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

This essay provides an overview of different types of business organisation and their advantages and disadvantages, an analysis of different organisation structures, core business functions, and the importance of organisation culture in achieving growth and success.

Understanding
business organisation

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Business organisation describes an entity formed for purpose of carrying of commercial
activities that involves buying and selling of products and services. Such organisation follows
laws and regulation that guide the activities and operations in order to achieve goals and
objectives (Afxentiou and Melanthiou, 2022). This essay is based on Savoy Hotel, it is luxury
hotel in London, England. It was established in 1889, was the first hotel to introduce electric
lights throughout the building, lifts, bathrooms and with lavished and furnished space for their
guests. This report includes an overview of different types of business organisation and their
advantages and disadvantages and also an analysis of different organisation structure which will
help an organisation to achieve growth and success.
MAIN BODY
Type of business organisations
Every business is surrounded by society, they cannot operate in isolation, hence they are
being affected by the different factors that are existing in the business environment. There are
different kinds of business organisation structure depending on the purpose for which it is being
formed. The most common type of organisation structure is the Sole trader or sole
proprietorship. Sole trader is a business organisation that is owned and controlled by a single
individual. The owner has the sole responsibility to take all the decisions and for all the profits
and looses. Example for a sole trader would be a small coffee shop in London , that serves its
customers with coffee and different snacks and offer them the premium quality by following
high standards. Sole trader type of business structure has many advantages. They are simple and
affordable, the person enjoy freedom and flexibility in operations, less paperwork, simple
registration process and return filling. With advantages it has some disadvantages also which
includes unlimited liability as single individual is liable for all the debts of the firm, it is
comparatively hard for sole trader to get financed and business credit for their operations (Ray,
Mishra and Dash, 2022). The another kind of organisation structure is Partnership , it is an
association of two or more persons that have agreed t share profits of the business, which is
being carried by all or any of them. Example of partnership firm is NotOnTheHighStreet is
founded by two award wining entrepreneurs, Holly Tucker and Sophie Cornish. There aim is to
make it easy for people to browse and buy. It was founded in 2006, and growing as an e-
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commerce business in UK. Advantages of partnership are less legal obligations, Easy formation,
Access to knowledge, skills and expertise. Some disadvantages are Liability of partners for dents
are unlimited , there is always a risk of disagreement and friction between the management and
the partners, each partner is liable for the actions of the other partner (Clark and Hazen, 2018). If
a partner leaves or admitted to partnership then it comes to an end. Another business organisation
structure is Private limited organisation, it is an organisation whose main aim is to make profits
and held privately by stakeholders. For example Savoy hotel, is a privately owned luxurious
hotel which offers its costumers valuable and quality services. Thee are many advantages which
are related to a private organisation which includes the liabilities of members are limited to the
extent of its shares they hold with the organisation. There is no minimum capital requirement for
partners to contribute. It is a separate legal entity that means the organisation and members have
separate identity. The liability of members are limited up to the shares held by the members,
there is ease to raise the funds from venture capitalists or angle investors. But there are some
limitations , private organisations has restriction to offer its share in the public, number of
shareholders cannot exceed above 50 and they cannot register its shares in recognised stock
exchange. Hence there are many organisation structure that a business can choose depending on
the objectives.
Organisation Structure
It is a framework that used to define a hierarchy within an organisation. It assigns roles
and duties to be performed by different individuals within an organisation that will lead an
organisation to achieve their organisation goals and objectives. There are many kinds of
organisation structure depending on the tasks and objectives of an organisation. In context of the
organisation Savoy hotel, it uses a hierarchical organisational structure to run its operations and
activities smoothly to attain a competitive marketplace. In order to understand, the role of
organisation structure within an entity, it is important to analyse different structure and their role
in managing different business organisation. Tall organisation structure or hierarchical
structure is a framework that has many leaders and layers of management. The business use a top
down approach in this particular structure (Gupta and et.al , 2019). In this structure mangers
have a confined control on limited number of subordinates. The role and responsibilities of the
employees are being allotted in a proper way which does not The communication pathway
within organisation is usually long because of chain of commands and managerial levels.
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Another type of organisation structure is flat structure, is an organisation structure which have
few levels of middle management between leadership and employees. Mostly small organisation
prefer this structure within their organisation (Fonseca, 2022). There are many advantages of flat
structure which includes reduced overall operating expenses, increased responsibility in the
workforce, In flat structure conveying information is considered easier and faster and there are
reduced risk of employee getting incomplete or wrong information. There is improved
coordination between employee because the employees are being assigned with autonomy and
responsibility which increases the overall productivity of organisation and maintain a positive
attitude and work environment. But along with some advantages, it has disadvantages also
management do not have full authority over the organisation, struggle between superior and
subordinates, confusion regarding their tasks and many more. Example of flat organisation
structure is Little French hotel, which gives more autonomy and responsibility to their employees
which promotes a flexibility in the operations and achievement of organisation goals.
Business functions
Business functions are set of activities that are carried by enterprise to achieve
profitability. Business organisation are divided into several core functions and department which
can lead the organisation to achieve their organisation efficiently and effectively. In context to
Savoy hotel, the organisation have several different functions and operations and the core
functions are Human Resource management, operations and production. Human resource
department within an organisation is responsible to hiring, management, training and
retrenchment of staff. It is the function associated with human resource which are responsible to
put plans into actual actions. With reference to Savoy hotel, The hotel should provide its
employees with adequate training and incentives, safety and compliance, providing adequate
training and development and more which will enable the business to operate its operation with
efficiency and attain competitive advantage. Another core function is management of
operations, which implies conversion of raw material into finished goods. For example In
hospitality industry, Savoy Hotel should use its resources as per the needs and requirement of the
customers associated with the organisation, which will help an organisation to retain a large
group of consumers which is the main concern of hospitality industry (Fisher, 2021). Another
important and core functions within an organisation is marketing, it is a set of activities,
processes for creating, communicating, delivering and exchanging offerings that possess value
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for customers, clients and society at large. Examples of marketing in hospitality industry, In
context to Savoy hotel, it should use different strategies and plans to attract and drive customers
towards them. The hotel can offer discounts, different packages for their guests to make their
experience memorable and enjoyable. In context Savoy hotel , it is significant to mange all the
functions properly that can help an organisation to attain a competitive edge in the marketplace.
Organisation culture
Organisation culture is the collection of mission , values and practices that guide the
actions of the team, the manner in which they will performed its operations (Knight, 2022). It is
a practices which enables the organisation to achieve its objectives efficiently by promoting
employee performance, productivity and engagement by using different methods and techniques.
In context to Savoy hotel, it focus on making a coordinative and cooperative workforce that
enables the hotel to increase its overall productivity and profitability. There are various kinds of
culture that exists within an organisation to regulate the actions and functions properly. Role
culture, where responsibilities are assigned to individuals depending on specialisation
qualification and more, which leads the organisation to complete their tasks. Power culture, it
focuses on key decision makers, it enables the organisation to be quick and responsive to the
changes. Another type is the task culture, it focuses on a specified projects and tasks. It allow
individuals to share their ideas in decision making process, it is a common structure in
advertising and design agencies. In context to Savoy hotel it should use power culture, which
enables the organisation to make effective strategies and plans for their specific projects and
operations. It enables the organisation to achieve organisation goals and retain a competitive role
in the marketplace.
CONCLUSION
From the above essay it is concluded to achieve growth and success within an business
organisation, it is essential to comply with laws and regulations and maintain a coordinative
internal environment. The essay includes the impact of business functions, different business
culture, which enables the organisation to maintain and regulate their operations and functions
accordingly. Importance of organisation culture to increase the overall productivity and
profitability of operations by properly allocation of tasks and resources . It is of core importance
that organisation should pace with the changes that are taking place in the business environment
to remain competitive in long term.
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REFERENCES
Books and Journals
Afxentiou and Melanthiou, 2022. Reengineering the Organisation Design of Wine Businesses. In
Business Under Crisis, Volume III (pp. 87-109). Palgrave Macmillan, Cham.
Ray, Mishra and Dash, 2022. Analysis on employees' perception towards ERP implementation
and its impact in different organisation. International Journal of Productivity and
Quality Management, 36(4), pp.553-568.
Clark and Hazen, 2018. Business models pour les équipes: voyez comment votre organisation
fonctionne vraiment et quelle y est la place de chacun. Pearson.
Gupta and et.al , 2019. Systematic literature review of project failures: Current trends and scope
for future research. Computers & Industrial Engineering, 127, pp.274-285.
Fonseca, 2022. The EFQM 2020 model. A theoretical and critical review. Total Quality
Management & Business Excellence, 33(9-10), pp.1011-1038.
Fisher, 2021. A survey of some problems of defining and estimating dividend and business
saving functions. In Economic Studies in Profit, Business Saving and Investment in the
United Kingdom 1920–1962 (pp. 73-108). Routledge.
Knight, 2022. Measuring nonprofit organisational culture: key issues and insights. Handbook of
Research Methods for Organisational Culture, pp.230-243.
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