Understanding Business Organizations

This report covers various types of businesses such as sole trader, partnership and limited company along with its advantages and disadvantages as well as concepts of flat and tall business structure and differences between them. Furthermore, different human resource management functions like operations and production and their impact on organisational functional activities and people is explained.

Understanding
business organisations

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

INTRODUCTION
Business is referred as an organisation or entity that is engaged in various commercial,
professional and industrial activities with the objective of generating profits as well as attracting
higher number of customers. In organisation, various people work together to achieve some
specific goals and objectives (Ahmad and Murray, 2019). It becomes important for the business
to analyse environmental factors than take efficient business decisions that lead business towards
growth and development. This report covers various types of businesses such as sole trader,
partnership and limited company along with its advantages and disadvantages as well as
concepts of flat and tall business structure and differences between them. Furthermore, different
human resource management functions like operations and production and their impact on
organisational functional activities and people is explained. Along with that, concept of
organisation culture and its impact on business success are mentioned.
TASK
There are various types of businesses that involves in producing and selling products and
services with the objective of generating higher profits. All type of business are different from
each other on the bases of their advantages and disadvantages. Sole proprietorship or sole-trader
business is defined as the unincorporated business that has one owner who perform all business
operations and gain overall business profits. It is the easiest type of business due to having less
government regulations. Sole-trader take all risks of starting their own business with having
disadvantage of unlimited liability (Bencivenga, Marchegiani and Marchiori, 2019). Advantages
of sole-trader are that it is easy to establish, sole-trader retains all profits and free to take business
decisions where its disadvantages are that it is difficult for business to raise funds, heavy
workload of sole-trader that creates unbalance work life balance. Partnership is defined as the
agreement between two or more people for attain common goals and objectives. In this
agreement, all partners manage and operate business as well as share profits in determined ratio.
Partnership contains minimum legal formalities to establish, free from government control, risk
is shared among partners in the share of their invested amount and for its dissolution any legal
procedure is not required as well as work is divided among partners that reduces workload. On
the other hand, it has unlimited liability, future of partnership is uncertain and unstable and have
long and difficult decisions that impact in overall business performance. Limited company is the

defined as the general form of incorporation that limits the amount of liability that are contained
by the organisational shareholders. Its advantages are that its employees have limited personal
liabilities, having professional status and employees get higher personal remuneration as well as
company has its own separate legal identity. On the other hand, company need to adhere strict
book-keeping and record-keeping requirements, it records must be available at registrar office
for public inspection, company accounting procedure is complex and high time-consuming that
created negative impact on overall organisational efficiency and effectiveness.
Organisational structure is the system that outlines certain activities that are directed to attain
determined goals and objectives of business. Tall business structure in defined as the vertical or
top-to-down management style in which organisational leaders establishes work culture,
strategies, goals and communicate all these strategies or planning to middle management or
supervisors with the objective of implementing this process through lower department of
organisation (Katagiri, 2020). It is suitable for larger business that need rigid hierarchy for
maintaining workplace efficiency. There are multiple departments that are manages by the
managers. This business structure has clear chain of command and employees only responsible
for implementing strategies that are developed by top management. On the other hand, in this
structure information take long time to reach all hierarchical level of business and impact in
morale of employees because they are not allowed to take part in decision-making. Premier Inn
is the big hotel of UK that adopts tall structure that consists various department and manager take
all decisions. Whereas in flat business structure, few managers or supervisors and more
authority and freedom is provided to employees. As compared to top-bottom business structure,
flat structure consists bottom-up approach that help business to take advantages of employee’s
skills, talent and creative imagination because they are included in business decisions.
Employees are not obliged to take approval to take decisions that enhances their performance
and productivity (Smirnova, 2019). Employees are encouraged to provide unique ideas and adopt
changes to improve workplace efficiency. In flat structure, effective communication is found
because of few layers of management. The Towe Hotel implements flat business structure that
contains less department and employees are included in business decisions. It is important for the
business to analyse business structure and adopt best one to run business operations in efficient
manner.

Business has different function and all these department are interlinked as main aim of all these
department is to attain goals and objectives of firm. It is important for business to control this
function in order to attainment of goals of business. These functions included in business are
human resource management, financial management, production, operation, marketing and
others. All these functions focus on different work in order to attain common goals of business.
Human resource department is one of important department of business as it deals with human
resource. This department ensure organisation has proper availability of resources in organisation
for attainment of goals and objectives. It hires right employees for right position at right time. It
is a function that also deals with payment of salary of employees (Kumaresan and Liberona,
2018). It also monitors working of employees, providing them timely training, maintaining
records of personal information of employees. Another function of business is operation
management that deal with efficient of employees. It is one of important department which helps
business to monitor process adopted in organisation and allow firm to ensure completion of order
on time. It is important in order to maintain quality of products and service of company and also
allow them for purpose of improving satisfaction of customers with offering of business.
Production function deals with conversion of raw material into finished goods. It is important for
business to managers of company to monitor thins function in effective manner. All these
function in business allow them to complete work of company in effective manner and also for
attainment of goals and objectives. It allows firm to fulfil demand of customers and allow firm to
increase profitability of firm.
Organisational culture refers to collection of expectation, practices and values that inform and
guide action of different team members. It is important for an organisation to adopt various
culture trait as it allow them to improve performance of company. Culture is one of essential
component in business that allow them for purpose of focus on goals of company. Culture are
ideas, belief and custom of people of specific society. There is different culture in different
country. A multinational organisation hires employees who belong from different country
(Osafo, 2022). It is important for managers of company to manage culture in organisation.
Culture management is important task as if business does not manage it in effective manner, it
can result in conflicts. Culture management is a process that cultivate and scaling work of work
culture in an organisation. Impact of culture of company is on morale as well as productivity of
firm. Positive culture in an organisation helps to build trust among different members where

employees can speak without any hesitation. Culture management is also important in order to
maintain performance of company. It is also important for business in order to maintain key
quality in environment of business. On basis of it, it is important for business in order to
collaboration of other people and also promoting team work in business. Positive culture in
business also helps them to promote innovation in business that also leads to performance
(Runciman, 2022). This innovation is on basis of resources, market and technologies. In this of
culture, employees are free to provide them ideas and suggestion to business that also helps
business to adopt innovation.
CONCLUSION
From above mentioned project report, it can be concluded that it is important for an entrepreneur
to understand organisation. There are different types of organisations including sole trade,
partnership, limited company and others. All these organisations structure its own advantage and
disadvantage for business. There are also different types of organisation structure and use of it
depended on business. Organisation has various function which are aiming for attainment of
goals. These functions include human resource operation and production function.

REFERENCES
Books and Journals
Ahmad, M.U. and Murray, J., 2019. Understanding the connect between digitalisation,
sustainability and performance of an organisation. International Journal of Business
Excellence, 17(1), pp.83-96.
Bencivenga, R., Marchegiani, L. and Marchiori, M., 2019. A Process Toward a Good
Organisation?. Business Ethics and Care in Organizations.
Katagiri, H., 2020. Conceptual organisation of customer engagement: Understanding the concept
of engagement and considering the structure of customer engagement factors. The
Marketing Review, 20(1-2), pp.109-142.
Kumaresan, A. and Liberona, D., 2018, August. A Case Study on Challenges and Obstacles in
Transforming to a Data-Driven Business Model in a Financial Organisation.
In International Conference on Knowledge Management in Organizations (pp. 263-
276). Springer, Cham.
Osafo, E., 2022. Using human anatomy and physiology to explain business organisation
effectiveness. International Journal of Business and Systems Research, 16(2), pp.259-
276.
Runciman, B., 2022. It in the Organisation. ITNOW, 64(1), pp.24-25.
Smirnova, L.S., 2019. Economic effects of the implementation in the company of the innovative
models of management based on the stakeholder approach and network forms of the
business organisation. International Journal of Nuclear Governance, Economy and
Ecology, 4(4), pp.273-287.