Exploring Organizational Structures, Size, and Objectives in Business

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BUSINESS AND THE BUSINESS ENVIRONMENT

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Table of Contents
INTRODUCTION........................................................................................................................2
LO1........................................................................................................................................... 3
DIFFERENT TYPES OF ORGANISATIONS................................................................................3
SIZE AND SCOPE OF THE ORGANISATIONS...........................................................................4
LINKING OF THE ORGANIZATIONAL STRUCTURE AND SIZE TO BUSINESS OBJECTIVES.....5
LO2........................................................................................................................................... 7
ORGANISATION STRUCTURES AND FUNCTIONS...................................................................7
STRUCTURES RELATING TO SIZE AND SCOPE OF OPERATIONS........................................7
ANALYSIS OF ORGANIZATIONAL FUNCTIONS AND ITS IMPACT ON ORGANIZATIONAL
STRUCTURE...................................................................................................................... 8
REFERENCES........................................................................................................................... 10

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INTRODUCTION
This essay is focused on gaining the knowledge about the various types of organizations, by
considering the scope and size of operations. The understanding of the organizations based
on the size would also be gained. Further, the essay would also explain and highlight the
relationship between the functions of the organization based on the structure and the
objectives of the organization. The advantages and limitations of this would also be
analyzed.

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LO1
DIFFERENT TYPES OF ORGANISATIONS
The organizations are the structures which are being designed in the form of structures.
Each individual within the structure is provided with responsibility which contributes
towards the organizational goals and objectives.
PROFIT ORGANIZATION
The profit organizations are referred to as the organizations whose major objective is
earning profits, by undertaking the operations of the company. These organizations function
with the major objective of maximizing the wealth of the shareholders (Drucker, 2017). The
profits earned by the business entity are either distributed to the shareholders as dividends
or are being retained by the business entities in the form of reserves for dealing with future
contingencies. The examples of profit sector organizations are McKinsey, Nestle, Walmart,
Kering and many others who work with the objective of earning profits and increasing
shareholders wealth.
NOT FOR PROFIT
The not for profit organizations are being owned and managed by government. These
organizations are aimed at providing goods and services to the communities within the
economy. The organizations of the sector aim at generating revenues for the country and
ensuring economic transformation. The examples of the public sector organizations are the
European Commission, The White House, United Nations, Foreign Offices and others. The
activities are undertaken by the company’s aim at providing services, without the motive of
profit generation.
NON-GOVERNMENTAL ORGANISATIONS (NGOs)
The non-governmental organizations are majorly run with the objectives of contributing
towards the overall public welfare. Therefore, for such organizations, profit is not
considered as a governing factor. It is very essential for organizations to maintain funds to
ensure its long term functioning. This sector aims at social undertaking by the business

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organizations. The major objective of running and establishing this kind of organization is to
contribute towards the overall welfare of society and to spread social awareness. The
examples can be stated as The Red Cross, PETA, Greenpeace, and others.
SIZE AND SCOPE OF THE ORGANISATIONS
The organizational size is a useful measure for defining the overall objectives of the
organization. The different kinds of organizations have been explained as under:
MICROENTERPRISES
The micro-enterprises are the very small scale organizations which requiring minimum
human resources and capital. These organizations operate with nearly 10-15 employees.
The examples can be restaurants, cafes, and other similar organizations. These organizations
have a very smaller contribution towards the overall development of the economy. The
micro-enterprises have a very vast scope and comprise of business activities which require
very less technology (Forsyth, 2016). The enterprises are usually engaged in manufacturing,
financial and construction services.
SMALL ENTERPRISES
The small enterprises are the business organizations that employ less than fifty employees
and also these enterprises do not have a huge turnover (below $ 10 million). The small
enterprises are usually sole proprietorship business and are usually private entities. These
include architectural firms, hotels, and others.
MEDIUM-SIZE ENTERPRISES
The medium size enterprises are the enterprises that have less than a hundred employees
and annual revenue of less than $ 50 million. These organizations also possess significantly
larger capital and a huge amount of fixed assets in terms of buildings and machinery (Hillary,
2017). These enterprises are a medium of connection for small businesses and large scale
enterprises.
LARGE ENTERPRISES

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The large scale enterprises are the organizations that have more than a hundred employees
and huge revenue turnover. These entities are usually public listed companies and thus,
they have a number of owners in the form of shareholders. The organizations are usually
multinational corporations, who have their operations in more than one country. The
management of the company is in the hand of few people.
LINKING OF THE ORGANIZATIONAL STRUCTURE AND SIZE TO BUSINESS
OBJECTIVES
The structure, size and the scope of business operations are directly connected with the
objectives, products, and services of the particular business organization. The organizations
can only set huge targets in situations when the organizational structure is well defined and
when the people employed at various positions within the organization are well aware of
their roles and responsibilities. In the absence of this, the organization will be unable to
accomplish the objectives.
The organizational objectives are also established on the basis of the size of the
organization. This means that the number of employees and the available capital are the
essential factors driving the objectives of the organization (Arvidson and Lyon, 2014). The
large enterprises tend to establish higher targets and therefore, they make huge capital
investments. The for-profit enterprises have communal objective of profit maximization by
ensuring customer satisfaction. However, the profit level which needs to be achieved by
them depends largely organization’s size. All the public listed companies such as Marks and
Spencer, Bentley Motors Limited and other public organizations have a strong organizational
structure and therefore, higher profits.
The objectives are also established by business organizations based on the scope of their
business activities. The business activities largely depend on the level of business activities
as a majority of the business organizations have turned multinational corporations (Forsyth,
2016). These organizations aim to serve its customers at all the levels namely the local,
national and international level. The structure of operations is dependent on the products
and services offered by the business organizations. When the business is involved in
providing a large array of products and services to its clients, it would require a larger
organizational size and therefore, the organizational structure would be large. When the

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business organization has huge functions, it adopts the functional structure (Edwards and
Hulme, 2014). Therefore, it can also conclude that organizational structure is defined by the
functions undertaken by the company.
LO2
ORGANISATION STRUCTURES AND FUNCTIONS
The structure is mostly dependent on the size and scope of the business operations. The
organizations adopt the most appropriate structures suitable for their operations based on
the size, objectives, and functions (Patel, et al. 2015).
This could be understood by taking the case study of The Coca-Cola Company. Which has
adopted a functional organizational structure.
In Coco-cola, the functional departments are managed and controlled by managers at the
functional level. The organization is also divided on the basis of geographies which enable
the business organization to operate as diverse functions within the same market.
STRUCTURES RELATING TO SIZE AND SCOPE OF OPERATIONS
TRANSNATIONAL ORGANISATION STRUCTURE
The business organization aims at adopting the core and single structures. These business
aims to coordinate the business activities to ensure their sustainability even in the local

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market. These are the complex strategic units who have made investments even in the
foreign counterparts.
INTERNATIONAL ORGANISATION STRUCTURES
International businesses are usually involved in export and import activities. International
businesses are dependent on businesses from various economies (Patel, et al.2015).
However, it is also evident that these organizations have their major focus on customization
of their products and services according to the needs of the customers.
GLOBAL ORGANISATION STRUCTURES
These businesses adopt a global strategy. The pattern of the market demand and sales are
being analysed and established after considering the overall domestic market. The authority
of decision making pertaining to the investments lies in the hands of the management and is
aimed at achieving the economies of scale for meeting the needs of local markets.
ANALYSIS OF ORGANIZATIONAL FUNCTIONS AND ITS IMPACT ON
ORGANIZATIONAL STRUCTURE
The organizational structure is largely dependent on the functions undertaken by the
business. The pros and cons of the interrelationship amongst the organizational functions
and structure are:
ADVANTAGES
The organizational structure facilitates the fulfilment of objectives. The appropriateness of
the organizational structure also provides benefits in terms of the allocating the
responsibilities to juniors and implementing changes all across the organization (Shenkar, et
al. 2014). The benefits of establishing a connection between organizational functions and
structure are:
 The linking of employees of different departments helps the growth of organization
by ensuring cooperation of activities.
 This helps in enhancing revenues of the organization as the employees share
statistics essential for business decisions.

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 The overall productivity of the organization would be enhanced due to increased
coordination among the divisions.
DISADVANTAGES
The organizations also face several disadvantages due to an interconnection between the
organizational structures and functions:
 The evidence collected by the employees would be harmful to the decision making
within departments and organization as a whole.
 The organization might face increased competition among various divisions and
employees of the organization.
 Situation of disputes might arise amongst the sub-divisions.


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REFERENCES
Arvidson, M. and Lyon, F., 2014. Social impact measurement and non-profit organizations:
compliance, resistance, and promotion. VOLUNTAS: International Journal of Voluntary and
Nonprofit Organizations, 25(4), pp.869-886.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology. Elsevier.
Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press
Edwards, M. and Hulme, D., 2014. Non-governmental organisations-performance and
accountability: Beyond the magic bullet. Routledge.
Forsyth, J.A., 2016. The role of the Independent Director in for-profit organisations
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge
Patel, B.S., Booker, L.D., Ramos, H.M. and Bart, C., 2015. Mission statements and
performance in non-profit organisations. Corporate Governance, 15(5), pp.759-774.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.