existence of the company is the moment of its state registration in accordance with the procedure regulated by law. Each enterprise has a unique name, which indicates the chosen form of activity.

There are commercial and non-commercial legal entities. The first are those that work for profit. They are formed in the form of societies, partnerships, cooperatives, state and municipal enterprises. The second group - created not for the sake of profit, which means that they conduct entrepreneurial activity only within the framework of achieving the main goal, for the sake ofwhich the legal entity was formed.

Don't take away

In any form, any type of legal entity is an important element of nat. economy. Such enterprises are the basis for raising nat. income, GDP, GNP, ensuring defense capability, reproduction. Firms are the foundation of the existence of the state; without them, the execution of the state is impossible. functions. At the same time, enterprises are necessary for the progress of science, technology, medicine, culture, and education. They help to solve the problem of unemployment and other social difficulties. Within the framework of a market economy, the functions of the organizations mentioned above are extremely important both for the state as a whole and for individual citizens in particular.

The enterprise is created in such a way that the results of the work are positive, the activity is profitable. Additional important goals include improving the quality level and achieving a leading position in technological areas. Any company wants to occupy as much of the selected market as possible, use all available resources as efficiently as possible, and increase employment. This is possible through the stabilization of the situation and minimization of resource costs (including labor) in the manufacture of each unit of the product. Functions of the organization considered within the framework of economic science:

• nature conservation;
• providing adequate wages for the employed;
• providing the buyer with a product that meets the requirements of the agreements;
• solving social problems.

Working principles

Organizational economics as a science establishes the following principles for the activities of modern companies:

• improving the economic efficiency of the production process;
• decentralized governance;
• respect property rights.

To evaluate the effectiveness, it is necessary to regularly analyze the ratio of the results of activities, costs, volumes of resources used in the work.

Decentralization means that the directive management system is an outdated approach. The enterprise must organize and control production processes on its own.

Property right is a basic phenomenon of a market economy. Compliance with it, as well as proprietary interests, allows you to make entrepreneurship free, to ensure adequate market competition.

For a company to be successful, it is important to get employees interested in it, while at the same time making them responsible for the results. Financial incentives are a basic tool of personnel policy that helps to achieve increased labor efficiency from employees. The strongest will be the desire to work qualitatively with someone who is confident in paying him a decent wage. At the same time, the task of management is to allow each employed person to realize that attention is riveted to him personally. It is important to introduce incentives in the company - this will help increase efficiency, at the same time make it clear that a high level of responsibility is the key to the success of an employee, which means his higher salary.fee.