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

This report discusses the types of business organisations, their structures, operating functions, and organisational culture. It also highlights the merits and demerits of different business types and structures.

Understanding business organisation

Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
TASK 2............................................................................................................................................3
TASK 3............................................................................................................................................4
TASK 4............................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business can be defined as that entity having legal identity which is involved in certain
operations like industrial, commercial, marketing, production and selling and buying of goods
and services. It has the main aim of earning profits and revenues. Business owners are of many
kinds like partners, sole trader, limited company and these all have their own merits and demerits
(Ahmad and Murray, 2019). Organisational structure is known as that system or framework that
involves performing of business operations for the achievement of predetermined goals and
objectives with the aim of creating profits. There is adoption of organisational structure
according to the activities of business and its nature. Business structure is of two types that is tall
and flat structure. There are many different operations that are performed by an organisation like
management, producing, human resource. These resources are defined with their task to achieve
defined goals and objectives in systematic way. There are many values and ethics related to
organisational culture that has positive impact in the performance of business. This report
discusses merits and demerits of these business types, organisational structures and operating
functions that are performed in an organisation. Industry practices as well as organisational
culture concept is also discussed within this report.
TASK 1
With the main aim of generating profits, there are many activities that are involved by a business,
these activities can be production and selling of products and services. These activities are
undertaken for satisfying customers’ needs and wants (Anshari and Sumardi, 2020). There are
numerous kinds of business that are run by organisations and these are different as in terms of
nature of business and features of it as such sole trader, partnership and limited company. Sole-
trader is that business possessing simple working structure and all activities that are performed
by an individual. Sole-trader is the one who takes all decisions of business. The structure that is
established of sole-trader business is easily simple with quick decision-making as well as there is
less set-up cost. There are some demerits also that are related to sole trader as being the owner of
business, there is possession of unlimited liability as well as capital raising is limited and there
are high duties and responsibilities to perform. Partnership can be known as that deal or

agreement in between two or more people or businesses that agree to manage and operate for
achievement of certain predetermined goals and objectives. In partnership, there is sharing of
liabilities and profits in between all members. Partnership also has certain advantages in its easy
formation, within its flexibility, sharing of risk and work division in between all its partners and
there is more scope expansion with it. There are some disadvantages associated with it as it
possesses unlimited liabilities with long and complex decision-making, involvement of mutual
differences and also of uncertainty (Beynon-Davies, 2021). Limited company can be known as
that business organisation where the stakeholders possess limited liability. There is defined legal
structure stating limited liability of its members with the stake of its organisational members.
Limited company contains personal liability that is minimum that means that employee is not
responsible for settlement of deficit of business from their own personal assets. There is even
separate identification of the owner from that of business and owner can possess tax free income.
There are many demerits of it, as it has restrictions with complex accounting systems and are
time consuming and business set up is also complex. Analysing of all types of business types is
necessary and then its adoption is there for performance of all operating functions with its aim to
achieve predetermined goals and objectives.
TASK 2
Organisational structure is known as that structural format or framework that helps and guides in
delegating business activities in a systematic way for achievement of predetermined goals and
objectives. It also describes roles and responsibilities along with different departments of
business as well as also ensures that there is clear communication flowing. If there is presence of
clear business structure than there is proper functioning of operations. It is important for
adoption of best suited business structure as it will lead to fast decision-making, will improve
business operations, as well as will help in reducing employee conflicts and enhancement of
performance level of all employees (Chawla, 2020). Effective business structure also builds
strong communication system along with clearly defined hierarchical level of organisation,
resulting in proper functioning of business. Hierarchical, flat, functional and matrix business
structure are kinds of business structure that are there in market. When there are variety of
leaders and layers in organisation is known as tall business structure. It has long chain of
command and also has top-down approach. This organisational structure possesses narrow span
of control with manager along with less number of subordinates and staff. In tall business

structure, communication process is long as passage of all information and communication goes
through every element of business commanding chain. This tall business structure is followed by
Tesco that consists of various parts and departments and it also ensures that work is done
effectively. On the other hand, flat organisational structure is that business structure that is
horizontal and have less stages in its management (Kumaresan and Liberona, 2018). There is
wide controlling span as well as higher subordinates. Nike has flat organisational structure which
leads to the overall operation of performance. there is short communicating structure in this
business structure and it helps Nike in taking effective and efficient with quicker decision
making in achievement of all goals nd objectives that are determined earlier. There is more
autonomy with managers.
TASK 3
Business functions and operations are activities that are operated within an organisation with the
aim of achieving of predetermined goals and objectives in right manner. there are many core
activities that are performed within business like marketing, human resource management,
operations, and finance and many more that all impact the business operations directly or
indirectly. Human resource management is responsible for the management of human resource
in organisation. Recruitment and selection of candidates that qualify the needs of that particular
job position, training and developing programs and many other operations are performed by HR
department. HR also enhances the productivity of employees along with designing the
compensation system, employment contract and many other functions that leads to enhancement
of employee’s performance and productivity (Osafo, 2022). Another important function of
business is operating that is transformation of raw materials into finished goods. Sainsbury has
great separate department for performance of operations in efficient manner. Production
department maintains the production level of products as well as their quality, for attaining
efficiency as well as also ensures that proper resources are there and also are available during
production. Along with that, various other operations like marketing, finance as well as
accounting functions are also performed for enhancement of business sales and profitability.
Finance department looks all business transactions, then records them along with allocating
finance to different departments of business.

TASK 4
Organisational culture is known as all those different policies and practices, techniques and
tactics along with various values and beliefs that provide proper guidance and help in the
performance of all determined tasks to all employees. The main sources are code of conduct of
employees and characteristics and ethics of a business, various property rights and many more. It
is necessary for organisation to have effective business culture that will help in the attainment of
business goals and objectives along with retainment of trained and effective employees within
the organisation (Wirani, Hidayanto and Shihab, 2020). Positive business environment along
with business culture leads in growth and development as there is top level management engaged
in it which leads increase in employee productivity, their role satisfaction and loyalty towards
business organisation. Tesco has also adopted positive business culture that is supportive and
also results in making a different position in market allowing it in many competitive advantages.
Tesco looks for the well-being of its employees while creating specific department for all the
problems and also for addressing and solving their problems. It also motivates its employees and
also enhance employee retention in the business for longer time being. In positive business
environment, there is feeling of comfort to employees and they feel motivated that also results in
greater profits and sales in the market for the organisation. Tesco has a unique organisational
culture as it is team oriented that fosters and guides in innovation, as well as serving clients with
quality products. It also looks for the growth and development of employees at personal and
professional level both. Tesco also has great team for employee appreciation that pays and
guides on attention towards organisation’s employees welfare and growth.

CONCLUSION
From the above report, conclusion can be made that business is entity having legal identity which
is involved in performing various operations resulting in right direction and achievement of
predetermined goals and objectives. There are many kinds of business such as sole-trader,
partnership and many others. It is necessary for the business to select best suited business format
which will guide and help to operate in right direction. Maintenance of business structure is
important for an organisation as it helps in taking effective decisions. It is important to maintain
positive working environment in this competitive business environment. As it motivates and
enhances working and functioning of employees. Positive business environment also helps in
improving overall productivity and profits of business.

REFERENCES
Books and Journals
Ahmad, M.U. and Murray, J., 2019. Understanding the connect between digitalisation, sustainability and
performance of an organisation. International Journal of Business Excellence, 17(1), pp.83-96.
Anshari, M. and Sumardi, W.H., 2020. Employing big data in business organisation and business
ethics. International Journal of Business Governance and Ethics, 14(2), pp.181-205.
Beynon-Davies, P., 2021. Business analysis and design: understanding innovation in organisation.
Springer Nature.
Chawla, P., 2020. Impact of employer branding on employee engagement in business process
outsourcing (BPO) sector in India: mediating effect of person–organization fit. Industrial and Commercial
Training.
Kumaresan, A. and Liberona, D., 2018, August. A Case Study on Challenges and Obstacles in
Transforming to a Data-Driven Business Model in a Financial Organisation. In International Conference
on Knowledge Management in Organizations (pp. 263-276). Springer, Cham.
Osafo, E., 2022. Using human anatomy and physiology to explain business organisation
effectiveness. International Journal of Business and Systems Research, 16(2), pp.259-276.
Wirani, Y., Hidayanto, A.N. and Shihab, M.R., 2020. Factors affecting acceptance of internet banking with
technology-organisation-environment framework: a perspective of corporate customer in
Indonesia. International Journal of Business Information Systems, 34(4), pp.560-593.