French SMEs Economy

Transcription

French SMEs Economy

French SMEs Economy
Grant Agreement number: 2003-3448/001-001-LE2-51 OREF
This programme is a part of a LEONARDO Community Vocational
Training Action Programme in favour of small and medium-sized
enterprises (SMEs) across Europe.
Eight countries participate to this programme: Belgium, Britain, France,
Germany, Hungary, Poland, Slovakia and Spain.
This module covers 3 ects divided into seven chapters enabling the student to organize
work over a three month period.
This module is designed for on line use only. During the learning period a tutorship and a
technical hot line will be activated, and a discussion forum and on line tests will be
available.
1
Bibliography
« 100 fiches pour comprendre l’organisation et la gestion de l’entreprise », Albéric
HOUNOUNOU, éditions Bréal, 2005
« L’entreprise et son environnement économique », Guy TRIOLAIRE, éditions Sirey, 1994
« Stratégie : les clés du succès concurrentiel », Jean-Marie DUCREUX et Maurice
MARCHAND-TONEL, éditions de l’organisation, 2004
Web links
Short summary of the introduction of the national economies and the location of
SMEs
1. http://www.apce.com/index.php
L'Agence Pour la Création d'Entreprises (APCE), en français, site d’information sur
les PME en France
2. http://www.apce.com/index.php?type_page=IL&pays=1&rubrique_id=300000111
French Business start-up agency, English language, this site offers information
about SMEs in France
3. http://www.oecd.org/h
Organisation de coopération et de développement économiques, site
d’informations économiques, dont plusieurs rapports sur les PME, Français
4. http://www.oecd.org
Organisation for Economic Co-operation and Development, economic information
including rapports about SMEs, English language.
Legal and administrative environment (legislative administrative procedures,
legal forms,
1. http://www.apce.com/index.php?rubrique_id=116&tpl_id=106&type_page=I&typ
e_projet=1&param=0
Statuts juridiques des PME en France, présentation simplifiée de l’apce, en
Français.
2. http://www.apce.com/index.php?rubrique_id=3000001122&type_page=IL&pays=
1
Legal structures in France, in English, short presentation of procedures in France.
English language
Laws, foundation, termination, dissolution
See part IV, general information
Administrative burdens on SMEs (employment, working conditions)
1. http://www.travail.gouv.fr/etudes-recherche-statistiques/statistiques/relations-
professionnelles/85.html
Site du ministère du travail, informations et statistiques sur l’emploi, le chômage,
les relations professionnelles, uniquement en Français.
2
2. http://vosdroits.service-
public.fr/particuliers/N442.xhtml§&n=Emploi,%20travail&l=N5
Les contrats de travail dans les entreprises – en français
site qui présente les différents types de contrats de travail, congés, licenciements,
démissions, retraites, conflits du travail.
Tax rates and structure (tax systems, administrative burdens etc
1
French tax system for SMEs, in English,Tax system for each legal structure of
SME.
1
Social security in France, English, Information on the global social security system
for SMEs in France
3. http://www.apce.com/index.php
Site de l’Agence Pour la Création d’Entreprises, informations et exemples sur le
système fiscal et les cotisations sociales , en Français
General information
1. http://www.centre-inffo.fr
2.
3.
4.
5.
6.
7.
8.
9.
Ce portail propose aux usagers et professionnels une approche synthétique sur les
dispositifs de la formation permanente en France Langue : Français
Contenu : ensemble des informations pratiques sur les dispositifs de formation
http://www.centre-inffo.fr/sommaire_uk.php3
This site in English offers analysts and practitioners a quick and synthetic
approach to the French vocational training system. Language English
http://www.pme.gouv.fr
Site du ministère français des PME, comporte des informations économiques et
règlementaires, des études, des liens et des adresses utiles. Seulement en
Français.
http://www.diact.gouv.fr/datar_site/datar_framedef.nsf/webmaster/pat_framedef
_vf§OpenDocument
PME et aménagement du territoire, en Français, voir aussi datar
http://www.diact.com
La Datar est devenue la DIACT, Délégation interministérielle à l'aménagement et
à
la
compétitivité
des
territoires,
en
Français
This website is not yet available in English
http://www.projetsdeurope.gouv.fr
Projets Européens pour l’aménagement sur le site du gouvernement Français, en
Français
http://www.projetsdeurope.gouv.fr/index.php?lang=en
The European projects in English on the French government website, concerning
France , in English language
http://www.territoires.gouv.fr/index.php
Le portail de l’Observatoire des Territoires vise à faciliter l’accès du plus grand
nombre à une sélection d’informations territoriales, en français.
http://www.cgpme.fr
La Confédération générale des petites et moyennes entreprises et une
organisation syndicale interprofessionnelle d’employeurs de PME. Elle est
3
reconnue comme partenaire social par les autorités. Ce site est en Français. Il
comporte des informations économiques, sociales et internationales qui
concernent les PME.
10. http://www.cgpme.fr/english_version.pdf
The General Confederation of Small and Medium sized Enterprises (CGPME), is an
interprofessional, private, independent organisation for employers and is a
recognised French social partner. Website in English
11. http://entreprises.insee.fr
Portail des entreprises de l’INSEE, toutes les statistiques économiques sur les
entreprises, en France, par région.
Français
12. http://www.pme.gouv.fr/economie/chiffreclefspme/index-d.htm
Les chiffres clés des PME, informations du ministère de l’économie sur les PME,
par le gouvernement Français.
Français
13. http://www.entreprises.minefi.gouv.fr/entreprises/theme2/creer.htm
Serveur du Ministère de l’Economie et des Finances, sur les entreprises.
En Français, comporte des informations sur le cadre juridique, les formalités
administratives, la fiscalité, la protection sociale, et des liens avec des
partenaires.
http://www.entreprises.minefi.gouv.fr/v_english.htm
14.
The purpose of MINEFI Serving Businesses is to provide businesses with
information, to simplify their relations with MINEFI and to support their expansion
projects.
English
Online formalities, Local economic information available online and Links to
partner site
15. http://europa.eu.int/comm/enterprise/index_fr.htm
Site européen, des politiques en faveur des PME, en Français, tous les dispositifs
européens en faveur des PME
16. http://ec.europa.eu/enterprise/index_en.htm
Website in English, a guide to SME policy in Europe, in English, information about
all European devices about SMEs
17. http://ec.europa.eu/enterprise/enterprise_policy/charter/index_en.htm
The European Charter for Small Enterprises, only available in English language,
information about the European priorities for SMEs.
18. http://ec.europa.eu/enterprise/networks/eic/eic.html
Euro info centres inform, advise, and assist businesses on Community issues.
They also provide feedback to the European Commission about community
matters affecting SMEs. English language
19. http://www.apcm.com/artisanat/default.htm
Les chambers des métiers
20. http://www.acfci.cci.fr/presentationCCI/index.htm
Chambres de commerce et d’Industrie, site français
21. http://www.acfci.cci.fr/Site%20anglophone/index.htm
The Assembly of French Chambers of Commerce and Industry (ACFCI). In english
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1 Introduction of module
1.1 Role and goals of the module
The module presented below is to show the contemporary situation of French SMEs and
the conditions for the development of these enterprises.
It is divided in an introduction and 6 sections :
•
•
•
•
•
•
The first part gives information about French economy and the position of SMEs
concerning productivity, export and Innovation Capacity of SMEs. The SMEs
distribution by sector is presented with the employment, and working conditions.
The second part study the labor relation system in France, and especially
management of workforce and collective bargaining, labour inspection and the
Chamber system to understand the relationship between employees and firms.
The third part focuses on the legal system with means to know the statutes of
SMEs and the whole story of them from the establishment to the termination.
After then the financial environment is presented. It concerns taxation as a whole,
social security system and the specificities of accounting and auditing.
The manpower is fundamental, so the fifth part (Knowledge) deal with the
education and training system especially concerning national life-long education
strategy. It helps to understand skills and competencies required par demand and
offer side leading to resources for training
The last part presents some case studies on five French SMEs just to show in
various sectors what their life is.
1.2 Guide for module
Work Methods
The required work, distributed over a 12 week period, corresponds to a 2.5 hour weekly
work load. For the most part the student will be on his own.
Some assignments will require information retrieval or practical exercises.
Methods of evaluation
The evaluation of the participants will be done according to two great principles:
1. On line evaluations will account for a third of the grade (multiple choice,
reckoning, answers to questions, text commentaries.)
2. A common examination, with a time limit will account for two thirds of the final
grade.
3. The validation of the module will require an average of 10 out of 20 points in
France.
1.3 Pre-requisites
This programme is open to four kinds of students, with varying access requirements and
pre-requisites
1. Students registered in L3 at Paris X Nanterre, who take this module on an extra
curriculum basis to familiarize themselves with the economy of SMEs
2. Professionals with management skills who will be admitted after approval by a
qualifiying
committee
In some cases changes will have to be brought to the programme. These students
will follow an on line course and may when necessary take part in group sessions
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3. Students on European or international exchange programmes wishing to make
themselves familiar with French SMEs.
1.4 What is a SME ?
Traditionally the definition of SME in France is based on two quantitative criteria namely,
number of employees and turnover.
SMEs are companies
· employing less than 500 employees
· or realizing less than 77 millions euros of turnover
Nevertheless the French and European definitions are really different. It became usual,
even in France, to agree with the definition suggested by the European Commission.
Thus, the SMEs are companies
· employing less than 250 people (in annual full time equivalent)
· realizing an annual turnover until 40 million euros
· or with a total result not over than 27 million euros
· that are not held to a total value of 25% or more (capital or voting right) by one or
more companies not corresponding to the definition
The European Observatory of SME classifies SMEs according the different following types
of manpower:
· the very small companies employing less than 10 employees
this category can be subdivided in
- companies without employee (self-employed workers)
-or companies employing from 1 to 9 employees
· the small companies employing 10 to 49 employees
· the medium companies employing 50 to 249 employees
Test your knowing on statistical definition of SMEs
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2 Position of SMEs in the National Economy
As in all the European countries, SMEs occupy an important place in French economy,
where it represents nearly 60% of employees in the private companies. SME also ensure
a significant part of exports and innovation.
2.1 French economy
Geography
Total surface: 550 000 square kilometres
The widest country of Western Europe (close to a fifth of the surface of the European
Union)
Population
In 2004, the population of France (included overseas) is estimated at 62 million
inhabitants.
The French population thus represents 16 % of the population of the Union.
The life expectancy is 76 years for the men and 83 years for the women.
Births: 796 000 and Deaths : 539 700
The birth rate is 1,91 child by woman
Death rate: 8 ‰
The average age is 39,2 years
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Age distribution
less than 20 years: 25%
from 20 to 59 years: 55%
60 years and more: 20%
Education
In 2002, the expenditure of education is 108,1 billion euros, 7 % of the GDP and 38 % of
the budget.
The expenditure of education represents an amount of 1 690 euros per capita, or 6 500
euros per pupil or student
Primary education and secondary: 12 130 000 pupils
Higher : 2 200 000 students
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Occupational structure
Employees
Workers
Intermediate employees
Managers and professionals
Handicraft, Trade and self employed
Farmers
Whole occupied labour force :
7
6
5
3
1
400
640
400
510
450
600
25 000
9
30%
27%
22%
14%
6%
2%
100%
Gross domestic product
GDP and national aggregates
In billion of euros (2003)
2.2 Productivity, Export and Innovation Capacity of SMEs
2.2.1 Productivity in SMEs
The productivity is the ratio between the product of a factor of production and means use
to produce it. It is always difficult to isolate the productivity from a factor (labor for
example) among the whole of the active factors. This is why one speaks about
“apparent” productivity of a factor.
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The productivity of a company depends on its sector of production; its variations are
related to the technological developments of production and/or management.
The productivity of a sector varies according to the nature of the companies often
related to their history. If two companies, one old and almost obsolete and an other new
modern company, cohabit, the productivity of the sector is the average of both. If the
obsolete company disappears, then the productivity of the sector reaches brutally to the
leverl of the productivity of the modern company without any modification in the process
of production of the modern company.
The productivity of a country is even more complex to analyze since all the factors
quoted mix with it previously.
Comparison of productivity of companies according to their size (SME versus large
companies) can thus be influenced by:
•
•
•
the real effectiveness of the factors of production (less tools, older tools, lower
qualification of the workers, …),
the type of product trade against industry or high technology for example,
the demography of companies, new companies being generally SME and often
very small compagnies.
2.2.1.1 Comparison with the productivity of work between SME and large
companies
Whereas SME represent 64 % of total employment in France, they ensure only 53 % of
the added value.These results clearly indicate a difference productivity of work, an
employee of SME produces on average 17 % less richness than an employee of large
company.
Chart 2.2.1 SME (0 to 250 employees) in national economy en %
2.2.1.2 Principal causes profits of productivity
The principal conclusions of OECD are the following ones:
•
•
•
A large fraction of aggregate labour productivity growth is driven by what happens
in each individual firm, while shifts in market shares from incumbents in decline to
those who are growing seem to play only a modest role.
Labour productivity growth is also boosted by the exit of low productivity units,
especially in mature industries. In other industries in particular those experiencing
rapid technological changes (e.g. ICT-related industries) the entry of new units is
important in fostering overall productivity growth.
Within-firm growth makes a relatively smaller contribution to multifactor
productivity growth – a proxy for overall efficiency in the production process than
it does to labour productivity. This suggests that incumbents often raise labour
productivity by increasing capital intensity and/or shedding labour. By contrast,
11
•
•
new firms provide a relatively larger contribution to multifactor productivity,
possibly because they enter the market with a more “efficient” mix of capital and
labour and likely new technologies.
A large number of firms enter and exit most markets every year. The early years
are the most difficult for entrants: 20 to 40 per cent of entering firms do not
survive the first two years. Young firms that fail are often very small, while those
surviving tend to be larger and experience further increases in the initial years.
Some tendencies are common to France and the other Europeans countries:in the
branches most concerned with communication and information technologies The
entry of new firms makes a contribution to the growth of the productivity of work
higher than the average, which indicates the important role of the new companies
(of high technology) in a sector characterized by a powerful wave of technological
changes. It is apparently the opposite in more mature industries, where a more
substantial contribution comes either from the growth inside the company, or of
the exit of obsolete companies.
In France, overall and in comparison with the other European countries, the growth of
productivity is mainly due to the profits of productivity inside the company and to
disappearances of the least competitive companies.
2.2.1.3 Productivity and survival of the companies
Although the rates of survival of the young companies vary considerably from one
country to another, more than 25 % of disappearances during the first two years of
existence, 40 % during the first 4 years and 50 % at the end of seven years. A weak rate
of survival is not necessarily alarming because the entry of new companies can be
regarded as a process of experimentation, which implies in itself a rate of high failure.
Moreover, the entry of new companies pushes the operators in place to improve their
efficiency and their profitability.
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2.2.2 Export-Import in SMEs
France has a place of choice in the world economy. It is nevertheless interesting to notice
that the majority of these exchanges are carried out within the European Union. In
addition, the geographic concentration of our external exchanges is important. Our first
nine customers are also our first nine suppliers. These nine suppliers/customers cumulate
nearly 70% of the totality of our foreign trade. The European Union represents
approximately 60% of our exports and 59% of our imports.
Exercise
The majority of the industrial sectors are in surplus, which makes it possible to
compensate for the deficit of the energy sector. Nevertheless, the exchanges are more
often the fact of the large companies. Indeed, only 30% of the French
exportations/importations are carried out by SMEs and this figure is relatively stable in
time. According to the majority of surveys about SMEs, carried out by INSEE, the
turnover to the export of SMEs did not evolve over our period of studies.
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2.2.3 Innovation Capacity in SMEs
As Bertrand Saporta indicates it : “To innovate constitutes for SMEs an essential
requirement and this, for two principal reasons. The first, which is common to all the
companies whatever their size, is that the innovation constitutes the privileged way to
create (or to recreate) a potential of development to the long-term. The second reason,
specific to SMEs, relates to their capacity of competition, i.e. their real capacity of
survival face to the other companies (often with a bigger size) and, more generally, with
drill unfavourable environment. However the disparity of the resources is obvious: it is
opposed in particular so that SMEs can use the weapon of the biggest firms, i.e. the
recourse to the economies of scale , with the reduction in the cost prices thanks to
the accumulated experience. To innovate consists to break the combat and to carry it on
a ground more favourable at SMEs. To resume, the small companies must oppose the
innovation to the experiment of the large companies” (Saporta B, p. 2731).
The most important field RD innovation is that of industry. By looking at the distribution
by size of companies, we could see that the share of the innovating companies
progresses with the size (in connection obviously with the means at disposal which are
more important in the large companies). The fact that it is the industrial sector which is
more innovating could be the under-sectors of aeronautics, electronic and the telecoms
which are more innovating.
SMEs primarily set up innovations of products rather than of processes, which rather be
the prerogative of the large companies.
Where Are Economies of Scale?
The increase in efficiency of production as the number of goods being produced
increases. Typically, a company that achieves economies of scale lowers the average cost
per unit through increased production since fixed costs are shared over an increased
number of goods.
Example : the first case show a decreasing average unit cost as far as the size growths
In the second case, the decreasing stops and increases again after passing by a
minimum value.
In the second case, the optimal size is not the biggest one.
There are two types of economies of scale:
- External economies - the cost per unit depends on the size of the industry, not the firm.
- Internal economies - the cost per unit depends on size of the individual firm.
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Exercise
A company produces 1000 units with 100 employees.
Each increase of one employee increases the total production of 100 units.
• Which is the initial apparent productivity of work (100 employees)?
• Which will be the productivity with 105 employees?
• At which time the productivity won't growth any more?
• Try by simple calculation first, then use a spreadsheet like Excel to solve the
question.
The exercise
The solution
2.3 Distribution of SMEs by Sector
SMEs constitute a universe extraordinary diversified, multiform, composed of
heterogeneous entities, not easy to apprehend as a whole. We could find indeed there, at
the same time, hotel keeper employing 10 paid workers, the manufacturers of machine
tools employing 200 paid workers, the craftsman-masons working alone, high-tech
companies with strong potential of development, the bakers installed in a borough of
province.
The study of SMEs covers very diverse situations in the industrial plan. The most
important point of the study of the sectors is that SMEs of the industrial sector are
definitely fewer than the others, and in particular that those of the services.
Number of enterprises in France by size (IAA = agriculture)
Geographic location in France
The following table makes it possible to locate the whole of SMEs on the French territory
by sector.
15
The tertiary activities (the services) account for approximately 60% of the whole of
French SMEs (25% of French SMEs are SMEs operating in the tertiary activities and
localised in Paris and its neighbourhood).
2.4 Employment, Working Conditions
2.4.1 Employment in SMEs
With nearly third of the employees in the companies, SMEs are very largely the first
private employers of paid in France.
Employees in France enterprises by size
To reach the exercise, click here
The small enterprise(category “10 to 49 paid”) accounts for almost 50% of the
employment paid in SMEs,
and nearly 30% in the ensemble of the companies.
In addition,the commercial and services sectors employ the half of manpower.
16
Paid workers by size of the SME in 1999
Food-processing industry
Industry
(except
food-processing
industry)
Building trade
Trade
Transport
Services
Education, health, social action
Total
0 to 9
10 to 19
20 to 49
50 to 249
Total SME
37,3%
16,2%
12,1%
12,7%
18,9%
27,0%
31,7%
44,1%
100%
100%
43,8%
41,0%
20,3%
42,3%
46,9%
35,4%
18,5%
14,3%
13,3%
14,1%
10,4%
14,1%
21,4%
22,6%
26,7%
19,8%
16,5%
22,4 %
16,3%
22,1%
39,7%
23,8%
26,2%
28,1%
100%
100%
100%
100%
100%
100%
Source: INSEE-DEcas (fiscal database SUSE)
Paid workers by size and sector of the firm in 1999
Food-processing
industry
Industry (except foodprocessing industry)
Building trade
Trade
Transport
Services
Education, health, social
action
Total
0 to 9
10 to 19
20 to 49
50 to 249
Total SME
250 and
more
Total
4,7 %
3,8 %
3,8%
5,0%
4,5 %
4,2 %
4,3 %
9,8 %
19,2%
25,8%
33,5 %
21,4 %
35,5 %
27,0 %
16,2%
27,8%
3,2%
30,6%
17,2%
24,4%
5,3%
25,7%
12,5%
24,3%
6,8%
22,5%
7,5%
18,9%
8,0%
21,7%
13,1%
24,0%
5,7%
25,5%
3,3 %
14,1 %
9,3 %
32,8 %
9,2 %
20,1 %
7,1 %
28,5 %
7,7%
4,4%
4,3%
5,4%
5,8%
0,8 %
3,8 %
100,0 %
100,0 %
100,0 %
100,0 %
100,0 %
100,0 %
100,0 %
INSEE-DEcas (fiscal database SUSE)
The small structures have remunerations levels less high than the large ones.
Actually, SMEs, on average, practise levels of wages lower by 15% than those of the
large companies.
These differences are more important for the direction and the managerial staff, the
situation is opposite for qualified workmen and commercials.
Through various investigations show that differences inside the same professional
category according to sizes of companies, are in the industrial sector :
8% for basic technicians and 16% for managerial staff.
The tertiary activities present a much greater homogeneity. In this sector SMEs “from 50
to 99 paid” have the best wages.
Other remarkable fact: the proportion of paid to the SMIC strongly decreases with the
increase in the size
of the company.
The following table gives the average amounts of the basic wages in SMEs by sector.
Wages level (base 100 for the 4th trimester of 1998)
SMIS(minimum hourly wage)
All the workers
17
2002
2003
6,67€
114
6,83€
118
All the workers
SHBO
(hourly wage gross of the workers)
SMBS
(monthly
wage
of all the employed persons)
In construction
industry
(except
construction)
In
tertiary sector
All the workers
In
industry
(except
gross construction)
In construction
In tertiary sector
Workers
New-workers
Employees
Intermsdiate profession
Senior executive
114
118
115
114
115
107
120
117
118
110
107
110
109
106
107
nd
107
107
107
112
109
110
nd
110
109
109
Source: DARES (statistics service of the French labour ministry)
Over the studied period, which is true for the economy as a whole, is also for SMEs.
The employment in the primary and secondary sectors decreases, while the tertiary
employment increases like the total employment.
2.4.2 Working Conditions in SMEs
For big enterprises or SMEs the working conditions has improved since a half century.
The approach the working conditions in SMEs will use 5 indicators:
• use of new technologies,
• flexibility,
• absenteeism,
• rate of personnel rotation and
• work duration.
1. The most obvious indicator is the use of microprocessing. In this field, the SMEs are
less equipped than the big companies. This difference can be explained by the
distribution of the professional categories in the companies: there is less managerial staff
in the SMEs than in the big companies.
2. Flexibility can be analyzed using rate of temporary employment (interim and contract
with a determinated duration, called CDD).
The proportion of companies using temporary employees grows with the size to reach
70% for the large companies against 10% for the small companies. The recourse to the
CDD do not show big differences with size. A small company on two uses the CDD
whereas the average and large companies are users with 80%
.
Try to find explanations to these constatations.
3. There is a real homogenisation concerning the absenteeism. If the small companies
were protected from this phenomenon but since the beginning of the 90’s, the absentee
rate increased in the small companies to stabilize itself at the same level as the large
companies (approximately 6% in 1999).
4. The rate of rotation (“turn over”) of SMEs has been systematically higher than the
large companies during the last 15 years. This rate in the tertiary sector is the double of
the one in the industry.
18
5. Work duration: it is lightly different in large and small companies, and whatever the
professional branches of industry. More often, the work duration is a shorter in large
companies. In SMEs, the employees full-time work generally more than 40 hours per
week and this figure tends to decrease, whereas the number of hours per week of the
part-time workers is itself in increase.
Number of worked hours per week in the SME
Part-time employment
Full-time-employment
1998
1999
2000
2001
2002
2003
22,9
41,0
22,9
40,9
23,1
40,2
23,3
39,6
23,1
38,9
23,4
40,7
Source : Eurostat
2.4.3 Advantages and Constraints of SMEs
SMEs have a number of unique advantages :
•
•
•
•
•
•
•
SMEs provide jobs to poorly skilled and semi-skilled workers;
Many SMEs provide jobs in rural areas where finding a job is more difficult than in
urban areas;
Productivity is often low in SMEs, which provides a high potential for
improvement;
SMEs are eager to have more information to improve productivity and working
conditions;
Improvements can be carried out quickly since most managers are both the
owner and the manager of the enterprise;
The relationship between workers and managers is closer, which favours
cooperation;
Managers often work in the factory and therefore understand technical problems
and are able to take innovative, informal and flexible approaches to solving
problems.
Do these characteristics seem to you right ? Think about SME's you know.
Many SMEs suffer from business and management constraints which create difficulties
introducing improvements in working conditions and productivity. Some of these
constraints include :
•
•
•
•
•
•
•
•
Financial problems, since SMEs often have low investment capital and little access
to loans;
Difficulty obtaining high quality raw materials;
Difficulty marketing products;
Inadequate power supply and transportation systems;
Poor quality of plant and equipment;
Difficulty finding skilled workers;
Lack of knowledge about management and occupational safety and health;
Lack of technical support.
19
2.5 Summary
2.1 French economy
2.2 Productivity, Export and Innovation Capacity of SMEs
2.2.1 Productivity in SME's
2.2.2 Export-Import in SME's
2.2.3 Innovation capacity in SME's
2.2.4 Exercice
2.3 Distribution of SME's by sector
2.4 Employement, Working Conditions
2.4.1 Employment in SME's
2.4.2 Working conditions in SME's
2.4.3 Advantages and constraints of SME's
2.5 Summary
2.6 Key words
2.7 Questions
2.8 References
2.6. Key Words
Productivity
Export/Import
Innovation
Capacity
SME's by sector
Employement in SME’s
Working Conditions in SME's
Advantages of SME's
Constraints of SME's
2.7. Questions
Exercise 1
Exercise 2
Exercise 3
2.8. References
1.
http://entreprises.insee.fr : Portail des entreprises de l’INSEE, toutes les
statistiques économiques sur les entreprises, en France, par région. Français
2.
http://www.pme.gouv.fr/economie/chiffreclefspme/index-d.htm : Les chiffres clés
des PME, informations du ministère de l’économie sur les PME, par le
gouvernement Français. Français
3.
http://www.entreprises.minefi.gouv.fr/entreprises/theme2/creer.htm : Serveur du
Ministère de l’Economie et des Finances, sur les entreprises. En Français,
comporte des informations sur le cadre juridique, les formalités administratives, la
fiscalité, la protection sociale, et des liens avec des partenaires.
4.
http://www.entreprises.minefi.gouv.fr/v_english.htm : The purpose of MINEFI
Serving Businesses (French economy and finance ministry) is to provide
businesses with information, to simplify their relations with MINEFI and to support
20
their expansion projects. English. Online formalities, Local economic information
available online and Links to partner site.
5.
http://europa.eu.int/comm/enterprise/index_fr.htm
:
Site
européen,
des
politiques en faveur des PME, en Français, tous les dispositifs européens en
faveur des PME.
6.
http://ec.europa.eu/enterprise/index_en.htm : Website in English, a guide to
SME policy in Europe, in English, information about all European devices about
SMEs.
7.
http://ec.europa.eu/enterprise/enterprise_policy/charter/index_en.htm
:
The
European Charter for Small Enterprises, only available in English language,
information about the European priorities for SMEs.
8. http://ec.europa.eu/enterprise/networks/eic/eic.html : Euro info centres inform,
advise, and assist businesses on Community issues. They also provide feedback to
the European Commission about community matters affecting SMEs. English
language.
21
3 Labour relation System
In France labour relations are ruled by an ample body of regulations, ensuring the labour
force legal guarantees within a complex social framework.
In France, social benefits are particularly numerous (as in many other European
countries) in a difficult economic environment (a persistent 10% unemployment average
rate, privatisations, outsourcings...)
Collective bargaining frequently leads to agreements, even though social relations are
often tense (social conflicts, strikes....) Both employers and Unions expect the State to
settle their conflicts and pass legislation.
3.1 Management of Workforce and Collective Bargaining
3.1.1 At the firm level : the Collective Convention
Collective convention has vocation to deal with the totality of the collective relations
between employers and employees (collective bargaining, all the conditions of
employment and social guarantees). It supplements and adapts the provisions of the Fair
labor standards act to the particular situations of a branch of industry.
Collective convention is a written act concluded between :
•
•
one or more trade-union organizations of employees representative,
one or more organizations of employers or any other grouping of employers, or
one or more employers individually taken.
The collective convention of a sector is concluded between trade-union organizations
representative for this sector (metallurgy, wholesale,...). It applies to the companies in
the activity and having adhered to an employers’ organization signatory of the
convention.
The collective convention of company is concluded between the employer, taken
individually, and one or more representative trade-union organizations of employees of
the company.
A collective convention generally contains a basic text, endorsements and agreements or
appendices. After having defined the field of application, it deals with the majority of the
subjects related to the professional life of paid workers such as :
•
•
•
•
•
•
•
•
•
•
•
•
period of test (lasted, notice),
work duration, partial time, night work ,
overtime / public holidays,
paid-leaves,
various premiums (seniority, transport, 13th month),
exceptional allowances,
not-competition clauses,
military obligations,
replacement, change,
disease, accident, maternity,
retirement (notice, allowances, …),
resignation and dismissal (reasons, notice, allowances).
22
If it is necessary, it defines the methods of adaptation of the working time following the
35 hours application. Collective convention can still bring precise details on the methods
and the operation of the representation bodies of paid workers in the company, such as
trade union or work's council.
3.1.2 At the individual level : the contract of work
There is now three type of contract of work :
1 - Contract at Unspecified Duration (CDI)
2 - Contract at Specified Duration (CDD)
3 - New recruitment contract (CNE)
For all these contracts, the main problem is the dismissal conditions
1 - Contract at Unspecified Duration (CDI):
If employment corresponds to a normal situation of the firm development, the employee
must, in theory, be hired under an working contract with unspecified duration (CDI).
Indeed it is the contract of common right.
The Contract at unspecified duration cannot be broken by the employer : the dismissal
must be justified, either for a personal reason, or for an economic reason.
More often there is a period of test in the working contract. During this period it is
possible to break the contract at any time without notice nor allowance. The duration of
this period is in theory free (contrary to the CDD), except when applicable collective
convention fix a duration maximum.
2 - Contract at Specified Duration (CDD):
When recruitment is made for a temporary situation, it is possible to use a contract at
specified duration (CDD). A great number of companies use this contract in order to
evaluate the qualities of the employee or justify it by the fact that the period of test
planned for a working contract at unspecified duration is not sufficient.
This type of contract can only be used in precise cases enumerated by the Law, in
particular when a precise and temporary task within the company is concerned
(replacement of a person absent or temporary increase in the activity of the
enterprise…).
Moreover the use of the CDD is not without danger since the company will not be able to
put a term at this contract before the contracted date. Thus, when the CDD is concluded
for a 6 months period, the head manager, except serious or heavy fault or in some
special cases, will not be able to put a term at this contract in an anticipated way. One
exception yet : he can pay the totality of the wages which would normally have been
paid. In the other hand, the employee cannot resign during the contracted period.
The CDD can be renewed, but it is subject to strict conditions (art. L 122-1-2 of the Fair
labor standards act) : concerning the duration (18 months maximum, renewal) and
concerning the frequency : only one possible renewal.
In all cases, when the maximum duration of the contract reaches its end, and when the
activity of the company requires it, the head manager and the employee must conclude a
contract at unspecified duration.
3 - The new recruitment contract (CNE)
The new contract has been created in August 2005 for companies under 20 employees.
This contract is a true contract of employment. The contractor has all the rights and
guarantees
which
affect
the
quality
of
employee.
23
Concluded for one unspecified duration, this contract obeys however particular methods
of rupture during the first two years after its signature. During this period, the contract
can be broken on the initiative of the employer or the employee, without having to justify
his decision.
The device tries to set up a new balance in the working relationship, while associating,
with a simplification of the dismissal procedures, new guarantees (returned of
replacement, help to employment...) for the employee.
Dismissal conditions
SMEs employers consider that dismissal condition are complicated in France and
dissuades recruitment of new employees.
Reasons: a contract cannot be broken by the employer any time: the dismissal must be
justified.
Notice of dismissal: except in case of serious or heavy fault, the rupture of the contract
intervenes one or two month after the notification of the dismissal, according to the
seniority.
A dismissal indemnity is due: its amount depends on the conditions of the collective
agreement without being able to be lower than the legal amount. The legal amount is
1/10 of the wage for each year in the company (1/15 over 10 years)
Can you imagine the reasons of this new contract of work § Why is it only for
small entreprises ?
3.1.3 Social regulations (LRS) - Social dialogue (consent)
The social dialogue in the French company (SME or large company) falls under a lawful
and legislative context extremely abundant. In particular, the “effects of threshold” are
determining. If we consider the whole of the Fair labor standards act, we find 25
thresholds of release of financial or social obligations for the companies between 10 and
300
paid.
The threshold of 10 paid workers has a primarily financial impact (continuous vocational
training, construction, transport, modes of payment of the social security contributions)
and institutes the representation of the personnel by elected delegates.
The threshold of 50 paid workers has a very strong social incidence for the institution of
the trade-union section of company, of the committee of hygiene and safety (for the
industrial plants), of the establishment or work's council and of the annual obligation to
negotiate
(Auroux
laws).
There are three essential levels of representations of the personnel: delegated of the
personnel, work's council and trade-union section.
•
•
The role of the delegates of the personnel is to take care of the application of
existing legal, lawful and conventional in current operation (working conditions,
conventions collectives…);
The work's council manages social activities and ensures an economic surveillance
mission
24
•
The trade-union section ensures, as for it, the bond between the level local or
national.
It will be noted that actually, as the majority of SME have between 10 and 49 paid, only
the delegate of the personnel is present in these structures.
3.2 Labour Inspection
The labour inspector controls the application of the regulation of work, advises and
informs the employers and the employees on their rights and obligations. He also tries to
reconcile the parts, in particular at the time of collective conflicts.
The labour inspector has very wide missions: he controls the application of the regulation
of work in all his aspects, which it is about the contract of employment, of the duration of
the work, hygiene and safety, of the correct operation of the institutions representative
of
the
personnel.
It also has a role of council near the employees, employers, who can call upon him for
any information relating to the law the labour. In many situations, the employer must
request from the labour inspector his authorization before acting. It is the case, for
example, when it wishes to lay off a staff representative, a doctor of work, to obtain an
exemption to increase the weekly duration of the work of the young people of less than
18 years, to make work the employees beyond the free quota of overtime.
The labour inspector also controls the rules of procedure of the company. Once this one
worked out, the employer sends to him. The inspector can require that an illicit or
bearing clause reached with the rights of the people be withdrawn from it. The employee
who estimates that a clause of the rules of procedure is illegal must seize the labour
inspector. Clauses laying down absolute prohibition to whistle, sing or to have
conversations external with the service, or to carry badges, types of hairstyle, were
cancelled because they were contrary to the personal freedoms.
The labour inspector does not regulate the litigations between the employer and the
employee in connection with the application of the contract of employment. He can
possibly intervene as a conciliator. But if the litigation persists, it is towards the
“prud’hommes” that it will be necessary to be turned.
To exert his missions, the labour inspector has various means of action. He can penetrate
in the company and visit it, without informing the employer beforehand. He can carry out
surveys and question the employees, ask for the communication of documents, take
products, call upon external organizations approved to check the buildings and the
materials.
When it notes irregularities, the inspector has several possibilities to act. He can recall to
the employer his legal obligations, for example as regards safety, and indicate to him
that in the absence of setting in conformity he will establish an official report transmitted
to the public prosecutor. This last can then decide to engage some penal continuations.
In the event of dangerous situation for the employees, the labour inspector can approach
the judge concerning the summary procedures to suspend the dangerous activity.
3.3 Consular organizations
The consular organizations is a network of local, regional and national public
establishments
•
•
155 metropolitan Chambers of Commerce and Industry (CCI)
20 Regional Chambers of Commerce and Industry (CRCI)
25
•
•
The Assembly of French Chambers of Commerce and Industry (ACFCI)
and French Chambers of Commerce and Industry abroad (CCIFE)
3.3.1 Chambers of Commerce and Industry (CCI)
Source : site of CCI (February 2006) : http://www.acfci.cci.fr/presentationCCI/index.htm
Public establishments related to administration, the Chambers of Commerce and Industry
(CCI) were instituted by the Law of April 9, 1898.
155 CCI, of very different sizes, are on the national territory. They are, near the public
authorities, “the bodies of the commercial interests and industrialists of their district”.
CCI acts mainly in its district but can, as a national public establishment, to only carry
out or in partnership, of the actions apart from this limit.
The network of the CCI comprises 5150 regular official members elected by the universal
vote of the companies and 30000 collaborators divided on the whole of the territory,
connected by Intranet. Each CCI are made up of:
•
•
•
members elected for 5 years, which train the General Assembly,
associate members, designated by the General Assembly, taking part in the
deliberations with advisory voice,
technical advisers co-opted by the General Assembly.
The total budget consolidated for 2003 of the network rises to 3.68 billion euros. It is
obtained by:
•
•
•
•
tax receipts (Additional Imposition with the Professional Tax - IATP),
public contributions,
loans,
resources related to its own products and services.
Among their activities, the CCI train each year 500000 students, apprentices, trainees, of
the first levels of qualification at the higher schools of trade or engineers (540
establishments of formation).
They administer:
•
•
•
•
•
•
•
120 airports,
180 ports,
36 multimode platforms,
18 complexes road,
28 warehouses or parks with logistic vocation,
55 congresses hall and parks of exposures,
2 bridges (Normandy, Tancarville)
They record more than 800000 formalities related to creation, resumption or
transmission of company in their Centers of Formalities of Companies (either
approximately 60% of the formalities carried out in France).
3.3.2 Regional Chambers of Commerce and Industry (CRCI)
The 20 Regional Chambers of Commerce and Industry, heiresses of the economic
areas created in 1938, were transformed into CRCI in 1964. 20 Regional Chambers
gather the CCI of their area. Each CRCI exerts two main missions:
26
•
•
the representation of the regional interests of industry and the trade near the
public authorities,
the coordination of the means of the CCI of the district for the realization of
actions of interest general.
Fields of intervention for CCI and CRCI: to be represented and to put forward the
interests of companies. The Law of April 9, 1898 stipulates that “the Chambers of
Commerce and Industry represent the commercial and industrial interests of their district
near the public authorities”. Two objectives:
•
•
To take care of the taking into account of the interests of the companies and to
take part in the development of the public policies,
To facilitate the relationships of the companies with the administrations national
and territorial
The CCI formulate opinions and proposals on:
•
•
•
•
•
•
•
•
•
•
•
the development of the economic activities,
the installation and the development of the territory,
environment,
transport,
tourism,
training and employment,
town planning,
commerce,
international commerce,
the setting in safety of the economic sites,
international action.
Their missions are exerted on 4 levels: European, national, regional, local, within
authorities of dialogue. The CCI are also very present in the field of the commercial
activities.
3.3.3 The Assembly of French Chambers of Commerce and Industry
(ACFCI)
The Assembly of French Chambers of Commerce and Industry (ACFCI) is the national
public establishment responsible for the direction and amalgamation of the French
Chambers of Commerce and Industry (CCI).
The ACFCI groups together 155 local chambers, as well as the 20 regional chambers, and
has two missions:
•
•
representing 1,800,000 French companies. The ACFCI is the intermediary
between all the CCIs and the French and European Public Authorities,
international organisations and large public or private partners. Its task is to
provide guidance, support and advice to the chambers within their spheres of
activity and to ensure the synthesis of their proposals on the means of increasing
the prosperity of industry, the trade and the services.
It facilitates the sharing of skills and experience by means of an intranet network
for the chambers of commerce and industry. Its organisation is a manifestation of
its tasks of representation and support to the chamber network.
The president of ACFCI is elected every 3 years by his or her peers. The actual President
is: Jean-François BERNARDIN (re-elected in 2005)
27
The services of the ACFCI fall under the responsibility of a chief executive officer. The
ACFCI, with 180 direct collaborators and several associate organisations, constitutes a
large resource and advice centre for the entirety of the CCIs
3.3.4 French Chambers of Commerce and Industry Abroad (CCIFE)
The French Chambers of Commerce and Industry Abroad are private associations which
gather the French companies established abroad as well as local companies. 110 CCIFE
are established in 75 countries. Their mission is to promote the image of France out of
France.
They offer a range of services to the companies:
•
•
•
•
•
•
public relations,
communication,
information,
observation of the market,
commercial action,
legal and tax assistance...
The union of French Chambers of Commerce and Industry Abroad gather these
Chambers.
3.3.5 Professional and trade chambers
Source: The site of the permanent assembly of the professional chambers.
http://www.apcm.com/default.htm
Professional and trade chambers regroup more than 250 sectors. Created in 1925,
professional and trade Chambers are public establishments administered by tradesmen
elected by universal suffrage every five years. These are bodies which represent the
general interests for tradesmen within public authorities.
The Professional and trade Chamber ensures the representation of tradesmen in their
political, economic and social environment. It collaborates with local authorities:
communes, departments, countries and urban communities for projects involving
tradesmen and local development.
Regional professional and trade chamber
Tradesmen are represented in each region by the Regional professional chamber (CRMA).
The general assembly of each regional chamber is made up of the representatives of
departmental professional and trade chambers.
They coordinate the execution of the missions of the professional and trades chambers
and ensure the consistency of action. They act as the contact point for regional
institutions with regards vocational training and economic development for tradesmen
and work for departmental Chambers on action concerning quality, the environment,
export, and the arts, etc.
The position of Tradesman and the titles of Maître artisan, Artisan d’art and
Maître d’apprentissage confirmé
To be entitled to the position of tradesman from registration on the Trade register, and to
use this title, the holder must hold a diploma or similar certificate in the trade or a
related trade, or be registered on the trade register for at least six years.
The title of Maître d’apprentissage confirmé is issued by the professional and trade
Chamber to reward teaching capacities and the ability/availability for the training of
apprentices.
The size of the enterprise
At the time of creation, enterprises employ less than ten employees. But they can remain
registered on the trade register beyond this size if the director is a "tradesman" and
28
holds a CAP as a minimum or has been registered for 6 years. This is the "droit de suite"
introduced in 1997.
Trades in Europe
Trades and small enterprises are an essential part of the European economic landscape.
These enterprises are represented by the UEAPME (European Association of Craft, Small
and Medium-Sized Enterprises) in which the 25 member countries are represented by at
least one organisation.
Founded in 1979, this association represents 11 million European enterprises employing
50 million companies via its members.
The mission of the UEAPME is to provide information on common policies, to promote
collaboration between national organisations and to give the point of view of members
within the European institutions: the Commission, the Directorates-general, including the
DG “Enterprise” (Crafts and SME) and the European Parliament.
3.4 Summary
3.1 Management of Workforce and collective bargaining
3.1.1 At the firm level : the Collective Convention
3.1.2 At the individual level : the contract of work
3.1.3 Social regulations (LRS) - Social dialogue (consent)
3.2 Labour inspection
3.3 The chamber system
3.3.1. Chambers of Commerce and Industry (CCI) and Regional Chambers of
Commerce and Industry (CRCI)
3.3.2. The Assembly of French Chambers of Commerce and Industry (ACFCI)
3.4
3.5
3.6
3.7
Summary
Key words
Questions
References
3.5 Key Words
Collective bargaining
Collective Convention
Contract of work
Social regulations (LRS)
Social dialogue (consent)
Labour inspection
Consular organizations
Chambers of Commerce and Industry (CCI)
3.6 Questions
Choose one of the questions below basing your answer on additional research
(approximately one page).
1. What do you think of the CNE: advantages and drawbacks
2. Is labour inspection useful? And why?
3. How are working hours negotiated?
3.7 References
1. http://www.cgpme.fr : La Confédération générale des petites et moyennes
entreprises et une organisation syndicale interprofessionnelle d’employeurs de
29
PME. Elle est reconnue comme partenaire social par les autorités. Ce site est en
Français. Il comporte des informations économiques, sociales et internationales
qui concernent les PME.
2. http://www.cgpme.fr/english_version.pdf : The General Confederation of Small
and Medium sized Enterprises (CGPME), is an interprofessional, private,
independent organisation for employers and is a recognised French social partner.
Website in English
3. http://www.apcm.com/artisanat/default.htm : Les chambres des métiers, site en
français
4. http://www.travail.gouv.fr/etudes-recherche-statistiques/statistiques/relations-
professionnelles/85.html : Site du ministère du travail, informations et statistiques
sur l’emploi, le chômage, les relations professionnelles, uniquement en Français.
5. http://vosdroits.service-
public.fr/particuliers/N442.xhtml§&n=Emploi,%20travail&l=N5 : Les contrats de
travail dans les entreprises – en français. Site qui présente les différents types
de contrats de travail, congés, licenciements, démissions, retraites, conflits du
travail.
6. http://www.acfci.cci.fr/presentationCCI/index.htm : Chambres de commerce et
d’Industrie, site français
7. http://www.acfci.cci.fr/Site%20anglophone/index.htm : The Assembly of French
Chambers
of
Commerce
and
Industry
(ACFCI).
In
english
30
4 Legal System
French legislation is particularly complex, compared to that of other European countries.
It is based on the principles of Napoleon “civil code” (common law) and is regularly
supplemented by new provisions.
Legal texts are thus in constant evolution and the following information corresponds to
year 2005.
4.1 Definition of SMEs
The different possible statutes are :
The one-man business (EI):
The one-man business (EI), so called society in proper name, is the legal form most
widespread (approximately 55% of the existing companies). This legal form concerns the
physical people wishing to carry on a commercial activity without creating company. The
advantages are that it makes it possible to quickly start an activity without having to
constitute a minimum capital, it facilitates management (less formalism) and it
authorizes the choice of a mode of simplified taxation (micro company, fixed price).
The limited liability company (SARL):
The limited liability company (SARL) concerns more than 20% of the companies. This
legal form is appreciated by creators of company because it allows the crétion of a
company with little capital, it preserves a family character at the company, it limits the
responsibility for associated and it gives to the manager of the company the possibility of
profiting from the mode of social protection from the employees.
The limited company (SA):
The limited company (SA) is spread and relates to only 5% of the companies. It has
nevertheless some advantages: it makes it possible to call upon the capital of a great
number of shareholders, it limits the responsibility for the shareholders, it authorizes the
free transfer of the actions. However it is the shape of very heavy company to manage
(obligation to name an auditor since the creation for example)
The unipersonal company:
The unipersonal company with limited responsibility (EURL) interests for its part 2% of
the contractors. It is a legal form derived from the limited liability company whose rules
of operation were adapted to the presence of a single associate.
Others:
Other forms exist (partnership (SNC), joint stock company simplified, limited liability
partnership or action), but it concerns less than 1% of the companies.
Essential differences between these statutes
Related to the components of the company:
S.A.
Two possible plans :
CEO, board of
directors and et
general meetings of
shareholders
President of the
executive board,
executive board,
S.A.S.
S.A.S.U.
President
S.A.R.L.
The one-man
E.U.R.L.
business (EI)
Business manager, The one-man
business takes all the
decisions alone
Assembly
Business partner
meeting
The statutes could
allow others
components (board of
directors, supervisory
board, committee of
31
supervisory board, and wages, consultative
general meetings of
committee, etc…).
shareholders.
Related to the company manager dismissal:
S.A.S.
S.A.R.L.
The one-man business
S.A.S.U.
E.U.R.L.
(EI)
The business
The President and the Freedom statutory :
manager removable
member of the board the statutes can
of directors are
envisage a revocation for justes motifs
removable ad nutum ad nutum or for justes
motifs (with or without
The general director is allowances)
removable for justes
motifs (except if he is
CEO)
S.A.
Related to the company manager qualities:
S.A.S.
S.A.R.L.
The one-man
S.A.S.U.
E.U.R.L.
business (EI)
The President and the The President could be The business
members of the board a legal entity or a
manager is a natural
person, shareholder
director must be
natural person The
or not
shareholders
President could be
shareholder or not
S.A.
Related to the company manager social regimes:
S.A.
The President is
assimilated to an
employee
S.A.S.
S.A.R.L.
S.A.S.U.
E.U.R.L.
(EI)
The President, natural The non-associated Self-employed person
person, is compared business manager or
to an employee
the minority
business manager
are assimilated to
employees The
majority business
manager is
considered as a selfemployed person
Related to the company manager taxation and wages:
S.A.S.
S.A.R.L.
S.A.S.U.
E.U.R.L.
(EI)
President: assimilated President: assimilated The business
Income tax of the
to an employee
manager is
to an employee
contractor (BIC or
assimilated to an
Members of the board
BNC)
employee (except in
of directors: tokens
a EURL which did
Members of the
not choose the
executive board: their
corporation tax)
remuneration is
decided by the
S.A.
32
supervisory board
Members of the
supervisory board :
tokens
Related to the government auditors:
S.A.S.
S.A.R.L.
S.A.S.U.
E.U.R.L.
Obligation to have an Obligation to have an No Auditor, except
Auditor
Auditor
exceptions
S.A.
(EI)
No Auditor
Related to the statutes advantages:
S.A.
Possibility to call up
private investors
- Good credibility
with the banks
- The working of SA
is known by a great
number
- Facility for the
transfer of the
actions
- It is easy to insert
of others partners in
the capital
S.A.S.
S.A.R.L.
S.A.S.U.
E.U.R.L.
Very great flexibility Simplicity
of working
- The working of
- Made to measure is SARL is known by a
possible in the
great number
distribution of the
- Low capital to be
benefit, the votes and released with
the capacities
creation
- Facility for the
- Contributions in
transfer of the
industry authorized
actions
- Modern image
- It is easy to insert
of others partners in
the capital
(EI)
No cost of working
- The personnel and
professional
inheritances are
confused
- Administrative and tax
formalities limited for
the small one-man
businesses
Related to the statutes disadvantages:
S.A.
- Important fixed
costs of working
- Could be difficult to
manage It is
necessary to have at
least seven
shareholders
S.A.S.
S.A.S.U.
- Important fixed
costs of working
- Require a very
meticulous drafting of
the statutes realized
with the assistance of
a professional
- Prohibition to place
itself on the stock
market
S.A.R.L.
E.U.R.L.
- Limited in a
number of
associated
- Credibility lower
than SA with the
banks
- Prohibition to
place itself on the
stock market
33
(EI)
- The individual
contractor is
responsible for the
debts of the company
on the totality of his
personal inheritance
- The personnel and
professional
inheritances are
confused
- It is more difficult
and more expensive to
yield an one-man
business than a
company
- From a certain level
of benefit or turnover,
it is preferable to
create a company
4.2 Establishment / Foundation of the Company
(see also on http://www.apce.com/ in french)
To build a project of creation of company and to increase its chances of success, it is
recommended to act with method by respecting chronological stages. After having the
idea for the creation of the enterprise, you need to check the good adequacy between the
personal project and the requirements related to the exploitation of this idea. The idea
will be transformed thus gradually into project, then in company if a serious market
research confirms that it is likely to interest sufficient customers. A good analysis of the
customers concerned makes it possible to check the feasibility of the project and to
determine the estimated turnover of the future firm. The development of financial
forecasts – or budgetary accounts – is essential to be ensured of the profitability of the
project of creation and to avoid sailing at sight. To write these accounts and to integrate
them in a plan of businesses facilitate the search for financing, obtaining assistances and
the future management of the firm. The choice of a legal statute is necessary to make it
possible the company to carry on its activity in all legality. It determines the formalities
of registration to carry out to give life to the company. The installation of the company
and the starting of the activity constitute the last stages of the creation of the company.
Of course, an excellent knowledge of the trade, branch of industry, and tax, countable
and social obligations of the new company are key factors as well as possible to live the
first months of activity and to give a maximum of chances of success.
The idea : that it is born from the experiment, know-how, the creativity or a simple
combination of circumstance, the idea often takes the form of an intuition or a desire
which deepens and matures with time. There are not good ideas in oneself, but only
ideas which can opportunely be developed by the people who conceived them and others
which will remain simple inclinations. The appreciation of the cogency of an idea is thus
inseparable from the personal project from that or that which expresses it. There is a
large variety of forms of ideas: the newer the idea is, the more it will be necessary to
wonder about the capacity of the future customers to accept it; the more banal it is, the
more it will be appropriate to wonder about its real utility compared to the already
existing offer on the market. At this stage, the first thing to be made consists to define in
a very precise way its idea and, if it presents a character of innovation, to take a certain
number of precautions so as to be able to prove that one is well at the origin of this idea.
The personal project : This second stage must make it possible to check the realism of
the project, i.e. coherence between:
- its personality, its motivations, its objectives, its know-how, its resources and its
constraints personal.
- and specific constraints linked to the product, the market, the means which it is
necessary to set up, which must prove to be controllable.
For that, it is necessary to collect documentation, opinions and councils, to analyze the
constraints and to define the broad outline of its project. At the end of this first
approach, if incompatibilities appear between the requirements of the project andits
personal situation, a certain number of correct
The market research : It is an essential element of the preparation of the project
because without customers, there is no possibility of firm! Indeed a "great idea" can
become a bad project, due to a lack of customers. On the other hand a "ordinary idea",
implementing in a certain context, can be very lucrative. The realization of a market
research allows:
- to define with precision which will be its customers,
- to position oneself in relation to competition ,
- and thus to adapt its product or its service according to the elements collected.
In addition, the analysis of the customers ' expectations, combined with the analysis of
34
competition allows:
- to define an acceptable level of price its future customers,
- to determine and quantify the first commercial actions which will be necessary to
capture its customers,
- to estimate the first turnover.
The financial forecasts : This stage consists in translating, in financial terms, all the
elements and checking the viability of the project. The establishment of the budgetary
accounts makes it possible to answer three essential questions:
- Which are the necessary capital to launch the project then to make viable the
company?
- Is the estimated activity of the company likely to provide a sufficient amount of receipts
to cover the loads pulled by the implemented human, material and financial means?
- Will the receipts registered by the company throughout the year enable him to
permanently face with the expenditure of the same period?
This step leads to the construction of a coherent and viable project, each option taken
finding its translation financial and its effect on financial balances. If imbalance is too
important, the project must be modified and its financial structure adapted consequently.
To find financings : The correct financing of a project is one of the conditions of
success of the project. It is advisable to have a sufficient capital so that all the durable
needs for the company are financed completely by financial resources adapted to the
duration for these needs. After having carried out the census of these needs and financial
resources available, it will be necessary to seek one or more solutions for the missing
capital. The support of an organization having a perfect knowledge of the tools of existing
financings - personal loans, loan to the company, capital risk, current accounts of
associates, leasing, etc - is essential to it stage
Assistance and help : There is a certain number of help to the creation of company
which it is advisable to know. These assistances, distributed by the State or the local
authorities are generally granted to support:
- the establishment of firms in priority territories as regards regional planning,
- the professional rehabilitation of people in difficulties,
- the realization of investments and creation of jobs.
They are of financial nature (refundable subsidies, advances, guaranteed of loans, tax
(exemption of tax, tax reductions and tax allowance…) or social (exemption of social
contributions). To get information sufficiently early about these devices makes it possible
to be able to deposit requests within the time limits. Be careful however, obtaining a help
should not be likely to condition the launching of the company.
To choose a statute : Whatever the importance and the nature of the considered
activity , the choice of a legal structure adapted to the project must be carried out: oneman business or firm ? The legal structure corresponds to the legal framework in which
the activity will be carried on. This choice must be studied thoroughly, with the
assistance of a professional, because it involves a certain number of consequences on the
statute, as well at the patrimonial level as social and tax. It can also engage the future of
the company. It is recommended not to leave with a preconceived idea, but to lean on
the various statutes in order to analyze of them the advantages and the disadvantages
compared to the project and its personal situation.
Formalities of creation : After having completed the development of the project on the
commercial, financial and legal level, the formalities imposed by the nature of the activity
and/or the selected legal structure could be implement. The firm can then obtain a legal
existence by the deposit of a request for registration at the Center of formalities of
companies (CFE). It is also the moment to carry out the financial procedures i.e. to open
35
a bank account and to secure a possible loan by presenting to the banker the plan of
businesses.
To install the company : At this stage, the mean objective must be to concretize the
contacts made with the customers in order to:
- to obtain as soon as possible its first orders,
- to organize consequently its production equipment.
It is also essential to observe a some principles of management and to install tools,
called "indicators", which will allow to control the development of the company and thus
to avoid or correct "slippage".
The first months of activity : Lastly, each manager of firm is brought to take a certain
number of decisions related to tax, accountancy and social. To avoid having surprise, to
be able to discuss with the concerned administrations and to proceed to the formalities
which are essential, it is important to understand the basic principles which govern the
taxation and the management of the firms.
4.3 Termination of the Company
The objectives of the right of rectification and the bankruptcy of the companies are
expressly affirmed by the texts :
•
•
•
to save the company,
to maintain the activity and employment,
and to audit the liability (Code of the trade, art. L 620-1, subparagraph 1st).
To save the company, a plan of rectification must be determined, which results either in
the continuation of the company, or by its transfer. To reach one of these results, the
legislator implement some derogatory rules at the common right.
The procedure begins with an observation period during which an economic and social
assessment and/or a project of plan of rectification are drawn up. During this period, the
rights of the former creditors are freezed : the payment of their credits is prohibited,
their rights of continuation and of execution are suspended. Moreover, they can be
consulted on the exit of the procedure but their opinion does not bind the court which is
the only judge of the decision regarding the terms of payment. The working contracts are
maintained, even if dismissals remain possible but under strictly limited conditions.
Nevertheless nine times out of ten the procedure ends with the bankruptcy, and this one
is very often immediately announced because the activity of the company have already
come to an end (even if the judgement stay open), or the chances of rectification seems
to be non-existent. The company is then liquidated and generally the money generated
by this liquidation and distributed between the creditors only cover a small part of their
credits.
36
Figure 1 - Synoptic diagram of the procedure
Source: http://sos-net.eu.org
4.4 Summary
4.1
4.2
4.3
4.4
4.5
4.6
4.7
Definition of SME's
Establishment / foundation of the company
Termination of the company
Summary
Key words
Questions
References
4.5 Key Words
Definition of SME's
Establishment / foundation of the company
Termination of the company
4.6 Questions
1. Which are the principal differences between SA and a limited liability company?
2. Which are the principal differences between SA and a unipersonal company?
4.7 References
1. http://www.apce.com/index.php : L'Agence Pour la Création d'Entreprises (APCE),
en français, site d’information sur les PME en France.
2. http://www.apce.com/index.php§type_page=IL&pays=1&rubrique_id=300000111
: French Business start-up agency, English language, this site offers information
about SMEs in France.
3. http://www.oecd.org/h : Organisation de coopération et de développement
économiques, site d’informations économiques, dont plusieurs rapports sur les
PME, Français.
4. http://www.oecd.org : Organisation for Economic Co-operation and Development,
economic information including rapports about SMEs, English language.
37
5. http://www.apce.com/index.php§rubrique_id=116&tpl_id=106&type_page=I&typ
e_projet=1&param=0 : Statuts juridiques des PME en France, présentation
simplifiée de l’apce, en Français.
6. http://www.apce.com/index.php§rubrique_id=3000001122&type_page=IL&pays=
1 : Legal structures in France, in English, short presentation of procedures in
France. English language
38
5 Financial Environment
This chapter introduces the major financial principles ruling SMEs operations in France.
It is not meant to be a course on corporate finance. Its goal is rather to show the various
tax bases applied to companies according to their legal status.
In this respect two particular aspects are developed: corporate profit taxation and social
contributions.
5.1 Taxation
The tax system takes into account the estimated turnover and the type of activity. It will
make it possible to determine the mode of calculation of the taxable profit, the frequency
of the tax declarations and the payment of the tax. During the existence of the company,
it is still possible to change the taxation mode. However, it remains impossible to change
a real regime for a micro-firm regime.
5.1.1 The different type of tax regimes
The different type of tax regimes are :
•
•
•
•
Micro-firm: this regime is exclusively aimed at the very small companies with an
annual turnover not exceeding 76 300 Euros for the sales volumes of goods and
27 000 Euros for the activities of provisions of services and the liberal
professions. The choice of this regime exempts the declaration and payment of
the VAT which can neither be invoiced, nor deduced. An obligatory mention must
be applied to the invoices and the notes of fees : “no applicable VAT, article
293 B of the CGI”. The taxable profit is evaluated in a contractual way by
application of a rate of abatement on the turnover : 72% for the sale of goods,
52% for the provisions of services, 37% for the liberal professions. The microfirm regime includes some reductions of tax and countable formalities. The
behaviour of the registers is reduced to the only behaviour of the day book of the
receipts and the register of the purchases (for the sale of goods). Even if they
respect the limits of turnover, certain legal structures cannot claim the micro-firm
regime. Particularly the companies subject to the society taxation (IS), the
companies of people subject to the income taxation (IR) and all the normally
companies indebted to the VAT.
Simplified real regime: The simplified mode relates to the industrial, commercial
and craft companies whose annual turnover lies between: 76 300 € HT and 760
000 € HT for the sales volumes of goods, 27 000 € HT and 230 000 € HT for
the activities of provisions of services. As for the regime of controlled declaration,
the taxation on the benefit is given on the real result. The carry forward and the
deduction of the deficit on the following exercise are possible. The activity is
subjugated with the VAT. The declaration of VAT is annual and the payment is due
each quarter (payment on account).
Real regime: The real regime must obligatorily be adopted by the industrial,
commercial and craft companies with annual turnover iover: 760 000 € HT for
the sales volumes of goods, 230 000 € HT for the activities of provisions of
services. The constraints of this regime are heavier because the companies are
obliged to hold an accountancy respecting the countable plan and to publish its
annual statements. The VAT must be declared and paid each month.
Controlled declaration: The regime of controlled declaration relates to the liberal
professions excluded from the field of the micro-firm, i.e. with annual turnover
over 27 000 €. With this regime, the taxation on the benefit is given on the real
39
result. The carry forward and the deduction of the deficit on the following exercise
are possible. The activity is subjugated with the VAT. The declaration of VAT is
annual and the payment is due each quarter (payment on account).
5.1.2 Imposition of the benefit according to the legal statute of the
company
The imposition of the benefit depends on the legal statute of the company: a company is
generally subject to the corporation tax, independent always are subject to income tax.
However, in some cases, a company can choose to be also imposed on the income. It is
the case for example of the EURL, the SNC or SARL of family.
•
•
Imposition on the companies (IS): After account closure of the exercise, the
current result before taxes must be declared to the tax services. In all cases, even
if the result is negative, companies will have to discharge IFA (Annual Contractual
Imposition). This tax is given according to the section in which the turnover
including all taxes is located. It constitutes a recoverable advance on the IS of the
year and the two following exercises. If the result of the exercise is negative, the
company can carryforward the deficit and reduce the result of the following
exercise. In the absence of a sufficient result, it could be renewed until the fifth
year after the overdrawn exercise. If this result is positive, this benefit will be
imposed as of the honest first. The imposition is currently calculated on the basis
of 33% on the result. However, in order to help the SME, the Finance law for
2001 set up a device of reduction of the imposition on the companies. This device
applies to the companies with turnover lower than 7,6 Million € and with capital
hold by physical people for 75% at least, in a direct or indirect way. For these
companies, the taxable profit will be taxed with : 25% within the limit of 38
100 € per 12 months period, for the open exercises in 2001, 15% within the
limit of 38 100 € per 12 months period, for the open exercises in 2002.
Imposition on the incomes (IR): The benefit resulting from the professional
activity or company are determined by professional results declaration This
benefit will be translated to the personal income tax declaration, proportionnally
to the rights hold in the company or entirely for the independent ones or EURL. If
the activity is commercial or industrial, this income is declared in BIC (industrial
and commercial benefit); and in the contrary case, the income is declared in BNC
(non commercial benefit). This income will be added to the other incomes of the
tax hearth and taxation will be calculated according to the progressive scale of
common right of income tax by taking into account the tax shares, the deductions
and abatements the hearth can claim.
5.2 Social Security
All data are available for the year 2005
Social security cover all the population in France.
Social security contributions are calculated in two parts: the employer part and the
employee part. The two parts are collected by the firm and the employer part deducted
directly from salary.
Contributions are payed to the URSAFF quarterly for a very small firm (under 10
employees), monthly for a medium or a big firm.
Total contributions are over 65% percent of gross salary, so an employee pays about
40
20% of his/her salary, and the employer 45%.
The self-employed pay the contributions themselves.
Created in 1945, the social security system follows now three principles:
- All French residents have social rights including health, housing assistance, minimum
income, …
-The calculation of national social insurances depends on a ceiling amount (2516 € for
2005). This means that some contributions are generally only calculated up to a
maximum amount (national pensions, …)
- A part of contributions depend of the law, other depend on the collective convention of
the sector (concluded between trade-union organizations representative and employers)
but concern almost all employees and their family’s (complementary health insurance, )
French social security system can be divided into 7 parts (2005):
1. Pensions :
• national pension insurance: compulsory insurance by distribution. There is a minimum
pension, for old people.
• complementary pension insurance: compulsory insurance by distribution. Contributions
are calculated on the ceiling amount for a part and exceeding earnings for a part.
• additional pension insurance: not compulsory insurance by capitalization, usually for
top management,
Pensions (main compulsory insurances)
Percent of
Employer
Employee
Total
National (CNAV)
under ceiling amount
8.20%
6.55%
14.75%
gross salary
1.60%
0.10%
1.70%
4.50%
3.00%
7.50%
complementary pension ARRCO under ceiling
amount
AGIRC over ceiling
12.50%
7.50%
20%
amount
+ Others
1.5% to 2% 1% to 1.2% 2.5% to
3.2%
Additional
Not compulsory
0%
0%
0%
2. Health :
• national health insurance, compulsory and covers all French residents. Generally
patient pays and gets back 70 % to 100 % of the amount from the social security.
• complementary health insurance, complete the national health insurance and covers
more than 90% of French people. This insurance is individual, but it is usually taken out
by the company. The firm funds, between 25% and 50%. For poor people, this insurance
is free: universal medical cover (CMU)
National (CNAM)
Percent of
gross salary
Employer
12.80%
Employee
0.75%
Total
13.55%
3. family allowances :
(CNAF): France has a pro-birth policy. Enterprises pay 5.4% of gross salary for the
national family allowance. They also contribute to the housing assistance (0.10% under
ceiling amount for companies until 9 employees, 0.50% of gross salary for companies
over 9 salaries)
41
4. unemployment insurance, for all employees
UNEDIC
Percent of
gross salary
Employer
4.45%
Employee
2.40%
Total
6.85%
5. care insurance , for employees earning more than the ceiling amount: employer
pays 1.50% up to the ceiling amount.
6. companies' accident insurance , depends of the activity of the company.
Employers pay usually between 1% and 6% of salary.
7. others (transportation, building taxes, general social taxes (CSG and CRDS),
vocational learning,…); employers 5% and employees 8% of gross salary.
5.4 Summary
5.1 Taxation
5.1.1 The different type of tax regimes
5.1.2 Imposition of the benefit according to the legal statute of the company
5.2 Social security
5.3 Accounting and auditing
5.3.1 The origins of accountancy
5.3.2 The 3 functions of the accountancy
5.3.3 The balance sheet and the income statement
5.3.4 Accounting principle
5.3.5 The supplier credit: the bill of exchanges
5.4.6 Audit and management control
5.4 Summary
5.5 Key words
5.6 Questions
5.7 References
5.5 Key Words
Taxation
Tax regimes
Imposition of the benefit
Social security
Accounting
Auditing
Balance sheet
Income statement
The supplier credit
The bill of exchanges
The management control
5.6 Questions
A company employs 10 workers, 2 secretaries, 2 technicians, 3 salespersons and one
engineer.
Given that a worker salary is 1300 € per month in France (nominal)
For a secretary (€ 1500) ,
A technician (€ 2000) ,
A salespersons (€ 3800) ,
and one engineer (€ 4000) ,
42
1. What are the total labour costs for this company§ You must include the social
security (employer part )
2. What are the net wages of each category§ (don’t forget the employee part of
social security)
The solution
Workers secretaries technicians salespersons engineer
Number
10
2
2
3
1
Salary
1300
1500
2000
3800
4000
13000
3000
4000
11400
4000 35400
Sum of nominal wages = 35 400 €
Total labour costs = 35 400 X 1,45 = 51330 €
Net wages of each category:
Net wages = nominal minus 20 %
Workers secretaries technicians Sales persons engineer
1040
1200
1600
3040
3200
5.7 References
1 : French tax system for SMEs, in English, Tax system for each legal structure of
SME.
1 : Social security in France, English, Information on the global social security
system for SMEs in France.
3. http://www.apce.com/index.php : Site de l’Agence Pour la Création d’Entreprises,
informations et exemples sur le système fiscal et les cotisations sociales , en
Français.
43
6 Knowledge
Since the law of July 16, 1971, the participation of the employers in the financing of the
continuous vocational training became obligatory. The two sides of industry and the State
set up various devices: the individual leave of formation, conventions of conversion and
trainings in alternation (contract of orientation, contract of qualification and contract of
adaptation), etc1.
However these devices showed some dysfunctions:
•
•
•
An unequal access to the continuous training, according to the size of the
company, the training level of the person or her professional situation.
The continuous training is in France a very occasional means to acquire a
qualification in an alternative way to the initial formation.
The education system is partitioned, not easy to understand and complex.
So this education system wasn’t able, in 2004, to answer to the stakes of the formation
throughout the life, nor to the development of the professional mobility and the
transparency of the qualifications which rise in particular from the opening of the
European borders and to the implementation of the coordinated strategies for
employment and the education systems.
The wish to create a European area of formation throughout the life2 found its translation
in France by law relating to the vocational training throughout the life and the social
dialogue, promulgated on May 4 2004.
6.1 Education training system
The law relating to the Life-Long Learning vocational training and the social dialogue,
(May 4 2004) created two new devices of access to the formation for the employees:
1
Devices of continuous vocational training set up by the two sides of industry and the State:
A/ Initiative of the employer
The plan of formation of the company gathers the whole of the training activities for which the
employer assumes the responsibility. The employee in formation is on professional mission; he is
remunerated by the company.
We can note that:
•
•
The time capital of formation makes possible to the employees to profit from formations
envisaged in the plan of formation of the company.
The co-investment formation defines the development conditions of qualifying formation
proceeding partly except working time.
B/ Initiative of the paid worker
All the employees have right to follow, during their working time, a formation of their choice within
the framework of an individual leave of formation (CIF).
A leave of assessment of competences makes it possible to the employees to analyze their
personal and professional competences in order to define a professional project or of formation.
C/ Trainings in alternation
They are the contract of orientation, contract of qualification and contract of adaptation
2
Resolution of the Governments in Seville (2002) as well as the “framework of actions for the
development of competences and the qualifications throughout the life”, voted by the two sides of
industry.
44
•
•
The individual right to formation (DIF) of 20 hours per annum which can be held
simultaneously over 6 years. This new right is implementing on the initiative of
the employee, with the agreement of the employer on the choice of the formation.
The installation of one professionnalization period through a training in
alternation.
In addition, the agreement amalgamates the various contracts of training in alternation
(contract of orientation, contract of adaptation, contract of qualification) in a single tool,
the contract of professionnalisation, opened with all, young seeking to form part of the
active life and adult applicants for work.
The device of the individual leave of formation is maintained with increased means.
6.1.1 Actors of the vocational training
The continuous vocational training is financed mainly by the State, the Regions, and the
companies. Cofinancings are encouraged.
•
•
•
Regions have a general competence related to continuous vocational training.
They are also responsible for the continuous vocational training intended for the
young people from 16 to 25 years. The role of the Regions is reinforced by the law
of 2004.
The State intervenes near the public more in difficulty, the professional branches
and the companies.
The financing by the companies is based on a legal obligation to take part in the
financing of the formation.
6.1.2 The mechanism of the vocational training
The law of May 4, 2004 defines the individual right to formation (DIF).
This agreement includes in particular:
•
•
The generalization of professional maintenance, every 2 years, for the employees
having at least 2 years of seniority. This maintenance must make it possible to
the employee to take an active part in his professional evolution.
The access of right to the assessment of competences and the VAE for all the
experienced employees.
45
•
•
The creation of the passport of formation intended to recall the assets of each
employee, with his initiative to support its internal or external mobility with the
company.
The creation of observatories of the trades and the qualifications in all the
professional branches, to contribute to the knowledge of the evolution of the
trades, the anticipation of the needs for formation and the implementation of
adapted policies of formation.
On the level of the branch
The professional branch formulates the priorities which must be required in the DIF as
well as the objectives of professionnalization of the actions suggested to the employees.
It can be based on a reinforced fungibility of the mutualized funds and on the data of the
observatory of the trades and the qualifications.
On the level of the company
The definition of the different kind of actions taking part of the formation plan is based on
the consultation of the work's council. In addition, the financial commitments of the
company are increased. Thus for the companies of more than 10 paid workers, the
participation in the development of the continuous training of 1.5 % of the wage bill will
be raised in 1.6 %, and for the companies of less than 10 paid workers, of 0.25 % to
0.55%. This effort relates to the mutualized part of the expenditure.
On the level of the individual and the employer
The conditions of development of the formation proceed of a negotiation between the
employer and the employee. Under some conditions, the actions of the formation plan,
DIF and periods of professionnalization can proceed apart from the working time. When
the formation proceeds apart from the working time, it gives place to the payment of an
formation allowance and the written formalization of the employer engagements on the
taking into account of the assets of formation.
The engagement of the state
The bill takes as a starting point the retained disposals by the two sides of industry within
the framework of the collective bargaining. However, it brings significant complements
there:
•
•
•
•
•
The assertion of a right to the differed qualifying formation;
The support brought to the development of the formation apart from the working
time (exemption of the allowance formation to the social security contributions);
The support for the contracts of professionnalization by the exemption of the
social contributions during these contracts, for the young people of less than 26
years and the adults of more than 45 years;
Assistance with the replacement of the paid worker in formation to facilitate the
development of the formation in small and medium-sized firms;
The simplification of the system of equalization to reinforce the effectiveness of
the mutualized funds.
6.2 Skills and competencies
The access to vocational training, depends on the size of the company
- Companies of less than 10 paid workers
- Small and medium-sized firms
46
6.2.1 Companies of less than 10 paid workers
27% of the employees work in companies of less than 10 paid workers, however the
expenditure of continuous vocational training represent only 3% of the total (year 2000).
Only 9% of these employees have access each year to the vocational training, whereas
the average is 36%.
The employees of the companies of less than 10 less often have three times access to
the vocational training, but each trainee profits from the same number of hours of
training course (8.21% of trainees profit from 7.64% of the hours).
Companies
Less than ten employees
% du total
Companies
Employees
Expenditure (en M€)
Number of trainees
Hours of training
(millions hours)
1 092 722
3 665 557
226
329 773
12.4
91%
27%
3%
8,21%
7.64%
More than ten
106
10 066
7
3 688
712
395
201
912
150
Total
1 199 434
13 731 952
7 427
4 018 685
162
Source : MES/DARES
6.2.2 Small and medium-sized firms
The proportion of trainees in the firms increases with the size of the firm. The rate
passes from 9% for the very small companies to 30% for the average companies (50 to
249 paid workers) and exceeds 50% for large and very big companies.
The access to the vocational training seems differentiated according to the sex: the
number of women among the trainees is weak in the small companies then increases
directly with the size of the company3
Companies
10 à 19
20 à 49
Trainees /
employees
9.7%
15.4%
30.0%
11.5%
16.3%
27.4%
Women among
trainees
50 à 249 250 à 499
500 à 2000
> 2000
40.6%
50.0%
54.2%
36.2%
44.1%
47.1%
The differences according to socio-professional categories are very marked. The
variations are more important according to socio-professional categories in the small
companies than in the big ones. Thus the not-qualified workmen in the companies from
10 to 19 paid workers have often access less than 5 times to the formation than the
engineers, whereas the ratio is 1 to 3 for the big firms.
Access to training by size of the companie
Companies
10 à 19
20 à 49
50 à 249 250 à 499 500 à 2000
3
> 2000
This remark must however be moderate because the comparison should also relate to the number
of women paid according to the size of the company.
47
Not-qualified workers
3.1%
6.2%
11.4%
16.3%
23.0%
24.5%
Qualified workers
6.9%
11.8%
23.9%
31.5%
36.3%
40.6%
Clerks
9.0%
14.2%
24.8%
34.8%
42.6%
44.8%
Technicians
20.5%
22.0%
41.8%
53.1%
60.9%
68.1%
Engineers
15.6%
25.6%
42.4%
55.9%
65.0%
67.1%
6.2.3 The use of e-learning
France recently took some measure (at the time of the interdepartmental Council on the
company of the information (CISI) of July 10 2003) in adequacy with the decisions of the
conference of the European Ministers in Athens in November 2003 so as to fill its delay.
Currently the use of the e-learning remains limited in the whole of the system of French
formation, in particular for the continuous vocational training in small and medium-sized
firms.
6.3 Resources for training
France devotes each year (since the beginning of 2000) approximately 22 billions of
euros (B€) to the continuous vocational training and the training, representing 1.55 % of
its GDP.
This investment4 is distributed between:
•
•
•
the employers, public and private, (12.9B€), including 3.4B€ for the State as an
employer. Companies of more than 10 paid workers, the participation in the
development of the continuous training of 1.6 % of the wage bill, and for the
companies of less than 10 paid workers 0.55%.
the State (4.8B€) and the Regions (2.1B€) for the formation of public for which
they have the responsibility,
1.6B€ for the other administrations and UNEDIC (unemployment insurance), the
remainder is dealt with by the households themselves.
The provisions adopted into 2004 express a marked political good-will to make it possible
from now on French to reach Life-Long Learning.
The methods of applications, under development, will give contents and a concrete form
to the individual right to the formation defined in the law.
However, so that the right to Life-Long Learning becomes a reality for the employees of
SME, the actors of the vocational training (State, Regions, companies, the two sides of
industry) will have to ensure a constant follow-up accompanied by necessary inciting
measurements.
6.4 Summary
6.1 Introduction
6.2 Education training system
6.2.1 Actors of the vocational training
6.2.2.The mechanism of the vocational training
6.3 Skills and competencies
6.3.1 Companies of less than 10 paid workers
4
Source > inffo flash - Numéro spécial chiffres – mai 2003
48
6.3.2 Small and medium-sized firms
6.3.3 The use of e-learning
6.4
6.5
6.6
6.7
6.8
Ressources for training
Summary
Key words
Questions
References
6.5 Key words
Education training system
Actors of the vocational training
The mechanism of the vocational training
Skills and competencies
6.6 Questions
SME of 35 people takes part in the vocational training of its employees.
1. Which is the minimum amount of its financing (in % of the wages)?
2. Which are the possibilities of formation offered to paid workers?
3. After three years without vocational training, an employee asks for one month of
training. What do you think about it?
6.7 References
1. http://www.centre-inffo.fr : Ce portail propose aux usagers et professionnels une
approche synthétique sur les dispositifs de la formation permanente en France
Langue
:
Français.
Contenu : ensemble des informations pratiques sur les dispositifs de formation.
2. http://www.centreinffo.fr/sommaire_uk.php3 : This site in English offers analysts
and practitioners a quick and synthetic approach to the French vocational training
system. Language English.
49
7 Lessons from the Case Studies
In this part, four particular companies from different sectors will be studied:
Arthur & Marie: French games and toys Sector
Ragni SA: French manufacture of lightning apparatuses sector
Lassalle SA: Road transport of goods
Effisoft: French software sector (sub-sector of ICT)
Dima Tours: French tourism sector
Each enterprise will be studied in five dimensions :
1.
2.
3.
4.
5.
Location of the sector selected in the national and regional economies
Main characteristics of the firm investigated
Activity and markets of the firm
Work organisation and management
Knowledge use and development practice
7.1 Arthur & Marie: French games and toys Sector
7.1.1. Location of the sector selected in the national, regional economies
The toy industry is characterized by a great diversity of manufactured products. The
traditional toys with cultural and teaching properties dominate the French production.
These products intend to contribute to the development and the blooming of the child.
This sector is much diversified because the toys can be made in plastic, metal, wood,
cuddly, carton… With a manpower approximately amouting 5 500 employees, this sector
represents a turnover a little more than 700 millions euros. The companies of less than
20 employees are numerous and approximately generate a turnover of 80 millions euros.
The performances of these companies are caracterised by their efforts to export, 33% of
the sales are devoted to the external markets. This rate has been in constant progression
over the three last years. Moreover, their rate of investments is relatively high (14.6%
against 9.2% for the whole of the consumer goods). Each year, the sector renews 25 to
30% of their collection and makes large efforts of creativity, which imply an adaptation of
their production equipment. Half of the manpower is located in Franche-Comté and the
Rhône-Alpes.
France is the second market of Europe for the traditional toy (20% approximately of the
total value), behind the United Kingdom, and right in front of Germany. The total
production (games and child care) represents 1,242 billion euros (factory value net of
tax). Germany, Italy and France are the European leaders of this production.
The sector is composed of 120 one-man businesses, of which 20% have a turnover over
7.5 millions euros.
50
Number of firm by turnover for 2002
Source : INSEE
The 10 larger companies on the market are: Berchet SA, Charton SA, Clairbois SA,
Corolle, Société Nouvelle Majorette, Méccano, Monneret, Nounours SA, Editions
Ravenburger and Smoby SA. The sector is very strongly caracterised by the saisonnality
since
60%
of
the
sales
are
carried
out
for
Christmas.
Exports of toys represent 671 millions euros (video included) with a progression of 16%
and 527millions euros (except video) with a progression of 18% on the 5 last years. The
imports of toys represent 1,973 billion euros (video included) with a progression of 1%
and 1.502 billion euros (except video) with a reduction of 5.7%. The rate of export is
higher than 50% for the whole of the sector. The European Union is the first customer
(with 84% of exports) and the second supplier (with 27% of the imports). The SouthEast Asia is the first supplier (65% of the imports, including 42% coming from China and
of Japan).
Export and import of France for the Game and toys sector in 2002
The types of distribution and their share of sale are essentially in the hypermarkets and
supermarkets (48%) and the specialised shops (30%).
One of the particularities of this sector is the advertising expenses. The advertising
investment (videos included) reached 198 millions euros including 65% spent during 4th
quarter 2003.
The toy’s sector, like the luxury goods one, faces the problem of imitation. The imitation
is an intellectual swindle, an unfair competition and an attack to the brand image.
Nevertheless in this sector, there are almost exclusively imitations of drawings and
models: imitations of boxes of well-kown brands, imitations practised by casting, or
“intelligent” imitations in which small differences are made to escape the objection of
imitation!! All these copies are always less expensive than the original, of worse quality
and often not in conformity to the requirements of safety.
51
The legislation in this sector is in permanent evolution. The legislation takes particularly
care of the safety of these products users (mainly children and teenagers).
7.1.2. Main characteristics of the firm investigated
In 1985, two carpenter friends start to manufacture toys in a corner of the workshop of
Bertrand Auffret the carpenter-cabinetmaker of the village. They called their one-man
business with the names of their children: Arthur and Marie. This one-man business
became a limited liability company in 1990. The principal reason of the creation of the
company was the diversification of the activity of a joiner’s workshop (created in 1976) in
favour of a very targeted sectoral speciality: the educational wooden toys and wooden
decoration elements. By the time, the limited liability company have strongly developed
and employs now various professions (screeners, carpenters, administrative personal…).
Originally the company head-manager, Bertrand Auffret, 51 years, was not trained as a
manager. He comes from the literary and artistic channels: his educational background is
a literary baccalaureate (end of college) and a two years formation to the Art schools.
The SME “Arthur & Marie” was created by his initiative, so, very naturally, he became the
company head-manager. In order to manage the project as well as possible, he obtained
a skill in management at the Institute of Management Of Rennes (France).
“Arthur & Marie” is a limited liability company, not quoted out of Stock Exchange, whose
capital is equitably distributed between the active people (who worked in the society) and
the inactive one (who have provided funds at the start of the adventure). The principal
activity of the company is thus creation, manufacture and sale of teaching wooden
games. The company owns its production building (approximately 280 m²) and the
tenant of the building with use of office (70 m²). It is established in Brittany (Morbihan).
7.1.3. Activity and markets of the firms
The company mainly targets organizations like kinder-garten, primary schools, and
nurseries. It is a market where the budgets are especially public, therefore relatively
stable. It is nevertheless a market with very strong competition, since the contracts are
awarded to the least expensive answers, therefore competition is done mainly by the
prices. The competitors, in addition, are especially large companies (Nathan, Celda,
Wesco…) and French SMEs (MDI, Syllema, Bourrelier…). The products of the company
are distributed on the three phases of the product life cycle (new, mature and declining),
because approximately three products are created each year and come to reinforce a
catalogue including about fifty references. The customers of the company consist in
professionals of the early childhood. The products are directly sold to these professionals.
After having fixed a meeting time, the customer attends a demonstration of the range of
games carried out by commercial (person with exclusivity part-time contract). Up to now
it has not been necessary to call upon external skills (like consultancy…) in order to seek
new customers or new markets.
The SME “Arthur & Marie” did not face any financial problem during these last years.
Main financial indicators
Annual turnover
Total of wages
Financial charge
Debt
Capital assessment
1996
349 000 €
145 000 €
13 000 €
74 000 €
7 600 €
1997
370 000 €
159 000 €
12 000 €
126 000 €
7 600 €
1998
412 000 €
620 000 €
13 000 €
114 000 €
7 600 €
1999
462 000 €
186 000 €
13 000 €
127 000 €
7 600 €
2000
639 000 €
283 000 €
16 000 €
160 000 €
7 600 €
52
2001
741 000 €
333 000 €
16 000 €
150 000 €
7 600 €
2002
721 000 €
344 000 €
22 000 €
324 000 €
7 600 €
2003
879 000 €
395 000 €
23 000 €
334 000 €
7 600 €
2004
1 030 000 €
440 000 €
23 000 €
332 000 €
7 600 €
The company does not export any of these products, but imports some manufactured
elements which are integrated to the manufacture of these products (almost 12 000 € as
imports for 2003 and 2004).
Regarding the institutional context in which it evolves, the standards of the activity of
this sector are mainly safety requirements on manufacture. These standards are very
hard because they take into account the public targeted by the products (namely children
from 6 month old to 7 years old).
The SME “Arthur & Marie” does not have a particular link (others that competition) with
other companies of the area or country, whatever company size. In the same way, it
does not take part to any consortium and does not call upon subcontractors. On the
other hand, it has a constant relationship with training organizations, a school of
serigraphy. It regularly accommodates trainees sent by the universities of the area.
7.1.4. Work organisation, management
The organization work of the company is the following one:
Organization work in Arthur & Marie
25 workers are employed by "Arthur & Marie", including 3 executives and 7 in the
production workshop. The evolution of the number of employed people is described in the
following table:
Evolution of the number of employees
53
The characteristics of these employees are summarized in the table according to skills,
the seniority, the types of contracts etc….
The employees of the commercial sector of the company have been proposed formations
of sales (approximately 4 formations made per annum by a formation consultancy).
The company "Arthur & Marie" is a typical family structure. The employees have no
affiliation with any trade-unions and the aplication of the 35 hours rules was run as
naturally as possible. As in most small family structures, one of the characteristics of the
working organization is the autonomy and the responsibility given to each employee.
Moreover the company does not suffer from the syndrome of the "peaks of activities". It
keeps a stock approximately representing the sales for one month and the manufactured
quantities are determined on the basis of sales statistics.
54
The professionnal risks are not related to the sector of industry, but to the nature of the
work, namely woodwork and serigraphy. In 2002, in order to face these risks, the
company built new workshops.
7.1.5. Knowledge use, development practice
The activity of the company does not request innovating processes or new matters since
it is clearly defined: the manufacture of wooden toys. The innovation thus does not
consist in the manufacture method but rather in the design of the product. Indeed, in
order to remain competitive, the company has created new original toys every year. In
order to protect this originality, the SME “Arthur & Marie” carries out deposits of models
at the INPI (National Institute of Industrial Property). In addition, the diffusion of toys is
strongly controlled in order to limit the imitation. The use of Internet is quite limited but
makes on-line visibility possible, as well as on-line shoping only for B to C (but it remains
a marginal activity).
7.1.6. Future perspectives
In the sectoral analysis, we have described, the characteristics of the market of games
and toys. But part of this sector more relates to the studied company: the sector of the
wooden games and toys. After the permanent domination of the great groups, the small
manufacturers of wooden toys have decided to react: “On the national level, the sector of
the wooden games and toys do not cause market studies. The producers of wooden toys
realizing, as well as the producers of plastic toys, different kind of toys like didactic
games, plays of first age, vehicles, plays of imitation, plays of construction… These
productions and sales are thus included in each category quoted in this first part.
However, by its marginal caracteristic, this sector deserves a very detailed attention.
Indeed, one of every two producers of wooden toys is an independent craftsman. So the
production is less, and it turnover is, in 60% of the case, lower than 153 000 €. Only
11% of the producers carry out a turnover higher than 1.53 million €. This marginality is
confirmed through the study of the distribution systems: the latter reveals, for the sector
of the games and toys, the prevalence of the supermarkets. However, only 8% of the
producers of games and toys use this distribution system. The direct sale with the private
individuals and the sale in specialized shops are privileged”. So, in order to emphasize
the wooden toys the regroupement of the producers of this kind of toys is necessary to
make their efforts of innovation more visible regarding new design toys.
Thus, after a few difficult years, SME still present on this sector seem to have organize a
resistance face to the great groups and the foreign enterprises. In addition, with the
renewal of a particular attraction of the consumers for the traditional toys (and in
particular out of wood), these companies still have beautiful days before them.
7.2 Ragni SA: French manufacture of lightning apparatuses sector
7.2.1. Location of the sector selected in the national, regional economies
The sector “manufacture of lightning apparatuses” is a sub-category of the sector
“industry of the intermediate goods”.
First of all, it is a large and very heterogeneous sector.
The number of firms tends to decrease, whereas the number of employees increases.
This is due to the phenomena of mergers and acquisitions, alliances, absorptions, etc….
Evolution of the number of firms and of the number of employees
55
The sector of the “manufacture of lightning apparatuses” has improved over years. In the
beginning of the 90’s, the sector had to face a difficult period, but at the end of the 90’s
and the beginning of this decade, the French firms have won some market shares at the
world level and significantly improved their situation.
Evolution of the main financial results of the SME of this sector
The sector is essentially composed of SMEs (more than 50% of SME with 20 to 49
employees, and more than 25% of SME with 50 to 249 employees).
The average number of employees per SME (with 20 to 49 employees) is very stable over
time: approximately 30 employees.
Structure of the sector in terms of number of firms and number of employees
The principal ratios of management confirm that the sector has improved, in particular if
we look at the evolution of the average turnover.
Evolution of the main ratios of management
56
The number of employees is relatively stable. The main labour contract is a full-time one.
Evolution of the main indicators related to the labour factor
The sector includes twice as many men as women (many technicians and engineers).
The main indicators of the employee’s mobility seem to be relatively stable over the time.
The sector is neither export nor import oriented as can bee seen in the following tables.
The small amount of imports and exports are realised by a few firms (generally the
biggest one in the sector).
This sector is not a big consumer of research and development. But there are some firms
investing in research-development to discover new material or new process.
7.2.2. Main characteristics of the firm investigated
The firm Ragni SA is a typical example of a great success based on a family business.
Indeed, in 1927, three years after he arrived in France (holder of the baccalaureate and
under sentence of death by Mussolini regime), Victor Ragni created an ironwork shop.
This small company specialized in lanterns, glosses and bracket lamps for private
individuals progressively changed its activity to specialize in public lighting in 1974. Since
his father was a designer but not a manager, Roger Ragni, the current chairman, early
managed the family company (when he was 19 years). Today, the firm is universally
known and recognized. It is one of the leaders in its sector and it is always a company
with a human and family face, managed by the family Ragni (4 brothers and sisters,
nephews and nieces and the girl of Roger Ragni).
The company “Ragni SA” is managed by 5 partners, brothers and sisters, and 4 children
of the fourth generation. Roger Ragni assumes the responsibilities of chairman and
executive director.
Roger Ragni is 58 years old. His educational background concerns the ironwork (CAP),
but he has learned “on the job” throughout his professional course. In addition, he
regularly follows training in various fields, in order to remain in adequacy with the
responsibilities of his position (word in public, language, accountancy, management…).
Ragni SA is a SAS (simplified limited compagny) not quoted on the Stock Exchange,
whose capital is distributed among the members of the Ragni family, all working in the
firm:
•
•
•
•
•
Victor Ragni : 35%
Roger Ragni : 35%
Marie-France Ragni : 10%
Laure Ragni : 10%
Marcel Ragni : 10%
The activity of the company is now exclusively public lighting. The company “Ragni SA”
owns 3 buildings necessary to its activity (approximately 10 000 m²).
The company “Ragni SA” obviously exports all the references of its catalogue and imports
the casting items out of cast iron aluminium and cast iron steel necessary to the
57
production. The exports increased a lot since ten years (+800%) and the import too
(+379%).
7.2.3. Activity and markets of the firms
Ragni SA have has not faced particular financial problems during these last years. It is a
very flourishing company as witnessed by the great amount of prizes won (for good
management,
of
exportations…).
Main financial indicators in RAGNI SA
This good financial health is also characterized by the first regional place for annual
turnover. The rank of the firm Ragni SA at the national level confirms this good health. It
is a model of success for SME. Indeed, it is ranked 16th, behind the great groups and the
large companies (there are only 2 or 3 SME out of the 16 first, and the company Ragni
SA is the only SME that is not a subsidiary company of great groups).
The main customers of the company are municipalities (French or foreign) wanting to
arrange or renovate their urban lighting. It is thus a very large sector, because there still
exist many spaces where urban lighting is in bad state, even non-existent, but this sector
depends on the budgets allocated by the State. There is a strong direct competition
between the companies to get these contracts. The principal competitors of Ragni SA are
great multinational corporations (such as Schreder, Philips, Groupe Allemand, GE…).
The product is a mature product. The technique of production is controlled. The product
is nevertheless evolutionary with regard to the design. We could note that this sector
records an annual growth of about 3%...
Marketing for export is managed by J.-C. Ragni. With regard to France, the sales are
done by sales representatives who cover geographical sectors (about several
departments). The canvassing of new customers is made in a traditional way, by the
means of the regional exposures and the national trade shows. The prospection for new
customers is primarily done by the way of many trade shows (in France or abroad), but
also by the influencers and the design offices canvassing. All this research is done by the
company; it never calls on consultant offices. The company Ragni SA holds the required
skills.
The firm Ragni SA is in permanent contact with other local, national or foreign SME for
subcontracting. The company decided to call on subcontracting because they decided to
do only what they can do well and want to protect themselves against the copy of their
58
processes. In addition, the company is in contact with the schools and the universities
and thus regularly receives trainees within its offices and factories.
7.2.4. Work organisation, management
The 35 hours was implemented without difficulties within total dialogue between the
employees and the direction. The employees still work 38 hours per weeks (including 3
hours remunerated by the overtime tariff). In addition the company calls on the
temporary workers in the case of heavy workload. The working conditions are typical of a
family company with human face where “the human factor” is always the most
important. The team does not join any trade union and the relations between the
direction and the employees are very pleasant. Concerning the risks related to the
activity, there are neither more nor less risks than in any other establishment. In
addition, the law imposes a regular evaluation of the risks. In 2004 there are 49 people
employed by “Ragni SA and this figure has been relatively stable since 1994.
The organization of the firm is the following:
If we look at the characteristics of these employees, we can summarize in the table
according to the kind of job, seniority, kind of contracts, etc…
Typology of the jobs in RAGNI SA
All contracts are undetermined period and full time.
Many trainings are proposed to the employees having evolutionary jobs in order to adapt
their skills to this evolution.
59
7.2.5. Knowledge use, development practice
The firm has invested on a Website, which is the window of the company and is daily
updated. The use of Internet is also daily. Obviously, the company carries out a
technological survey to remain updated with avant-garde materials and processes in
order to remain competitive. But there are no great innovation and creation in this field.
Indeed, the major innovation lies in the quasi permanent development of new models.
The company did not face much problem regarding property right. The managing team of
Ragni SA feels rather well protected by the law on the property rights of 1957.
7.3 Lassalle SA: Road transport of goods
7.3.1 Location of the sector selected in the national, regional economies
The sector “Road transport of goods” (602M) is a sub-category of the sector “Transport”.
It is a large and very heterogeneous sector. In fact, the sub-sector 602M includes a large
number of firms with very different sizes, turnovers and localisation.
As we can see in the following table, the number of firms is stable since 1996, but
number of employees has increased (+18% for the same period).
Evolution of the number of firms and of the number of employees
The sector of the “Road transport of goods” has grown regularly over years (+ 45% since
1996 for the turnover). The sector is essentially composed of SMEs, approximately 99%
of SME (64% with 0 to 5 employees). The average number of employees per SME (with 1
to 9 employees) amounts 1,5 and has been very stable over time.
60
The number of employees has increased regurlarly and their salaries have increased
since 1996. This sector is not a sector oriented to research and development
7.3.2 Main characteristics of the firm investigated
The company was created in 1974. The compagny is directed by the family.
The principal motivations for them to have set up their own company are the
independence and free hands. The head manager has no special formation.
The firm Lassalle SA is a limited liability company with a capital of 230 000 €. Located in
the centre of France, with the crossing of large axes of communication (RN7, Route
Centers Atlantic Europe, A71, A75, the North-South and East-West connections SNCF),
Lassalle SA is a firm specialised in the transport logistic for the transport of good by road.
Indeed, this site has 60 000 m² of covered warehouses, accessible to the complete trains
thanks to its railway junction and to its many installations (7 km from railways, 2 km of
quays of transhipment). These assets of scale will enable to obtain a real flexibility
between the site of production and the customers.
Lassalle SA is able today to propose a complete panel of logistic solutions , from the
simple storage to the complete management of the flows of goods.
7.3.3 Activity and markets of the firms
The firm Lassalle SA have not faced particular financial problems during these last years.
Its turnover is quite stable over the years (the turnover has an increase of 20% since
1998).
61
Main financial indicators in Lassalle SA
The company is healthy while it does not rank first (neither at the national nor regional
level). The firm is the 18 at the regional level, and the 558 at the national one. This
ranks tell us that this sector is really dominated by the big firms and the big groups.
One of the main particularities of this firm is that its export turnover is growing up
regularly since few years (+ 385% between 1998 and 2003).
7.3.4 Work organisation, management
The 35 hours was implemented without difficulties because 95% of the firm’s
collaborators are in the firm since a long time. The number of employees is very stable
along the time from 40 personnes in 1997 to 48 in 2001. Many trainings are proposed to
the employees having evolutionary jobs in order to adapt their skills to this evolution.
7.4 Effisoft: French software sector (sub-sector of ICT)
The sector “edition of software” is a sub-category of the ICT sector.
First of all, it turns out to be large and very heterogeneous. In fact, the sub-sector 722A
includes a large number of firms with very different sizes, turnovers and localisation.
As we can see in the following table, the number of firms has increased a lot
(approximately + 31% between 1996 and 2001), such as the number of employees
(+42% for the same period). This is due to mergers and acquisition, alliance, absorption,
etc.
Evolution
of
the
number
of
firms
and
of
the
number
of
employees
The sector of the “edition of software” has grown rapidly over years. After an exceptional
growth for few years, the sector slown down as the figures show.
62
Evolution of the main financial results of the firms
The sector is essentially composed of SMEs, approximately 99% of SME (37% with 0
employee and 50% with 1 to 9 employees). The average number of employees per SME
(with 1 to 9 employees) amounts 3 and has been very stable over time.
The number of employees has increased rapidly. The main characteristic of this sector in
terms of employment is the mobility of the employees (a lot of entry/exit over the time).
The
sector
is
rather
a
sector
with
qualified
employment.
Kind of job
The sector is neither export nor import oriented. The small amount of imports and
exports are realised by a few firms (generally the biggest one in the sector).
This sector is a big consumer of research and development. The majority of the firms
(whatever the size) invest in research-development to discover new material or new
63
process.
Evolution of the resources allocated to the research-development
The company was created in December 1988 in order to position in a sectoral specialty
on a new market (edition of insurance software). The creators are Marc Accos, Pascal
Stopnicki and Olivier Adler. The direction staff is composed by two of the three founding
members: Marc Accos and Pascal Stopnicki. They are 43 years old, holders of statistics
DUT and a MSG in Paris Dauphine. They have not had any particular training since they
set up the company (for lack of time), but they are members of an association of head
managers (which enables them to exchange on the lived professional experiments) The
principal motivations for them to have set up their own company are the independence
and free hands.
Effisoft is a limited liability company of which 69% of the capital is distributed between
the 3 associated (active physical people within the company). The remainder of the
capital is held by two others associated which physical but not active people within the
company. Effisot has a subsidiary company in London, Boston and a subsidiary company
specialized in the supply of computer services in France (Effisoft Consulting).
The activities of the company are the edition of software for the risk management, the
insurance and the reinsurance.
The company conceives, develops and sells software packages on markets in insurance
and risk management.
Effisoft rents a building in Paris (approximately 550 m²).
The firm Effisoft have not faced particular financial problems during these last years It
turns out to be very flourishing (+274% for the turnover in 5 years).
Main financial indicators in Effisoft
The company is healthy while it does not rank first (neither at the national nor regional
level). This sector is largely dominated by the big international group (Cap Gemini,
Dassault, Oracle, Ubisoft...).
64
The exports of the firm represent approximately 10% of the turnover. There is no import
for Effisoft
The market is characterised with customers that are very large companies (what
reassures the banks), with a turnover higher than the billion of euros or reinsurance and
insurance companies with a turnover higher than 500 millions of euros. The products
proposed are at different steps of the product life cycle:
•
•
•
WebRISK is a product on the decline
Assuretat is a mature product
WebXL is a new product in full growth.
The sale is direct : the canvassing of new customers is done by recommendations of a
customer to another, then by sending information to a mailing list.
The 35 hours was implemented without difficulties because 95% of the firm’s
collaborators are young (average age 30 years) and middle manager. It was
accompanied by a frost of remunerations during 1 year. The negotiation was carried out
with the delegates of the personnel. Employees have 5 paid-vacations weeks per annum
and 10 days of RTT (of which 7 to take on period imposed by the direction). The middle
managers tend to leave late in the period of strong activity or intensive work, but they
have a very great freedom on the schedules in a general way. With regard to the
organization of work, planning are established 6 months in advance according to the
order book. Planning are revised every month by a micro and slipping way. The very
busy periods are managed by the mobility of the associates among different computer
development, even while going to take resources on other teams. The slack periods are
not problematic because they are used to carry out investments in the market products,
methodologies and the sale of the services. The organization of the firm is the following:
65
Flow chart of the company
In 2003, there are 56 people employed by "Effisoft" and these figures have increased
regularly over the time (15 employees in 1994 and 56 in 2003).
If we look at the characteristics of these employees, we can summarize in the table
according to the kind of job, seniority, kind of contracts, etc…
Typology of the jobs in Effisoft
Many trainings are proposed to the employees having evolutionary jobs in order to adapt
their skills to this evolution.
66
7.4.5 Knowledge use, development practice
The company regularly uses new technologies and new materials since one of its
activities is the production of computer services where they incorporate new
technologies. The place of Internet is very important since all their products are
conceived to be used on a Internet/Intranet environment. All the supports of products
used by the company (Microsoft, BO, Oracle…) are available on Internet. It is the way of
communication used the most by the company and its customers. The company did not
face much problem regarding property right. The products being in permanent evolution
it is not easy to copy them; therefore it is not useful to commit in long and expensive
procedures of protection.
7.4.6 Future perspectives
This sector is in evolution essentially thanks to the externalisation. It constitutes a source
of regular incomes for the operators of this sector very largely subjected to the
international economic situation. Indeed, the moroseness of certain world markets has
obvious effects on sectors of this type. They are obviously the first expenditure reduced
by the companies in difficulties.
In addition, the tendency on this sector is with the pooling of resources (by the way of
alliances or mergers). A tendency should thus be confirmed: 85% of the companies
employ less than 10 paid and carry out only 17% of the world turnover.
For the majority of the specialists of the sector, the French productivity is into clear
withdrawal compared to countries like Germany or the United Kingdom. Moreover the
structure of the sector is rather different in France. Whereas in the other European
countries the average size of the companies is lower than 5 people by companies, in
France it is more than 8. This shift is explained by the simple presence of very great
groups in France such as Cap Gemini and Atos Origin.
7.5 Dima Tours: French tourism sector
A dubious international context associated with a morose economic situation made that
2003 was a bad year in terms of international tourism. In France, the arrivals and the
nights of the foreign tourists appreciably dropped.
The figure which corresponds to the volume of nights passed by the tourists of each
nationality to France is the best indicator of tourist frequentation. The number of arrivals
of foreign tourists in France, which is the indicator most frequently used to compare the
countries between them, tends to give an overestimated image of the tourist
frequentation from abroad in France. Indeed, the geographical position of France is such
as this country constitutes an obliged passage for many European tourists whose final
destination is Spain or Italy. The whole of these tourists “in transit”, who pass only a
very limited number of nights in France, makes increase the figure of the number of
arrivals but weighs little in term of receipts.
67
Volume of nights of the principal tourist customers of France
Source: Direction du Tourisme (provisional figures)
The reduction of the number of nights is more marked for the countries not in the
European Monetary Union. Indeed, the rates of the European currency reached very high
levels into 2003, which involved an increase in the price of the holidays in France for the
tourists originating of the countries out of the euro zone. These tourists thus often
preferred another destination than France.
The decrease of the tourist frequentation is reflected quite naturally on the receipts of the
line “travels” of the balance of payments, which correspond to the expenditure carried
out by the tourists and excursionists in France.
Receipts generated by the principal tourist customers of France (in millions
euros)
Source: estimates by the “Direction du tourisme” and the “Banque de France”
The receipts of the line “travels” of the balance of payments rise to 32.3 billion euros into
2003. They are lower by 5.4% than that of 2002.
The fall of the American receipts is particularly marked. During more than thirty years,
the United States was the country which paid the most to France in terms of touristic
68
receipts. In 2003, for the second year consecutive, the British receipts precede the
American receipts. As the average expenditure by stay of the tourists coming from the
United States is higher than the average, the decrease of American frequentation had
more effects on the total of the receipts of the line “travels” than on the total of the
nights passed through the foreign tourists to France. If the receipts decrease more than
the nights, it is also because the tourists not coming from the euro zone probably tried to
limit their expenditure in France, by choosing for example a mode of lodging better than
hotel trade.
Lastly, the last important under-sector of the tourism sector is the travel agencies. In
2003, for the second consecutive year, the annual turnover total of the travel agencies
decreased (-2%): ticketing decreases by 1.5% while the resale of package tours falls of
3.7%. This bad performance is undoubtedly to bind to an unfavourable economic
situation in 2003 and to an unstable international context because in particular of the war
in Iraq and the epidemic of SRAS. The decrease of the turnover is particularly marked
between April and August. Since the end of the summer, the travel agencies know a light
renewal of dynamism thanks to the resumption of the sector of ticketing.
Dima Tours is a turn operator specialist in the Central America and South America. The
limited liability company was created in 1992.
The market on which operate the company is an atomized market. Indeed, one counts
there some general practitioners and lot of specialists on sectoral niches. The principal
competitors of Dima Tours are Jet set, Empreinte, Vacances Air Transat and Kuoni.
The customers of Dima Tours have a rather particular profile. They are customers who
travel by 2 or in family, resulting from a higher class socio-professional and especially
who are amateurs of comfort and expatriation.
We could note that to exert as a tour operator need to have a licence as “agent of
voyage” and a financial guarantee subscribed near a professional.
The company counts 5 paid workers. The company is organized around 4 poles: the
direction, the reservation individual service, the group reservation service and the
accountancy. In addition, taking into account its size, the company was not concerned
with the passage to the 35 hours. The branch manager has a bac+4, the others paid
were trained on the job (self-educated). The activity of the company is a traditional
activity of tour operator: request information, establishment of estimate, inscription and
reservation of the file, confirmation and invoicing, realization of the notebook of voyage.
The only characteristic of work is some flexibility because obviously the work is a little
seasonal (rush of activity before the holidays).
69

French SMEs Economy

Transcription

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