This circuit is an audio amplifier consisting of two stages of amplification.  The 741 operational amplifier is used as a pre-amplifier whose gain is controlled by its feedback resistor R2.  The 386 is a general-purpose power amplifier used as the output driver for delivering power to the speaker.  The volume of the speaker may be controlled via resistor R3.  A 0.1 μF bypass capacitor must be placed across the power supply to reduce the noise.  The value of R2 must be chosen well to prevent oscillation or distortion.