Understanding Business Organisation: Types, Structures, Functions and Culture

This essay explains how businesses are formed, structured, and how they accomplish their objectives. It defines different business functions such as Human Resource Management, Operations, Production, and many more. It also discusses the importance of organisational culture and provides examples of companies that have the best organisational culture in the UK.

Understanding
Business Organisation

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION ...............................................................................................................................6
REFERNCES:..................................................................................................................................7
Books and Journals:....................................................................................................................7
Online:.........................................................................................................................................8

INTRODUCTION
The Business Organisation explains how businesses are formed, structured and how it
accomplishes the business objectives and aims. There are various forms of business
organisations that associate to how the organisation is formed, owned and operated (Ancillai and
Et.al., 2019). The basic forms of business organisation are sole trader, partnership and limited
company. Each type of business has its own advantages and disadvantages. Organisational
structure determines how certain activities in the business are directed in order to meet the
company's targets. There are various forms of organisational structure such as flat structure or
tall structure (Antony and Gupta, 2019). The essay also aims to define different business
functions such as Human Resource Management, Operations, Production and many more.
Organisational culture offers positive impacts on the business success. Also, discussing some of
the industry practices examples.
MAIN BODY
The business structure that a person choose influences everything from day to day
business operations, profits to gain, taxes to pay, personal assets are at risk and many more. It is
important to select the appropriate business structure that delivers the exact balance of legal
protections and benefits (Vaishnavi, Suresh and Dutta, 2019). A sole trade business is simple to
establish if one person do business operations but do not register as any other form of business
(Bogolyubov, 2020). It do not have separate legal entity in which owner personally liable for the
obligations and debts of the business. Sole traders able to get a trade name for their business. It
has low risks and it will be a good choice whenever the owner want to test their ideas of business
before establishing a more formal business. For example, plumbers, taxi drivers, photographers
and many more. Partnership is that form of business in which two or more persons come together
in order to share profits and liabilities. There are two types of partnerships i.e. limited
partnerships and limited liability partnerships. In limited partnership there is only one partner
who has unlimited partner and other partners have limited liability. In limited liability
partnerships, all partners have limited liabilities, which protects each partner from debts and they
won't be liable for the actions of other partners. For example, Red Bull & GoPro, Dr. Pepper and
Bonne Belle and many more. In a limited company, the liability of the members is limited to
what they guaranteed or invested to the business (Yuan and Chayanuvat). It is divided into public

and private companies. A limited company has its own separate legal entity (Correa, 2020). The
company receives all profits and pay taxes accordingly, distribute a portion as dividends to
shareholders and retains left over as working capital. Tesco is a great example of public limited
company, whereas Premier Inn is a example of private limited company.
Most of the companies are based on the organisational structure. Business leaders
chooses right kind of organisational structure that deals best for the specific situation. Companies
needs structure to attract and retain the skills employees and to create a workable hierarchy in the
organisation. It defines different layers of management, role, duties and responsibilities of each
employee in the workplace (Foltean, Trif and Tuleu, 2019). A tall or hierarchical structure has
different leaders and layers of management and uses top to down concept with a long chain of
command. It is often required by large and complex organisation. In this structure, managers
have a small area of control and comparatively, will have less subordinates or employees. Thus,
it has a long chain of command, communication passes through each level i.e. top level to lower
level authority. It has some benefits such as managers have tight control over their staff, business
can be easily managed (Sharma, 2021). But, it has some drawbacks such as employees may be
demotivated because of lack of autonomy, changes may be easily not implemented. Walmart has
a tall or hierarchical structure. A flat or horizontal structure has few layers of management.
Managers have a wide span of control and have more employees under them. The
communication pathway is short and often results in faster, with more effective communication.
It encourages autonomy, attempts to tap into creative and talented employees and resolve
problems by collaboration. It has benefits such as more responsibilities and autonomy for the
subordinates, motivation amongst employees and so on, whereas drawbacks such as increases
workload for managers, increased subordinates for managers. McDonald's uses flat structure for
all its restaurants.
A business function can be meant by different activities which is performed by a business
organisation (Franklin and Marshall, 2019). Such activities are categorised into different
departments or functions. It also refers high level of groupings of a business capabilities and
processes to explain its work. It ensures that business runs smoothly and satisfy its customers,
employees, shareholders and leaders in a most effective way. There are various functions of
business such as Human Resource Management, Production, customer service, IT department,
Operations, Research and Development and many more. Human Resource department in the

organisation deals with the functions associated to employees such as hiring talent, selecting
candidates, explaining benefits, employees relations, managing employees performance,
developing organisational policies, maintaining workplace culture and many more. HR
departments ensure abidance with local, state and national employment and labour laws,
investigate allegations or claims, resolve workplace conflicts. It identifies the business needs
related with workforce, provide appropriate training and development programmes to workforce
to encourage them to be productive, also handling termination or dismissal. Production
department in the organisation is the manufacturing department which focuses to produce goods
and services to clients (Gupta, 2020). This could be a factory setting where raw materials are
converted, assembles components into final products and packages them for the selling purpose.
The main focus is on the efficiency. Operation management is that area of management in the
business that is concerned with designing and controlling the production activities. It is the core
business process for any organisation. Also, it may vary from business to business. It needs
management of both the strategic and routine production of goods and services. It is concerned
with the whole service or production system which is the process that transforms the raw
materials, energy, labour and consumers in the form of final products or services. It covers all
sectors like hospitals, banking sectors, customers, working with suppliers and using technology.
All such functions are inter-related with each other in the business (Hejjas, Miller and Scarles,
2019). For example, HR department helps to recruit people for the production department by
collecting information such as number of vacant seats, certain required skills and many more.
Cadbury is one the best examples that inter-relates with other functional department in the
organisation (Roig-Francolí, 2021).
Organisational culture is the collection of values, beliefs, ways and assumptions that
makes a contribution to the unique social and psychological surroundings of an organisation.
When the culture of organisation is great then it exemplifies positive traits that results in the
enhanced productivity of the business., whereas dysfunctional organisational culture brings out
the traits that can hinder even the most successful business (Janssens, and Zanoni, 2021).
Workplace culture is the key benefit when it comes to attract talents and stands out among the
competition. Business leaders are considered as the most vital architects of culture who
illustrates how people should behave, which can support staff members to achieve aims. When
organisational culture is positive, it delivers various positive impacts on the business. It attracts

and retains top in the organisation. Organisations that invest in producing sound and healthy
culture represents that they value their employees. In turn, staff members will be likely to stay
for a longer period of time. It also improves productivity and outcomes in the organisation as
when the employees are satisfied with their job, they goes beyond their work and invest their
time with the company (Liu, Hsu and Fan, 2020). This benefits the organisation. Employees also
turn as advocates where they not only love their work but also let others know where they are
working. They can become an amazing advocates for the brand (Merritt, 2019). It also have an
impact on the revenue for the business. It has been researched that most of employees are willing
to be advocates for the company where they are working if they are having a satisfying work
culture. For example, BookingGo, Civica or Skyscanner are having the best organisational
culture in UK (These 14 Companies Have The Best Cultures and Values in the UK, 2018).
CONCLUSION
From the above discussion, it has been concluded that business organisation demonstrates
that how business is structured in order to meet certain goals and objectives. There are various
types of business such as sole proprietorship, partnership or limited company. A person can
choose business structure as per the limit of their investment and purpose. The organisational
structure discussed in the essay are flat and tall structures. In the tall structure, chain of command
flows from top to down, where flat structure has few layers to pass the information. There are
various functional departments in the organisation such as HR, Production or Operation and
many more.

REFERNCES:
Books and Journals:
Ancillai, C. and Et.al., 2019. Advancing social media driven sales research: Establishing
conceptual foundations for B-to-B social selling. Industrial Marketing Management, 82,
pp.293-308.
Antony, J. and Gupta, S., 2019. Top ten reasons for process improvement project
failures. International Journal of Lean Six Sigma.
Bogolyubov, P., 2020. The learning company: the learning organization the British way–its
origins, present, and future directions. An interview with John Burgoyne. The Learning
Organization.
Correa, J. C., 2020. Metrics of emergence, self-organization, and complexity for EWOM
research. Frontiers in Physics, 8, p.35.
Foltean, F. S., Trif, S. M. and Tuleu, D. L., 2019. Customer relationship management
capabilities and social media technology use: Consequences on firm
performance. Journal of Business Research, 104, pp.563-575.
Franklin, D. and Marshall, R., 2019. Adding co-creation as an antecedent condition leading to
trust in business-to-business relationships. Industrial Marketing Management, 77,
pp.170-181.
Gupta, A., 2020. Developing model for Organization Structure and Firm Performance
relationship mediated by impacting factors ie, Organization Culture, Strategic
Orientation, Environmental Uncertainty and Technology usage in service sector in
India. Journal of Critical Reviews, 7(3), pp.1733-1747.
Hejjas, K., Miller, G. and Scarles, C., 2019. “It’s like hating puppies!” Employee disengagement
and corporate social responsibility. Journal of Business Ethics, 157(2), pp.319-337.
Janssens, M. and Zanoni, P., 2021. Making diversity research matter for social change: New
conversations beyond the firm. Organization Theory, 2(2), p.26317877211004603.
Liu, A. X., Hsu, C. H. and Fan, D. X., 2020. From brand identity to brand equity: a multilevel
analysis of the organization–employee bidirectional effects in upscale
hotels. International Journal of Contemporary Hospitality Management.

Merritt, C. C., 2019. What makes an organization public? Managers’ perceptions in the mental
health and substance abuse treatment system. The American Review of Public
Administration, 49(4), pp.411-424.
Roig-Francolí, M. A., 2021. Understanding post-tonal music. Routledge.
Sharma, T., 2021. Book review: Rasmus Hougaard and Jacqueline Carter, The Mind of the
Leader: How to Lead Yourself, Your People, and Your Organization for Extraordinary
Results.
Vaishnavi, V., Suresh, M. and Dutta, P., 2019. Modelling the readiness factors for agility in
healthcare organization: a TISM approach. Benchmarking: An International Journal.
Yuan, A. and Chayanuvat, A., A Study on the Difference between Organizational Learning And
Learning Organization.
Online:
These 14 Companies Have The Best Cultures and Values in the UK, 2018. [Online] Available
Through <https://www.glassdoor.co.uk/blog/21732-2/>