Features of the Economic Institution
Posted on Mar 23, 2021 at 04:03 PM
Economic Institution have contributed to the formation of human groups based on the use of financial, intellectual and material means to achieve specific objectives set by their management, and they seek to achieve profits at the lowest costs, and meet the diverse needs of individual consumers and to increase their standard of living.
The economic institution can be defined as:
- a productive organization that aims to create market value through certain factors of production and then sells it on the market in order to achieve financial profit.
- or it's an economic unit that carries out a range of activities related to production, purchase, sale, and storage. Contributes to the achievement of the objectives for which the Foundation was founded.
- and it defined according to the International Labour Office: is any place containing economic activities, and has private and independent records therein.
Features of the Economic Institution:
- It has an independent and legal entity.
- Seeking to perform the function for which it was founded; because it has the capacity to carry out production.
- It Should Have the ability to survive; it's the continuation of the institution by obtaining adequate funding, adapting to political conditions, and interest in adequate employment; thereby contributing to its ability to adapt to volatile and changing circumstances.
- The programs and methods of work are defined; each institution seeks to set specific goals and is therefore keen to achieve them.
- It's concerned with the provision of financial resources; for the continuation of its own operations, obtains these resources through financial revenues and loans, or combines all or some of these elements in accordance with the circumstances of the institution.
- Adapt to their surroundings so that they can perform their tasks in the best of circumstances; if they don't adapt to the environment, their operations and objectives may be obstructed.
The Objectives of the Economic Institution:
All economic institutions are interested in achieving objectives that correspond to the nature of their activity, and the following is a set of the most important of these objectives:
- Economic objectives: the pursuit of profit, and response to the wishes of customers, and attention to rationalizing production.
- Social objectives: To ensure the achievement of an acceptable level of salaries and wages, and to contribute to improving the living standards of employees and workers, and to ensure the cohesion and organization of employees, and provide appropriate insurance for them.
- Cultural objectives: To provide all cultural and recreational means for employees, and to provide training for beginners.
- Technological objectives: the interest in development and research, the use of the media to reduce costs and gain time, and access to reliable and accurate information.
Types of Economic Institutions:
Economic institutions are divided into several types according to certain patterns, including:
- Based on the nature of their ownership: It's divided into the following types:
- Private enterprises: they belong to a person or group of individuals.
- Mixed institutions: they are privately owned and public owned.
- Public institutions: they are owned by the state, and managers are not entitled to act according to their personal opinions, nor may they sell them until they have obtained state approval.
- According to the economic activity, It's divided into four types:
- Agricultural institutions: are keen to increase the production of land or contribute to the reclamation,
- Businesses institutions: that are interested in private business activities.
- Financial institutions: are institutions that contribute to the implementation of activities related to money,
- Service institutions: Institutions that provide specific services, such as university institutions and transport institutions.
- Based on the number of workers, It's divided into the following types:
- Small enterprises: enterprises with fewer than 50 employees.
- Large enterprises: enterprises with more than 500 employees
- Giant enterprises: enterprises with more than 10,000 employees.
Thus, we have shed light on the basic features of the economic institutions. Has this article sparked your curiosity to learn more about economic institutions? so feel free to browse the list of Finance and budgeting training courses in Dubai and join your colleagues.
