Company principles: concept, goals and activities

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The company's vision is a figurative representation of the meaning of its activities, as well as prospects. It demonstrates and explains to the public and employees what a commercial structure is, what it should be and what should be strived for. In our article, we will consider the principles of the company and other aspects of this category.

Company Vision

Before studying the principles of a company, it is advisable to analyze its vision and mission, because you need to know why certain rules and behavior strategies are needed. Shaping a vision is one of the tasks of leaders. The horizon of vision, in other words, the period of remoteness in terms of time of the created image of the company, can be different. We are talking about periods from several months to a certain number of years. Under the vision of the future of a large structure, it is necessary to consider the idea of the economic, political, and social situation both in a particular industry and in the country as a whole. This also includes thoughts about the desired state of the company in the currentsituation.

Vision is connected exclusively with the future: it loses its relevance in case the desired state of the structure is reached and must be created again. It is worth noting that the vision statement is a dynamic, concise design that is convenient in terms of perception. Often it is presented as a slogan. The content in this case must meet a number of requirements: be simple, like an image or memory; inspire; contain guidelines that can become the basis for the formation of a strategy; deserve public trust.

Mission

The principles of a company are essential to mission accomplishment. It should be understood as a business category that reflects the purpose and key goal of the business. What is the difference between mission and vision? The fact is that the first concept characterizes only the "real" company: the type, differences from competitors, the scale of activity. At the same time, development prospects are left without attention. The mission is intended to detail the status of the company and provide it with guidance for developing strategies and goals at different organizational levels.

Among the main components of the mission, it is important to note the following:

1. The services or products that a company produces, in other words, the range of public needs to be satisfied.
2. Categories of target consumer groups.
3. Used management functions and technologies, in other words, the method of meeting customer needs.
4. Advantages over competitors.
5. Business philosophy.

Company Goals

The main goal of any structure is to achieve the desired result, a certain end state. To do this, management applies not only specific strategies and management tactics, but is also guided by the principles of the company. It is worth noting that the strategic intention of the structure to take a particular position in the business is determined by means of long-term goals. Their identification is necessary for each end result that managers consider important for the formation of the structure's competitive advantages and success.

Today, it is customary to distinguish seven main areas within which the company sets long-term goals:

1. Innovation. It is important to note that the targets in this area are related to the identification of new business methods, the use of new methods of production organization or technologies, the development of new sites for the sale of products or services.
2. Market position. Among the market goals, one can note an increase in the market share belonging to a particular structure, up to a certain size; gaining leadership in a particular market segment.
3. Production. The key goals in this case are: reducing production costs compared to competitors, improving product quality, achieving maximum labor productivity.
4. Employee management. It is worth noting that the goals for employees, as well as the principles of company management, may relate to the preservation of jobs, improvement of motivation and conditionslabor, ensuring an acceptable level of wages and so on.
5. Marketing component. The following points can serve as key results of activities in this area: reaching the first position in sales of certain commercial products, creating your own image for a product or service, improving the quality of customer service.
6. Financial aspect. The overall goal is to maintain and preserve financial resources at the required level, their rational use.
7. Management. The main goal in this area is to identify critical areas of managerial impact.

Operating principles of the company

It is important to keep in mind that each commercial structure has its own list of principles that guide it. These rules allow you to achieve your goals effectively and in a clear time frame. It is necessary to consider the basic principles of companies operating in the Russian market:

• Mutually beneficial interaction with customers. This principle of the company's activity assumes that it provides services or sells a commercial product to a wide range of customers. Any commercial structure respects its partners and consumers, values their reputation and time. Thus, firms operating on the territory of the Russian Federation, as a rule, tend to cooperate on a mutually beneficial and long-term basis. At the same time, they comply with all the rules of conducting a civilized partner business.
• Continuous improvement. This operating principleof the company involves its constant development, optimization of business processes and structure, improvement of technologies and building up expertise. Due to the correct development, the leaders of Russian firms raise the level of their own decisions. It is also about improving the quality of products and services. That is why this rule should be attributed to the principles of the company's marketing.
• Result-oriented, ability to find solutions. This principle of the company's employees suggests that they see the only criterion for the success of the project is nothing more than an effective solution of the appropriate one at reasonable and optimal resource costs within the agreed time frame. In most Russian commercial organizations, employees approach each task creatively. So, rich experience and a high degree of responsibility allow them to find solutions that take into account the needs and specifics of each client as much as possible.

The role of principles in achieving goals

The goals and principles of the company are interdependent categories. The first cannot be achieved in time and qualitatively without the second. Consider a few more examples of company principles:

• Openness and honesty. Russian companies are open to their partners and clients. Respecting their interests, expecting mutually beneficial and long-term cooperation, they reliably and timely provide information on all factors influencing the course of the project, as well as its results. In another way, the rule can be called the principle of socialcompany liability. In accordance with this provision, in relations with market participants, firms comply with the requirements of the current legislation, as well as generally accepted norms of civilized business conduct.
• "He althy" competition. Commercial structures adhere to the principles of open and free competition based on the possibility of combining the requirements of fair competition and the economic success of the company. Such contact with competitors is formed on the basis of correct business interaction.
• Responsibility and efficiency. This example of a company principle implies a constant increase in the level of efficiency in achieving the goals set, as well as the quality of the result obtained. In accordance with this rule, each employee is personally responsible for the results of their own activities. In turn, the company is responsible for the results of the work of absolutely every member of the team.
• Public relations are among the main principles of the company. Russian firms, as a rule, do not allow the dissemination of false or unverified information, distortion or concealment of facts regarding the activities of a commercial structure.

So, we have considered the corporate principles of the company. It is worth noting that there are also specific provisions or those that relate to certain areas of the company's functioning. Consider them in a managerial way.

Company management principles

Today it is customary to single out the following principlescommercial structure management:

• Profit.
• Financial sustainability.
• Economy.

It is advisable to take them apart.

The principle of economy

Firstly, this category assumes the achievement of a certain result, subject to minimization of costs. By the way, that is why it is called the principle of minimization in another way. Secondly, for a given amount of material and energy resources, the greatest result should be obtained. It is about the principle of maximization or economy. In this case, the requirement is relevant: there is no need to waste production resources for nothing, in other words, it is necessary to work “economically”.

Financial sustainability

Among the main principles of the company, it is important to highlight financial stability. It should be understood as such activity of a commercial structure, according to which it can, if necessary, pay off its debts at any time. We are talking about using your own funds, a deferral mechanism or obtaining a bank loan.

Profit Principle

It is important to note that the key goal of economic activity is the excess of income over expenses, other owls, results over costs. This is the achievement of the greatest possible profit or the highest possible profitability. It must be borne in mind that the ideal situation is one in which the receipt of the maximum profit fully ensures a high level ofprofitability.

In the conditions of modern market relations (at least in the period of transition to them) there are three main sources of profit:

• through commercial and industrial activities;
• due to the monopoly position of the company for the production of marketable products;
• through innovative activities.

What principles are relevant when creating a company

Special attention should be paid to the principles of company formation. They represent a certain sequence of actions. This algorithm includes the following items:

• Self-esteem.
• Entrepreneurial idea.
• Evaluation of the market at this stage of operation.
• Get the resources you need.
• Determination of the legal form of the structure.
• Selecting the composition of the founders.
• Company registration.

Let's consider each of the stages of peculiar principles in more detail. The principle of self-assessment implies that when making a decision regarding the creation of their own business, a novice entrepreneur must carry out an objective assessment of their capabilities and abilities, as well as the advantages and disadvantages of implementing independent economic activity. Here you need to conduct a detailed analysis of all your own qualities. Entrepreneurs tend to have the following traits:

• Competence in a certain field of activity in which he plans to open his own business.
• The ability and ability to take risks.
• Knowledge of laws andmarket rules, specific niche.
• Communication and leadership qualities.
• Satisfactory business reputation.
• Initiativity.
• Emotional resilience.
• The ability to adapt to market changes, in other words, flexibility.
• Confidence in yourself and your business.
• Knowledge and relevant education (the last attribute is optional).
• Good he alth.
• Persistence and energy.

The second principle involves developing an entrepreneurial idea. Economic activity begins with an idea, which is later transformed into a specific business project. It is worth noting that a novice entrepreneur must be sure that his idea is viable from a commercial point of view and there will definitely be a sufficient number of people who will be willing to pay for the marketable products produced by his company or the services sold. The key success factor is the confidence that the businessman will produce a product of the proper quality that the consumer needs. And the price will be acceptable. In the end, this will bring a certain amount of profit, which is enough to improve and grow the business.

It should be remembered that any idea is carried out in order. It is impossible to promote a business without formulating goals that are realistically achievable. However, they must be commensurate with the business opportunity. They can be qualitatively and quantitatively determined. Goals have clear time frames. It is necessary to learn the basic rule: the more accurate the goal, the more likely it is to achieve it.achievement. The art of goal setting is primarily about running your own business. This makes it possible to control the process and results of work, as well as properly motivate employees. That is why, at the initial stages of your own business, it is necessary to establish and agree on current goals and objectives with all the founders, if any. Only then can you proceed to the formation of a business plan.

The third step is to evaluate the market. Before making a final decision regarding the start of economic activity, it is advisable to once again analyze the situation in the relevant area. Moreover, it is necessary to clearly identify the market niche and type of activity. It is important to know the location of the company and the geographic limits of the business. A novice entrepreneur must thoroughly study the market of potential competitors and customers in order to determine their own strengths and weaknesses. It is worth noting that such a study is usually included in the business plan as a separate section.

Attracting the right resources is considered the fourth principle of the formation of a commercial structure. The most important stage in creating your own business is the solution of issues regarding the financial capabilities of the entrepreneur. He must figure out where to get the money to start a business, in other words, to purchase equipment, raw materials, and hiring labor resources. It is worth noting that the sources in this case can be the savings of a novice businessman, cash from the sale of securities, bank loans, as well assubsidizing by certain government agencies.

Following the attraction of resources is the definition of the legal form of the company. The choice of the legal form within which the business will be conducted is considered one of the most important and difficult decisions that an aspiring entrepreneur makes. According to the civil legislation of the Russian Federation, any individual has the right to develop entrepreneurial activities without forming a legal entity. In this case, we are talking about registration of IP. You can also open your own business in accordance with a different legal form. It is worth noting that a businessman should thoroughly study this issue, if possible, having received advice from a tax audit specialist or a lawyer. In addition, in the process of choosing a legal form, a businessman must carry out a thorough analysis of three main aspects: responsibility, taxes and control.

Final part

So, we have considered the key principles of the company and other aspects of this category, discussed the formation of the commercial structure, management and marketing. At the same time, we found out that the mission and goals of the company are categories closely related to its principles.

In conclusion, it should be noted that today companies operating in the Russian Federation pay great attention to corporate principles. The reason for such an interesting approach is the high level of competition. Thus, firms build long-term partnerships with customers. They take into accounthigh requirements for the quality characteristics of their products, delivery service, and also set the best price. In addition, employees of commercial firms promptly and conscientiously solve the tasks. Each structure is trying to be better than its competitors, use more efficient methods of production and sales of the product, as well as launch brighter and more effective advertising. All this belongs to the category of corporate principles, which allows you to strengthen the connection of companies with counterparties and raise their status in the eyes of consumers.