Understanding Business Organization - Benefits, Problems, Structures, Functions, and Culture

This report discusses the benefits and problems of different types of business organizations, compares and contrasts organizational structures, explains the functions of management, and defines organizational culture. It also provides examples of corporate organizations and their practices.

Understanding business organization

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Discuss the following...................................................................................................................3
TASK 2............................................................................................................................................4
Compare and contrast organisational structures..........................................................................4
TASK 3............................................................................................................................................5
Explain the functions of management .........................................................................................5
TASK 4............................................................................................................................................6
Explain organisational culture ....................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The purpose and objectives of a business depends upon different factors such as the size,
the financial resources of the business, the ownership of the business and other related factors.
The core functionalities and objectives of the business varies as per different types of businesses.
This report will briefly talk about the benefit and problems of different kinds of business
organisation such as sole traders, limited liability company, partnership, comparison and
contrast between different organisational structures, different functions such as HRM,
production, operation et cetera and how such functional units impacts the business performance
and the human capital, introduction about what is organisational culture and how positive
organisational culture impacts the business success (Aldous, 2018).
MAIN BODY
TASK 1
Discuss the following
Sole trader businesses: Sole trader businesses include all such businesses that are
functioned and controlled by a single owner of the business. This single owner of the business
solely operates all functional activities and implements decisions as per his or her own will. Such
single owner can also delegate employees based on the requirement to manage other business
activities. Example of sole trader businesses can be businesses that operates under self-employed
owners such as plumbers, taxi drivers, gardeners and others (Anitha, 2016). The advantages of
sold to the businesses can be that all the core functionalities are being carried and managed by
the single owner, thus, it can be said that the owner enjoys hundred percent control over the
business activities. The profit is being accessed and enjoyed by the single owner. Low business
cost and difficulties for starting new business venture. The disadvantages of sole trader
businesses are discussed. The owner is liable for business loss and failure. The owner has to pay
taxes by himself or herself. Increases the financial burden
Partnership businesses: Partnership businesses in simple terms can be defined as a
legitimate contract or agreement between two or more partners mainly to share common vision
and mission of the business. The example of partnership business can be, “Pret a Manger”, it is a

partnership venture which is headquartered in London, United Kingdom, this organisation was
founded in the year 1983 and it operates in food and beverage industry (Beynon-Davies,
2021).The advantages of partnership businesses can be that the financial burden is being
distributed among the partners. Better decision making and efficiencies in business performance.
Ease over raising business capital. The disadvantages of partnership businesses can be like the
business does not have a separate legal entity from its owners. There is higher risk of business
conflicts. The partners are equally responsible for bearing business risk and failures.
Limited company: A limited company can be defined by businesses that runs with a
separate legal entity different from its owners. A company can be further divided into public
limited, limited liability partnership, private Limited, private and limited company. Its example is
Burberry which is a global international Limited company listed under the London stock
exchange. This public limited company is headquartered in London, United Kingdom founded
by Thomas Burberry in the year 1856 (Carvalho, 2019). The advantages of limited company can
be that there is no personal liability of the owners as the business and the owner is being treated
separately. Limited company helps to add on reliability and goodwill in the market place.
Business have a separate legal existence. The disadvantages of limited company can be like there
is a higher rate of security and privacy leak. Higher business expenses. Preparing financial
statements at the end of the accounting year becomes complex.
TASK 2
Compare and contrast organisational structures.
Tall organisational structure: Tall organisational structure can be defined by businesses
that follows many levels of management (Dubey and Singhal, 2016).The span of control is
narrow. It incurs higher business cost in comparison to flat organizational structure. The
corporate example of business that follows tall hierarchical structure can be government agencies
that follows higher bureaucracy within the management.
Flat organisational structure: Flat organisational structure can be defined by business
structures that involves limited or very little management levels. The span of control is wide. The
cost incurred for flat organizational structure is lower in comparison to tall organisational
structure as the business does not have to spend more to maintain many levels of management
(Elsmore, 2017). The example of business that follows flat organisational structure can be Marks

& Spencer which is a PLC business headquartered in London, United Kingdom. This association
follows a flat organisational structure with very little levels of management in order to reduce
bureaucracy and to bring efficiencies in business overall performance.
TASK 3
Explain the functions of management
Different businesses have separate functional units solely to manage core business
functionalities. In order to understand different functions such as human resource management,
finance, research and development, Zara is chosen as a corporate example to reflect different
functional activities managed by the business association. Zara is a British retailer and also a
global organisation founded in the year 1975. The overall business objectives are being divided
into different functional units such as finance, research and development, human resource and
others (Gillam and Cosford, 2021).
Finance: Finance is a core functional activity of the business and also plays a significant
role in order to carry business activities as per predetermined objectives and standards. The
financial unit of the business is being delegated to a finance manager who is further deployed
with different responsibilities and roles to perform (Goldman, Nienaber and Pretorius, 2015).
The main all the major roles performed by the financial manager is to prepare financial
statements by the end of accounting year, evaluating the overall business performance and the
positioning in the marketplace, delivering financial advises to top-level executives, determining
the funds required, allocation of the funds, utilizing the funds into the productive manner are
certain roles performed by the manager. Further the financial unit is also segregated into
different sub-units to manage the overall financial activities of the business.
Research and development department: The research and development department in
Zara is deployed in order to conduct market survey and research by using different
methodologies and algorithms. Such market research and survey conducted by the R&D
department helps to keep updated information about the current market trends and demand,
further, helps business Association in order to formulate decisions pertaining to the market
offerings to be delivered to the end prospects.

Human resource management unit: As the name only suggests by managing the human
resource. The human resource management unit in Zara is delegated in order to manage the
overall human capital performance and their contributions at work. The human resource manager
is mainly responsible to carry recruitment process, training and development, compensation to
the employees, measuring performance as per the business standards and other related activities
(Jackson and et.al., 2017).
TASK 4
Explain organisational culture
Organisational culture can be defined as the set of values that a business carries in order
to manage the human relations at work. Organisational culture can also be defined as a
predetermined set of belief or value that any business follows over a period of time to manage
the human efforts into same direction and all the business activities as per the laid objectives.
Taking Marks & Spencer as a corporate example, which is an UK-based global organisation and
one of the oldest retailer in the country. Marks & Spencer was started as a small business and
followed the same organizational culture even after the business became a global market leader.
The business executives of the Association believed that there are no such requirements of
bringing amendments in the organizational cultures as it was counted as a reason of success and
thus the association followed the same inflexible corporate culture since a very long time
(Maheshwari, and et.al., 2017). However, over time the executives realised that business
environment is dynamic and keeps on changing over time, the business needs to make necessary
amendments in the traditional cultures to sustain in the market place. Thus, the business
executives in Marks & Spencer adopted an organisational culture which is more dynamic and
flexible in nature resulting to which the business faced different positive outcomes such as
employee satisfaction, flexibility over formulating and implementing decisions, more dedicated
employees and less resistance to change and other merits.
CONCLUSION
In the light of the above discussion, it can be said that there are different businesses
operating on the basis of their ownership, their functional activities, the size, capital invested and
other factors of differentiation. Business functions such as human resource management, finance,

research and development and other functional units are solely responsible to manage the overall
business objective and drive business success. Organisational culture also plays a significant role
in order to accomplish business success as it drives positivity and better inputs at work

REFERENCES
Books and Journals
Aldous, M., 2018. Business ownership and organisation. In An economist’s guide to economic
history (pp. 167-174). Palgrave Macmillan, Cham.
Anitha, J., 2016. Role of Organisational Culture and Employee Commitment in Employee
Retention. ASBM Journal of Management. 9(1).
Beynon-Davies, P., 2021. Business Analysis and Design: Understanding Innovation in
Organisation. Springer Nature.
Carvalho, A. M. 2019. Operational excellence, organisational culture and agility: the missing
link?. Total Quality Management & Business Excellence. 30(13-14). pp.1495-1514.
Dubey, A. and Singhal, A. K., 2016. Role of organisational structure in empolyee's
empowerment. International Journal of Education and Management Studies. 6(1). p.110.
Elsmore, P., 2017. Organisational Culture: Organisational Change?: Organisational Change?.
Routledge.
Gillam, S. and Cosford, P., 2021. Organisational structure. In Leadership and Management for
Doctors in Training (pp. 26-31). CRC Press.
Goldman, G. A., Nienaber, H. and Pretorius, M., 2015. The essence of the contemporary
business organisation: A critical reflection.
Jackson, D. and et.al., 2017. Employer understanding of work-integrated learning and the
challenges of engaging in work placement opportunities. Studies in Continuing
Education. 39(1). pp.35-51.
Maheshwari, V. and et.al., 2017. Exploring HR practitioners’ perspective on employer branding
and its role in organisational attractiveness and talent management. International Journal
of Organizational Analysis.
Miskiewicz, R., 2017. Organisational structure in the progress of integration.
Odor, H. O., 2018. Organisational culture and dynamics. Global Journal of Management and
Business Research.
Stalph, F., 2020. Evolving data teams: Tensions between organisational structure and
professional subculture. Big Data & Society. 7(1). p.2053951720919964.
Su, Z., Chen, J. and Wang, D., 2019. Organisational structure and managerial innovation: the
mediating effect of cross-functional integration. Technology Analysis & Strategic
Management, 31(3), pp.253-265.
Tosey, P., 2017. Understanding organisation development. Kogan Page Publishers.