Understanding Business Organisation

This report covers advantages and disadvantages of different types of business, different organisational structure and different functions that are performed in business. Along with that concept of organisational culture and different examples of industry practices.

Understanding
Business Organisation

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

INTRODUCTION
Business is defined as the legal entity that is engaged in various activities such as
commercial, industrial as well as selling and purchasing products and services with the objective
of generating profits. There are different types of people such as sole trader, partnership and
limited company having their own advantages and disadvantages. Organisational structure is the
system that outlines who business activities are performed to attain business determined goals.
Business adopts organisational structure as per business activities and nature such as tall and flat
business structure. Business performs various operations such as human resource, management,
production and operations that helps business to attain defined task in appropriate manner.
Organisational culture includes values or ethics of business that creates positive impact on
business performance. This report covers advantages and disadvantages of different types of
business, different organisational structure and different functions that are performed in business.
Along with that concept of organisational culture and different examples of industry practices.
TASK 1
Business is engaged in various activities such as producing and selling products and services to
satisfy customers need and generating profits. There are various types of business are conducted
by the organisation that are different in terms of business nature, activities and characteristics
such as sole trader, partnership and limited company (Di Vaio, Palladino, Hassan and Escobar,
2020). Sole-trader is the business that has simple business structure that run and own by an
individual. Sole-trader take all decisions related to business. Establishment structure of sole-
trader business is simple, decision-making is quick and have low set-up cost. Along with that,
some disadvantages of sole-trader are the owner of business have unlimited liabilities, capacity
to raise capital is limited and it contains high responsibilities. Partnership is defined as the
formal agreement between two or more people who manage operations to attain common
objectives. In partnership, all members share both profits as well as liability (Fernandes, et. al.
2022). Some advantages of partnership are that its formation is easy, flexibility, risk sharing,
division of work among members and contains more scope for expansion. There are some
disadvantages of this type of business such as it has unlimited liabilities, long and complicated
decision-making, mutual differences and uncertainty. Limited company is defined as the general
form of incorporation in which stakeholders of business contains limited liability. It contains

specific legal structure that state that liability of organisational members is limited to the stake of
organisational members. Limited company contains minimum personal liability that states that
employee’s not responsible to settle business deficit from their personal assets. Along with that,
it has separate entity from its owner, having professions status and in this business owner can
maximise their tax-free income (Staniškis, 2022). There are some disadvantages of this business
such as it contains certain restrictions, accounting requirements are complex and time-consuming
and the process of setting-up business is complicated. It is important to analyse all these types of
business than adopt suitable one that lead business towards performing operations smoothly and
attaining determined goals and objectives.
TASK 2
Organisational structure is considered as the as the system that helps organisation to delegate
certain business activities is appropriate manner to attain determined goals and objectives. it
outlines different roles and responsibilities with different department of organisation as well as
ensures that communication flows in appropriate manner. If business structure is properly
organised than it can operate its operations in best possible way (Harsh and Prasad, 2021) . It is
important for business to adopt suitable business structure such as faster decision-making,
improving business operations efficiency, reduce employee conflicts and enhances performance
level of employees. effective business structure maintains strong communication among all
hierarchical level of organisation that help to run business operations properly. There are various
types of organisational structure such as hierarchical, flat, functional and matrix business
structure. Tall business structure is also known as the hierarchical business structure that includes
variety of leaders and layers in business. It is related to the top-down approach with having long
chain of command. In this organisational structure, manager of business possesses narrow span
of control and lesser number of staff members or subordinates. In tall business structure,
communication path way is usually long because all information, data and communication must
pass through each and every element of determined chain of command. Tesco follows
hierarchical or tall business structure that divides into various parts and ensure that work will be
completed in efficient manner. On the other hand, flat organisational structure is known as the
horizontal business structure that contains few layers of management. Managers of organisation
have wide span of control and higher subordinates (Loasby, 2021). Nike adopts flat
organisational structure through which it operates business overall performance. Communication

pathway in this structure is short that is helpful for Nike because effective and quick decisions
and actions are taken by the organisation to attain determined goals and objectives . managers of
organisation provide more autonomy and responsibility to employees that motivated them to
perform more efficiently.
TASK 3
Business functions are defined as the activities that are performed by the organisation to attain
determined goals and objectives in appropriate manner. There are core and supportive functions
that are performed by the organisation such as human resource management, production,
operations, marketing and finance and accounting related functions that directly or indirectly
impact on business functional management and people who are working with organisation.
Organisation operates human resource management that is responsible for managing human
resource in organisation (Loft, 2020). HR department of organisation conduct various activities
such as identifying needs of workforce, recruiting and selecting employees who possess right
qualification, provide training and development opportunities to employees that enhances their
productivity, design compensation system, employment contract and manage industrial relations
that enhances overall employee’s performance and productivity (Rüsen, Kleve and von Schlippe,
2021). Another function of business is operations that is related to activities of transforming raw
material into finished goods. Sainsbury creates separate department for all functions that take
responsibility to perform related operations in efficient manner. respected organisation ensures
that separated goals are established to all department than put efforts to achieve them. Production
department maintain production level and quality of products, attain higher level of efficiency as
well as ensure that educate resources are available at the time of production. Sainsbury maintains
interrelationship between all departments that lead operations towards right direction
(Maréchaux, 2020). Along with that, marketing, finance and accounting functions are performed
by the organisation to enhance business sales and profitability as well as maintain organisational
accounting functions. Finance department manage business transactions, records and allocate
finance to all department of organisation so that perform operations in systematic manner on
time.

TASK 4
Organisational culture is defined as the collection of different values, practices, expectations and
tactics that provide guidance and information to all team members and ensure that they perform
their determined task with efficiency and effectiveness (Osafo, 2022). Along with that, it
constitutes shared beliefs that characterize an organization. The main sources of organizational
culture include characteristics of people within organizations, organisational structure,
organizational ethics, and property rights according to employees. It is important for the
organisation to maintain effective, supportive business culture that motivates employees to retain
with organisation. Positive business environment and culture lead business towards growth and
success because it attracts top talent towards organisation and retain them existing skilled,
talented and experienced staff member with organisation, improve employee productivity, their
engagement, job satisfaction and loyalty towards organisation (Maroun, 2020). Tesco is the
organisation that adopts supportive and positive business culture that differentiate organisation in
marketplace from other competitors that provides competitive advantages to organisation. Tesco
ensues employees well-being and create specific department that address their quarries and
resolve problems that are faced by them in certain situation. It enhances employees motivational
level and retain them with organisation for longer period of time. In positive business
environment, employee feel comfortable and motivated that directly impacts on their
performance and productivity level as well as enhances their contribution level towards attaining
organisational goals and objectives in specific period of time (Niknejad, Ismail, et. al. 2020).
Tesco organisational culture is quite unique because it is team oriented culture that foster
innovation, having desire to serve clients with quality products and meaningful solutions and
emphasis on personal growth as well as empowerment of employees that inspire them to perform
with greater efficiency and effectiveness. respective organisation also formed employee
appreciation committee that pay attention on organisation’s employees welfare.
CONCLUSION
As per above report, it can be concluded that business is the legal entity that involved in
various operations and activities that lead business in right direction to attain determined goals
and objectives in best possible manner. There are various types of business like sole-trader,
partnership, limited liability and others so, it becomes important for the organisation to select
suitable business format that guide business operations in right direction. Maintaining

appropriate business structure is essential for business because it helps business to take effective
decision and command actions properly. It current competitive business environment, it becomes
important to maintain positive and supportive business culture and provide value to them that
motivates them and enhances their engagement and loyalty level. Positive business environment
improves overall productivity and performance level of organisation.

REFERENCES
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