Essay on Understanding Business Organisations and Environments

This essay provides a comprehensive overview of business organisations and their environments. It begins by discussing various types of businesses, including sole proprietorships, partnerships, and limited liability companies, highlighting their respective advantages and disadvantages. The essay then compares and contrasts tall and flat organisational structures, examining the impact of different business functions, such as human resources, operations, and production, on management activities. Furthermore, it analyses the role of organisational culture and how a positive culture can significantly contribute to the success of an organisation by promoting transparent communication, enhancing mutual trust and respect, reducing employee turnover, and minimising internal politics. The report concludes that fostering a healthy work environment and understanding the intricacies of organisational structures and functions are crucial for achieving business goals effectively.

Understanding business
organisations and their
environments

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Types of businesses ....................................................................................................................1
Compare and contrast organisational structures.........................................................................2
Different business functions and the impact of their functional management activities on the
organisation.................................................................................................................................3
Organisational culture and explain how positive culture impacts on the success of an
organisation.................................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business organisations refers to an entity whose purpose is to carry out commercial
activities. It is a process through which tasks gets divided into groups an delegation of authority
and responsibility has to be done. The aim of the entity is to make people work at their utmost
efficiency so that the organisation can achieve goals and objectives (Brewster, Mayrhofer and
Farndale eds., 2018.). The main purpose of an entity is to provide products and services to the
consumers in return to which they receive monetary benefits. The products and services of the
business provides value to he customers and because of that added value the consumers are
willing to pay prices which is the revenue of the company. In this report, types of business is
boing discussed along with the understanding of organisational structures. Furthermore, different
business functions and its impact on management activities along with organisational culture's
impact on success has been provided.
MAIN BODY
Types of businesses
Their are three types of business which are given below:
Sole proprietor: These types of entities are financed, controlled and managed by a single owner
and are generally small scale organisations (McGilvray., 2021). For example, Ma Bakery is a UK
based business providing various types of breads to its customers along with recipe courses.
Advantages:
 The formation of this type of entity is generally easier than any other form.
 They enjoy wide variety of government subsidies. Quick decision making because of full control of a single person.
Disadvantages
 These types of entities generally lack professional talent
 The owner have unlimited liability. Limited growth prospects.
Partnership: This type of entities involves more than one owner who are willing to do business
mutually (Mathieu and et. al., 2019). For example 909c is a partnership firm providing digital
marketing services to its customers.
Advantages
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 Their are less number of legal obligations
 The burden of workings is divided onto partners They have variety of skill and knowledge because of different partners.
Disadvantages
 Partners have unlimited liability which means their personal assets are also on stake.
 Potential of conflict due to change in perspectives. Slower decision making
Limited liability company: This type of organisations have a separate legal entity and there are
several number of members in this organisation (Kerzner., 2019). For example Publicis Groupe
is a UK based limited liability company advertising and public relation services.
Advantages
 There is no personal liability of any member towards debts or losses.
 The members have flexibility in the structure Major taxation benefits
Disadvantages
 Formation is more complex that sole proprietor or partnership
 Limited life of the company
 Complex method of transferring ownership.
Compare and contrast organisational structures
Tall organisational structure Flat organisational structure
 Tall structure of organisation have
several stages of hierarchy and
generally involves different posts in an
organisation.
 It is also known as traditional or
mechanical structure (Barnes., 2019). It
enhances clarity and control of
managers.
 It has a long chain through which the
employees can communicate and have
 Flat structure in an organisation have
less number of organisational structure.
 In flat structure of organisation the
focus of the company is on
empowering the employees rather than
on the code of conduct or chain of
command (Barbosa and et. al., 2018).
 Flat structure of organisation promotes
more opportunities to employees and
allow them to excel the field of their
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a long chain of command.
 Large companies promote this structure
as it increases the efficiency of
systematic work.
 They provide obvious lines of control
and responsibility and have a clear
promotion structure (Mukherjee,
Makarius and Stevens., 2018).
 For example, Sainsbury is using tall
organisational structure in order to
delegate responsibilities effectively
choice.
 It is a more democratic style of
structure which allows employees to be
creative and explore new ideas which
can enhance their productivity and
efficiency (Harris and et. al., 2021).
 For example Nike company uses flat
structure in organisation in order to
increase transparency in the
organisation.
Different business functions and the impact of their functional management activities on the
organisation
Human resource department: One of the most important resource for a company is
human resource. without human resource the company will not be able to have talent in their
organisation. It is important for an organisation to have human resource department as it will
enhance the employer employee relationship and will make sure that there is positive work
environment in the organisation. Human resource department personnels make sure that the
employees are not suffering from any problem which can affect their productivity and try to
provide constant motivation to the employees (Hamilton and Webster., 2018). This department
helps the organisation in retaining employees and decreasing employee turnover ratio of an
organisation which creates a positive impact on the reputation of the company and the company
will be able to attract talent in their organisation. For example, HR department of Tesla make
sure that the company is recruiting right employee for the right job.
Operations department: This department of the company make sure that the company is
having appropriate resources in order to carry out their business. It is important for the company
to have appropriate resources in order to void any interruption in the processes of the company.
Interruption in the processes can make the company face severe losses which is not good for the
profitability of the company (Ladley., 2019). It is important for the company to make sure that
they are ordering the right amount or resources and department helps the company in finding
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economic order quantity which will make sure that the company is spending the right amount on
ordering cost as well as on carrying cost. For example, operations department of Tesco make
sure that the resources required by the company is available in right amount.
Production department: This department is responsible for the manufacturing and
production processes of the company. The department makes sure that the process of the
company is effective and efficient so that there is no or less wastage of material. It is important
for an organisation to have effective production department as it will help the company in
reducing the cost of products and services of the company (Gimpel and et. al., 2018). As the
markets are highly prices sensitive, reduction in cost of products can make sure to provide
competitors advantage in the market to the company. By improving the level of manufacturing,
this department can provide major benefits to the company. For example, production department
of Marks and Spencer makes sure that the processes of the company are working effectively and
efficiently.
Organisational culture and explain how positive culture impacts on the success of an
organisation
Organisation culture plays a major role in the workplace and on the productivity of
employees. If company is having positive culture then their employee will have greater
productivity and motivation whereas, if the company is having negative working culture then the
employees of the company will remain demotivated and it will eventually leads to decreased
productivity. Following are some of the benefits of positive culture and its impact on the success
of organisation.
Promotes transparent and open communication: Positive organisation culture
promotes transparent and open communication which decreases the scope of misunderstanding
and miscommunication (Cosenz and Noto., 2018). It will make sure that the company is creating
an open communication system in which people can freely speak up and can easily communicate
their ideas. It will help the company in collecting creative ideas which can increase their
efficiency.
Enhances mutual trust and respect: when the company have a positive work culture
and people can easily communicate without any hierarchical barriers, it will enhance the mutual
trust of employer and employee and will also enhance the feeling of respect mutually (Speller.,
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2018). It is important for the organisation to have positive work culture so that teams can work
mutually towards the goals and objectives of the company.
Reduce employee turnover: When an employee feels satisfaction in their workplace, it
will enhance their productivity. One of the major aim of organisational culture is to provide job
satisfaction to its employees (McGilvray., 2021). In this way the company will be able to retain
their talented employees and will also make sure that the company is attracting more talent due
to its good reputation.
Less internal politics: When there is a positive work culture which is enhancing open
communication, there are less chances of office politics. When there is positive working culture,
it will make sure that employees are having increased productivity and motivation which makes
the employees even busy and it gives a lesser scope to the office politics in the management of
the organisation.
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CONCLUSION
From the above report it is concluded that in order to achieve the goals and objectives
effectively and efficiently it is important for the company to provide healthy working
environment to their employees. There are several types of companies and each one have their
own advantages and disadvantages which is needed to be taken into consideration by the
organisation and owners. The different departments of an organisation and their functions also
plays a major role in the management of an organisation. Positive work culture will help the
organisation in attracting talented employees and will also help in retaining employees in the
company. Reduced employee turnover will enhance the workings of the company and will also
enhance the reputation of the company.
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REFERENCES
Books and Journals
Barnes, C., 2019. Understanding the social model of disability: Past, present and future. In
Routledge handbook of disability studies (pp. 14-31). Routledge.
Brewster, C., Mayrhofer, W. and Farndale, E. eds., 2018. Handbook of research on comparative
human resource management. Edward Elgar Publishing.
Cosenz, F. and Noto, G., 2018. A dynamic business modelling approach to design and
experiment new business venture strategies. Long Range Planning, 51(1), pp.127-140.
Gimpel and et. al., 2018. Structuring Digital Transformation: A Framework of Action Fields and
its Application at ZEISS. J. Inf. Technol. Theory Appl., 19(1), p.3.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Harris and et. al., 2021. Modern construction management. John Wiley & Sons.
Kerzner, H., 2019. Using the project management maturity model: strategic planning for project
management. John Wiley & Sons.
Mathieu and et. al., 2019. Embracing complexity: Reviewing the past decade of team
effectiveness research. Annual Review of Organizational Psychology and
Organizational Behavior, 6, pp.17-46.
McGilvray, D., 2021. Executing data quality projects: Ten steps to quality data and trusted
information (TM). Academic Press.
Barbosa and et. al., 2018. Managing supply chain resources with Big Data Analytics: a
systematic review. International Journal of Logistics Research and Applications, 21(3),
pp.177-200.
Mukherjee, D., Makarius, E.E. and Stevens, C.E., 2018. Business group reputation and affiliates’
internationalization strategies. Journal of World Business, 53(2), pp.93-103.
Ladley, J., 2019. Data governance: How to design, deploy, and sustain an effective data
governance program. Academic Press.
Speller, I., 2018. Understanding naval warfare. Routledge.
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