FOREWORD

and
INTRODUCTION

Enterprise Economics and Management

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The Lectures of the Course Enterprise Economics and Management are
aimed at :

1. PROPOSING TO THE STUDENTS a LANDSCAPE of the

• Economic Aspects

• Commercial Aspects

• Industrial Aspects

• Financial Aspects

affecting the job of the Industrial

Enterprise Engineer
Economics and Management

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2. GIVING TO THE STUDENTS the General Knowledge and the
Basic Management Tools necessary to understand and to
properly afford such aspects, and to adequately behave within and
between the Companies where they will operate.

Somehow at the end of these lectures it is expected that the

students will have obtained the elements allowing them to
INTEGRATE the technical and scientific knowledge deriving
from the other disciplines with an adequate VISION about the
applicative context represented by :
• The MARKET and the BUSINESS
• The ORGANIZATIONS populating the MARKET

Enterprise Economics and Management

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A Tutor will assist the students in practically exercising the elements
learnt during the lectures : in particular he will drive you through the
application of most of the elements by simulating the Full Estimating of a
Project of an Oil Refinery .
The year-end final test (exams) will be based on a written test and a
discussion :
• The written test is usually articulated on 10 "multiple-answers"
questions , out of which at least one is a written exercise requesting
the application of the calculation tools learnt during the course.
• The discussion is partly centered on subjects chosen by the
student, partly on subjects indicated by the Commission.
The course is worth 6 credits.

Enterprise Economics and Management

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For the purpose of making sure that the models and the cases that will be
studied be fully coherent with a master degree in Industrial Engineering , it
is worth clarifying that the focus on the ENTERPRISE ECONOMICS AND
MANAGEMENT will follow the view and the needs of an Engineer , not of
an Economist. Subsequently we will discuss about INDUSTRIAL
ENTERPRISES, or at least of those Enterprises being contiguous and
familiar with the Industry.

Between said ENTERPRISES our "Primadonna" will be the Engineering

and Construction Company , and more in general the Contracting
Company : not only because in these Companies most of our
Engineers work (or at least start to work) , but also because the
E&C Companies represent those “Projects Based” Enterprises
that for their complexity generate most of the evolutions, both
technical and managerial, that should represent significant
elements in the staff of a good Industrial Engineer.

Enterprise Economics and Management

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The exercises that will be developed under the lead of the Tutor , will apply and
integrate the subjects discussed and learnt during the lessons : for the purpose of
keeping a tight connection with the world of the Chemical Engineer said exercises
will afford the different aspects (technicaL economic, financial etc ) of the
Estimation and of the Information Memorandum of a "grass root" Oil Refinery ,
going through the entire process of CONCEIVING , DESIGNING, ESTIMATING,
CONTRACTING AND CONSTRUCTING such a complex plant.

Why a Refinery ? Because despite the fact that the most recent evolutions of the Oil &
Gas market have made such a plant less popular than in the past, still the Oil
Refinery is A VERY COMPLEX OBJECT, ONE OF THE MOST COMPLETE TO APPLY
AND SYNTHETIZE the various aspects of the Chemical Engineering : furthermore
the realization of a Refinery involves many elements of Economics, Organization,
Management, and therefore can perfectly represent the INTEGRATION between the
Basic Technical and Scientific knowledge and the Applicative Context that is one of
the primary targets of this course.

Enterprise Economics and Management

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 Enterprise Economics and Management
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www.unicampus.it
The lectures can be grouped in 3 parts :
T
1. Highlights on the main concepts of Economy and Markets

2. The Enterprises, the Companies and their main elements and structures

3. The Projects , how to manage the Projects, the Projects Risks and the International
Contracting Market

During the course , the students will receive the basic elements of the Financial Mathematics necessary for the
applications of the concepts discussed, and will also learn the classification and the rationale of the Financial
Tools (including Project Finance) , of the Business Plans, of the Organizational Models.

A portion of the lectures will also be dedicated to the Communication and to the Communication Tools, that
represent fundamental instruments in the management of a Project, and of a Company as well.

At the conclusion of the course, a discussion will be dedicated to the access to the Labour Market for young
engineers

Enterprise Economics and Management

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 Lesson n. 1

COMPANIES (Corporations)
INDUSTRIAL COMPANIES
"PROJECTS - BASED ENTERPRISES”

Enterprise Economics and Management

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To adequately afford the world of the COMPANIES (Corporations) it is necessary to DEFINE THE
CONCEPT OF ENTERPRISE

THE ENTERPRISE IS AN ECONOMIC ACTIVITY ORGANIZED

FOR THE PURPOSE OF PRODUCING OR EXCHANGING
(trading) GOODS or SERVICES
The Organized Entity allowing to exploit such Economic Activity is the COMPANY
(Corporation)

The final goal of the Entrepreneurial Activity is the CREATION OF

ECONOMICAL VALUE for the STAKEHOLDERS.

Enterprise Economics and Management

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This said, our definition of an organized Company (Corporation) is the
following :

AN INDUSTRIAL COMPANY is an Organized Entity having the scope to

undertake and execute an Entrepreneurial Activity ( Enterprise ) working in
the Industrial Market (or in the market of Infrastructures) TO PRODUCE OR
TO TRADE GOODS OR SERVICES .
THE COMPANY ’S target is to create “ECONOMIC VALUE” for its
STAKEHOLDERS, , including (but not limited to) a “FAIR PROFIT” for its
SHAREHOLDERS; said Entity is characterized by its MISSION, its THOUGHTS
and BELIEFS, its CODE of ETHICS.

This is the kind of Company we will focus on : we call it INDUSTRIAL because

we want to underline that our analysis is limited (or extended) to the main
domains of the ENGINEERING. Therefore in our view a Company will be
considered INDUSTRIAL to the extent that it operates within the Industrial
Market (i.e. Factories and Construction Yards and Sites)

Enterpreise Economics and Management

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but also the Civil Construction Contractor, the Infrastructural
Construction Contractor, the Electromechanical Contractor, the
Engineering and Architectural Company (E&A), the Engineering and
Construction Company (E&C), the Technical Consulting Company.

Among the above Companies, the “PROJECTS BASED” ONE (PBE –

PROJECTS BASED ENTERPRISE) is that Company is built and
organized to work “by PROJECTS” , so meaning that its organization
and its workflow is centered on the execution of Projects.

Working “by PROJECTS” is historically the approach of the E&A Companies,

of the E&C and of the EPC Companies, of most of the Construction
Companies, of the “Software” Companies ; today such an approach is
going to be spread over a wider multiplicity of Companies, mainly the ones
devoted to CONTINUOUS INNOVATION, and to the FLEXIBILITY as basic
operative condition.

Enterprise Economics and Management

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Therefore a PBE is featured as follows :
• Work “by Projects”
• Continuous Innovation
• Search for Flexibility

An Enterprise becomes “Projects Based” when it acknowledges

the need for a “Continuous Improvement”, and organizes itself
to live the Innovation as an Entrepreneurial System ; the
enterprises able to “think by Projects” have a high effectiveness
in their business environment because they can manage the
innovation and transform it into complex objects “Performance
driven” , under the lead of “AD HOC” Project Management
organizations.

Enterprise Economics and Management

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The Performance of an Enterprise is made of :

• Effectiveness , that is the ability to fulfill one’s

Targets, and therefore to create Economic Value.

• Efficiency, that is the index of the “return” against the

resources employed.

Enterprise Economics and Management

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Another fundamental element of an Enterprise is its
Organization : this will be explained and afforded later
on in these lectures, discussing the Organization
Principles and Models , and the criteria by which the
Enterprise Organization is to be designed.

On the top of its physical composition, an Enterprise is

described by its Philosophy (Vision) , by its Mission, by its
Code of Ethics.

Some examples are reported in the following slides.

Enterprise Economics and Management

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 Mission
La Missione della ……… è di progettare e costruire ………..
all’avangauardia ed innovativi, applicando soluzioni di
elevato contenuto tecnologico e realizzando prodotti eco-
compatibili con processi eco-sostenibili, e realizzando un
“fair profit”. La qualità delle opere realizzate viene assicurata
da un rigoroso sistema interno di Garanzia di Qualità , e
migliorata costantemente attraverso una continua attività di
Ricerca e Sviluppo di nuovi sistemi e tecnologie di
progettazione e costruzione e tramite l’utilizzo di materiali
innovativi.
Offrire soluzioni progettuali e costruttive che rispondono alle
esigenze dei Clienti , collaborando con questi per
comprenderne appieno, e per rispettarne le esigenze e le
aspettative è l’obbiettivo principale dell’attività di ………….

Enterprise Economics and Management

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Lo sviluppo di una partnership solida e duratura con i
Fornitori permette di migliorare progressivamente il
valore aggiunto delle tecnologie usate. L’uso di
materiali eco-compatibili e di processi eco-sostenibili
e l’attenzione al risparmio energeticon sono
perseguiti per la salvaguardia dell’ambiente e per il
miglioramento delle condizioni di lavoro e di vita dei
lavoratori e delle popolazioni a qualunque titolo
coinvolti nelle fasi di costruzione e di utilizzo delle
opere realizzate.

Enterprise Economics and Management

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 VISION

Il valore reso al Cliente , il rispetto di tutti gli Stakeholders, la

Responsabilità Sociale sono i valori alla base della filosofia di
………………. Come risultato tutte le funzioni aziendali sono
orientate alla piena soddisfazione del Cliente (Customer’s
Satisfaction) , al rispetto del Codice Etico, all’attenzione
assoluta verso i diritti di tutti i lavoratori (Social Accountability).
Il “fair profit” è conseguito tramite la capacità di innovare
continuamente in termini competitivi il sistema PROCESSO-
PRODOTTO-MERCATO-ORGANIZZAZIONE , e comunque
sempre nel pieno rispetto del sistema di valori in cui l’Azienda
si riconosce.

Economia e Gestione dell’ Impresa

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 Economia e Gestione dell’ Impresa

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