Understanding Business Organisations: Types, Functions, Structure and Culture

This project essay provides insights into the business environment by discussing types of business, organisational structure, business functions, and organisational culture. It covers sole trader, partnership, and public limited company, flat and tall organisational structures, marketing, human resource, and operations functions, and Handy's cultural model.

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Understanding
Business
Organisations

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The term business environment can be defined as sum total of all factors that have potential to
affect functioning and operations of an organisation (Massa, Tucci and Afuah 2017).
Understanding of business facilitates in framing of strategies which leads company towards
attainment of both short term and long term objectives. Adding to this, it also helps company in
becoming more responsive against its competitors. This project essay is based on business
environment in order to gain insights. For better understanding of business environment, Hotel
Premier Inn is taken into consideration. This project essay will highlight various categories of
business along with organisational structure. In addition to that, it will cover several business
functions as well as organisational culture.
TASK
Business may be termed to any enterprising organisation which involves in either professional,
commercial or occupational activities with motive to earn profit. One of the simplest type of
business is sole trader in which business is established, managed and operated by a single person.
For example, Little French restaurant is type of sole trader and operated by a single person. The
major advantage of this type of business is that it offers flexibility and owner is liable to enjoy all
profit margins and do not have to take suggestion from its directors or others. Owner has full
control over its assets and can power remains in one hand. It also requires low capital for
establishing enterprise and there is less need of professional advices. This will result in lowering
down of overall cost and owner enjoy higher profits. One of the major drawback of sole trader is
that owner has responsibility to bear all loss in case of recession. Sometimes taking decision
becomes rigid and it may lead in taking wrong decision. The another limitation of sole trader is
that it limits expansion capacity due to inadequate capital (Gill and Hart, 2018). All the decisions
and responsibilities remains in one hand and that becomes hectic for an individual to manage
activities. The other form of business is partnership in which two or more individuals agrees to
setup enterprise in order to carry out business activities to generate profit. The major advantage
of partnership is that it forms greater borrowing capital. It becomes easier to establish company
with partnership as each partner brings capital which reduces burden on one as can be seen in
sole trader. Thus, large amount of capital can be raised with partnership and it bridges gap
between expertise and knowledge in order to carry out business operations. In partnership, a

single partner cannot take decision and have to take jointly decision. When partnership dissolves,
the ownership changes and it becomes difficult for partners to recreate deeds and other
formalities. It also results in legal conflict in case of informal agreement or in absence of
partnership deed.
Public Limited company is also one form of company in which it is commenced through shares
of stock which are intended for free trade on stock exchanges. For example, Hotel Premier Inn is
listed on London Stock Exchange. In Public ltd company, the main advantage is raising share
capital especially if the company is listed on recognised stock exchange. This helps company at
time of funding capital from internal or external sources (Formosa, 2018). It can be seen as a
prestigious symbol that gives confidence to public and they can invest their savings in company.
In relation to Hotel Premier Inn, there are various managers who collaboratively focus on
making company successful. The major drawback of public limited company is that it is
subjected to specific scrutiny level from its investors and regulators. The other drawback is that it
only focus on short term goals and not on long term objectives of company.
Organisational structure can be defined as a system that outlines several ways along with
practices that contributes in fulfilment of objectives. There are various types of organisational
that company opts as per its operational level. Some of the examples of organisational structure
are tall and flat structure. Tall structure can be depicted as hierarchal structure in which company
breaks down its into various hierarchy. In relation to Hotel Premier Inn, it breaks departments
inti various hierarchy and each hierarchy have its own manager who is responsible to carry out
functions. High control and clear responsibility lines can be seen in this structure. All the
hierarchy of company collaboratively work in order to accomplish objectives. The advantage of
tall structure is that it lies in clarity as well as in managerial control. It also facilitates in
providing various layers along with responsibility lines and clear promotion structure. Whereas,
flat structure is also known as horizontal structure in which company have few or no middle
management between personal and executives. Few management levels, high responsive towards
dynamic market and decentralised management approach are some characteristics of flat
organisational structure (Zingales, 2021). There are various opportunities lies in this structure so
as to excel time for showcasing business vision. It is flexible in nature and consist better
potential in order to adopt change. This organisational structure empowers workforce and allows
them for greater sense of autonomy along with responsibility.

Business function can be said to those activities which are carried by enterprise having
motive to earn profit. In relation to Hotel Premier Inn, some of key business function are human
resource, marketing and operations. The first business function is marketing and it relates to
promoting of products and services to its target customers. It plays an important role in making
aware public about its offerings. By promoting products, company can attract larger customer
base. In relation to Hotel Premier Inn, it opts digital marketing tools in order to engage and to
communicate with its customers. Marketing activities positively impacts on company’s brand
equity and makes product visible to mass audience which contributes in enhancing sales volume.
The another business function is Human Resource function and it relates to recruitment and
selection, payroll administration, evaluation of employee’s performance and provides training
and development sessions (Sinclair, 2020). It is responsibility of HR manager to maintain a
healthy relation with its employees which leads to higher job satisfaction and reduced employee
turnover. It is important for company to create a foster working environment in which employees
feel valued part of company and work with peak potential. The functioning of HR manager
affects on performance as well as in productivity of company. In ensures that each workforce is
motivated enough to carry out their roles and to attain organisational goals. Another business
function is operations and it relates to conversion of input to output. Operation aims to provide
better services to its customers and acts as a mechanism for control. The operational activities of
company are efficient and contributes in making company more efficient. All these activities
positively impact on improvising strengths by which competitive advantage can be taken.
Organisational culture can be referred as sum collection of all practices and expectations
together with norms and values that facilitates in directing and informing team members. It
consists of shared beliefs which are formed by leaders and managers which further
communicated in addition to reinforce by using various methods that eventually shapes
perceptions and thoughts of employees. It is important for company to create a foster working
culture in which employees feels comfortable and motivated enough to attain personal and
professional goals. In relation to Hotel premier Inn, it opts Handy’s cultural model in order to
shape various methods to work and behave within organisation. In power culture, company
operates in a centralised culture which focus on decision makers. The working culture of Hotel
Premier Inn is effective in which each employee feels valued part of company and it also
provides growth opportunities to deserving employees. Along with this, company also conduct

training and development sessions by which employees can polish their existing skills and
acquire new set of skills.
CONCLUSION
From the above project essay, it was concluded that there are various forms of business such as
sole trader, partnership and public limited company. In sole trader, all the responsibility lies in
one hand and owner enjoys profit as well as bear loss. Along with this, there are various
functions such as human resource, marketing and operations that collectively contributes in
accomplishing objectives. Flat and tall are types of organisational structure which outlines
procedure, roles and responsibility of employees. Having effective organisational structure helps
in enhancing operational efficiency and brings workforce together so as to attain goals.
Organisational culture forms positive workplace environment that influences nature of plans
which drives company to long term vision.

REFERENCES
Books and Journals
Cary, W.L., 2016. How Illinois Corporations May Enjoy Partnership Advantages: Planning for
the Closely Held Firm. Nw. UL Rev., 48, p.427.
Formosa, A.M., 2018. From a sole trader to a company: a legal and financial analysis (Master's
thesis, University of Malta).
Gill, M. and Hart, J., 2018. Policing as a business: The organisation and structure of private
investigation. Policing and Society: An International Journal, 7(2), pp.117-141.
Massa, L., Tucci, C.L. and Afuah, A., 2017. A critical assessment of business model
research. Academy of Management Annals, 11(1), pp.73-104.
Sinclair, A., 2020. Approaches to organisational culture and ethics. Journal of Business
ethics, 12(1), pp.63-73.
Zingales, L., 2021. Insider ownership and the decision to go public. The review of economic
studies, 62(3), pp.425-448.