Understanding Business Organisations: Types, Structures, Functions and Culture

This report covers various topics such as overview of business organisations, different types of business organisations, advantages and disadvantages of different types of various organisations, comparison of tall and flat structure of organisation and their advantages and disadvantages also about business functions and their impact on functional management activities on organisations and the people within the organisations. Lastly, this report discusses about organisational culture and have explained in brief about how positive culture impacts the success of the organisation in context with Hotel Premier inn.

MGBBT0UBN
Understanding
Business Organisations

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Business organization is an structure which is developed for the purpose of carrying on
business operations. These types of organisations are established on systems of law governing
contract and exchange, property rights, and incorporation. The various categories of business
organisations are sole trader, partnership, and limited company (Arumbarkah, 2020). Premier Inn
is a British limited service hotel chain and the UK's largest hotel brand, with more than 72,000
rooms and 800 hotels. This report will include various topics such as overview of business
organisations, different types of business organisations, advantages and disadvantages of
different types of various organisations, comparison of tall and flat structure of organisation and
their advantages and disadvantages also about business functions and their impact on functional
management activities on organisations and the people within the organisations. Lastly, this
report discusses about organisational culture and have explained in brief about how positive
culture impacts the success of the organisation in context with Hotel Premier inn.
MAIN BODY
A business Sole proprietorship or sole trader is a type of business organisation is
owned, controlled, and managed by a single individual. A sole trader earns the financial rewards
is completely responsible for taking all risk and liabilities while running the business (Avci,
2021). Some of the major advantages are owner can make quick decisions and also has privacy
to keep their documents protected from others as well as owner keeps all profit earned from
business. Now some major disadvantages are; scarcity of the resources with unlimited liabilities
as being a single owner to the business and also in case of death, insolvency of the owner it
becomes challenging to run this business. Example of sole proprietorship are; travel bloggers and
tour guides. Partnership is a type of business where an agreement is made between two or more
people to become the partner in the business, and to take their respective responsibilities to run
the business (Chen, 2018). Some of the major advantages are easy agreement process for the
formation of partnership with having huge amount of resources to run the business and also both
the partner can share risks caused by the business and settle it down together by equal
contribution. Also some major disadvantages are the liabilities on the owners from the business
with having no freedom to take decisions for the organisation individually. Which creates
misunderstandings and misconception between the partners. Examples of partnership are
1

Southwest and Volaris, Marriott and Cosmopolitan resort. Limited company is type of business
organisation which is most famous legal structure for all types of business in the UK (Donovan,
Blare, and Peña, 2020). Some of the major advantages are reducing personal liabilities as
company is only responsible for the losses occurred even the professional status of the owner
gets boosts and also owners get their separate legal identity. Some of the disadvantages are that
company needs to pay incorporation fees to company house even the accounting requires are also
very confusing and take a lot of time to be done also if owners want to withdraw money from
company then they have to undergo complex procedures (Thierry and et. al., 2018). Example of
this type of business is; premier inn and Mitchell's and Butlers.
Organisation structure is a method by which work flows through an organisation is
known. In this type of structure it allows groups to work together to complete the task. There are
various types of organisational structures which includes hierarchical, functional, horizontal,
divisional, matrix. Team based and network org structure respectively (Gorondutse and Hilman,
2018). Let us discuss in detail about Tall and Flat organisational structure. Tall organisational
structure; it is type of structure is having lots of leaders and layers of management. In tall
organisational structure chain of command are from top to bottom (Hoffman, 2018). some
advantages of tall structures are it provides speciality to its each and every employees and also
on the regular intervals it provides motivation to its employees for the career stability and
promotion opportunities for then with in the organisation. Some of the noticeable disadvantages
are that the communication within the team is quite slow as the team needs to follow complete
hierarchy and in this structure lower level of employees feels demotivated as they are not able to
share there innovative ideas for the growth of business as every decision is taken by the higher
authorities (Sihombing and et. al., 2018). The examples of this structure are; Holiday Inn express
and Premier Inn. Flat organisational structure; it is also known as horizontal structure. In this
type of structure organisation have very less amount of managers with many employees and here
employees have power to take decision without the need of managers approval (Howorth and
Robinson, 2020). Some of its advantages are that employees gets more responsibilities and this
structure encourages more to open communications. Now lets limelight about its disadvantages
I.e. it creates misconception between the employees regarding the work as they don't have
managers or supervisors to report and also it becomes difficult to run the organisation when the
2

business starts expanding. Examples of this structure are; G adventures, Intercontinental hotel
group and exodus travels.
A Business function is an activity that is carried out by the business. A business
performs different business functions for instance human resource management, finance,
production, operation, research & development and marketing etc. the business functions are
interrelated with each other (Kamenar, 2018). The Finance function handles aspects like budget,
managing the funds, funding, and accounting of the business. This function also performs tax
return, filing tax payments, salaries of the employees, audits and other finance related activity.
This function also supports the decision making and business planning if the wrong information
is provided the decisions taken by management can negatively affect the organization. The
finance function also does the allocation of the funds into different departments, this can
positively and negatively affect the organization if the funds are allocated unnecessarily to the
departments. The Premier inn is using the finance function very effectively. The Research and
Development function performs actions that leads to innovation. This function performs market
research, industry comparison, product development and helps companies with new products or
services to generate more profits and expand market share, if this function does not perform
research and doest not develop any new products the organization will start loosing the market
share and the competitor will gain edge in the competition (Lopez and Seligson, 2019). The
Production function of the business deals with the manufacturing of the goods and products.
For the proper functioning of the production the product department it needs several resources
like finance, labour, and other facilities. The production department has to keep the product
quality high. If the production department fails to maintain the quality it will impact the business
negatively. Also the production department has to keep the manufacturing according to the
demand if they fails to meet the demand the consumers will switch to the competitors brands and
this will result in loss of market share (Ozyurt, 2022). The Premier inn is meeting with the
demand of the hotel rooms and increasing the number of hotels and hotels rooms if needed.
The organizational culture is the group of values, beliefs, expectations and practices
that guides the actions of the employees of the enterprise. The organization culture defines how
to behave within the organization. The organization culture is very important it helps
organization to succeed in the business (Moeran, 2021). The organization culture within the
organization should be positive it increases the performance and revenues. The organizational
3

culture affects the whole business. The positive organisation culture improves the engagement
of the employees, This motivates and inspires the employees and creates a positive atmosphere
within the organization. The positive culture of a organization attracts and keep the top talent.
Organization's investment in the culture can make a huge difference. The employees also
supports the organization and the employees are more likely to stay in the organization for long
period. It decreases the cost for the company such as hiring cost training cost etc. (Saruchera,
and Asante‐Darko, 2021) the positive environment also improves the productivity of the
employees. If the employees are satisfied with their job it increases the the employees efficiency
and performance. The positive work culture differentiates the organization in the market. It
creates the positive brand image for the company. Also it creates a competitive edge for the
organization when customers and vendors notices prosperous and involved employees. It creates
a healthy teamwork environment inn the organization. The employees might feel stressed in a
negative work culture environment this could result in extra cost for the company as healthcare
expenditure (Shafie and et. al., 2019). The company can reduce this cost by providing positive
environment for work. The premier inn has created positive work environment for employees
through the better communication, they listens to the concerns and ideas of employees, the
company encourages the employees feedback and their opinions on the new policies.
4

CONCLUSION
By the above essay it can be concluded that the company can be a legal person and have
its own identity. The organizational structure is important for the organisation to systematically
operate the business. The tall structure helped managers to take more control over employees,
whereas in the flat structure it is hard to provide extensive supervision to the employees. The
different business functions are interrelated with each other and helps the top management to
take the decisions. The business functions have to work together in order to increase the
productivity and overall performance of the organisation. Also the organisational culture is
important for the success of the enterprise. The company had invested in positive work culture
helps to improve the brand identity and reduces the cost for the company. Also it helped
company to attract the best talent and that improved the efficiency and productivity.
5

REFERENCES
Books and Journals:
Arumbarkah, A.M., 2020. Influence of organizational structure, description position and
requirements position on Performance employee. Point Of View Research
Management, 1(3).
Avci, P., 2021. Structures and Functions of Holding Companies in Different Countries.
In Handbook of Research on Financial Management During Economic Downturn and
Recovery (pp. 41-57). IGI Global.
Chen, S.A., 2018. Social Spacing, Organizational Development and Network Utility of Chinese
Business Organizations in Cambodia. International Journal of Business
Anthropology, 8(1).
Donovan, J., Blare, T. and Peña, M., 2020. Multiple certification uptake by coffee businesses:
Evidence of functions and benefits from Central America. Business Strategy &
Development, 3(3), pp.264-276.
Gorondutse, A.H. and Hilman, H., 2018. Does organizational culture matter in the relationship
between trust and SMEs performance. Management Decision.
Hoffman, G.R., 2018. A case study examining how stakeholders experience and perceive
changes in organizational structure and culture throughout the paradigm switch from
traditional to hybrid secondary education. Indiana University of Pennsylvania.
Howorth, C. and Robinson, N., 2020. Family business. Routledge.
Kamenar, M., 2018. Analysis of the human resource management functions in Sound of Vienna
Konzertveranstaltungs GmbH (Doctoral dissertation, University of Rijeka. Faculty of
Economics and Business).
Lopez, J.R. and Seligson, M.A., 2019. Small business development in El Salvador: the impact of
remittances. In Migration, Remittances, and Small Business Development (pp. 175-206).
Routledge.
Moeran, B., 2021. The business of ethnography: Strategic exchanges, people and organizations.
Routledge.
Ozyurt, S., 2022. The Study of Social Media Marketing and Its Relationship to Servant
Leadership within Profit Organizations (Doctoral dissertation, Alliant International
University San Diego).
Saruchera, F. and Asante‐Darko, D., 2021. Reverse logistics, organizational culture and firm
operational performance: Some empirical evidence. Business strategy &
development, 4(3), pp.326-342.
Shafie, N.A., and et. al., 2019. The Effects of Organizational Structure, Organizational Culture
and Environmental Factors on the Effectiveness of Internal Control in Social
Cooperatives. International Journal of Business & Management Science, 9(2).
Sihombing, S., and et. al., 2018. The effect of servant leadership on rewards, organizational
culture and its implication for employee’s performance. International Journal of Law and
Management.
Thierry, K.L., and et. al., 2018. A self-oriented mindfulness-based curriculum improves
prekindergarten students’ executive functions. Mindfulness, 9(5), pp.1443-1456.
6