Understanding of Business Organisations

This essay outlines the advantages and disadvantages of different types of business including sole trader ship, limited company and partnership firms with comparison between organisational structures and their contrast. It also covers the different functions of the business including production, human resource management, operations, etc. with the impact of their functional management activities on companies and the respective employees of an organisation.

UNDERSTANDING OF
BUSINESS
ORGANISATIONS

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................5

INTRODUCTION
A business can be said as the regular trade, occupation or profession of an person, it is a
type of commercial activity that is done for a specific reason which monetary gains(Handy,
2020). As everything needs money in today's time so it is the best motivation behind most
businesses but not every business.
The objective of any business is what makes it survive and conduct its activities in the
long run as survival is the basic requirement of any business organisation.
This essay aims to outline various advantages and disadvantages of the different types of
business including sole trader ship, limited company and partnership firms with comparison
between organisational structures and their contrast. An addition to this the different functions of
the business including production, human resource management, operations, etc. with the impact
of their functional management activities on companies and the respective employees of an
organisation. Organisational culture has its positive impacts which are behind the success of any
organisation so will be included.
MAIN BODY
A sole proprietorship business is the one that is owned by an individual, a limited liability
partnership or a company and in this type of enterprise, the business does not have a separate
legal entity.
Advantages of sole trade business includes the fact that in a sole trader ship there is no
boss other than the owner who conducts the business which means that the business is in full
control of the owner with all the decision making(Bernoste, Khedhaouria and Thurik, 2019). All
the profit is kept with the owner and there is maximum privacy in the business operations.
Disadvantages of sole trade business type include all the responsibility that is on the shoulders of
the owner which makes it hard to take holidays. The capacity of raising capital is limited and the
owner has unlimited liability. For example a tour guide at a monument.
A partnership form of business is the one where more than one person agree to carry on a
business by getting into a agreement and thus the business is known as a partnership firm.
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Opportunities of partnership firms include facts like it is easy to start a partnership firm,
tax liability is less and it is easier to raise funds as there are more than one partner and each can
bring money based on their capacity(Sum, 2022). Threats of partnership business include the
factors that every partner is liable to losses, any form of misunderstanding can cause disruption
which is high possibility when there are more than one partners and if the firm gets profit all of
them are shared between the partners which brings less money per partner. For example JW
Marriott hotels & Resorts.
A limited company is the one where its investors or owners are responsible legally for its
debts but only to the extent of the capital invested by them.
Benefits of limited company business include the fact that there is minimal personal liability
which means if the company runs in some trouble the personal assets of the owners will be
secure, the professional status helps to improve the trading activities and finally the tax
efficiency which is in its favour(Jelsma, Phillip and Pamela Everett Nollkamper., 2018).
Drawbacks of limited company consist of point related with the pay of incorporation fee to
company house with disclosing of personal information to the public with restrictions in
changing of company details. Example of limited company is City tourism ltd.
Tall organisational structure generally consists of various management levels which
makes the command chain long where as in flat organisational structure the command chain is
very short with no levels or fewer levels between staff and managers(Clement, 2019). All
employees and managers in tall organisational structure are well supervised by the seniors of the
organisation but in a flat organisational structure there is no senior that supervises the employees
which is one of the big difference between them. Tall organisational structure are seen more in
mature companies where as flat structures are witnesses in small companies. In a Flat
organisation due to the small level of management the employees are well focused and have the
knowledge about their boss where as in Tall organisational structure employees can often blame
their faults on others due to large amount of time taken to figure things out due to large amount
of levels and less knowledge sharing between bosses and employees(TINGSAGER and SMITH,
2022). There is a culture of flexibility, cooperation and working over boundaries in a flat
structured organisation while in a Tall structured organisation there is less amount of flexibility,
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cooperation and working over boundaries. There are less problem sharing opportunities due to so
many management levels which can go up to 8 in the tall structured organisation while more
problem sharing opportunities are witnessed in a flat structured organisation which has less gap
between the employees and their respective boss. Examples of tall structured organisation is
Goibibo which operates around the world on a large scale and provides tourism and hospitality
services whereas example flat structured organisation are those 1, 2 or 3 star local hotels who
operate on small basis in a town or city.
Human resource management serves as a strategic approach to the development, well-
being and employment in an organisation(Stone, Cox and Gavin, 2020). It usually involves
management decisions that affect the actions and relationship between the employees and their
respective organisation. Human resource management concentrates on making the best use out of
its employees which ultimately help in achieving the objectives of the organisation. It is in
existence to balance employee satisfaction with their needs and the profitability of an
organisation to reach its objectives. In tourism and hospitality the human resource must be
trained well enough to receive customers based on their high expectations, as the customers
come to enjoy their time so their needs need to be met with the best behaviour of employees.
Production is the process that focuses on meeting the expectations of the customers of an
organisation by delivering best quality products possible at least cost. Production planning is a
dynamic, customer focused and knowledge driven process through which the employees of an
organisation get rid of waste with the aim of creating value. The needs related to competitiveness
of the business can be fulfilled with the increase in direct production activities on the basis of
direct supply chain expectations. The force that drives production is essence of creating
substantial performance in addition to utilization of resources in the best manner. Examples of
production in tourism and hospitality industry include the working in a restaurant where dishes
need to be served as soon as possible to the customers so their production must be as fast as
possible.
Operation Management is an integral part of organisational strategy in most organisations
which provides indication towards the overall importance of it in the development of the
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respective organisation. Employees working in operation management will be responsible for
working with other executives and managers to find out how operational planning could
contribute in the long term strategy of the organisation(Wolniak, 2020). Operation management
also help the organisation to achieve organisational goals with the activities related to
coordination formed between the departments of the respective company. Example of operation
management can be found in the hotel industry where a hotel plan to expand its operations in the
future, so their future strategies need to be planned.
Organisational culture consists of the collection of expectations, practices and values that
inform and guide the actions of the employees, in other words it consists of traits that make the
organisation what it really is(Odor, 2018). A good organisational culture emphasises on the
positive traits that help he company to improve its performance and bringing out culture that
brings the errors which would otherwise hinder even the successful companies(Liu, Tsui and
Kianto, 2021). Organisational culture must not be confused with the goals or aims of the
respective organisation because a culture is formed through authentic and consistent behaviour
and not with press releases or documents of policy.
A positive organisational culture helps in pulling employees motivation and companies
objectives into one direction which can be referred as alignment. In a positive culture the trust is
a vital factor where employees feel comfortable enough to rely on one another. Performance is
the key factor because the main reason behind the development of a positive culture is great
amount of business that organisation is looking for which ultimately is good team work.
In hospitality industry culture develop spontaneously irrespective of the fact that it is nurtured or
not, so it is very important to manage the organisational culture of hospitality organisation to
make right impression on time. To create a positive hospitality culture, its very important to
define the values and missions of the respective company. In hospitality industry service culture
comes into work, so candidates must be asked about their respective capacity of attention in
detail. Once the employees are in place, positive qualities must be nurtured that the organisation
is in need. Staff members must feel the culture being mentioned if the organisation expects the
employees to deliver a good experience to the clients and customers.
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CONCLUSION
From the above report it can be concluded that a business is a commercial activity which
involves the exchange of goods and services for the reason of monetary gains at least enough for
the organisation to survive.
Human resource management includes strategic approaches that are essential for the
development and well being of an enterprise with the inclusion of decisions made by
management to affect the relationships and actions between the employees and their
organisation. Production management focuses on delivering the expectations of the customer's
demands by delivering adequate quality on timely basis with regular cost. Operation
management being the integral part of the organisation's strategy helps in providing indication
about the development level of an organisation. A good organisational culture in hospitality
industry helps to make a good impression on the customers, so positive qualities of the
employees must be nurtured if the organisation expects employees to deliver a good experience
to the customers.
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REFERENCES
Bernoste, I., Khedhaouria, A. and Thurik, R., 2019. Positive affect, the entrepreneurial process,
and the entrepreneurial success of sole proprietors. M@ n@ gement, 22(2), pp.273-296.
Clement, F.H., 2019. Tall or Flat? Examining The Relationship Between Organizational
Structure and Turnover Intention (Doctoral dissertation, Azusa Pacific University).
Handy, Charles., 2020."What is a business for?." Harvard business review, December.
Jelsma, Phillip L., and Pamela Everett Nollkamper., 2018. The limited liability company.
Liu, G., Tsui, E. and Kianto, A., 2021. Knowledge-friendly organisational culture and
performance: A meta-analysis. Journal of Business Research, 134, pp.738-753.
Odor, H.O., 2018. Organisational culture and dynamics. Global Journal of Management and
Business Research.
Stone, R.J., Cox, A. and Gavin, M., 2020. Human resource management. John Wiley & Sons.
Sum, K., 2022. The Power of Partnership: A Book Review. The Journal of Educational
Innovation, Partnership and Change, 8(1).
TINGSAGER, C. and SMITH, F., 2022. Strategy and structure. Studying Human Resource
Management: A Guide to the Study, Context and Practice of HR, p.41.
Wolniak, R., 2020. Main functions of operation management. Production Engineering
Archives, 26.
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