BILINGUAL SUB-REGIONAL UNIVERSITY OF CEMAC, AGENLA

ACADEMY. YAOUNDE

COURSE MANUAL

Economy & Organisation of

Enterprises

Lecturer: FOKAM JEFF-ASTEINS

Level: LEVEL 1

Course code:

Total credit: 2 credits

Lecture hours: 30 hours

MODE OF EVALUATION:

- Attendance, assignments, preparedness and participation in class (10%)

- Continuous assessment (will be done in the form of a practical case) 20%
- Final exams (70%) March, 2019

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ABBREVIATIONS

SMEs: Small & Medium Size Enterprises

VSE: Very Small Enterprises

SE: Small Enterprises

ME: Medium Size Enterprises

CFCE:

COURSE OBJECTIVE:

Every manager must know and understand the context of the exercise of his
activities, that is, the enterprise. The objective of this course is to provide students, with
knowledge on the basic concepts and tools necessary to understand the enterprise and
how it functions in the environment. Hence, at the end of this course, students must be
able to:

- Understand the different representations of the enterprise

- Define the environment of the enterprise
- To know the relations between the enterprise and its environment and the mode
of managing these relations
- Understand the functions and structure of the enterprise
- Know the basic managerial practices

METHODOLOGY:

A lecture approach, group work, assignment, continuous assessment, field visits (if
possible), class room interaction, brainstorming… and final exams will be used to analyse
the level at which the subject matter (Enterprise & Organisation of Enterprises) has been
mastered by the students.

FOKAM JEFF-ASTEIN PhD Student, UNIVERSITY OF YAOUNDE II Page 2

SELECTED REFERENCES.

 CHARON et SEPARI, organisation et gestion de l’entreprise, DONOD

 DAYAN et AL……, Manuel de gestion, Agence universitaire de la
Francophonie, vol 1 et 2, 1999

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Course content

General introduction

CHAPTER 1: GENERALITIES OF ENTERPRISES AND ORGANISATION OF

ENTERPRISES

I. Definition of Enterprises
II. Mode of analysis of Enterprises
- As a production unit
- As a distribution unit
- As a social center
III. Classification of Enterprises
- Based on the Sector of activity
 Primary sector
 Secondary sector
 Tertiary sector
- Based on the legal status (Ownership)
• Private Enterprises
• Public Enterprises
• Para-statals
- Based on the Size
 Very Small Enterprises
 Small Enterprises
 Medium Size Enterprises
 Large Enterprises

CHAPTER 2: ORGANISATIONAL STRUCTURE

 Functional Organisational structures

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  Divisional Organisational structure
 Mixed Organisational structure

CHAPTER 3: INSERTION OF ENTERPRISE IN ITS ENVIRONMENT

I. Definition and Characteristics of the environment of the enterprise

II. Interactions between the enterprise & its environment

CHAPTER 4: INFORMATION SYSTEM AND DECISION MAKING PROCESS

OF AN ENTERPRISE

I. Information system
II. Decision making process
CHAPTER 5: MAIN FUNCTIONS/PRACTICES OF THE ENTERPRISE

I. Production function
II. Commercial function
III. Financial function
IV. Human Resource function

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 CHAPTER 1: GENERALITIES OF ENTERPRISES
AND ORGANISATION OF ENTERPRISES

The enterprise is at the base of all economic activity of production, transformation

and marketing of goods and services. In this perspective, the objective of this chapter is to
understand the genesis (origin) of the enterprise, the inescapable ingredients for the
creation of the enterprise and the steps for the creation of the. Hence upon completion of
this chapter, students should be able to anwer the following questions:

 What is the origin of the enterprise? Otherwise, where do enterprises come

from?
 What are the steps to create an enterprise ?

I. Origin and Definition of Enterprises

A. Origin of Enterprises

An enterprise is a structure created by a person called “entrepreneur” from a business

idea and the means mobilized for this idea to be transformed to a business opportunity.

However, an idea and a business opportunity are insufficient to give birth to an

enterprise. The enterprise is a result of three basic elements:

 A collective or individual actor called entrepreneur

 A business idea that can be concretized into a project and finally,
 The means to realize this project (see diagram below).

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 A desire to succeed

An idea (business An individual or a team Human and Financial

opportunity) Means

Birth of an enterprise

Sources of business idea

There exist several sources of business ideas:

 The past professional experience of the creator: this is the main source of
business idea. Example: a mechanic worker opens a car repair shop;
 The non-satisfactory (unmet) need in the environment proposed by the market,
customers, suppliers and competitors. Competitors offer several opportunities to
take advantage of.
 Passion is one of the motivations of many creators. For example, a computer
enthusiast will open a computer assembly shop
 Creativity can be a source of business idea.
 Professional and current economic events.
 An idea from a trip abroad. People travelling abroad are sometimes surprised at
a relevant product or service not available in their country;
 Subscription in local newspapers.
 Patents and licenses: certain inventions or discoveries are not always exploited
by their inventor. The latter may be obliged to transfer their inventions through
the granting of patents and licenses.
 Consultation of web-sites dedicated to already existing enterprises.

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  Business takeover: Acquiring an existing business delivers a set of ideas from
the activities already present in this enterprise;
 An unexpected idea during the resolution of a conflict.
 Trade fairs, and workshops allow meetings and exchanges between project
leaders;
In Cameroon, the creation of an enterprise is coordinated by the Ministry of Small
and Medium sized Enterprises, Social Economy and Crafts (MINPMEESA) in
partnership with other administrations such as: CNPS, MINFI, MINJUSTICE,
etc.,
In addition, the Cameroonian State has created in each region a center for
Business establishment formalities (CFCE). The cost of starting a business is
41,500 Frs CFA payable to the nearest CFCE. After passing via the CFCE, the
entrepreneur has the obligation to go to his home tax center to update his tax file
and declare his taxes even if he has not realized any turnover.

B. Definitions of Enterprises

Enterprises are economic entities that produce goods and services destined to satisfy
human wants and needs; directly or indirectly. The constant search for the
satisfaction of human needs makes us highly dependent on the products and services
of the enterprise and thus, its activities.
For example, FOKOU, SOFAVINC, CASINO, CAMTEL, MAHIMA,
SANTA LUCIA, EXPRESS UNION, REFERENCE DOCUMENTATIONS…
are enterprises that we solicit their services on daily bases to satisfy our needs.
For us to understand these entities and its different dimensions, it is important to
present some definitions of the enterprise before highlighting its different
dimensions.

According to several authors, there is no exhaustive definition of the enterprise

because of the multiplicity of their legal form. In this perspective, three definitions can
be retained.

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 1. An enterprise is a legally autonomous economic entity independently organized
for the implementation of set of factors of production and distribution of goods
and services in the market. On the legal plan, the National Institute of Statistics
(INS) in 2009 defines an enterprise as a physical or moral person operating an
economic activity on its own account.

2. An enterprise is a financial independent unit that buys goods and sells to

customers in order to make profit.
3. An enterprise is a financial independent economic unit that combines factors of
production to produce goods and services destined to be sold in the market for
the purpose of making profit.
The second definition corresponds to commercial enterprises whose
objective is the buying of goods and services to resale to the state without transforming
or changing its form.
On the other hand, the third definition corresponds to industrial enterprises
that combine factors of production, transforms or change them into finished or semi-
finished products intended for consumption. E.g. carpentry workshop
From these three definitions, we can retain three common elements:
 An enterprise satisfies the needs of consumers;
 An enterprise sells in the market;
 An enterprise is out to make profit.

II. Mode of analysis/dimensions of Enterprises

It suffices here to present the different dimensions of the enterprise. Enterprises are
the first economic agents in the measure where, there are units of production,
centers for decision and information, units of creation of wealth, units of
distribution wealth created and a political system

 The Enterprise as a production unit

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 The enterprise is an economic agent whose essential function is to produce and
distribute goods and services destined to be sold in the market to realize profit. In order
to highlight on this point, we shall answer the following two questions:

1. What do enterprises produce (que produisent les entreprises ?)

Primarily, enterprises produce goods (stockable material products) and services (non
stockable material products). These products are of different order, types, and
commands. E.g. equipment goods (bien d’equipement), current consumption goods
(been de consummation currents), communication, distribution activities and financial
services.

2. What do enterprises need inorder to produce? To produce, enterprises need

to employ factors of production i .e. goods and services which can be used to
produce other goods.
 Capital: There are durable goods i.e. goods which can be used in several
processes of production e.g. financial capital, production tools (machines,
buildings) ; they are material goods
 Know-how (savior faire) of an enterprise which are immaterial goods.
 Circular consumption otherwise called intermediary consumption. This are
goods and services destroyed, transformed or incorporated in the final product
during the production process e.g. raw materials, energy, transport and
information which are more material.
3. Do enterprises hold the monopoly in the production of goods and
services? N.B: Enterprises do not hold the monopoly of the production of goods
and services. This is because households produce their own consumption goods
and the state and administrations equally produce non marketable goods and
services for free or sold at an inferior price relative to the cost of production

 The enterprise as a unit of creation of wealth.

During the production process, the enterprise creates wealth called value added.
Value added materializes the total wealth created by an enterprise in the
production process. It equally materializes the contribution of enterprises in the
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 economic development of the country. It is equal to the total value of production
minus intermediary consumption i.e.

VA= Value Added

VP= Total value of production VA=VP- IC.
IC= Intermediary Consumption

 The enterprise as a unit of distribution of wealth created

The VA created by an enterprise is distributed between all those who contribute

directly or indirectly in the realization of the enterprise’ activities and objectives. They
include:

 Employees who receive salaries

 Shareholders who receive dividends
 Lenders who receive interest
 The state who receives taxes
 The enterprise itself who receives auto-financing (plough back profit)
 Social organization e.g. National Social Insurance Fund (NSIF) who receives
contributions.

 The enterprise as a center of decision and information

The production of goods and services by means of factors of production is done based
on the of transformation process adopted by the enterprise. The process can be defined
as the set of element which transforms the factors of production into goods and services.
These elements are: the decisions and information

 The enterprise as a center of decision:

The enterprise is however the center of decision in the measure where she takes
the following decisions:
 Strategic decision;
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 These are choices which engage the future of the enterprise in the long run, and its
relation with the environment. They are taken by actors of the strategic summit (top
management). E.g. The choice of location, the choice of the products, the choice of
technology, the choice relative to growth (acquisition of an enterprise), the choice of
activities, the choice of the market, etc.

 Tactical, Administrative or organizational decision

These decisions contribute to the realization of the strategic decision. They represent
the organization, acquisition and the development of resources and competency
necessary for the realization of the strategic decision. They are taken by the
intermediary managers at the intermediary level. Example: The financial,
commercial, accounting and marketing decisions. It affects the enterprise in the medium
run. E.g. choosing the computer software adapted to the accounting program of the
enterprise
 The current or operational decision.
They concern the day-to-day operations of the enterprise. They are taken by
managers at the base hierarchical levels of the enterprise who ensure the direct
coordination of employees. It affects the enterprise in the short run.

 The enterprise as a center of information:

The enterprise is also a center of information in the sense that; it is information

that gives birth to decision. Information is a contribution of knowledge that can be
received in a written, spoken, or gestural manner. Information is data which can be
communicated, conveyed or stored by a signal or a collection of signals resulting from
a determined register. Decision making requires an important amount of information.
Decision-making in enterprise requires a sum of information whose sources may be
external or internal to the enterprise.
a. External Sources of information.
 Public organization such as INS, chambers of commerce, industries and
ministries that produce studies on the different sectors of activities, branch of
activities and the macro-environment.

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  Professional organization (les organisms profesionnel) such as trade union
(syndicates) and professional corporation that produce technical information,
daily newspapers (SOPECAM) and LOGICAM that produce sectorial studies
of electronic information etc.
A) Internal Sources of information.
 Strategic and operational documents which defines the general policy and
strategy of the enterprise e.g. strategic plan, plan of action or budget, the
enterprise files, information on the activities of the different sub systems. It is
the case of report on activities, account rendered during a meeting balance score
card (tableaux de bord), financial documents, etc.
 The environmental statistics which informs on the different key figures of the
enterprise in relation to sales, accident at work, exportation and importation.
 The organigramm and the organic chart: It provides information on the
functioning of the enterprise.
 Internal regulations (les régalements intérieur). It informs on the internal rules,
behaviors required and indecent socio professional behaviors.
 The manual procedures: it informs on the method and practices concerning
supply, production, commercial usage, human resource management and the
norms accepted by the enterprise.
 There exist other documents such as certificate and attestations of norms which
informs on the activities of the enterprise, their right, their product, clients and
suppliers etc.

III. Classification of Enterprises

The business universe is diversified and consists of different categories ranging

from small craft enterprises to multinational enterprises or large international groups.
To make comparisons, a classification of these enterprises is necessary. For this reason,
certain criteria have been retained:
 Sector of activity ;
 Legal status;

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  The size.

- Based on the Sector of activity

It constitutes the set of enterprises having the same principal activity.

Traditionally, we distinguish three (03) main sectors of activities based on this
criterion:

The primary sector enterprises: these are enterprises which are concerned with
the extraction of raw materials provided by nature, i.e. enterprises which are
primarily engaged in agriculture, livestock, fishing and forest exploitation.
Example: CONGELCAM, MAISCAM, HEVECAM.
Secondary or industrial sector enterprises: these are enterprises whose main
activity is the production and transformation of raw materials into finished
products. Examples: SABC (Société Anonyme des Brasseries du Cameroun),
CHOCOCAM, CICAM, ALLUCAM, CIMENCAM, ...
Tertiary sector enterprises: These are mainly commercial or distribution
enterprises. These are enterprises which are concerned with the rendering of
services to individuals. Examples: AGENLA ACADEMY, MAHIMA,
ECOBANK, EXPRESS UNION, HOSPITALS etc.

- Based on the legal status

It consists here to classify enterprises according to their origin of capital or type of ownership.
In this perspective, we will distinguish private sector enterprises, public sector enterprises,
parastatals and enterprises of the social economy sector.
 Private sector enterprise: these are enterprises that belong exclusively to individuals
or private persons. Example: FOKOU, CASINO, etc. based on this category; we can
distinguished the following:
 Individual enterprise referred to as “sole proprietorship” owned by single person
 One-person enterprise consisting of one employee;
 corporate enterprise: enterprises in which capital is provided by shareholders or
associates;

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  Société en nom collectif (SNC): here, the partners are jointly and severally liable for
the liabilities of the company;
 Société en Commandité Simple (SCS) i.e. Limited Partnership: constituted of members
(associes commandité) with unlimited liability and partners whose liability is limited to
capital contributions;
 Société Anonymes (SA): Limited company consisting of two or more shareholders who
are liable to the limit of their capital contribution;
 Société à Responsabilité Limités (SARL) Limited liability Company: intermediate
form between the companies of persons (SP) and capital companies.

 Public sector enterprises: these are enterprises whose capital is entirely contributed
by the State or a group of states or public authorities. Otherwise, they are enterprises in
which the state holds more than 50% of the capital. Example: CRTV, CAMTEL, CNPS;
 Parastatal Enterprises, also known as mixed-capital enterprises or Semi-public
enterprises: these are enterprises whose capital ownership is partitioned between the
state and private persons. Otherwise, they are enterprises in which the state holds less
than 50% of the capital and the other part is held by third parties . Example: CAMRAIL,
BICEC, ENEO, ...
 Social economy enterprises: these are enterprises that operate in the form of
cooperatives (mutual enterprises) whose purpose is not the exclusive pursuit of profits,
but the promotion of values, solidarity, social and human relation. This category
includes Economic Interest Groups (GIC), non-governmental organizations (NGOs),
associations, cooperatives and.

- Based on the Size

This classification distinguishes very small, small, medium and large enterprises. The
criteria used for this classification are:
 The number of workers employed
 The financial criteria (capital, turn over, value added)
 The qualitative criteria (sector of activity, the quality of workers, managers and
shareholders, the capital structure)

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 Generally, the number of workers employed is the most used criteria. However,
the classification most often combines two criteria. This criterion varies from one
country to another and from one institution to another in the same country.

In Cameroon, we distinguish between large enterprises and SMEs. For SMEs,

they include very small enterprises (VSEs), small enterprises (SEs), and medium-sized
enterprises (MEs).
In order to classify enterprises, given that there is no standard classification, we
retain the definition of small and medium sized enterprises.

The official definition of SMEs/ SMIs in Cameroon is derived from Law No 2010/
001/ of April 13th 2010 on the promotion of Small and Medium-sized Enterprises
(SMEs). This classification retains two (02) criteria

 The number of permanent employees and

 The entreprise turnover (chiffre d’affaire)
We thus distinguished:

Very Small Enterprises (VSE): Enterprise that employs five persons at most and
whose annual turnover net of taxes is below 15 million CFA francs.
Small-sized Enterprises(SE): Enterprise with a permanent employee
complement of between six (06) and 20 persons and with an annual turnover net
of taxes of between15 and 100 million CFA francs
Medium-sized Enterprises (MEs): Enterprise that employs at least 21 and no
more than 100 persons and whose annual turnover net of taxes is between
100million and 1 billion CFA francs
Large enterprises (LEs) with number of permanent employees ranging from 100
employees and above and a turnover net of taxes of above 1billion.
The following table provides a breakdown of this definition

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 Enterprises Permanent employees Net annual turn over

VSE ≤ 05persons ≤ 15 million

SE 06 ≤ persons ≥ 20 15million≤ CA ≤ 100 Million

ME 21≤ persons ≥100 100million ≤ CA ≤ 1billion

LA ≥ 100 persons ≥ 1 billion

PRACTICAL ASSIGNEMENT

Encounter an enterprise promoter of your choice and ask him the following
questions.
 Why did he create an enterprise?
 How did he proceed in opening the doors of his enterprise?
 What were his challenges or difficulties?
 Does he think to has succeeded?

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