What Is a Company?

You've probably seen ads in magazines and on television sponsored by names such as Xerox, IBM, General Motors, and Exxon. These are huge companies that hire thousands of workers to produce goods or services for you, the consumer. Thousands of companies make products or provide services for you. A company is an organized group of people doing business.

Every company is in business to sell products and to make a profit. Remember that one resource needed to make things is money, or capi­tal. In order to get a company started, someone has to invest (put in) money to start the company. Then, once the company is organized, you have to have some way to run it. There are different ways to manage (run) a company.

- Proprietorship: A proprietorship is a business owned by just one person. It is the easiest type of business to form because you as the owner have complete control over everything. Besides that, you get to keep all the profits.

- Partnership: A business owned by two or more people is a part­nership. It is also easy to form. The partners share the profits. An advantage to being in a partnership is that you can share the workload and responsibilities.

- Corporation: A corporation is a company organized and owned by stockholders. A stockholder is anyone who buys a share in a company. While you own the stock, you will also receive what's called a dividend. A dividend is a payment you get as part owner of the company. Sometimes corporations start out as proprietorships or partnerships. They have a very structured organization because there are so many people involved.

The corporate structure includes the following:

- Stockholders: People who have bought shares in the company. Stockholders hold an annual meeting. At the annual meeting, they elect the board of directors for the next year.

- Board of Directors: Board members are elected. They set com­pany policies and determine the main company goals. They report how the company is doing to the stockholders. The board also hires a company manager or president to run the company.

- Management: These people run the company. They have to be good leaders and hard workers to make the company successful. Management people have to pick the products the company will make, decide how to raise money to buy or rent buildings, where to get raw materials, and how much to pay workers.

- Administration: The people in administration carry out the decisions made by the management department. There are many other workers in a company, too. As you learn what each department does, think about what jobs you would like to do or would feel most qualified to do. These are some of the main depart­ments in most companies.

Human Resources: In some companies, this department is called Personnel. This department makes sure that the people who have the skills needed for certain jobs are hired. If extra training is needed, the Personnel department makes sure workers get the training. The Human Resources department also makes sure you are rewarded if you are a good worker. Usually you are advanced to a position with higher pay.

Research and Development Department (R&D): The research and development department improves existing products or designs new products that people really want. Companies depend on R&D departments to find efficient ways to make products so that they can save money and make a profit.

Production Department: The production department is in charge of actually making the products for the company. The production workers must turn materials into parts for products and then assemble the prod­ucts. The production department usually plans a production system to make sure each job is done as accurately, quickly, and safely as possible. A mistake in production caused by poor planning can cost a company a lot of money or slow production down. The production department has to plan ahead so there is no downtime, or stop in production.

Marketing Department: The job of the marketing department is to sell the company products. Sometimes they conduct consumer surveys to find out what people want, how much they are willing to pay for a product, and who would probably buy that product. The marketing department must also have a marketing plan for promoting and selling the product.

 

Завдання 9 Визначте, які з поданих нижче речень відповідають змісту тексту:

 

1 Companies are organized to produce products but it is not their aim to sell them.

2 Providing services has nothing to do with business.

3 Investments are necessary to start a business.

4 All companies are managed in the same way.

5 Partnerships are the most complicated of all different ways to run a company.

6 Corporations never start out as proprietorships.

7 Board of directors are hired to manage a company.

8 The departments a company includes are never the same in different businesses.

9 Marketing research is very important for successful operation of any company.

Завдання 10 Дайте відповіді на запитання до тексту:

 

1 What is a company?

2 What are companies organized for?

3 What is the resource you need to start a company?

4 What is the difference between a proprietorship and a partnership?

5 What do we call a company which is organized and owned by stockholders?

6 What are the main components of a corporation?

7 What do we call a share?

8 Whom do we call a stockholder?

9 What is a dividend?

10 How is a board of directors formed?

11 Do they elect managers of a company?

12 What are the main departments in most companies called?

13 How can you define the main tasks of each department?