Flow of Activities
The flow of activities in an enterprise differs depending on the nature of the firm.
- Manufacturing firms: raw materials are received into storage, moved into manufacturing, stored again as finished goods, and then sold.
- Reseller firms: goods are purchased, stored, and then sold — without a manufacturing stage.
Alongside the flow of goods, there is also an inflow and outflow of funds, as money enters or leaves the firm.
Economic Role of an Enterprise
- Gives profit to the business owners.
- Creates employment opportunities.
- Stimulates development in various sectors of the economy.
- Is a source of revenue to the state, through the payment of taxes.
Social Role of an Enterprise
- Produces and brings goods to consumers, satisfying their desires.
- Provides a variety of goods that improve the standard of living.
- Provides social services (health, education, water, electricity) that improve living standards.
- Reduces starvation by moving goods from areas of surplus to areas of shortage.
- Stores goods during times of plenty and supplies them during times of scarcity.
