Activity of companies
Among the main advantages of companies have to do with their very rapidly adapting nature to the needs of the market, the fact that they consist of a group of people who have a shared vision and that enables them to develop the trust of customers quickly and usually have a simple organizational structure that allows management to control different departments easily. This way of organizing facilitates cost control and management of general procedures.
Often, companies’ advantages are also found in their environment, and often they are in function of the domain. They are not found in a vacuum but manage to interact with other members of society. In North America, for example, key enterprises thrive in prosperous environments characterized by economic and political stability driven by powerful innovation. While in Japan, the business develops on less independent lines as society encourages employees to work in larger firms rather than compete. While in developed societies, there are fewer barriers for entrepreneurs who have decided to open their businesses in transition economies or those of Eastern Europe, there have been two schools of thought which are based on the two central economic policies that have developed these countries about companies.
In general, in the literature, companies’ main weaknesses are the fact that they do not have sufficient financial resources. Thus their primary concern is to minimize costs and maximize benefits. As a result, the main focus is on management, and risk management is neglected. The main actions of companies require to have high speed, profitability, and efficiency. Work styles vary from person to person and change over time. There may be a lack of clear guidelines, standard operating procedures, and a lack of control systems – increasing the risk of corruption and bribery. Lack of control systems can also pave the way for abuses and a lack of trust between staff and management, which can damage the reputation of the company or firm.
This is especially noticeable in those countries like the Republic of Albania, where privatization processes have happened rapidly, and individuals have been encouraged to open businesses for self-employment. There has been a mismatch between employee skills and demand for market work.
Among the shortcomings of limited liability companies are most often mentioned: remuneration and high salaries of shareholders, falling stock values, abuse of power by executives or administrators, and their bankruptcy that culminates with the demand for assistance from the state to help.
In developed countries, the public is becoming increasingly dissatisfied with the support that governments give to these companies because they want their taxes to go to better causes. The public does not think that these companies should be supported simply because they can create unemployment or too large to go bankrupt. Thus, more and more calls are being made to develop a business or corporate social responsibility within these limited liability companies to respond to this current skepticism that has begun to spread around them.