Understanding Business Organisations: Advantages, Disadvantages, and Impact on Workforce

This essay discusses the meaning of business organizations, the advantages and disadvantages of sole proprietorship, partnership, and limited liability company. It also compares tall and flat organizational structures and their impact on businesses. The essay further explores the impact of HRM, production, and operation functions on the organization and its people. Lastly, it defines organizational culture and its positive impact on business success with examples from the hotel and tourism industry.

UNDERSTANDING
BUSINESS
ORGANISATION

Table of Contents.
INTRODUCTION...........................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business organisation refers to an entity which is incorporated to carry a
commercial activity of buying & selling. In simple words, it means how the businesses are
structured and how it helps them to achieve their required goals. These organisations are
predicted on property rights, regulations and incorporation (Osafo, 2022). There are mainly four
major business organisation i.e. sole proprietorship, partnership, Limited Liability Partnership
and Company. The essay will explain and outline three advantages and disadvantages of the
different kinds of businesses like sole trader, partnership and company. Further, the project will
compare tall and flat structure of an organisation with an example of hospitality and tourism
industry. The task will discuss the business functons such as human resource management,
production, operation and the impact of these activities on the workforce. The essay will define
the organisational culture and how positive culture influence its success. In the end, the study
will provide examples of different industry practices.
There are many forms of businesss organisations and you need to choose one while
setting up your business considering its merits, demerits and type of business. Sole
proprietorship is an enterprise which is exclusively owned by one natural person having
unlimited liability and not being seperate from its owner (Kasahun, 2020). There are advantages
of this form such as simplest and least costly business to operate having full control, easy
registration of business license while registering in your name and no need to pay seperate tax
for the proprietorship (Lawrie, 2020). The main demerits of sole enterprise are firstly the owner
is personally liable for all the debts & legal battles, may jeopardize the personal assets of the
owner and the entity would become defunct with the death of the owner. Partnership is another
form of business formed by two or more individuals sharing the profits & losses in regard to the
capital invested by them (Safter, 2019). There are certain benefits like partnership can be
maintained easily due to no requirement of meeting, no need to pay corporate taxes if not
registered and sharing of liability could be limited if using modern kind of partnership. It has
drawbacks like legal battles due to informal partnership agreements, limited number of members
could only be associated as given under the law and unlimited liability in case of any dispute
arises in running business (Anopchenko and et.al., 2019). The example of partnership would be
Hilton London Bankside. Limited Liability Company is the third form of business which is an
artificial person created by law, having perpetual succession and a common seal for

identification (Reiser, 2018). Merits of LLC are they can choose how they want to continue in
regard to taxation, have limited laibility and flexibility in management. It also has certain
demerits like not suitable for venture capital, difficult to accept new members and members are
vicariously liable for the act of the company in some cases (Akhmetshin and et.al., 2018).
InterContinental Hotels Group is the suitable illustration of LLC.
Organisation structure is a system that provides formal chain of command to run the
business smoothly to focus on the common objectives (Liebel, and et.al., 2018). It is further
divided into two i.e. tall and flat. Tall structure also called mechanistic or traditional structure in
which CEO runs the chain of command with many levels beneath (Karimimoshaver and
Winkemann, 2018). While flat structure also known as orgiastic structure involves less level of
management with large workforce body in the process of decision-making. The key difference
between them is in regard to levels of hierarchy and on the nature of the industry. Further, these
can be compared and contrasted with the help of following table:
Basis Tall structure Flat structure
Meaning It has many levels of hierarchy. It has limited levels of hierarchy.
Control It has narrow control. It has wider control.
Decision-making It takes long time to take
decisions due to many levels.
It takes less time while making
decisions due to more control.
Cost It is expensive because of more
employees.
It is relatively cheaper as compared to
tall.
Promotion It has high chance for promotion. It has limited chance for promotion.
Therefore, it is clear from the above table that tall structure are adopted by larger
companies which have two purposes i.e. transparency of obejective and cost controlling
(Andersson and et.al., 2019). Small number of employees are being managed at every level
which helps to be clear regarding the work. UK's Premier Inn Hotel is an example of this kind
of structure where manager is in charge of the work and also have a strong support system.
Whereas, flat structure are embraced by small businesses which help them to save their cost and
having mindset of flexibility, problem-sharing, cooperation as well as to be customer-centric.
ABTA – the travel association is an apt illustration of this kind of structure.

Business functions are the activites divided into core and support which are carried out
by an enterprise. The functioning of any business is depend on the Human Resource
Management, production and operations which help in the performance of the activities of an
organisation (Nekovee and Pinto, 2019). The sole purpose of HRM is to establish strong bond
between the firm and its employees. It makes the process easier and include pratices like hiring,
training, appraisals, payroll and benefits through bonus, incentives etc. HRM analyse the
performance of each employee which help them to be more focused on their flaws by doing
training programmes. However, HRM function have a great impact on both the organisation's
and its people conduct and achievements. The Edinburgh Grand is the suitable example for
HRM. Operation management function is another kind of function which have a direct impact on
the organisation and its people. Operation is responsible to the processes of production of items
in the business. By applying strategies the production could be increased to fulfill the customers
wants. The key functions of operation management includes product design, forecasting demand,
quality control and finance (Păunescu, Popescu and Blid, 2018). Operation management plays an
crucial role in tourism industry as to attract the tourists the industry should focus on the core of
the business which they are planning to start. Trailfinders is the best example for the tourist
company in UK. Another kind is production management which includes planning, organizing,
directing and controlling of activities related to production. To satisy the needs of the consumers
6M's are important i.e. men, money, machines, materials, market and methods. It helps the firm
to accomplish the objectives. Vikings European Tours is one of the example of good production
management.
Organisational culture means beliefs and values embedded in an organisation for a long
period of time which provides the business mission, expectations, objectives helps in guiding its
workforce (Abo-Murad, Abdullah and Jamil, 2019). There is a slight difference between
organisational goals and culture. Culture is formulated by continuous and consistent behaviours.
For example, how a CEO of an hotel responded during the pandemic to save the company or
how an executive correct mistakes of an employee. Positive organisational culture increases the
employees engagement, motivation, connection with their team members which enhance their
work experience. Positive environment increase the turnover of the organisation and improve the
efforts of employees, increases productivity by collaboration (Heinz, 2021). It would heightens
the brand identity, attract higher-caliber candidates, meeting employee's expectations, flexible to

adapt new change, encourage employees to be enthusiastic, retaining best talent, happening
onboarding process, increase teamwork, better wellbeing of employees, boosts productivity are
some of the positive impacts on the organisation. Firmdale Hotel is the best example as it got
shortlisted for the positive culture. Breakfast clubs, staff appreciation weeks, training certificate
and suggestion from the staff to make culture better are some strategies used by the hotel to
create a positive culture within the organisation (Moseley, 2020). The London Edition is another
example which was launched in 2013 is a luxury hotel working with Marriott International. The
HR team of the hotel arrange monthly events so that the staff could experience the cool culture
of the hotel which includes private cinema, pub quizzes, private rooftop, boat parties etc. This
way workforce and manager levels relax together and positive culture impacts the performance
of the organisation.
CONCLUSION
The essay has been concluded by clearly explaining the meaning of business
organisation. Further, the study has been defined the sole proprietorship, partnership and limited
liability company with its advanatages and disadvantages. The essay has been summarised that
LLC is the most suitable form of business organisation while considering the hotel and tourist
industry. These industries required a large amount of capital and investment with a high risk
involved. Due to limited liability feature LLC distribute the burden of debt amongst the members
of the company and no one could be completely liable for the act of another. Further, tall
organisational structure is better option for international chain of hotels like Premier Inn Hotel
which are large organisation whereas flat organisational structure are better option for the small
businesses and with time they can switch to tall structure while expanding. The task has been
discussed the impact of HRM, production and operation function on the organisation and its
people. Lastly, essay has been summarised by defining the organisational culture and positive
culture impacts on the success of the businesses.

REFERENCES
Books and journals
Abo-Murad, M., Abdullah, A. K. and Jamil, R., (2019). Effect of the Organisational Culture on
Crisis Management in Hotel Industry: A Qualitative Exploration. International Journal
of Entrepreneurship. 23(2). pp.1-18.
Akhmetshin, E. M. and et.al., (2018). Freelancing as a type of entrepreneurship: Advantages,
disadvantages and development prospects. Journal of Entrepreneurship
Education. 21(2). pp.1528-2651.
Andersson, T. and et.al., (2019). Building traits for organizational resilience through balancing
organizational structures. Scandinavian Journal of Management. 35(1). pp.36-45.
Anopchenko, T. and et.al., (2019). Modeling public—private partnerships in innovative
economy: A regional aspect. Sustainability. 11(20). p.5588.
Karimimoshaver, M. and Winkemann, P., (2018). A framework for assessing tall buildings'
impact on the city skyline: Aesthetic, visibility, and meaning
dimensions. Environmental Impact Assessment Review. 73. pp.164-176.
Kasahun, A. K., (2020). The Impact of Working Capital Management on Firms’ Profitability-
Case of Selected Sole Proprietorship Manufacturing Firms in Adama City. Journal of
Economics and Finance. 11(1). pp.45-55.
Lawrie, G. R., (2020). WHAT BUSINESS ENTITY SHOULD A STARTUP
CHOOSE?. BOOK REVIEW. 27(2). p.44.
Liebel, G., and et.al., (2018). Organisation and communication problems in automotive
requirements engineering. Requirements Engineering. 23(1). pp.145-167.
Nekovee, M. and Pinto, J., (2019). Modeling the impact of organization structure and whistle-
blowers on intra-organizational corruption contagion. Physica A: Statistical Mechanics
and its Applications. 522. pp.339-349.
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.
Păunescu, C., Popescu, M. C. and Blid, L., (2018). Business impact analysis for business
continuity: Evidence from Romanian enterprises on critical functions. Management &
Marketing. 13(3). pp.1035-1050.
Reiser, D. B., (2018). Disruptive philanthropy: Chan-Zuckerberg, the limited liability company,
and the millionaire next door. Fla. L. Rev.. 70. p.921.
Safter, K., (2019). Finding A Language for Making Meaning: Naming Turning Points in
Partnership. Teaching and Learning Together in Higher Education. 1(27). p.7.
Online references
Heinz, K., (2021). 4 Benefits of a Strong Organizational Culture [Online]. Available through
<https://builtin.com/company-culture/why-is-organizational-culture-important>
Moseley, C., (2020). 7 reasons why organizational culture is important [Online]. Available
through <https://blog.jostle.me/blog/why-is-organizational-culture-important>