Types of Business Organization, Organizational Structure and Functions

This report discusses the different types of business organizations, including sole proprietorship, partnership, and limited company. It also covers the advantages and disadvantages of each type. The report also explains the tall and flat organizational structures and their impact on employee supervision and decision-making. Additionally, it discusses the different business functions, such as human resource management, operations, and marketing. Finally, the report delves into the importance of organizational culture and its impact on employee satisfaction and retention.

Understanding Business
organization

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Advantage and disadvantage of three organization ....................................................................3
Tall and flat organizational structure...........................................................................................4
Different business function..........................................................................................................5
Organizational culture..................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business organization is entity which is formed with motive of carrying on commercial
enterprise. This type of company has to follow law and exchange property rights and
incorporation. Along with this, business organization is described as how business is structured
and it helps them in meeting their goals. The present report is based on various types of and
there advantage and disadvantage is described. Major focus of the study is based on hospitality
industry and tall organization structure as well as there advantage and disadvantage.
MAIN BODY
Advantage and disadvantage of three organization
Sole Trader
Advantage Disadvantage
Sole trader keeps all the profit with themselves
and it also get to run the organization a make
the decision by themselves. Along with this,
starting sole trader is legal and easiest of all
types of ownership (Webber and Dunbar,
2020). Moreover, it has fewer regulations as
compared to other business types.
It is one of the risky business as owner can
face difficulty in knowing about the profit and
loss. There is disadvantage of unlimited
liability y and sole trader is responsible for
organizational debts. Risk of selling own
property in case failure of business.
Partnership
Advantage Disadvantage
It is one of the easiest formation process where
fewer legal formalities are present and cost is
low. The registration of the firm is also not
needed in order to create partnership business.
One of the major advantage is flexibility where
there is minimum legal formalities and also
free from government control.
There is unlimited liability because partner
agree to share profit and loss as well as has to
take responsibility for all the debts. Thus, there
is burden on the personal properties and
finances of the partners (Puente and
Schneider, 2020).
Example: Kimpton Hotel Vintage Seattle
Limited Company

Advantage Disadvantage
No minimum capital is required to develop
private limited company. As such organization
can be registers with minimum amount. There
is separate legal entity in the court of law ,
meaning assess and liability of the business
are not the same as the assess and liabilities of
the director (Dube, Van Eck and Zuva, 2020).
One of the main disadvantage of private
limited company is it restrict the
transferability of shares by its articles. Along
with this, number of shareholders in any case
cannot be exceed 50.
Tall and flat organizational structure
Tall organizational structure also known as vertical organizational structure where there
is numerous of management levels and CEO sits on the top of the chain. Whereas, flat
organizational structure is the one in which less management levels involve and employees of
company are involved in decision- making process (Whetsell, et. al. 2021). There are various
factors that impact the decision of which organizational structure to be followed in company.
Size of the entity is one of the factor and large scale companies generally follow tall
organizational structure. On the other hand small businesses often follow flat structure where
middle level management is generally not there. In comparison to flat structure, tall structure is
more complex and have long chained of command. The involvement of employees are fewer i.e.
few employees reporting to managers which provides greater supervision. Whereas, in flat
structure where there are few levels of management employees who requires to report to each
manager are high. As a result, managers are not able to provide extensive supervision which
enables employees to come up with solutions on their own and this structure gives employees to
participate in decision- making process.
In contrast to flat structure, organizations with tall structure provide employees with more
directions which give them sense of job security and understanding of their roles and
responsibilities. Tall structure is particularly beneficial for organization which has new and
unskilled employees who are required to be given directions and guidance to help in completion
of their tasks. It is the reason due to which factories with unskilled employees follow tall
organizational structure (Clement, 2019). Hospitality and tourism industries generally follow flat
organizational structure because it enables them in taking appropriate and effective decisions by

involving employees in the process. As there is no middle level in flat structure the
communication process has become more efficient and there is low chances for
miscommunication and delay in sharing information. Hospitality industry requires few
management levels which gives opportunity to employees in making decisions and this increases
their confidence and ensures employee satisfaction.
Different business function
There are different types of business functions which various from business to business.
Human resource management
Human resource management function is very essential business function that is required
in every form of organization. The important role of human resource department is to manage
human resource who are considered as essential pillar of business that plays a vital role in
success of business (Macchi, Savino and Roda, 2020). With the advancement in technology and
increase of globalization the roles and responsibilities of human resource management has been
changed and it has become more advanced. The roles and responsibilities of human resource
department are:
 Identifying the demand of employees within organization and balancing demand
and supply of workforce.
 Hiring employees accordance to skills, talent and qualification of employees and
according to demand of employees in entity.
 Training and developing employees which can improve their performance and
motivate them.
 Developing a healthy and friendly work culture where employees can be feel
secure and work effectively.
Operation
Operation function which is also known as production function where the employees and
management are responsible for activities related to production of goods and services. The other
responsibilities of operation functions are:
 Procurement of raw materials and converting the same into finished goods.
 Ensuring that adequate resources are available for production.
 Maintaining quality of products or services produced.

 Production of products and services according to demand in market and ensuring
satisfaction of customers.
Marketing
The marketing department of a company is responsible for marketing, research, sales and
after sales services that are provided to customers. There are other responsibilities that are to be
fulfilled by marketing department to ensure customer satisfaction and customer retention.
 They are required to conduct a good research of market and customers and understand
needs of customers.
 Through effective market research, marketing department is required to develop a
product development plan.
 They are required to implement effective marketing strategies using various tools to
attract more customers and develop a strong relationship.
In hospitality and tourism industry it is very essential to hire skilled and qualified employees
who can provide effective service to customers and give excellent customer experience
(Păunescu and Argatu, 2020). This can be ensured only if company has good human resource
management department.
Organizational culture
Organizational culture can be defined as collection of values, practices and expectations
that are used in guiding employees and managers of organization towards achievement of
common goals and objectives. A good organizational culture exemplifies positive traits within
company that improves performance and productivity of employees leading to business success
and growth of entity (Paais, and Pattiruhu, 2020). Strong and positive culture is created through
consistent and authentic behaviour and policies that are implemented by management for
providing an understanding of roles and responsibilities of employees and to enable them to
adapt the workplace and culture. This develops strong employee relationship which enhances
employee satisfaction and commitment of employees towards business. Organizational culture
affects all aspects of business and influence internal as well as external stakeholders of
organization.
There are various qualities of great organizational culture i.e. alignment, appreciation,
trust, performance, resilience, teamwork, innovation, integrity, etc. Alignment comes when
company and employees objective are the same, and they move in one direction for achieving it.

When there is a culture of appreciation within the organization it highly impacts employees
performance and success of entity. Management of company is required to ensure that employees
have trust on them which help in building employee relationship and ensures retention of
employees (Lubis and Hanum, 2020). It is very essential for organization to encourage teamwork
within entity which gives effective and efficient result and develops a health work environment
which helps new employees to get easily adjustable with company and employees. The
teamwork enable employees in sharing their knowledge and experience and to learn from each
other which ehlps in overall development. The strong organizational culture helps in reduction of
employee turnover as it enhances customer satisfaction and enables company to retain high
skilled employees. Higher job satisfaction of employees and training helps in increasing
productivity and performance of employees which ultimately benefits organization as it increases
market share and profitability.
CONCLUSION
From the above report it has been concluded that business motive is to earn profit and
provide services to customer. Along with this, in the present study there are different types of
business has been explained such as sole proprietor which is run by single wore with motive of
earning profit. In partnership there two individual which collaborate together in order to earn
the profit as well as to run the organization in better ways. The study has also summarized
about different type of organizational structure such as flat and tall as well as there is advantage
and disadvantage has been described.

REFERENCES
Books and Journals
Clement, F. H., 2019. Tall or Flat? Examining The Relationship Between Organizational
Structure and Turnover Intention (Doctoral dissertation, Azusa Pacific University).
Dube, T., Van Eck, R. and Zuva, T., 2020. Review of technology adoption models and theories
to measure readiness and acceptable use of technology in a business
organization. Journal of Information Technology. 2(04).pp.207-212.
Lubis, F. R. and Hanum, F., 2020, December. Organizational culture. In 2nd Yogyakarta
International Conference on Educational Management/Administration and Pedagogy
(YICEMAP 2019) (pp. 88-91). Atlantis Press.
Macchi, M., Savino, M. and Roda, I., 2020. Analysing the support of sustainability within the
manufacturing strategy through multiple perspectives of different business
functions. Journal of Cleaner Production. 258. p.120771.
Paais, M. and Pattiruhu, J. R., 2020. Effect of motivation, leadership, and organizational culture
on satisfaction and employee performance. The Journal of Asian Finance, Economics
and Business. 7(8). pp.577-588.
Păunescu, C. and Argatu, R., 2020. Critical functions in ensuring effective business continuity
management. Evidence from Romanian companies. Journal of Business Economics and
Management. 21(2). pp.497-520.
Puente, I. and Schneider, B. R., 2020. Business and development: how organization, ownership
and networks matter. Review of International Political Economy.27(6). pp.1354-1377.
Webber, E. and Dunbar, R., 2020. The fractal structure of communities of practice: Implications
for business organization. PloS one.15(4). p.e0232204.
Whetsell, T. A., et. al. 2021. Formal hierarchies and informal networks: How organizational
structure shapes information search in local government. Journal of Public
Administration Research and Theory. 31(4). pp.653-669.