Understanding Business Organizations: Types, Functions, and Structures

This report provides a detailed study of types of business organizations, their functions, advantages and disadvantages of different structures, and organizational culture. The report also includes a case study of Marriott International Inc.

Understanding
Business
Organizations

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Business organisation can be referred as an entity or a body formed by solo, group or
multiple members in order to carry trade activities of buying and selling of goods and services
with prime objective of attaining profits along with improving societal benefits. There are
multiple kinds of business organisations categorised on the basis of their nature of business, type
of business etc.(Clement, 2019) In this report, detailed study of types of business organisation
and few basic function of business organisations would be mentioned. Along with this, this
report also illustrates the advantage and disadvantages of types of structures prevails in an
organisation. For better understanding, reports detailed information is shared in context to
Marriott International Inc. and other partnership and sole proprietorship hotels are taken into
consideration for detailed analysis. Forth, in this report a brief information related to
organisational culture is also presented.
TASK
Business organisations are mainly classified into three categories. Sole proprietorship,
partnership and limited company. Though the mutual purpose of all business entities is earning
profit but the working and operations differs in each business categories.(Holbeche, 2018)
Sole proprietorship refers to the business entity wholly managed by a single person who is
responsible for acquiring, implementing, generating capital on his own. In such business owner
has full control on his business. For example – The feathers hotel is a single owner or sole
proprietorship hotel operated by its founder and owner itself. In such type of business the owner
enjoys complete flexibility and has full control over its assets and enjoys full percentage of profit
earned. Sole proprietorship business also required less amount of capital with lower professional
advised to conduct business operations.(Dahlan and et. al., 2021) On the other hand, owner have
to bear the losses if incurred and would be solely accountable for his/her business activities.
Also, being a single individual it becomes difficult in decision making process to adopt the best
possible ides required to conduct efficient business operations without any advisory body. Apart,
a limited amount of capital restricts the expansion of the business creating limited approach of
business expansion.(Myers, 2020)

There is another form of business and it contributes to higher percentage of such entities
in business world. This form of business is known as partnership businesses. In partnership
business two or more individuals form an business enterprises by creating an partnership
agreement deeds to conduct business activities like investing, operating and sharing of profits
and losses in specific partnership ratios. The biggest advantage of conducting partnership
business is that lenders could easily lend required financial capital to establish the business.
Apart, expertise can be brought to the table to form and implement most efficient ideas and
suggestions to carry business operations. (RECTOR, 2021) Partnership business enables
acquiring of huge capitals to expand the business operations in multiple location within or across
the countries. Though there are several disadvantages of proprietorship business as unequal
partnership ratios causes questioning on accountability and responsibilities in case of losses and
uncertain happening in business operations. Also, disputes between partners created negative
goodwill of the organisation. And if, any partner wills to move out of the business it requires
huge formalities and dissolving of deed which eventually leads in change of ownership of the
organisation.(Irum, and Yadav, 2019)
Another form of business is Public limited company where the business is listed in stock
exchange board of the respective country it is established in. and raises most of its capital
through trading of its shares at stock market. Hotel Marriott Inc. is a public limited business
entity that raises its capital form its shares listed at stock exchanges this is one of the major
advantages of businesses like Marriott. Public limited companies are the most established
business organisations that builds trust in the market so any capital requirement can be easily
acquired by financial institutions present in the country. Though, public limited company while
making decisions considers boards of directors advises that sometime takes longer time in
framing important decision. Apart, such companies and organisations are more inclined towards
achievement of short term goals rather than long term objectives.(Obrist, 2020)
Organisational structure can be defined as the roadmap or pathways to determine how the tasks
and activities are delegated or directed to certain departments, teams or individuals within the
organisation. Companies and organisations follow proper organisational structure for efficient
flow of activities, tasks and responsibilities within the business premises to meet the objectives
efficiently(Erthal and Marques 2018)
Two most prominent structure are further discussed -

Most companies follows proper hierarchical structure in the organisations which is also
called as Tall structure. Their are certain levels and departments above each other that forms an
tall – hierarchy to be followed in carrying activities in the business premises. In reference to
Marriott International Inc. Marriott follows strict hierarchy and levels in its organisation to
delegate the responsibilities and also for flow of communication within its hotel's branches
worldwide. Tall structure helps in maintaining transparency and clarity of assigned tasks and
responsibilities at every level. Also, company uses hierarchical structure in providing promotions
to the deserving employees according to the level of structure in an organisation.(Nassar, 2018)
On the other hand, Flat organisational structure includes single level at which business
operations are carried in an organisation consisting of managers and other higher level
authorities that can be accessed on the same level of structure in the company. With
decentralised approach of management this structure offers flexibility in working environment
and addresses free flow of communication bringing more efficiency in working of organisation.
This can also be called as Horizontal organisational structure.(Ferreira, Pimenta and Wlazlak,
2019)The benefits of flat structure is that it brings efficiency in overall working of various
departments of company. Also, flat structure establishes collaborative and autonomous culture
within the organisation. In hotels like Marriott, Tall structure is followed to bring more
centralised and proficient delegacy in working operations as it reflects the most formal trait of
working within the Hotels. Flat structure creates an informal culture which cant be considered in
Hotels as it marks indecency of brand like Marriott International Inc.(Iqbal and et. al. 2020)
A certain set of activities and operations are carried within the enterprise to achieve the
final motive of earning profit and desired goals. Such set of activities can also be expressed as
business functions. There are some prominent functions that are actively conducted in Marriott
International Inc. The first is Human resource functions, to hire, train, and retain the workforce
within the hotels, Human resource management of Marriott performs several operations like
Recruiting, selecting. Training and development of employee along with ensuring fair payments
of wages and salaries along with creating healthy and interactive working environment within
the workplaces. Apart, Marketing and sales management takes care of promoting, advertising
and selling of Marriott's products and services in order to acquire more revenue growth along
with gaining competitive edge over its competitors. (Williams, 2022) Marketing department of
Marriott is highly focused in acquiring larger customer base by presenting lucrative offerings of

services offered. On the other hand operations department of Marriott focuses on providing more
creative services by producing lucrative offers to the individuals and corporate customers to
retain their customers. Apart this operations department also emphasises on smooth functioning
of activities performed within the hotels to ensure proper business operations are being
conducted. All such functions plays crucial roles in effectively achieving the desired and set
objectives by the hotel management.(Shinde, 2018)
Organisational culture can be defined as the norms, values and activities practised within
the workplace to facilitate healthy working environment where employees are contributive
towards each other along with high focus on desired objectives. Healthy culture is of utmost
significance as it impacts the working of organisation in either ways. Leaders at organisations
ensures heathy beliefs and practices should surface within the workplace to bring more
efficiency in business operations. In reference to Marriott International Inc., company
implements Charles Handy's culture model to establish the proper distribution of power, tasks,
role among the workforce of the organisation.(Chión, Charles and Morales, 2019) To frame
collaborative and cooperative culture Marriott focuses on centralized working culture so that
employees can address their views and issues to their superior authorities. Marriott provides
supportive work environment where employees feel supportive and a sense of belongingness is
there to make them more efficient in serving their customers.(Mansouri, Singh. and Khan, 2018)
Regular training and development sessions conducted at Marriott ensures employees should be
competent and skilled enough to bear everyday challenges in most proficient ways.
CONCLUSION
It can be concluded from the above project essay that every business whether sole
proprietorship, partnership or Public limited has its own benefits and disadvantages as per their
nature. Though it can be further concluded that every business requires common organisational
functions to be carried to attain efficiency in organisation and every function plays an important
role in making business successful. The types of structures mentioned in the report illustrates the
free flow and efficiency that can be brought to organisation by adopting the best organisational
structure as per the business requirement leading in smooth functioning of the organisation. The
more supportive and collaborative culture prevailing within the organisation reflects the smooth

working at workplaces bringing more productivity and achievable desired results and objectives
of a company.

REFERENCES
Books and Journals
Myers, D.H., 2020. Corporate Implementation and Business Forms. In Sustainability in
Business (pp. 61-83). Palgrave Macmillan, Cham.
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Obrist, O., 2020. The impact of organisational structure and organisational culture on the
efficiency of a business (Doctoral dissertation).
Iqbal and et. al. 2020. Human resource practices and organizational innovation capability: role of
knowledge management. VINE Journal of Information and Knowledge Management
Systems.
Shinde, S.V., 2018. Functions of management. Lulu. Com.
Mansouri, A.A.A., Singh, S.K. and Khan, M., 2018. Role of organisational culture, leadership
and organisational citizenship behaviour on knowledge management. International
Journal of Knowledge Management Studies, 9(2), pp.129-143.
Clement, F.H., 2019. Tall or Flat? Examining The Relationship Between Organizational
Structure and Turnover Intention (Doctoral dissertation, Azusa Pacific University).
Dahlan and et. al., 2021, October. The Propose Organization Structure for Digital Workplace.
In 2021 IEEE Symposium on Computers & Informatics (ISCI) (pp. 31-35). IEEE.
Irum, A. and Yadav, R.S., 2019. Human resource information systems: A strategic contribution
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Nassar, M.A., 2018. Human resource management practices and organizational commitment in
four-and five-star hotels. Journal of Human Resources in Hospitality & Tourism, 17(1),
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Ferreira, A.C., Pimenta, M.L. and Wlazlak, P., 2019. Antecedents of cross-functional integration
level and their organizational impact. Journal of Business & Industrial Marketing.
Williams, P., 2022. Organisational culture: definitions, distinctions and functions. In Handbook
of Research Methods for Organisational Culture (pp. 5-22). Edward Elgar Publishing.
Chión, S.J., Charles, V. and Morales, J., 2019. The impact of organisational culture,
organisational structure and technological infrastructure on process improvement

through knowledge sharing. Business Process Management Journal, 26(6), pp.1443-
1472.
Erthal, A. and Marques, L., 2018. National culture and organisational culture in lean
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Holbeche, L.S., 2018. Organisational effectiveness and agility. Journal of Organizational
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