Establishment

From Open Risk Manual

Definition

Establishment. An economic unit (enterprise or part of an enterprise), business or industrial, that operates from a single physical location where business is conducted or where services or industrial operations are performed.

Examples include a factory, mill, store, hotel, movie theater, mine, farm, ranch, bank, railroad depot, airline terminal, sales office, warehouse, or central administrative office. One or more establishments make up an enterprise or a company. However, a single establishment may be comprised of subunits, departments, or divisions. In the industry classification systems - SIC and NAICS - the establishment is the basic unit for collecting many types of economic information.[1]

The physical location of a certain economic activity - for example, a factory, mine, store, or office.

An individual establishment is generally classified by having one NAICS code associated with it for statistical purposes, whereas an enterprise may be classified by multiple NAICS codes.

The statistical structure is defined based on the operating structure and the accounting data produced by that entity.

A given location may only need to publish revenues, whereas an operating unit (establishment) has employment statistics, etc.

An establishment is defined as a producing unit at a single geographical location at which or from which economic activity is conducted and for which, at a minimum, employment data are available.

In the case of a home-based business, the actual physical location would be specified as two distinct institutional units - as a household from a personal living and consumer perspective and as an establishment / operating unit due to the statistics required of the business.

See Also

References

  1. Concepts and Methods of the US Input-Output Accounts. K.J.Horowitz, M.A.Planting, 2009