Different Types of Business, Organizational Culture and Structure

This essay provides an outline of different types of business along with merits and demerits of each type of business. It also discusses different types of organizational structures and business functions along with their impact on business firms and employees. The importance of organizational culture in ensuring smooth functioning of the company and increasing productivity of the firm is also highlighted.

Essay

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business functions, organizational culture and organizational structure are important
factors to be considered during creation of of an enterprise (D’Allura, 2019). It is important to
gain knowledge of different business functions, different types of business firms in order to
effectively manage successful business firms. This essay aims to provide outline of different
types of business along with merits and demerits of each type of business. Sole trader,
partnership and limited company are the business types described in this report. In addition to
this different types of organizational structures are compared in this essay. A discussion on
different business functions is provided in this essay along with the impact of functional
management activities on business firms and employees working in business firms. This essay
mentions definition of organizational culture and positive impact of organizational culture on
success of a company.
MAIN BODY
Sole trader is defined as a self-employed individual who has the ownership of their
company and manages the operations of tier organization. The company of a sole trader is not
considered a separate identity from a legislative perspective. An example of sole trader in UK is
freelance writers in the country who offer their services as a sole trader. The primary advantage
of setting up a sole trader ship is that it is simplistic form of business structure and is relatively
easy and inexpensive to set (Khandelwal, Yadav and Kumar, 2020). The main disadvantage of
of sole trader is that it leads to poor work life balance and sole traders have unlimited liability. A
partnership refers to formal agreement between two or more parties to manage and operate a
business and share profitability of the company. The partners forming a partnership can be
individuals and other business firms and also governments. An example of partnership in UK is
John Lewis Partnership. The primary advantage of partnership is that it helps eliminate gap as
expertise from more than one individual is provided to business firms (Roulet, 2020). In addition
to this another advantage of partnership is that it reduces costs of setting up an enterprise. The
primary disadvantage of partnership is that it involves profit sharing which reduces individual
profitability of each partner (Villani, Greco and Phillips, 2017). Limited firms in UK are legally
separate and has separate finances from personal finance of individuals who operate the firm. A
limited company in UK is either limited by shares or limited by guarantee. The difference

between limited by grantee and limited by shares company is that limited by shares company has
shares and shareholders and retains profits made after payment of tax while limited by guarantee
company has guarantors and guaranteed amount the profit of such firm is invested back into the
business. An example of limited company in UK is Saiansbury's, which is public limited
company. The advantages of limited company is that it is tax efficient and offers limited liability
to the owner. The disadvantage of limited company is that formation of limited company is a
complex process.
Tall organizational structure is also refired to as a hierarchical organizational structure
because it involves several layers of management with a top down approach and long chain
command (Collinson and et. al., 2020). In comparison, flat organizational structure follows
people-centric approach to management with elimination of middle management which
facilitates direct communication between leaders and front line employees. Business firms with
tall organizational structure usually have more departments and positions in comparison to flat
organizations which usually consists of minimal middler management positions (Kemp and et.
al., 2018). The large number of positions in tall organizational structures help establish clear
understanding of employee roles and responsibilities. On the other hand, the lack of different
positions in a flat organizational structure enable collaboration between different employees to
come up with the most effective solution for the company (James, 2020). An example of tall
organization is Sianbury's which has rigid chain of command and different departments
including marketing, CTO and consumer data and corporate affairs. These departments are part
of hierarchy and orders are passed from the top of the hierarchy to the bottom level to ensure
effective management of the company. The advantages gained by Sainsbury's by adoption of tall
organizational structure are that more promotion opportunities increase staff motivation and the
company has higher level of control of actions of each individual employee. An example of a flat
organization in UK is Dyson. The firm is UK based technology company which designs and
manufactures household appliances. The company has adopted flat organizational structure in
which even executives do not have their personal office spaces in the company and staff
members work together in a large area. Dyson gains various advantages because of their tall
organizational structure which includes increasing responsiveness of the company to change and
employees are able to take more responsibilities in comparison to tall organizational structures
because of the independent nature of their job roles.

Business functions are defined as the activities completed by business firms in order to
gain success in attaining their business objectives. The business functions are divided into core
business objectives and support business objectives (Morris and Kuratko, 2020). Human
resources management, marketing and finance management are some of the core business
functions. The role of human resource management function is to attract and retain talented
employees, ensure HR compliance, supervise compensation and benefits of employees
implement training and development procedures for employees and maintain workplace safety
for security of employees. The impact of functional management activity of HRM on employee
is that tit improves employee experience and helps them reach their maximum potential
(Mahadea and Khumalo, 2020). The impact in case of the enterprise is that it helps the company
construct highly talented workforce. Sainsbury's is able to create high performing workforce
because of HRM function. The role of marketing function is to develop and implement
promotional campaigns for the products and services offered by the company along with creation
of employer brand image to attract skilled employees. The impact of the functional management
activities of marketing on employees is that it helps attract talented employees by building an
effective employer brand image. Business firms are bale to enhance the sale of their products
with the help of this function. Dyson has been able to attract skilled engenders by developing
suitable employer brand image through marketing efforts. In addition to this marketing has also
helped Dyson increase sale of their electrical appliances all over the globe. The finance and
accounts business function is responsible for allocating financial resource, creating economic
forecasts, reviewing opportunities for equity and debt financing (Gillespie, Fulmer and Lewicki,
2021). The management activities of this function affect employees as it helps in financial
progress of the company which has positive impact on bonuses and incentives received by
employees. Enterprises are able to gain funding for various endeavours through management
activities of finance and accounts business function (Sanz and Fontrodona, 2019). TESCO has
been able to gain success during the COVID-19 pandemic because of effective finance and
accounts business functions and was able to offer employees benefits because of this success.
Workplace culture is an essential element in ensuring smooth functioning of the company
and increasing productivity of the firm (Haqaf and Koyuncu, 2018). Organizational culture is
defined as collection of values, expectations and practices which guides actions of team
members. Organizational culture is formed by company norms followed by individuals of a firm

and shapes employee perceptions, behaviours and understanding. Organizational culture plays a
signifiant role in helping business firms gain success in their company (Hales and Jennings,
2017). A positive organizational culture motivates employees to seek continuous improvement in
their performance and unites the entire workforce to contribute to attainment of organizational
objectives. In addition to this positive organizational culture creates a harmonious working
environment in which every employee is able to collaborate towards organizational success
(Keller, 2019). This depicts the importance of organizational culture as it shapes employee
behaviours to help the company attain organizational objectives. One of the main benefits of
positive organizational culture is that it reduces organizational conflicts and helps maintain high
performance consistently (Tootell and et. a., 2020). Employees actively participate in different
training and development activities because of positive organizational culture which helps the
company quickly adapt to external changes and survive with profitability for long time period.
TESCO has positive organizational culture which played an important role in quick recovery of
the company from COVID-19 pandemic.

CONCLUSION
From the above report it is determined that there are different types of organizations and
legal structures including sole trader, limited company and partnership. Each of the business type
has different advantages and disadvantages which need to be considered during selection of
legal structure of an organization. In addition to this tall and flat organizational structure have
opposite characteristics and offer different benefits to business firms. Marketing, finance and
human resource management are different business functions which impact enterprises and
employees working in the enterprises. Apart from this organizational culture is one of the
primacy factors which impacts success of business firms.

REFERENCES
Books and Journals
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James, P. C., 2020. Understanding the Impact of Board Structure on Firm Performance:
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