4.2. Applying the system concept to the enterprise

As an economic and social body, the enterprise has a systemic structure in which its various components are mutually dependent. The totality of the component elements, in their interaction, is the operating mechanism of the enterprise. The functioning of this mechanism is carried out under the influence of internal and external environmental factors and manifests itself in a great variety of forms.

Economic practice has shown that the links between the elements of the enterprise system make the action of some to reflect on others and, implicitly, on the whole, respectively on the enterprise. For example, disturbances that may arise in the supply of raw materials affect the rhythm of production, and this has consequences for the enterprise's revenue. It follows that the enterprise system manifests itself as a distinct entity, as a whole.

The systematic approach of the enterprise lies in the priority given to the whole, namely the enterprise towards its components, structural and functional subunits and the study of the connections between the component elements in their dynamics and their complexity.

In Figure 4.1. the complexity of the enterprise system can be tracked.

Fig. 4.1. Complexity of enterprise system

The enterprise is made up of a set of elements in interaction, having relationships with the external environment and being oriented towards solving an objective.

Starting from the above characteristics, the enterprise can be considered as a process or procedure that converts a set of inputs into a specific element, called outputs. From this point of view, the enterprise consists of the following elements: inputs, outputs and the transformation process.

Inputs are made up of raw materials, materials, labour, energy, etc. Outputs consist of goods, works or services, which are, as a rule, the starting points in the design of production systems.

The transformation process ensures the transformation of inputs into products, works or services (they are actually the outputs).