Understanding Business Organisation - Types, Structure, Functions and Culture

This essay provides detailed information about types of business organizations, comparison of organizational structure, different business functions and the importance of organizational culture in achieving success.

Understanding Business
Organisation
ESSAY

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
Types of business organisations ..................................................................................................3
TASK 2............................................................................................................................................4
compare and contrast organizational structure............................................................................4
TASK 3............................................................................................................................................6
Discussing different business functions : ....................................................................................6
TASK 4............................................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business organization, an entity established for the purpose of carrying on commercial
enterprise. Every business organization must follow law systems, rules and regulation and
policies to run their business smoothly. The present report will be based on types of business
organization and it will provide detailed information about advantages and disadvantages of
types of business. Furthermore, it will also highlight the business functions and their roles to
improve organizational culture.
TASK 1
Types of business organisations
Sole trader
Sole trader is a type of business which is run and own by one person only, hence, this is
also known as sole proprietorship. The person can keep all business profits after they have paid
tax on them. The person is responsible for any losses and must follow rules and regulation to run
its business smoothly (Cappellino, 2020). All the important decisions are made by owner for
their own benefit. For example- beauty parlours, event planner, plumbers etc.
Advantages
 This is the most common form of business ownership because all the profits are subject
to the business owner only.
 The owners have business flexibility while running it and make decisions by their own to
earn profits. The person has to follow few rules and regulation as compared to other form of business.
Disadvantages
 Owner of this business has to bear all the losses alone.
 While running this business the owner could not able to differentiate between business
and personal income.
 It has been said that equity is limited to the personal resources of business owner.
Partnership
when two or more people oversee business activities, operations and share business loss
and profits then it is known as partnership company. In general partnership, owners of the
business invest their money, labour and property to achieve success (Enamul and Nilufar, 2018).
They all are liable for business debts and have to make important decisions together. While on

the other hand, limited partnership requires a formal agreement between the owners. They have
to file a partnership certificate and have to follow rules and regulations.
Advantages
 The major benefit of having this form of business is each partner have to share equal total
profits of the firm.
 By having this form of business, it allows owners to limit their own liability for debts of
business. All the decisions are taken with the approval of each other hence, similar flexibility is
maintained here.
Disadvantages
 The major drawback of this form of business is partnership between owner ends when
any of them decides to end it due to their personal or professional reason.
 All the owners are responsible for losses and risks, hence they have to deal with difficult
tasks.
 All the partners may find it difficult to sell business hence they will need new partner
every time if one left.
Limited Liability company
This Form of business organization is same as limited partnerships as mentioned above, it
provides partners with limited liability while offering them some of the benefits related to
income. For example- Blockbuster LLC
Advantages-
 By having this form, the partners can limit liability to the firm for losses or debts. The profits are shared among partners without double taxation.
Disadvantages-
 All the partners have to follow certain state laws to run its business smoothly.
 It is expensive in nature as it requires a high costs due to some legal laws and filing fees.
TASK 2
compare and contrast organizational structure
The business structure is very essential for achieving maximum profitability, productivity
and managing work of employees and also to meet goals and objectives of company.
Organizational structure describes about the roles and responsibilities of employees in the

company (Shaqiri and Ceku, 2019). Business structure provide information about how people do
their work, how each job roles fits in the overall work system and who makes important
decisions. Structure can be centralized or decentralized. Centralized structure have linear
hierarchies with a clear line of command between leaders, managers and workers. While on the
other hand decentralized give high levels of autonomy, decision-making process to staffs and
accountability.
Hierarchical Flat
This structure of business is known as tall
structure and majorly used by large
companies where workforce is more.
On this side, This type of structure is majorly
followed by small organization in which they
have a few or no levels of management between
employees, workers and managers or
executives.
This structure follows the layout of a pyramid,
from top to bottom (Badcock, Friston and
Ramstead, 2019). This is structures in such a
manner that descend into the base of lower
rank level staffs, who occupy the bottom level
of pyramid. And top management comes at
the top of pyramid.
Here, the structure have only one layer or a few
layer between lower level of staff members and
top-level management team.
Employees become loyal towards company
and their department members by using this
structure because of good communication
system. It is mandatory to adopt effective
communication in this structure otherwise it
will create conflict between people.
For example- Amazon is following
hierarchical structure.
On the other hand, By having this structure,
company can empower the staffs more and
elevates their roles and responsibilities (Wang
and et.al., 2019, July). As it has short chain of
command, the employees can easily
communicated with each other.
On the disadvantage side, staff members often
feel confusion as they are not sure whom to
report to and due to this employee can be
uncertain of job expectations. For example-
Nike is following flat structure.

TASK 3
Discussing different business functions :
According to Bright and Deegan, (2021), the functions of business usually vary in forms
of business but overall they are the same from production to sales.
Human resources management- It is one of the most essential business department for
any firm because HR team and professionals are responsible for hiring, recruiting, selecting and
retaining talented and skilled employees. The major role of this department is to manage
performance management, talent management, solve conflicts between staffs, compensation and
benefits, training and development of staffs and creating positive and healthy environment. For
example- Facebook has the best human resource management team who maintains optimum
working conditions.
Production- This function adopts an important position in any business activity, because
it is totally depended on function like marketing. By having this function effectively, the
company can generate good sales and revenue. This function is justifies when firm have resulted
in revenues through sales of products or services. It also includes heavy investment in working
capital and fixed assets. This function can be control by production and finance manager to make
decisions.
Operations- This department ensures that the production process of goods and services is
completed from start to finish. They are responsible to track performance and make necessary

changes by suggesting every department. This function is totally lined up with the objectives and
goals of other departments in the firm. Operation manager and staffs working in this department
of the company must be proactive in identifying issues or problems rapidly, efficiently and
effectively.
TASK 4
Organizational culture
Organisational culture play a vital role for the success of business. The culture of
company is the set or collection of values, practices and expectations that inform and guide the
employees actions. Basically, it is mission, objectives and goals of the company that guide its
employees. Martínez-Caro, Cegarra-Navarro and Alfonso-Ruiz, (2020), Says that Business
organization with healthy and positive culture tend to be more successful as compared to other
who does not have. A good culture have effective system in workplace that promote employee
performance, motivation and engagement, employee productivity. A Good and effective
organization culture develops the workplace environment through communication system
throughout the firm.
An experienced and skilled leader can develop and improve organization culture with the
help of skills, knowledge, equal treatment among people, allocating task and roles on the basis of
interest of staffs (Roscoe and et.al., 2019). A positive culture at workplace can also improve
teamwork with the help of good communication skills, raises motivational level, enhances
retention of the workforce. For example- If the company have healthy environment, them
workers will enjoy to work towards their goals and stay stress free. Tesco plc is maintaining
culture effective by listening to people and talking to them on regular basis. By doing, so they
create mutual trust and respect between team which is essential for success as per the owner of
Tesco.
If the company have strong and healthy culture than it will motivates every staff members
to do their best work and boost productivity. By having good culture, the firm can easily achieve
higher employee job satisfaction, increased productivity and employee engagement. For
example- Nike is a powerful example of a strong organization culture which encourage people to
work effectively and focus towards their goals. A company with healthy and positive culture
tend to have less or no conflicts between employees which is beneficial for company's
reputation. According to Erthal and Marques, (2018) firms who have strong and positive cultures

experience an increase in revenue growth as compared to other who does not follow effective
culture.
CONCLUSION
To conclude, every organization has its own types of business, structure and culture. By
evaluating the report it has been summarized that, every business needs to set up various types of
departments to smooth running of activities. Plus, Each and every department will consist of
skilled and experience staff and experts who guide others related to work. By having positive
culture, company can easily gain competitive advantages in the market and achieve success.

REFERENCES
Books and Journals
Badcock, P. B., Friston, K. J. and Ramstead, M. J., 2019. The hierarchically mechanistic mind:
A free-energy formulation of the human psyche. Physics of life Reviews. 31. pp.104-121.
Bright, D. and Deegan, S. J., 2021. The organisational structure, social networks and criminal
activities of outlaw motorcycle gangs: Literature review. Trends and Issues in Crime and
Criminal Justice. (621). pp.1-16.
Cappellino, A., 2020. How to Choose the Right Business Organization Form.
Enamul, I. and Nilufar, Y., 2018. Significance of negotiation skills for Bangladeshi HR manager
in private business organization. Elixir International Journal. 120. pp.51230-51234.
Erthal, A. and Marques, L., 2018. National culture and organisational culture in lean
organisations: a systematic review. Production Planning & Control. 29(8). pp.668-687.
Martínez-Caro, E., Cegarra-Navarro, J. G. and Alfonso-Ruiz, F. J., 2020. Digital technologies
and firm performance: The role of digital organisational culture. Technological
Forecasting and Social Change. 154. p.119962.
Roscoe, S. and et.al., 2019. Green human resource management and the enablers of green
organisational culture: Enhancing a firm's environmental performance for sustainable
development. Business Strategy and the Environment. 28(5). pp.737-749.
Shaqiri, M. and Ceku, O., 2019. Types of Organization of Business Organizations and Their
Impact on Business Success.
Wang, P. and et.al., 2019, July. Hierarchical matching network for crime classification.
In proceedings of the 42nd international ACM SIGIR conference on research and
development in information retrieval (pp. 325-334).