Understanding Business Organizations: Types, Structures, Functions, and Culture

This report discusses the various types of business organizations, including sole trader, partnership, and private limited organization, and their advantages and disadvantages. It also covers different organizational structures, such as tall and flat structures, and their impact on communication and decision-making. Additionally, the report explores the role of business functions, such as marketing and human resource management, in achieving organizational goals. Finally, it discusses the importance of developing a positive organizational culture and its impact on productivity and profitability.

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Understanding Business
Organizations

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK ..............................................................................................................................................4
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The term business organisation refers to the way in which the activities and operations of
business are structured that will enable the organisation to accomplish their organisational
objectives. The sole motive of every business is to earn profitability and growth in the
marketplace. Business organisation can be profit oriented business or non profit organisation that
works for the welfare of society, healthcare, education and more (Cooke and Huggins, 2018).
This report is based on UK based Savoy hotel, which is a luxury hotel in the city of Westminster
in central London . It was the first hotel to have electric lights throughout the building, furnished
rooms and more. This report discusses various kinds of business organisation and importance of
following different business organisation structure to regulate the operation within a business
that will lead an organisation growth and success.
TASK
Business organisation is an entity that is being formed for the purpose of commercial
enterprise. These organisations are being regulated by different rules and regulations and policies
and procedures that are being established by the government in a particular industry to regulate
and manage their operations and functioning. There are various kinds of business organisations
in which the most common is the Sole Trader, It is an organisation where a single person is
entitled with the exclusive rights over the business and its assets and liabilities and profits of the
business. For example small coffee shop. The advantages of sole trader is a single individual
enjoy complete autonomy within an organisation. There are more privacy of facts within an
organisation which allows business to keep secrecy of information. The process of establishment
and formation is very simple which involves low cost and time. Along with advantages there are
various disadvantages that is unlimited liability as a sole individual is responsible for unlimited
debts and all the decision making, they are unable to raise more capital for their business
organisation. Another type of business organisation is Partnership, it is a form of entity where
two or more individuals share profits, ownership and responsibility for managing the affairs of
business. For example Mumsnet which is a London based internet forum established in 2000 for
enabling discussion between parents and children (Rye, 2020). The main advantage of
partnership is that it has more borrowing capacity and more capital is being required. Partnership
needs to follow limited government regulations. There are certain disadvantages as well which
includes unlimited liability of partners they are jointly and severely liable, there is risk of

disagreements and friction among partners and management. Private limited organisation are
another type of business organisation, whose sole motive is to earn profits (Purnomo, 2021). For
example Savoy Hotel, which is a luxury hotel with a motive to earn profitability and growth in
the marketplace. The advantages of Private limited organisation is Limited liability of
organisation, separate legal entity , flexible business structure and protection from creditors.
Along with advantages there are certain disadvantages which are lengthy registration process,
Personal liability of the owner , more compliance formalities and more.
Organisational structure is a set of guidelines that determines how different organisation
functions and operations are being performed that can results in accomplishment of goals and
objectives. It includes various roles, responsibilities and rules and manage the flow of
information within an organisation. Organisation structure can be of different kinds which
includes tall an flat structure. Tall organisational structure is a form of structure in which leaders
and top executives hold the highest authority and guide other managerial levels. It is hierarchy of
distinct levels. For example Savoy hotel uses tall organisation structure to manage their
operations and functions that will lead the organisation to attain growth and success with clear
delegation of authority and responsibility. Advantages of Tall organisation structure is roles and
responsibilities are distributed in various managerial levels clearly which reduces the chances of
overlapping. Another advantage is specialisation in the operations as tasks are being assigned
depending on the skills and knowledge of subordinates. Disadvantage of Tall organisation
structure is less flexibility in communication as it has to go through various different levels,
lower job satisfaction as autonomy to make decisions lies in the hands of the leaders and many
more. Another disadvantage is that low control and flexibility make it difficult for employees to
develop and realize their ides they have to follow command of their superior. Another kind of
organisation structure is functional organisational structure, which groups individuals in different
groups based on their skills and competencies (Kongjian, 2020). Every department have
different leaders top guide their operations and functions . For example Midsummer House uses
flat organisational structure, which provides opportunities to their employees to provides
innovative ideas and strategies that will help the organisation to achieve their organisation goals
and objectives. Advantages of flat organisational structure is a cost effective structure it
eliminates the needs of labours due to less managerial levels. It is a structure that boost the
morale of the subordinates, there is more effective communication channel as compared to tall

organisational structure. It is a independent structures which allows everyone to participate in
decision making (Macqueen, Bolin and Greijmans, 2021). With benefits there are some
disadvantages as well which includes bad decisions can be taken under the guise of expertise as
there is tremendous reliability on the expertise of front line staff. This structure can limit the
productivity of the employees as there is lack of supervision by the top executives in the
workplace leads to non accomplishment of task on time and many more. Hence its depend on the
organisation complexities of operations and their objectives.
Business function refers to various activities that are being performed by an entity. The
activities of an organisation are divided into various departments and functions which results into
more efficiency and effectiveness. Business functions are essential part of organisation and
managing them properly leads in accomplishment of organisation goals and objectives. In
context to Savoy hotel, there are three main business functions which are Human resource
management, Production and operation function. The most essential function of Savoy hotel is
marketing, which is the act of trading in different products and services with the motive to earn
profitability in order to increase their overall sales and revenue . Marketing element of an
organisation impacts the reputation and customer base it hold in the marketplace. The other
essential function of Savoy hotel, is human resource management which is managing, recruiting
and training potential talents within an organisation that leads an organisation to hold a
competitive edge in the marketplace. It enables the organisation to manage its different tasks in a
efficient and effective manner that will enhance the overall productivity of an organisation. Other
than marketing and human resource management, operation of an organisation aims as proper
arrangement of required resources and directing and supervising the efforts of the employees that
will lead an organisation to get optimised in their tasks and operations. Proper operational
activities helps an organisation to satisfy the need and expectation of customers to attain
competitive advantage. Business functions enables organisation to run its operations smoothly
and provide satisfaction to their customers, shareholders, employees and leaders and help to
accomplish organisation goals (Ahlfänger, Kohut and Leker, 2020).
Organisation culture is the set and frameworks of values, expectations and practices that
impacts and guides the behaviours and attitude of employees towards organisation objectives. In
order to accomplish the objective it is essential to develop the traits inside the subordinates. A
good and positive organisation culture, improves the overall productivity and profitability of an

organisation. Organisation culture is a significant part and impacts all aspects of business.
Culture of an organisation make their employees feel more comfortable and connected ,
supported and valued (Wu, Buyya and Ramamohanarao, 2020). Organisation that focuses on
culture makes changes in the organisation functions and operations that lead a business to remain
competitive in the marketplace. There are various advantages of developing a positive culture
like productivity it increase the capability of subordinates by making them feel connected and
sense of belonging. It improvise the overall employees health and well beingness. It increases
customer satisfaction as organisation is more prone to the trends and expectation of the
customers that are existing in the marketplace. It enables the organisation to adapt technological
advancement and innovation within their operations and increase communication levels between
management, employees and customers that lead an organisation to hold a good market place.
CONCLUSION
From the above report it is concluded that business organisation growth and success
depends on the manner it operates its different functions and operations and follow different
rules and regulations. This report discusses the various organisation depending on the size and
structure, it discusses the role of organisation culture and functions in managing and affecting the
tasks and productivity of employees . It also assess the role of managing different managerial
levels that lead an organisation to hold a competitive edge in the marketplace. It analyse the role
of different business functions and its proper implementation and strategies that help
organisation to improve its overall productivity and profitability.

REFERENCES
Books and Journals
Ahlfänger, Kohut and Leker, 2020. Reconciling competing institutional logics in corporate
venture capital units. International Journal of Innovation Management, 24(08),
p.2040004.
Cooke and Huggins, 2018. High-technology clustering in Cambridge (UK). In The institutions
of local development (pp. 63-84). Routledge.
Kongjian, 2020. THE CONFLICT BETWEEN TWO CIVILIZATIONS: ON NATURE-
BASED SOLUTIONS. Landscape Architecture Frontiers, 8(3), pp.7-9.
Macqueen, Bolin and Greijmans, 2021. Democratising forest business: a compendium of
successful locally controlled forest business organisations.
Purnomo, 2021. The Analysis of Partnership Patterns and Broiler Supply Chain
Management. Current Topics in Agricultural Sciences Vol. 2, pp.146-153.
Rye, 2020. What is the difference between a sole trader and a limited company?. In Setting Up
and Running a Therapy Business (pp. 132-134). Routledge.
Wu, Buyya and Ramamohanarao, 2020. Modeling cloud business customers’ utility
functions. Future Generation Computer Systems, 105, pp.737-753.