International Business Research; Vol. 8, No. 5; 2015 ISSN 1913-9004 E-ISSN 1913-9012 Published by Canadian Center of Science and Education 146 The Enterprise and Its Relationship with the Financial System in View of the Innovative Methods of Capitalization: A Literature Review Maria Fedele 1 1 Department of Business and Law, University of Cassino and Southern Lazio, Italy Correspondence: Maria Fedele, Department of Business and Law, University of Cassino and Southern Lazio, Italy. E-mail: m.fedelecam@libero.it Received: February 24, 2015 Accepted: March 11, 2015 Online Published: April 25, 2015 doi:10.5539/ibr.v8n5p146 URL: http://dx.doi.org/10.5539/ibr.v8n5p146 Abstract This paper aims to provide a further contribution to the evolution of the relationship between the system “enterprise” and its over-financial, superordinate level (L + 1) system, in view of the risk-return ratio and taking into account the innovative methods of capitalization of the enterprises. To reach this goal, an inductive methodology has been applied with a focus on literature review. The originality of this paper lies in addressing the issue from a managerial point of view, providing in this way a further contribution. However, the empirical validation of the conceptual model proposed affects the work, thus it lays the basis for future investigations through a quantitative analysis of the bank-enterprise relationship from the view point of enterprise itself, according to the innovative regulation issued by the Basel Committee. Keywords: enterprise, viable system, financial system, financial requirements, equity, relevance of the financial function, funding sources, intersystemic relationships 1. Introduction It is well known that a strong relationship between banks and enterprises produces benefits for both parties. This happened especially in the last years; in order to ensure the stability of the system, the evolution of the rules of banking supervision has defined highly selective criteria for credit access in the form of a credit rating which, in many cases, cannot grant the credit designed to support the strategic choices of the enterprises. This criticality is particularly clear in small enterprises that mainly suffer an “endemically” exposition to bank financing. Based on this issue, the work aims to analyze the development trends of the reference literature about the bank-enterprise relationship and its evolution linked to innovative methods of capitalization. The article is structured as follows: after the introduction, the concept of enterprise is examined in depth, as a complex of interrelated components, both material and non-material, intertwined and in constant communication in order to pursue a common goal. In the third section the author has tried to read the Italian financial system with a systemic approach. Then, the paper will examine the financial needs of the enterprises for the purpose of a proper capital “government”. Paragraph five will highlight the role of the financial function in the enterprises that, evolving over time towards a model of strategic finance, interacts with other areas of the management every time when, during the life of the enterprise, objectives and strategies must be defined. The sixth section focuses on funding sources and the need to trigger an inter-systemic relationship between banks and enterprises. The last section focuses on the order of the choice among the different funding sources according to the Pecking Order Theory. The work ends with conclusions, managerial implications and suggestions for the future research. 2. Enterprise as a Viable System In the context of a systemic thinking, the entrepreneurial entity is also called “system” if we refer to a set of interrelated components, both material and non-material, intertwined and in constant communication in order to pursue a common goal. In his Studies, Zappa had already highlighted that “The enterprise, being an economically coordinated unit, is something more than the sum of its components; the complex has some properties not owned by its elements and those elements, on the other hand, do not define it; nor can the characteristics of the complex be given by a mere composition of the characteristics of the components” (Zappa, 1937). Zappa continues: “The company is not a dissociated mass, nor a gathering one, nor a combination of temporary factors and disjointed phenomena ... On the contrary, the company is a working reality: it grows day by day, it is construction is a continuous process, its structures always get renewed and always get fulfilled; in the dynamic processes carried out,