Organizational Types, Functions and Structure

This report discusses different types of organizations, their sizes, and scope, and the interrelationship of various functions within an organization and how they link to organizational structure. It also explains the purposes of public, private and voluntary sectors and legal structures.

Organizational Types,
Functions and Structure

Table of Contents
Introduction.................................................................................................................................................3
Explain the different types of organizations, including their size and scope................................................4
Size and scope of the various types of the organizations.............................................................................5
Explain different types and purposes of the organizations; public, private and voluntary sectors and legal
structures.....................................................................................................................................................5
Explain the size and scope of a range of different types of organizations....................................................6
Analyzing how structure, size, and scope of various types of organization are linked to business
objectives and the products and services offered by the organization..........................................................7
Demonstrate the interrelationship of the various functions within an organization and how they link to
organizational structure...............................................................................................................................8
Organizational chart of Toyota................................................................................................................9
Advantages and disadvantages of the interrelationships between various organizational functions and its
impact on the organizational structure.......................................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................12

Introduction
With the ramified economic changes and increasing complexity in the process, every
business entrepreneur incorporates the business entity as per his business requirements and
demand in market. In this report, different organization structure, scope, size and various
boundaries related to organizational structure have been discussed. This report reveals the key
challenges and size to formulate particular type of organization and the purpose to formulate
particular type of organization. The aim of the paper is to focus on the different types of the
organizations, their sizes, and scope, further, the paper discusses the relationship between various
functions and departments an organization has and they are linked to the structure of the
organization. In the starting of this report,, brief explanation of different types of organization
including its size and scope has been discussed. After that, interrelationship of various functions
within organization and how it link to organizational structure have been discussed in effective
manner. It will be useful to identify the key challenges and issues for new business entrepreneur
while incorporating the particular type of organization.

Explain the different types of organizations, including their size and scope.
Generally, there are five types of major categories of organizations, namely, Public,
Governmental organization, (Public organizations), cooperatives, charities and NGO’s and
Private organizations. In the private sector the ownership is by an individual owner (sole
proprietorship) or a group of two or more individuals (partnerships) (Bouckaert, Peters, &
Verhoest, 2016). The private organizations are set up for an aim to earn revenue in order to
generate profit. In the private organizations, Sainsbury is considered as the top private global
company. The private organizations can further be divided into sole traders, partnerships,
cooperatives and limited companies. The literature review suggests that the country’s public
sector economy is government controlled. In England, The National Health Service, the NHS is
one such popular Government public organization (Bryson, 2018).
The involuntary sector, on the other hand, majorly covers the bodies for charity, these are
not for profit organizations, and also, nongovernmental organizations, therefore, often termed as
NGOs. In the UK cancer research is one such organization which is voluntary and not for profit.
Contrary to these organizations, there are workplaces such as McDonalds, Toyota UK, which
have sectors such as, people, management, human resources and other material resources,
objectives and goals to achieve. Such organizations are based upon a different set up in order to
generate revenue to earn profits and market share (Charles Jr, Schmidheiny, & Watts, 2017).
However, these organizations also invest into Corporate Social Responsibilities to uplift the
society, which is free of cost and not for profit. The literature states, that Toyota is a sole trader’s
organization. Consequently, Toyota does not necessarily require the legal formalities in order to
develop the business. Given that, it is a sole trader company, the owner enjoys and controls the
business. Japan has it’s headquarter and Japan carry out the entire business operation. It’s the
management of the organization who decides the working hours and time and also the working
pattern to be followed. Despite the fact that the business operation of Toyota is according to the
skills and interests of the top level management, the Human resource management is in close
relationship with the internal customers (employees) and the marketing team is in the close
relations with the external customers, they take care of the marketing, branding, advertising, and
servicing. There are certain disadvantages to being a sole trader, that there is an unlimited

liability, also there is no choice to increase the additional capital. Another private company is
based in London, the Associated British Foods PLC (Doherty, et al 2017).
Growth of the international business environment
With the increasing GDP rate on international level, it has been observed that many countries are
expanding their business by tapping the international market. The Toyota company has expanded
its business in Asian countries. It is analyzed that the growth of the international business of this
company is too high which is positive indicator for the future growth and international business
expansion. The international alliance and strategies implemented by the Toyota Company is very
effective which will be useful for it to tap new market by focusing on creating core competency
in product differentiation and cost leadership strategies.
Size and scope of the various types of the organizations
The size of the Toyota UK is, it has 369124 employees as of 31st March 2018, with a
scope to produce motor vehicle and sell them globally. As of 2016, the capital is 635 Billion Yen
(Toyota global, 2018). The size of the Associated British Food is, it has 1,535.7 billion GBP
Revenue, and number of employees, exceeding 1,32,and 590. The scope of the work is selling
grocery items nationally and internationally (ABF, 2018).
Explain different types and purposes of the organizations; public, private and voluntary
sectors and legal structures.
Businesses need to customize their products and services as per the demand of their
customers, they just cannot sell what is on their plate. They need to redefine the products and
marketing strategies. Business situation has many factors to be dealt with, such as customers, the
material and human resources, the direct and indirect competitors, raw material suppliers and
distributors, the always changing industry trend and market demand, the increase in the use of
substitute products, for example, a reason why McDonalds had to bring in more healthy products
as well, the government activities, legislations and regulations. The demographic conditions,
changing and improving technology. Despite all the factors responsible for an organization to
build and sustain in the market, the human (internal and external customers), the financial
(revenue and profits) and physical resources are the most important factors and components for

any business to run smoothly and survive the competition. For example, Toyota produces only
cars, but it gains competitive advantage through their prices, their durability and quality and their
marketing strategies.
Explain the size and scope of a range of different types of organizations.
The limited companies: These are by and large noticed to be the corporate associations.
They have a legal identity, which implies that the properties and the assets are in the name of the
company and the members have no stake on the same. For that reason, the liability of an
individual who owns the business is less, due to the fact that the liability is held by the company.
Since, this is not sole trader or a sole proprietor company, it is formed by two or more people as
partners, who have different roles and responsibilities and different memorandum and article of
association. However, out of them, one has to be the shareholder, it depends upon the members,
and they can offer their larger share to the general public, mainly to those who are ready to sign
the contract (Harper, 2015).
Toyota is one such company which is a sole trader yet a public limited company which works to
earn profits. The company offers shares to the general public. In order to set and maintain their
public profile they have a different set of rules, regulations and legislations. They have been
registered with the London Stock Exchange, which monitors the company’s share trading and
makes sure with strict regulations that the company sells the shares to the general public. Not
only selling the shares, the company is also known for holding annual meetings with the
shareholders. It is the shareholders who take decisions for so as to who will appoint to take up
important strategic decisions in the company such as, company development, marketing and
investment. Further, the public limited companies are divided into three categories, small,
medium and large. It has been seen that the small scale enterprises find it difficult to fight and
sustain in the competition against the larger players in the market. Therefore, the small scale
organizations cannot alter their strategic decisions randomly and immediately. They have lesser
resource and less market to protect them. On the other hand, the medium size organizations are,
however, in a far better place as compared to the small scale organizations. They have a bigger
market and are in a position to fight with the competition and alter their strategies once in a while
(Ashkenas, Ulrich, Jick, & Kerr, 2015). They can also expand their reach depending upon their

business and market demand. Nevertheless, they still face a threat from the large organizations.
Organizations are also classified depending upon the type of product they are producing and
selling, for example, primary (Raw material and farming), secondary (using the raw materials to
make the final product) and tertiary, (the service sector) (Hannah, 2018).
The organizational scope depends upon the products and services they sell and the market
they serve. For example, the scope of the Associated British Food is producing and selling
grocery items, Toyota has a scope of selling automobiles, specifically cars, similarly, Coca Cola
has a scope to produce and sell carbonated drinks, fruit juices, tea and coffee and diet coke to
consumers. All these organizations, for profit or not for profit have their unique and specific
mission and vision, goals and objectives which are their benchmark against which they perform
in order to achieve that height. Vision is where the organization seeks itself and mission is the
small goals and purposes to reach the vision. Mission helps in setting a scope for the
organization and set a boundary (Fortes, 2018).
Toyota’s Mission statement: they wish to attract and attain the customers of America with their
high valued products and services, also by giving them the most satisfied experience being the
owner of the car
Toyota’s Vision Statement: The most respected and most successful car company in America
(Faq, 2018).
Analyzing how structure, size, and scope of various types of organization are linked to
business objectives and the products and services offered by the organization
It has been identified that there is a strong correlation between the organizational
structure, size and scope with the objectives and goals of the organization. If the organizational
structure is strong and reliable, the management will set a higher goal and a huge target for the
team to achieve (Child, 2015). For example, due to the strong organizational structure and legal
regulations of London exchange board, along with this, the sole trader and Director decides and
takes the major decisions, the company is in a position to set new and high targets and goals to
achieve. If, for example the organization has just a few people working with no team work, they
also lack in the skills required to perform their jobs, they will also not be able to achieve their

target, therefore the goals and objectives to achieve will be low. The large and structured
organizations are also in a position to invest the finances back into the business and still be able
to earn huge profits. According to the business scope, the business objectives and goals are set. If
a company has resources limited to, work nationally, the scope will be reduced and be limited to
national horizon. Similarly, if the product does not require storage of the huge inventory, there
will be less storage space and accordingly the structure will be developed. If the product requires
daily new projects, the structure needs to be very flexible (Scott, 2015).
Demonstrate the interrelationship of the various functions within an organization and how
they link to organizational structure
It has been studied from the review that the structure of an organization depends upon the
organizational functions. The organizational structure and the future, objectives and goals will
be dependent upon and will be influenced by the products and services they serve to the
consumers. For example, the associated British food PLC needs to increase the productivity in
order to never get out of stock from the market and stay in the minds of the customers, therefore
they need a structure which works ahead of time and produce proactively using push strategy, the
items must be in the market before the competitors’ (Herguedas, et al. 2016). The business
function however is aligned to the said objective and structure in order to serve uniformity.
Organizational functions include, HRM, Marketing, finance, supply chain management and the
top management, therefore this function will influence the organizational structure, and get
influenced, if the function demands a new employer in the HR department, there has to be a link
between the HRM and finance for salaries and compensation release, account opening. The
advertising and marketing team will advertise for the desired candidate for the role. The supply
chain function will have to procure the uniform, ID cards and visiting cards (Ashkenas, Ulrich,
Jick, & Kerr, 2015).

Organizational chart of Toyota
Source:- https://www.researchgate.net/figure/Organization-chart-of-Toyota-and-other-
companies_fig1_313178757
All the functions and activities of Toyota company is interlinked and based on each other. It is
analyzed that all the functions and team members are connected to each other and their
communication among the team is supported by the cyber computing system. The organizational
activities of the Toyota are much complex and procedural as compared to others. It is analyzed
that Toyota Company is indulged in production of the cars and other motor-vechile parts which
requires factory work and setting up interlink with the procedural work. This sort of
organizational chart would be different in case of other companies. The organizational structure
and work chart of the company is supported by the advance cyber computing system which
might not be easy for other organizational to implement due to its high costing. Nonetheless, It
has three main functions such as production, HRM and management functions and all the other
functions of company is interlinked and managed by these three department. The production
function department of Company is indulged handling (Van der Voet, 2014).

Advantages and disadvantages of the interrelationships between various organizational
functions and its impact on the organizational structure
Advantages:
1. Inter employee relationship is an inevitable part of the organization, the people need to
communicate in order to create and maintain cooperation among the workforce.
2. The employees of finance department cannot work without the people in the marketing
department if they don’t bring the leads and there is no revenue, the need of the advertising and
branding department is generated in order to post advertisements and market the products for
product positioning in the customers minds and they buy the product. The entire manpower
planning, attracting and retaining is the job of the HRM. Therefore, in a company there has to be
collaboration in order to increase the business effectiveness.
3. This also has a financial advantage that the profit needs to be escalated because every employee
is giving up their ultimate efforts in achieving the organizational goals and objectives.
Disadvantages
1. Since every employee understands the functioning and the delicacy of the working of the other
department, they are in the position to harm the department. For example, the marketing
department can hurt the HRM by posting jobs with missing work experience, the supply chain
can source bad quality product to save money in between (Wrighton, 2017).
2. As long as the competition is healthy it is justifiable, but it may increase the unhealthy
competition amongst the departments and functions (Reid, et al. 2015).
Conclusion
From the literature review, it has been identified that there are many types of
organizations, public, private, sole traders, and NGO’s. Each of these organizations has a
different role and profit sharing. Further, it has also been identified that Toyota being a sole
trader is a Public company, and thereby the top public company of America. Who works
according to the Directors yet keeping the internal and the external customers happy and

satisfied. It has also been noticed from the review, that it is imperative for an organization to
have the mission and vision statements in order to create a space to act upon, also, the goals and
objectives are tied to the organizational structure. Lastly, the above discussion shows that there is
a relation between the organizational structure and inter functional departments. After assessing
all the details and study, it could be inferred that each and every type of company has its own
purpose and prepared accordingly.

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