What is a practice enterprise?
A Practice Enterprise (PE) is a trainee-run company that operates like a real business. It silhouettes a real enterprise's business procedures, products and services. A Practice Enterprise resembles a real company in its form, organisation and function.
Under the guidance of a trainer or coach and business mentors, students and trainees create their Practice Enterprises from
- product development & production,
- distribution & sales,
- marketing & human resources
- accounting/finance, to
- web design.
As “employees” of the Practice Enterprise, trainees are responsible for its performance and through the learning-by-doing methodology trainees develop ownership competences:
- carry out market research,
- place advertisements,
- buy inventory,
- plan logistics,
- sell simulated goods or services,
- pay wages, taxes, benefits, etc.
Each company engages in business activities, both nationally and internationally, with other companies within the Practice Enterprise network, following standard commercial business procedures and frameworks.
There is no actual transfer of real goods and money but the trade transactions and financial exchanges take place for real: orders are made, invoices issued and payments transferred, financial records maintained, including information about creditors, debtors, stock holders, etc.
The terminology may vary from country to country (ex. Practice Firm, Training Firm, Virtual Enterprise), as well as their translations (ex. Entreprise d'entraînement, Übungsfirma, Empresa Simulada), however the methodology remains the same.
Learn more about the Key Players of a Practice Enterprise and their roles.
The Training Environment
There are standard requirements regarding equipment and IT (hardware and software) that need to be met for running a Practice Enterprise. To make the experience as realistic as possible, each learning space is divided into different sections that represent the different departments of a business such as reception, purchasing, human resources, operations and marketing.
The Practice Enterprise approach emphasizes learning in four key areas applying the learning-by-doing methodology:
Ownership: Trainees take responsibility for their own learning.
Experiential: Trainees’ learning is authentic and realistic.
Cooperative: Trainees learn with and from others and understand the dynamics of working as part of a team.
Reflective: Trainees experience the consequences of their decisions and apply that learning to future challenges.