Business Types and Functions: Understanding Business Organisation

This essay discusses various business forms, their benefits and drawbacks, comparison of tall and flat structure of an organisation, different functions and their impact on management activities, and organisation culture and its impact on success of organisation.

cMGBBT0UBN: Understanding Business
Organisation
September 2022-2023
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INTRODUCTION
An entity established with the purpose of conducting business is a business organisation.
Such an organisation is built on a system of law that regulates contracts and trade, property
rights, and incorporation. Depending on how they were established, who controlled them, and
how they were managed, business organisations can be classified into a number of different
types. A corporation, a partnership, and a sole proprietorship are the three primary types of
business entities (Fayziev, 2020). Each type of corporate entity has benefits and drawbacks.
The essay will discuss various business forms, as well as their benefits and drawbacks. There
will be comparison of tall and flat structure of an organisation with their advantages and
disadvantages. Further, there will be discussion of different functions and its impact on
management activities on organisation and people within the business. Lastly there will be
brief regarding organisation culture and how a positive culture can impact on success of
organisation.
MAIN BODY
Any combination of businesses that a single person or group of people jointly control is
referred to as a business organisation. An organisation may own one or more businesses.
There can be only one organisation within a firm. There are various types of business
organisation available for individual to grow in the market. For further understanding the
three different types of business such as, sole trader, partnership and limited company in
detailed are mentioned below.
A sole proprietorship is straightforward to establish and dissolve, is subject to few
regulations, gives the owner complete discretion, and frequently incurs negligible operational
expenses. The owner is in responsible of keeping daily financial records, while the year-end
accounts are handled by a professional accountant (Matschke and Brösel, 2021).
Advantages- Get going right away; Fewer fixed overhead; Total command. Disadvantages-
Unlimited liability; Fewer tax planning opportunities; Barriers to finance.
A partnership is different from a sole proprietorship in that it involves two or more
people pooling their skills to jointly own and run the business. Due to their unlimited
responsibility, sole proprietors and single traders have similarities. Partnerships typically
have the benefits of shared accountability, lessened time demands on each partner, and a
higher degree of financial clout and specialisation. Making decisions, though, can be
challenging. Additionally, one partner can think the other isn't working hard enough or is

making an unfair amount of money. Advantages- Income splitting is a choice that has the
advantage of generating large tax savings; Partners' commercial dealings are confidential; In
the event that circumstances change, changing the legal structure is simple. Disadvantages-
The partners are fully liable for the company's debts; There is a chance of disputes and
tension between the partners and the management; Each partner represents the partnership on
behalf of the others and is accountable for their actions.
Limited corporations come in two varieties: private limited companies and public limited
companies. The latter are generally well-known businesses that operate on the stock market,
as opposed to the former, which are frequently small businesses that do not. These businesses
have their own set of legal rights and obligations and are registered with Companies House,
as compared to sole proprietorships and partnerships. The two equal parts of ownership are
represented by shares. Whoever holds one or perhaps more shares of company stock is
known as a shareholder (Davydova and Koneva, 2020) Advantages- The business owner
bears little accountability under a limited corporation; The law views a limited company
business as being separate from its owner; The director may put money into a corporate
pension plan before taxes as an owner of the limited firm. Disadvantages- Information
pertaining to people and companies will be made public; The requirements for accounting are
more difficult and time-consuming; Strict procedures must be followed when withdrawing
money out of the business.
Tall structures are hierarchically complex organisational structures. This style of
organisation is referred to as "traditional" and "mechanistic," among other things. The
number of employees who report to a leader has a short range of authority in a tall structure.
Many bureaucratic public sector businesses execute their operations with the help of an
enormous structure (Colpan and Hikino, 2019). Advantages- Smaller control horizons;
Everyone is aware of their roles and duties, and they are well stated. Disadvantages- Longer
communication channels; Due to the abundance of bosses, employees feel less motivated. A
tall structure is a hierarchically complex organisational system. In a tall structure, a restricted
span of control is seen. Making judgments in a tall structure takes longer since there are more
tiers of staff to take into account. Managing a tall structure is expensive due to the additional
layers of people involved (Bogoviz and et. al., 2019). There are many opportunities for
advancement in a tall structure.

An organisational structure known as a flat structure only has a few layers of hierarchy.
This also goes by the name "orgiastic structure," and it has a broad range of control. Since
flat structures provide a flexible alternative to tall structures, they have become very popular
in recent years. Advantages-The business is strictly managed in some areas; Employees are
subject to strict management; excellent prospects for advancement. Disadvantages -A lengthy
chain of command causes the communication to be slow; Lack of autonomy may demotivate
employees; Organizational changes can take a while to take effect. An organisational
structure known as a flat structure only has a few layers of hierarchy. A flat structure has a
broad span of control. Flat structures have a rapid decision-making process because of the
wide range of control. In comparison to tall structures, the costs associated with flat structures
are quite modest. In a flat structure, there are few opportunities for promotion.
An organisational or business function is a fundamental process or series of
operations carried out within a department or other organisational unit of a company.
Common functions include those related to operations, information technology, marketing,
human resources customer service, finance, and warehousing. There is various function
involved in business in which some of them are mentioned below.
Human resources are responsible for overseeing the management of people. The
obligations of the HR. Department comprise: Recruitment is the process of identifying
qualified candidates for a position. This comprises posting a job opening, choosing
candidates for an interview, managing employment contracts, managing job descriptions, and
so forth. Training - The HR department will be in charge of providing training for both new
and existing employees in order to assist them develop and enhance their abilities. People
work for wages and salaries, and this process needs to be managed. How much does each
position pay, what extra benefits do employees receive (such a right to a pension or other
perks) and what happens when someone becomes sick. The HR division handles all of these
inquiries and problems. Pay discussions with employees, disciplinary actions, taking into
account employee grievances, as well as health and safety, social activities, and other things,
are all included in employee relations and welfare. Typically, the HR division will handle all
of these.
The production department is responsible for converting components and/or raw
materials (inputs) into finished goods (outputs) that are prepared for sale and delivery to
customers (Aagaard, 2022). The production director is in charge of managing the entire

project from start to finish. When a hair salon, restaurant, or bank provides financial services
to consumers, the process is referred to as operations, and the operations director is in charge
of it. Every company function is performed by the same person—the entrepreneur themselves
—in small enterprises like sole proprietorships (owned by just one person).
Marketing refers to all of a company's efforts to identify its customers' requirements and
create products and services to meet those demands. Choosing how goods and services will
be delivered, promoting goods and services, and developing a pricing strategy to increase
market share while retaining competitiveness are all part of the marketing role. In today's
high-tech corporate environment, marketing is also in charge of developing and overseeing a
company's internet presence (e.g., the company website, blogs, social media campaigns, etc.).
Social media marketing is currently one of the areas of the marketing function that is growing
the fastest. Company culture is the fundamental set of attitudes and practises that shape how
an organisation functions and the priorities it establishes for itself. While some businesses are
able to establish a solid corporate culture early on and maintain it, others gradually do so
through trial and error. Organizational culture has an impact on all aspects of any business,
including timeliness and tone as well as contract conditions and employee benefits (Niccacci,
2021). When their workplace culture corresponds to their tastes, their employees are more
likely to feel comfortable, supported, and valued. Businesses that prioritise culture are better
equipped to survive difficult situations and changes in their business environment. The most
prestigious hospitality companies have a quality culture that is motivated by the notion that
when everyone in the enterprise is committed to and understands management for reliability,
bottom line achievement will take care of itself. This approach calls for understanding what
customers want and providing for their needs by avoiding and eliminating any perceived
problems, concerns, and deficiencies. Companies that support the creation and maintenance
of a top-notch culture are those that will last in the hospitality industry. The type of long-term
goals that support the company in realising its vision and influencing the operating
environment within the organisation are both influenced by the culture. Culture also affects
the policies and practises that the organisation uses to carry out its mission on a daily basis.
Bringing everyone together will ensure business success. By bringing all of these elements
under the umbrella of the organization's culture, business success becomes inevitable.
CONCLUSION
From the above essay it is conclude there are various business organisation for one
choose in which has their own advantages and disadvantages that needed to keep in

consideration before starting the new business in the market. Further there are organisation
structure that need to be follow within organisation for process and better performance of
company. There is various function involved in business for maintaining the process
operation of business. Lastly there it is important for company to follow organisation culture
within organisation for better result and success of the organisation.

REFERENCES
Books and Journals
Aagaard, A., 2022. Sustainable business: Integrating CSR in business and functions. CRC
Press.
Bogoviz, A.V. and et. al., 2019. The Role and Functions of Mediator in the Process of
Decision Making in Modern Business Systems. In The Leading Practice of Decision
Making in Modern Business Systems. Emerald Publishing Limited.
Colpan, A.M. and Hikino, T., 2019. The functions of the HQ unit revisited: The
multidivisional enterprise vs. the business group. Entreprises et histoire, 94(1),
pp.128-144.
Davydova, A.A. and Koneva, A.A., 2020. Small Business: Essence And Functions. Business
Strategies.
Fayziev, T.R., 2020. FUNCTIONS AND TYPES OF MANAGEMENT IN SMALL
BUSINESS. Мировая наука, (3), pp.48-51.
Matschke, M.J. and Brösel, G., 2021. Business valuation: Functions, methods, principles.
UTB.
Niccacci, A., 2021. Types and Functions of the Nominal sentence. In The verbless clause in
Biblical Hebrew (pp. 215-248). Penn State University Press.