Understanding Business Organisations and Their Environments

This essay discusses the definition, advantages, and disadvantages of different types of businesses, organizational structures, business functions, and organization culture. It also provides practical examples from the hospitality and tourism industry.

Understanding of the business
organisations

Table of Contents
INTRODUCTION...........................................................................................................................3
“Understanding business organisations and their environments”................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The environmental change has direct impact over the business organization thus
understanding the environment and its impact over business organizations is quite crucial. The
present essay will be based on understanding business organizations and their environment. The
aim of the essay is to understand the definition, advantage as well as disadvantage of three types
of business such as sole trader, partnership and limited company. Further, the comparison and
contrast of tall and flat organization structure will be cover with the practical example of
hospitality industry (Huang and Hands, 2022). Further, the essay will also discuss the three
business functions and its functional activities impact over organization and employee using
examples. The purpose of this essay is to enhance the knowledge of organization culture and
structure to the users of business. Lastly, the essay will discuss the definition of organization
culture and the impact of positive culture over success of the organisations using hospitality and
tourism industry (Mutlutürk, Tekcan and Boduroglu, 2021).
“Understanding business organisations and their environments”
The three main type of business is sole trader, partnership and limited company. Sole
trader is a business where a single person set up a business using their own resources and alone
bear the gain as well as loss of business. The three advantage of sole trader includes full control
and greater flexibility, low set up cost and ownership of profit (Shykhnenko, 2021). The three
disadvantage of sole trader includes unlimited liability on debt, higher responsibility and bearing
losses alone. For example, MOMA foods is a small sole trader in UK operates in hospitality
industry that sells warm breakfast to the hungry commuter at London Waterloo stations.
Partnership is another type of business which means when two or more people together set up a
business and share ownership as well as income or loss of business (Reis and et.al., 2021). The
three advantage of partnership includes better work life balance, more business opportunities and
moral support. While on the other hand, three disadvantage of partnership includes share in
business liabilities, loss of autonomy and lack of stability. For example, Tourism partnership
working as a partnership with the national bodies such as visit Britain etc. with the aim of
helping audience to explore world and share ideas. Lastly, limited company is a private business
where owner is legally liable to pay the debt of business to the extent of the capital they invest.
The three advantage of limited company includes higher take home pay, limited liability and

personal assets protection (Luz Tortorella and et.al., 2021). The three disadvantages of limited
company on other hand includes filling accounts and corporation tax return, costly and certain
amount of paperwork. For example, Premier Inn is a UK based private limited company operates
in hospitality industry and is one of the largest hotel brands with more than 72000 rooms and 800
hotels (Reems, 2021). The hotel basically operates in both local as well as international level and
is subsidiary of Whitbread Plc which is a travel company.
Organization structure means how the activities, tasks, allocation, coordination and support
has been provided or directed within the organization with the aim of achieving the aim of
organization. The tall is a type of organizational structure where the organization is basically had
distinct hierarchy. Under this structure, there are many managers in business and each manager
manages the work of some portion of company (Lee, 2022). However, this is quite complex
organizational structure as one manager can not convey or communicate with the other manager
team members. The lack of communication and high cost is one of the drawbacks of this
structure. For example, Timberbush Tours which is one of the organizations under tourism
industry uses the tall organization structure in order to direct and control the work or activities
within its organization. With the help of this structure, tourism industry and organization able to
complete the task on time and achieve target easily and quickly (Lim and et.al., 2022). By the
way, the disadvantage of tall structure is more than its advantage that affect the business
profitability and market share. While on the other hand, flat organizational structure also known
as flat hierarchy where the company have few or no managers. Under this structure, the higher
management level work closely with the lower-level employee and give more responsibility to
employees. The employees are engaged in decision making. However, the disadvantage of this
method is that employee have lack of clarity and accountability. For example, Premier Inn hotel
of UK basically uses flat structure within their hotel in order to engage and motivate employee. It
is because for hotels industry in UK employees are the one that directly interact with the
customers. Hence, for them creating collaborative work team, greater employee autonomy, more
delegation power is more important which is possible only with the implementation of flat
organization structure (Wiblen and Marler, 2021).
Business function plays vital role towards the success of organization and management of
people or workforce. The three main business function is human resource's management,
production and operational management. Human resources management is a business function

whose responsibilities is to recruit, select, train and onboard new employees within the
organization. They also responsible for providing proper training, reward, compensation to
existing employee (Zacharias, Rahawarin and Yusriadi, 2021). There functional activities of
hiring talented employee result into the success and growth of business and its impact over
employee is such that their morale or productivity enhanced. For example, the human resources
management of Premier Inn of UK hire talent employee from all over the world such as chef for
success of its hotel. Production management of organization are responsible for managing the
day-to-day production of goods and rendering of services. There functional activities involve
acquisition of land, constructing hotels, installing equipment in hotels, purchasing and storing
raw material for food and beverages preparation. For example, by completing its activities,
production management of Premier Inn hotel start business in new location and suburb at local as
well as international level (Jegorow and et.al., 2021). They also motivate the employee to
produce or rendered quick service to customer within hotel. Lastly, the operation management is
concerned with the designing and controlling of production process and redesigning of business
organization with the aim of managing the smooth business operation. The impact of operational
management over business is that the productivity and performance along with the profitability
of company increases. The impact of this over employee is that the productivity and efficiency of
employee increases which leads to reducing in wastage of resources (Al-Swidi, Gelaidan and
Saleh, 2021). For example, Premier Inn operational management make sure that chef able to
prepare food within limited time and whole staff able to provide the best customer service to
their hotel’s customers.
Organization culture is basically a system of shared assumption which involve the values,
beliefs, and environment of the organization which ultimately govern how the people behave.
The behaviour of the employee depends upon the culture or environment of the organization.
Thus, it is important for the company to manage or promote positive organization culture. The
impact of positive organization culture over the business success is that the company able to
achieve targets easily and quickly (Dahlan, Abdullah and Suhaimi, 2021). It is because positive
organization culture enhances the morale of employee and keep them motivated even during the
tight deadlines or work load. It also enhances the brand reputation in the eye of the society and
other stakeholders when people or employee or company give positive feedback about company
over internet and social media sites. This also helps the organization to attract more talents from

all over the world towards the company. For example, the employee of Premier Inn always
provides positive feedback about the Premier Inn organization because they respect their
employee and provide high incentives for extra work. In hospitality industry, the growth of
employee is high because of the positive organization culture and because of it the employee
wants to join hospitality and tourism industry (Ali and Anwar, 2021). The employee of
hospitality and tourism sector are highly satisfied with the job and growth opportunity which is
available to them because of the positive and engaged organizational culture. The impact of
which the UK hospitality and tourism sector contribution towards growth of economy and GDP
is also high. The positive organization culture result into product and service development as
well as the expansion of business (Jayantha, 2021).
CONCLUSION
After summing up the above information, it has been analysed that organizational culture
plays vital role towards the success of business despite type of business. Further, it has been also
summarized the benefits and drawbacks of different type of business. On the basis of comparison
between tall and flat organization structure, it has been summarized that the flat organizational
structure is more preferable in hospitality industry and Premier Inn organization. The humans
resources management, operational management and production management of Premier Inn or
hospitality industry have high impact over the organization as well as the employee. It has been
also summarized from the above information that, training and development, employee
engagement and flexible working is some hospitality industry practices uses by Premier Inn
within their hotel.

REFERENCES
Books and journals
Huang, Y. and Hands, D., 2022. Business Thinking Through Design. In Design Thinking for
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Reis, I. F. and et.al., 2021. Business models for energy communities: A review of key issues and
trends. Renewable and Sustainable Energy Reviews. 144. p.111013.
Lee, S., 2022. The myth of the flat start‐up: Reconsidering the organizational structure of start‐
ups. Strategic Management Journal. 43(1). pp.58-92.
Wiblen, S. and Marler, J. H., 2021. Digitalised talent management and automated talent
decisions: the implications for HR professionals. The International Journal of Human
Resource Management. 32(12). pp.2592-2621.
Zacharias, T., Rahawarin, M. A. and Yusriadi, Y., 2021. Cultural reconstruction and
organization environment for employee performance. Journal of Ethnic and Cultural
Studies. 8(2). pp.296-315.
Al-Swidi, A. K., Gelaidan, H. M. and Saleh, R. M., 2021. The joint impact of green human
resource management, leadership and organizational culture on employees’ green
behaviour and organisational environmental performance. Journal of Cleaner
Production. 316. p.128112.
Ali, B. J. and Anwar, G., 2021. Business strategy: The influence of Strategic Competitiveness
on competitive advantage. International Journal of Electrical, Electronics and
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Reems, L. С., 2021. Humanizing the teaching of Business Law for non-law university students
of Business Administration. International Scientific Journal of Universities and
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Jegorow, D. and et.al., 2021. The Establishment of New Businesses as a Seasonal Phenomenon:
A Polish Example. European Research Studies Journal. 24(4B). pp.120-137.
Dahlan, M. K. M., Abdullah, N. and Suhaimi, A. I. H., 2021, October. The Propose
Organization Structure for Digital Workplace. In 2021 IEEE Symposium on Computers
& Informatics (ISCI) (pp. 31-35). IEEE.
Jayantha, K., 2021. Kaizen Equilibrium and Organization Behavior: A Conceptual Analysis.
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Lim, M. K. and et.al., 2022. Circular economy to ensure production operational sustainability: A
green-lean approach. Sustainable Production and Consumption. 30. pp.130-144.
Luz Tortorella, G. and et.al., 2021. What does operational excellence mean in the Fourth
Industrial Revolution era?. International Journal of Production Research, pp.1-17.
Shykhnenko, K., 2021. The Structure of Organization and Management of the Research at
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(12). pp.234-243.
Mutlutürk, A., Tekcan, A. İ. and Boduroglu, A., 2021. The structure and organization of
collective memory representations. Memory Studies.
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