Understanding Business Organisations: Types, Structures, and Impact

This report provides a comprehensive analysis of business organizations, examining different types such as sole proprietorships, limited companies, and cooperative companies, along with their respective advantages and disadvantages. It compares tall and flat organizational structures, highlighting the differences in hierarchy, decision-making speed, and cost. The report also explores key business functions like production and human resource management, emphasizing their interdependence and impact on organizational performance. Furthermore, it discusses the crucial role of organizational culture in fostering employee engagement, productivity, and overall success. The report concludes that understanding and effectively managing these elements are vital for economic development and organizational growth. Desklib provides students access to similar solved assignments and past papers.

Understanding Business
Organisations

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Explain and outline the advantages and disadvantages of different types of businesses............3
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business organisation refers to the entity which has been formed for the purpose of
carrying on the commercial enterprise. These are the organisations which are predicated on
systems of law of governing contract and exchange the incorporation and property rights.
Business organisations are important because as it help in terms of contributing towards the
economy and its overall growth and development as well(Acquah and Chen., 2021). The report
will cover discussion about the types of business organisation and also about its advantages and
disadvantages as well. In addition to this, the report will cover analysis about the comparison
between tall and flat structure of an organisation along with its advantages and disadvantages and
also about the different functions of the business. Moreover, the report will cover analysis about
the organisational culture and also about how the positive culture impacts the success of an
organisation.
MAIN BODY
Explain and outline the advantages and disadvantages of different types of businesses
There are different types of business organisation that are very significant in this world of
business and also they have their own importance on their own place.
 Sole Proprietorship: It can be defined as the someone who owns the business of nature
of unincorporated by herself or himself. Sole proprietorship is an enterprise that has been
run and owned by the individual person and also there is no distinction into terms at legal
level between the owner and business entity as well(Ahmad and Murray., 2019). For
example, Ad share is an organisation which is basically an agency that is headquartered
in UK which supports the small businesses and charities that navigates their way in
the place of market at digital level.
Advantages: Sole proprietorship is basically easy to form and also has the authority at individual
level as well. The process of decision making is totally dependent on the basis of individual and
also gains total profits of the business.
Disadvantages: Under sole proprietorship, they have the liability of unlimited nature for debts
and also has the potential to raise capital into limited nature. The individual is mainly responsible
for the business decisions of the daily basis.

 Limited Company: It refers to the general form of incorporation that limits the liability
amount that has been undertaken by the company's shareholders. For example, Nike is
known for the world's athletic apparel company and also known for it foot wear and
equipments.
Advantages: Limited companies have costs of lower set up and also can easily transfer the
business to someone else with a better type of reputation.
Disadvantages: This kind of company has complex and long process of registration with
formalities of compliance(Aldous., 2018). It has also the division of ownership and also has the
liability at personal level as well.
 Cooperative companies: Within this kind of business that has been owned by the
member owners and also controlled by the member owners. For example, ARLA foods
that is basically a Danish-Swedish cooperative at multinational level that is based in
Viby, Denmark.
Advantages: Cooperative companies have lower debt risk and also has more control over the
organisation. These kind of companies have the equal voting rights for their members.
Disadvantages: Cooperative companies has the limited resources and also have the incapable
management as well. It has also limited consideration and also have higher interest rates as well.
Within the world of business, there are different types of organisation who follows
different types of structure that supports the organisation for executing their functions into
effective terms.
Organisation of tall structure nature: Within this tall structure, they have different layers of
management and also has many leaders as well. Businesses who have this type of structure
generally utilises the approach of top-down nature with a long chain of command. For instance,
Marriott International Inc, has used this type of structure for the organisation.
Organisation of flat structure: This kind of structure have limited levels of management at the
middle level between the frontline employees and executives as well.
From the comparison point of view, tall structure has the structure of an organisation that has
different levels of hierarchy whereas the flat structure organisation have limited number of levels
of hierarchy(Hajli and et.al., 2020). The tall structure has the narrow level of control where it has
span of control into wider terms. Organisation of tall structure have more time to make decisions
as there are number of levels of personnel to consider where the speed of decision is very fast.

Under the tall structure organisation, the management cost of structure is very high since they
have different layers of staff whereas cost related to structure of flat nature have relatively low
compared to the tall structure. The tall structure has basically the opportunity for promotion
which is very high whereas within the flat structure they have limited opportunities that are
available for promotion in the flat structure. In this way, both the types of structures have their
own cons and pros as well for performing into accurate terms at the level of organisation.
There are different types of business functions that are very significant for running the
organisation into successful terms with the right kind of approach.
Production vs human resource management: Production department is dependent on the
efficiency level of employees that ultimately result into enhancement of performance level of
employees whereas human resource management is mainly about the people
management(Metallo and et.al., 2018).When there is support system of HR department then
production department can perform into best terms for fulfilling the needs of an organisation.
Production vs operations: The department of production is related to the aspects of production
at the individual level whereas operation management is related to business activities in an
organisation. The department of production needs large scale of capital whereas department of
operations has the lower scale requirements. So in the overall terms, both the department are
interdependent on each other because without deciding the business activities it is not possible
for the production department to start their work with right kind of approach.
It has observed at the level of organisation the activities of different departments creates the
positive impact on the organisation and people as well. These activities of management also
brings new change at the level of organisation and individual as well due to which they move
towards positive development and growth as well. In this way, the activities of functional
management has created positive impact on the organisation and people within the business
environment.
When it comes to Business Environment, the culture of the organization plays a very
important role and also results in creating a positive impact on the development(Zahadat and
Diaconescu., 2020). In relation to organisational culture, it basically helps in defining the
methods in order to behave within the company. The culture of the company basically consists
shared beliefs and values which are generally established by the leaders and afterwards are
communicated to different methods.

The culture of the company is basically reinforced through various methods and thus helps in
shaping the behaviours, perceptions and employees understanding. With the support of
organizational culture, it helps a lot in creating a positive influence on the success of the
company. A healthy and strong culture of the company contributes in cultivating the work place
where the employees have higher level of job satisfaction, deeper employee engagement and
increased productivity (Ziora., 2020). For the objective to have a positive culture, it is very
important to lead towards the direction and consistency within the organization. In addition to
that, it also acts as a action or guide in order to complete the targets into a positive way. In such
manner, it helps in creating a positive culture and results in influencing the success of the
company. With the support of effective and efficient work culture, it plays a really important role
in guiding the behaviour of individual employees.
CONCLUSION
From the above report, it can be concluded that business companies play a very important
role when it comes to achieving out of box performance level. Also it can be concluded that,
there are various kinds of business which has their own importance at the company's level. It can
be also determined that the organizational level has various kinds of structure and they basically
perform accordingly. When it comes to management activities, it has been basically conducted
into function form which has their own importance from the point of view of the company as
well as the individuals. At the organizational level, the culture of the company plays a very
important role due to which it results in creating a positive impact and influence on the success
of the company. Also when it comes to overall manner, the business organizations are considered
to be very important from the economic development and growth point of view as well.

REFERENCES
Books and Journals
Acquah, A. and Chen, H., 2021. The Impact of Workplace Stress Management in a Business
Organisation in the Service Industries–A Case Study on Kingstel Hotel Limited-
Takoradi, Ghana.
Ahmad, M. U. and Murray, J., 2019. Understanding the connect between digitalisation,
sustainability and performance of an organisation. International Journal of Business
Excellence, 17(1), pp.83-96.
Aldous, M., 2018. Business ownership and organisation. In An economist’s guide to economic
history (pp. 167-174). Palgrave Macmillan, Cham.
Hajli and et.al., 2020. Understanding market agility for new product success with big data
analytics. Industrial Marketing Management, 86, pp.135-143.
Metallo and et.al., 2018. Understanding business model in the Internet of Things
industry. Technological Forecasting and Social Change, 136, pp.298-306.
Zahadat, P. and Diaconescu, A., 2020, July. Reactive or Stable: A Plant-inspired Approach for
Business Organisation Morphogenesis. In International Conference on Artificial Life
(Alife).
Ziora, L., 2020. Machine learning solutions in the management of a contemporary business
organisation. Journal of Decision Systems, 29(sup1), pp.344-351.