Understanding of Business Organisations

This essay discusses the types of business organizations, their advantages and disadvantages, the tall and flat organizational structure, functions of human resource management, production management, and operations management, and the impact of positive culture on the success of an organization.

Understandings of
the business
organisations

Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
The topic of the essay is understanding of the business organisations. The aim of this essay is
to discuss about some types of business and their functions. The business organisation refers to a
corporation or an entity that is conducting their operations on the basis of commercial activity
and describes that how their structure will help them to achieve to their goals (Osafo, 2022). The
main aim of the business organisation is to earn profit but there are some business organisations
which purpose is to provide social welfare to the public instead of the profit earning. There are so
many types of business organisations which we will discuss in this essay. The essay covers the
advantages and disadvantages of three different types of business and discuss about the flat as
well as tall structure of an organisation (Panigrahi and Jena, 2020). In this essay, we will discuss
about the functions of the business and gives an explanation that how positive culture impacts
the success of any business.
MAIN BODY
There are so many types of business organisation but we will discuss only three different
types of business organisation, that is, sole trader, partnership and limited company. The sole
trader is a type of business organisation which is owned by a single person and is usually small
in size as compared to others. It is one of the most common and simplest form of business
organisation (Church, 2020). The operations, decisions, investment, etc. is totally depend on the
owner. The benefit of running this kind of organisation is the flexibility which is gained by the
owner as they has not to inform anyone about their operations, decisions, investment, etc. To
start this kind of business organisation, the owner has not to follow a lengthy process as they
needs only a business license. And there is a very little regulations that this type of firm has to
follow. But the main drawback that this kind of firm faces as there is no differentiation between
their personal and business income. The disadvantage of this organisation is as the owners have
to work for long hours as because they was the single person who run and owned this type of
enterprise (Mishulina and et.al., 2019). The next organisation is partnership which is formed with
the minimum two peoples and needs a formal agreement between them. In this type of
organisation, the partners decide to share the profits or losses and their duties which is generated
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from the business. This type of business enjoys the similar flexibility and simple design as of the
sole trader. And the advantage of starting this kind of enterprise is inexpensive as compared to
the other firms (Stapley, 2018). But to wind up this type of enterprise requires the agreement
from their partners. And it is difficult for the partners to sell this kind of enterprise. The third
type of enterprise is limited company which is on of the most popular type of business in UK and
has a separate legal entity from their owners or directors. But to start, this kind of enterprise, it
requires a huge and lengthy process and has to follow certain restrictions. The requirements of
accounting is considered to be a time-consuming and very complex (Hilt, 2018).
The structure of an organisation refers to a system which helps the firm to define that how
certain activities are manageable in order to accomplish organisational goals. To achieve the
goals in an effective way, there are two types of structure, that is, tall and flat organisational
structure. The tall organisational structure refers to a structure which has many leaders or
managers and it is commonly known as hierarchical structure. In this type of structure, there are
many layers of management and there is a usually long communication pathway as compared to
the other. It consists of a long chain of command like the manager of a hotel consists of workers,
supervisors, assistant manager, etc. The advantage of this type of organisational structure is the
managers have the tight control over their workers and handles the areas of the business in an
effective way (IASMINA, GABRIELA and ALEXANDRA, 2019). But as due to the long chain
of command, the communication is very slow and the changes of the organisation is executed in
a slow way. In this type of organisational structure, the workers are not motivated which leads to
an increase in the level of demotivation among them. The other type of organisational structure is
flat organisational structure which is also referred to as the horizontal structure. As it involves a
few layers of management as compared to the tall organisational structure (Low, Abdul-Rahman
and Zakaria, 2020). And has a short chain of command and can results to as the frequent way as
they can. This type of organisational structure is adopted mostly by small businesses as it was the
more contemporary approach of management. The benefit of adopting this type of structure is a
better communication as because this has less layers. And the workers are feeling more
motivated in the flat organisational structure. But it creates and raises the high workloads for the
managers and there is a lacking of advance opportunities (TINGSAGER and SMITH, 2022).
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The human resource management plays a significant role in achieving the goals of the
organisation. And develops the skills, knowledge and capabilities of an employee so as to
experience the growth and development. It contributes in the major decision-making of the
organisation (Raziq and et.al., 2020). There are various types of functions performed by the
human resource department are hiring and selecting the workers, provides training and
development to the employees, manage the relations with the workers, manage the performance
of the workers, provides an analysis of the job and compensation to the employees, and many
other functions also. Through the use of the human resource management department, the firm
can easily develop the skills in their workers which leads to better achievement of their goals.
The production management is a type of department which manages the supply the desired
outputs of a product and consists of various types of activities such as planning, executing and
directing. The functions of the production management are planning and control of the
production activity, preparing and selecting the designs and the product for the organisation,
managing the replacement and maintenance of the machines. Through the production
management, the firm can supply better products to their customers and leads to increase the
revenue of the organisation. The operations functions maintains the smooth running of any
procedure in the organisation (Nakano and Matsuyama, 2021). There are different types of
functions performed by the operations management, that are, providing a strategy for the
business, helps the firm in forecasting, provides finance, controls the quality of the product, etc.
It impacts the organisation as oversees the complete operating system of the firm and handles the
issues related to the design, maintenance, development, etc (Pfohl, 2022).
The organisational culture refers to a group of traits that form the company as it includes the
expectations, belief, and practices which guide the actions of the workers. If there is a great and
positive culture in the firm, it leads to improve the productivity and performance of the workers.
As we can say that it is a type of quality which brings success in the organisation. The
organisational culture is mandatory as it is allows the workers to understand the organisation in
an effective way and feels that their existence matters in achieving the goals of the company.
There are four types of organisational culture in the company, that is, clan culture, market
culture, hierarchy culture and adhocracy culture (Mazzarol and Reboud, 2020). The business can
maintain high performance culture by considering some ways such as keep the lines of the
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connection open, maintains traditions, appreciate the worker's contributions and achievements,
etc (Wziątek-Staśko, Stańczyk and Stuss, 2020). The positive culture in the organisation affects
the success as it maintains the top talent of the workers, improves the productivity of the workers
and builds a healthy team in the workplace which results in better accomplishment of
organisational goals. The positive culture has the main contribution on the expansion and growth
of an organisation (Scharfman, 2020).
CONCLUSION
In this essay, it is to be concluded that there are several types of business in the world and
each has some advantages as well as disadvantages. The main function performed in a business
is the human resource management which plays an important role in accomplishing the
objectives of any organisation. As it performs a variety of functions in the business like
providing training and development to the employees, managing the performance of the workers
in the organisation. But in the case of hospitality and tourism industry, they has to develop an
effective strategy so as to provide better and advanced services to their customers. As for the
continuous growth and expansion, the firm has to maintain a positive culture in the workplace
which leads to improve the productivity and performance of the employees. Hence, to maintain
the profit, the firm has to carry their functions in a proper way as along with the satisfaction of
their workers.
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REFERENCES
Books and Journals:
Church, A.H., 2020. The Meaning of Commercial Organisation. In The Contributions of
Alexander Hamilton Church to Accounting and Management (pp. 3-10). Routledge.
Hilt, E., 2018. Business Organization in American Economic History. The Oxford Handbook of
American Economic History, vol. 1, p.261.
IASMINA, I., GABRIELA, P. and ALEXANDRA, V., 2019. COMMUNICATION
MANAGEMENT IN HIERARCHICAL STRUCTURES. Agricultural
Management/Lucrari Stiintifice Seria I, Management Agricol, 21(1).
Low, W.W., Abdul-Rahman, H. and Zakaria, N., 2020. Organisational culture of Malaysian
international construction organisations. International Journal of Construction
Management, 20(2), pp.105-121.
Mazzarol, T. and Reboud, S., 2020. Operations Management. In Small Business Management
(pp. 277-317). Springer, Singapore.
Mishulina and et.al., 2019. Comprehensive assessment of business activity of a commercial
organization. J. Advanced Res. L. & Econ., 10, p.1824.
Nakano, M. and Matsuyama, K., 2021. Internal supply chain structure design: a multiple case
study of Japanese manufacturers. International Journal of Logistics Research and
Applications, 24(1), pp.79-101.
Osafo, E., 2022. Using human anatomy and physiology to explain business organisation
effectiveness. International Journal of Business and Systems Research, 16(2), pp.259-
276.
Panigrahi, R.R. and Jena, D., 2020. Inventory control for materials management functions—a
conceptual study. In New Paradigm in Decision Science and Management (pp. 187-
193). Springer, Singapore.
Pfohl, H.C., 2022. Service Functions of Logistics Companies. In Logistics Systems (pp. 257-
266). Springer, Berlin, Heidelberg.
Raziq and et.al., 2020. Organisational structure and project success: the mediating role of
knowledge sharing. Journal of Information & Knowledge Management, 19(02),
p.2050007.
Scharfman, J., 2020. Additional Operational Functions and Tasks. In Alternative Investment
Operations (pp. 101-111). Palgrave Macmillan, Cham.
Stapley, L.F., 2018. A large-system intervention: The influence of organisational culture. In The
Systems Psychodynamics of Organizations (pp. 157-173). Routledge.
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.
Wziątek-Staśko, A., Stańczyk, I. and Stuss, M.M., 2020. Organisational culture as a stress
determinant in SME sector organisations. European Journal of International
Management, 14(6), pp.955-975.
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