Understanding Business Organizations: Advantages, Disadvantages, Organizational Structures, Functions, and Culture

This essay discusses the definition and outline of three advantages and disadvantages of different types of business organizations, compares and contrasts organizational structures, explores different business functions such as Human Resource Management, Production, Operations, and explains how positive organizational culture impacts the success of an organization. The subject is Understanding Business Organizations and the course code, name, and college/university are not mentioned.

Understanding Business
Organizations

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
The definition and outline of three advantages and disadvantages of the different types of
business........................................................................................................................................1
Compare and contrast organizational structures..........................................................................2
Different business functions such as Human Resource Management, Production, Operations,
etc. and the impact of their functional management activities on organizations and the people
within the organizations...............................................................................................................3
Define organizational culture and explain how positive culture impacts on the success of
organization.................................................................................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business organization is a type of entity which is developed for the purpose of carrying on
commercial enterprise. The business organization helps in describing how the business are
structured and how these structures help in meeting the objectives and goals. The main aim of
the business organization is to earn profit and revenue by performing commercial activities. In
this report we will discuss about the definition and outline of three advantages and disadvantages
of the different types of business and also compare and contrast the different organizational
structures (Abdulaali, 2018). The report will also highlight the different business functions
involved in the organization and how organizational and positive culture impacts on the success
of an organization will also be explained in the report.
MAIN BODY
The definition and outline of three advantages and disadvantages of the different types of
business
Business organizations helps in illustrating that how the business are structured and processed in
an organization and how these strategies are used in generating profit margin. The main aim of
the business organization is to produce goods and products for the customers and then generate
revenue from the sell (Dilli, Elert, and Herrmann, 2018). The categories of business
organizations are sole proprietorship, partnership and limited companies.
Sole proprietorship- In this type of business organization the business is owned and operated
by a single individual and this is also known as individual entrepreneurship, sole trader. The
advantage of sole proprietorship is it follow few guidelines of government and has a benefit of
tax because tax is deducted only once in a year and personal tax will be deducted on earning
profit in the business. Apart from this it is one of the easiest and inexpensive process. The
disadvantages of this are there is no liability protection, it’s harder to get financing and business
credit in this type and it is quite hard to sell the business.
Partnership- This is the most commonly used technique for running a business in which there
are more than one partner and each partner is responsible for the profit or loss. The advantages
of this type are more capital is available for the business, greater borrowing capacity and easy to
change the legal structure whereas the disadvantages of this type are liability of the partner for
the debt is unlimited, partners are responsible for each other’s action and risk of disagreements.
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Limited company- The limited company is a type of business organization in which the assets
and income of owner are different from the income of company which is also known as limited
liability (Mancuso, 2021). The advantages of limited liability are it have a flexibility of income,
tax advantages are also there and have limited liability and the disadvantages of this business
organization are difficult to raise the capital, no perpetual existence and have confusion across
states.
Compare and contrast organizational structures
In the business organizations it is very important to have an organizational structure for
understanding the activities and supervision that are designed towards the achievement of the
organizational aims. There are two types of organizational structure in the business organization
such as tall and flat organizational structure. Tall structure is an organizational structure in
which there are multiple level of hierarchy (Joseph, and Gaba, 2020). This is also known as
‘traditional’ or ‘mechanistic’ structure. Flat organization is a type of organizational structure
which have limited number of hierarchy. This is also known as orgiastic structure. In tall
structure the cost factor is high as there are multiple number of employees to handle where as in
flat structure cost issue is relatively low because of limited number of employees in the
hierarchy. In tall organizational structure the span of control is narrow where as in flat
organizational structure the span of control is wide. The promotional opportunities in flat
organizational structure are very limited as compared with the tall organizational structure in
which the promotional opportunities are very high and this is the main benefit for the employees
of hospitality and tourism industry as there were also many levels of hierarchies. In the tall
organizational structure the cost factor is high because of multiple number of employees but in
flat organizational structure the cost issue is relatively low as less number of employees are
there.in the hospitality and tourism industry the tall organizational structure is followed because
of various level of hierarchies present in the organization. The extent of coordination is very
good in tall organizational structure and it is not so good in flat organizational structure. Close
supervision and control is there in tall organizational structure so there is less chance of mistakes
whereas in flat structure due to loose supervision and control chances of mistakes are
more(Shindo, 2018). The tall organizational structure is more time consuming as compared to
the flat organizational structure in which less time is required. The relationship between the
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employee and the manager is formal in tall organizational structure but in flat organizational
structure the relationship is informal because of less number of employees.
Different business functions such as Human Resource Management, Production, Operations, etc.
and the impact of their functional management activities on organizations and the people
within the organizations
The business functions of an organization are the activities carried out by an enterprise for
running the business in an effective manner. There are two types of business functions in the
organization which are core and support business functions (Macchi, Savino, and Roda, 2020).
Core business functions are the activities done by an enterprise to making the income like the
production of the material produced for the market or third parties. Support business functions
are the supporting activities which support the core business functions and the production
activities these business functions of the organization is performed by various departments like
human resource management, production and operations. Human resource management provides
a clear vision for the development of the organization .HR makes the employee so talented by
giving them trainings and that is beneficial for the organization as well. The main aim of human
resource management is to assure the customer satisfaction and helps in generating business for
the growth of the organization (O’riordan, 2022). The production department produce the
products which are further sold out in order to have great revenue. The aim of this department is
to ensure that the price of products are low in order to earn high profit and is also responsible for
the changes and innovations in the productions which influence the customers for buying the
product. Similarly the operation department ensures that all the processes for the production of
product is completed from staring to end. They help the organization in generating business by
providing the best product to the customers. This department also improve the productivity of
the employees as it streamline the employee communication and helps in reviewing the revenue
collection processes. The operational department of the organization also have a good impact on
the customers because of the prompt service they are providing. Taj Hotel also have a very good
Human resource and operational department which helps the industry to grow so well. Proper
trainings are provided to the employees by the human resource department in order to have a
good customer satisfaction.
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Define organizational culture and explain how positive culture impacts on the success of
organization.
Organizational culture is the key of generating business in the organization. Organization culture
helps in providing a positive working environment and helps in motivating the employees for
boosting their confidence level.it is the collection of values, expectations and actions that are
required to guide and inform the actions of all the employees in the organization. This helps in
improving the productivity and efficiency of the organization (Lubis, and Hanum, 2020). A
positive culture in the organization impacts the business in many ways by maintaining the
positive environment within the organization one can attracts and help in retaining the top talent
with them , by this the employee will be able to have higher job satisfaction , deeper employee
engagement and therefore increase the productivity of the organization, the companies having
strong and positive culture are not just employees they are the amazing advocates for their
brands, a positive and thrilling atmosphere in the organization helps in differentiating the
business in the target market and the last one is it keeps the workplace healthy and the team
members to be very confident. This also helps the organization in earning profit and good
revenue which makes the organization more successful.by enabling the voice of all team
members of the organization one can provide a good and positive culture and which helps in
making new innovations.in an organization having a good culture is very much required like
providing trainings and coaching to the employee for focusing on learning and development.
There are many qualities of a great organizational culture like there should be alignment
between the company’s objective and employees , appreciation is very essential for boosting the
confidence of the employees and helps in providing a great culture within the organization,
culture of trust is also very essential as the employees can rely on each other , resilience is
required where changes are made in a continuous manner and this helps in making innovations ,
having a culture of teamwork makes collaboration within the organization(Men, and Yue, 2019).
Similarly The Taj Hotel also have a very good organizational culture which helps the employees
to perform better and this also helps in retaining the employees as well.
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CONCLUSION
From the above report it has been concluded that for generating the revenue the business
organizations are playing a great role. All the different categories of the business organization is
important in generating business and for improving the growth and productivity of the
enterprise. For establishing and operating any business some strategies are required and that
helps the entrepreneurs for making the organization more profitable.in a business organization
business functions plays a vital role in the growth of the organization and a good culture makes
this growth consistent.
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REFERENCES
Books and references
Abdulaali, A.R., 2018. The impact of intellectual capital on business organization. Academy of
Accounting and Financial Studies Journal, 22(6), pp.1-16.
Dilli, S., Elert, N. and Herrmann, A.M., 2018. Varieties of entrepreneurship: exploring the
institutional foundations of different entrepreneurship types through ‘Varieties-of-
Capitalism’arguments. Small Business Economics, 51(2), pp.293-320.
Mancuso, A., 2021. Form Your Own Limited Liability Company: Create an LLC in Any State.
Nolo.
Joseph, J. and Gaba, V., 2020. Organizational structure, information processing, and decision-
making: A retrospective and road map for research. Academy of Management Annals, 14(1),
pp.267-302.
Shindo, T., 2018. Lightning striking characteristics to tall structures. IEEJ Transactions on
Electrical and Electronic Engineering, 13(7), pp.938-947.
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.
O’riordan, J., 2022. The practice of human resource management.
Lubis, F.R. and Hanum, F., 2020, December. Organizational culture. In 2nd Yogyakarta
international conference on educational management/administration and pedagogy (YICEMAP
2019). Atlantis Press (pp. 88-91).
Men, L.R. and Yue, C.A., 2019. Creating a positive emotional culture: Effect of internal
communication and impact on employee supportive behaviors. Public relations review, 45(3),
p.101764.
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