Business Organisations: Structures, Functions, and Culture Impact

This essay provides a comprehensive overview of business organizations, exploring various types such as sole proprietorships and partnerships, and delving into organizational structures like tall and flat hierarchies. It examines key organizational functions including human resources, production, and operations, highlighting their significance in achieving business objectives. Furthermore, the essay emphasizes the crucial role of organizational culture in shaping employee behavior, enhancing productivity, and fostering a positive work environment, particularly within the hospitality industry. It concludes that selecting the appropriate organizational structure and nurturing a conducive organizational culture are vital for business success.

Understanding
Business Organisations

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
A business organisation is an entity which is formed to carry on commercial business by
fulfilling customers needs or demands. There are different types of business organisations and
law of the country regulates the establishments of the business. These organisations can have the
legal entity of their own. Entrepreneur and investors collaborate with each other through the
organisations to attain their commercial target. There are many different forms of a business
entity like sole proprietorship, partnership, and public and private companies. It is important for
entrepreneur to choose the correct form and legal structure for the business (Marcus and Van
Dam, 2019). In this essay we will discuss about various different types of business organisations
and organisation structures. The essay will also discuss about various organisational functions
and how organisational culture impacts positively on the success of the organisation.
MAIN BODY
Sole Proprietorship
These types of businesses are operate and managed by a single person. Sole proprietors are liable
for every loss business may make but they also enjoy all the profit business may make.
Advantages of sole proprietorship business –
 In sole proprietorship the sole trader have whole control and they can take decisions
regarding business quickly to face the situations.
 Cost of commencing a sole proprietorship business in minimum, as compare to other
organisations types it is easy for entrepreneurs to start their business as sole
proprietorship (Friesen, 2020).
 Profit in such organisations are not divided, the owner is entitled for all the profit
business make.
Disadvantages of sole proprietorship business –
 Owners of these businesses have unlimited liabilities. These businesses do not have
separate legal entity and personal assets of the sole trader can be identified as business
assets.
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 Sole proprietorship face difficulties in raising capital for the business. Financial
institutions tend to avoid fund such businesses because of their unlimited liability.
 It is hard for a single person to manage all the activities in the business. Sole traders have
many responsibilities and they can't take holidays or breaks from the business.
Partnership
Partnership can be described as an agreement between two or more individuals to operate or
manage a business organisation and share all the profits and loss from the business (Church,
2020). Responsibility and business share of the partner is described under the agreement they
sign to form a partnership.
Advantages of partnership business -
 In partnership two or more person come together and it reduces the burden form single
person. Partners bring funds and their knowledge and skills in the business which can be
helpful the business.
 It is easy to commence and run a partnership business. Forming a company can be costly
and time consuming but to form a partnership firm main component is the partnership
agreement.
Disadvantages of partnership business -
 Differences and conflicts in partnership can occur because every partner hold power in
the business to make decision.
 Decision making process in the partnership firm can be slow because all the partners
must agree before taking any decision.
 Partnership can dissolve if any partner withdraw from the business.
Tall structure is a type of organisational structure used by big and complex organisations. In tall
organisation structure a long chain of command is formed. When an organisation grow, the level
of management also increases and the organisational structure grow taller. In tall structures there
are different levels of managers and each manager is responsible for the work of a particular
department. Tall structures have more management levels as compare to flat structure. Biggest
advantage of tall structure is it bring clarity in management decisions and managers can closely
supervise subordinated in such structure.
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Flat organisational structure consist few management levels and managers in these structure
manages different departments or functions. Organisations that adopt flat organisational structure
focus of motivating and developing their employees rather then sticking to a chain of command
(Ismanto and et.al., 2020). Flat structure encourage self direction and autonomy with the
organisation which promote new ideas of employees to solve a problem. Flat structure have
advantage that they can adapt changes quickly. Communication in organisations adopting flat
structure is effective and fast, it also improve decision making in such organisations. Flat
organisations follow a democratic style.
Human resource function help business to find, recruit and train employees. It is a vital part for
any business because it boost employees performance and productivity in a business. HR
department tackle different employee conflicts and issues related to employees. The department
is also responsible for recruitment, employee compensation and firing. Human resource
department work to increase innovation, creativity and flexibility in organisation which can help
organisation to gain an competitive advantage in the industry. Hospitality industry is highly
dependent on the quality human labour, to provide best service to customers an hospitality
organisation should have best human resource department.
Production function can help organisation in many ways, an effective and efficient production
function allow organisations to fulfil market demand and generate more profit. Production
function is interrelated to many different function in the organisation. Production function also
play a vital part in maintaining sustainable practice. By reducing wastage and limiting the excess
use of resources production function can help business to practice a sustainable practice.
Effective and efficient use of production function can also reduce the cost of producing good and
services which can highly influence business's profitability.
Operation function in the organisation is linked to every other function in organisation.
Operation department in organisation works to maintain every operation of the business. Every
business follow a defined process to complete their day to day activities. For example in a hotels,
they follow a process of check in and then guiding the guests to their rooms. The process remain
same for every for every guest and it is the operation functions responsibility to make sure the
process is smooth and it is not causing any difficulties for the guest. The operation function is
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vital for every organisation and it help businesses to run smoothly. The function make sure that
the business is doing optimum utilisation of its resources.
Organisational culture can be defined as values, expectations and beliefs that guide employees
behaviour in an organisation. A good organisational culture can improve the performance of the
business while a dysfunctional culture can increase communication gap and toxic work
environment for employees (Shenkar and et.al., 2020). Organisations have different cultures
which makes them different form other companies. Companies have different priorities and goals
which influence company's culture. Culture in organisation can impact many thing like, pace of
business, protocols of business, decision making, employee management and marketing or sales.
Employees in a business not only work for money they also do a job because they like it or they
trust the business where they are working. A effective organisational culture facilitates
employees to understand organisation's goals and employees in positive culture feel that their
opinion is valued in the business. Positive organisational culture also increase business
productivity and employee engagement. Hospitality staff serve customers and when the
customers interact with employees they get the taste of what business is all about. Managing
culture is more important for the hospitality industry because they need to make right impression
every time they interact with a guest. It is important to make mission and values and then find
employees who are committed toward these values (Gorbunov and Lvov, 2018). Organisational
culture determines a proper way to behave within an organisation setting. Organisational culture
can also provide a competitive advantage to the organisation and it gives a informal control
mechanism to business. It can manifest itself in many ways including communication style,
corporate celebrations and leadership behaviour.
CONCLUSION
From above essay it is concluded that there are different types of business organisations and
every business have its advantages and limitations. The management of a business plays an
important role in improving organisation's productivity. Entrepreneur while commencing the
business must decide the best organisation type after analysing the pros and cons of each type.
There area many functions in a business organisation and each function has its own significance
in business. In this essay we discussed about three function which are important in any industry
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specially in hospitality industry. We also discussed about tall and flat structure of a organisation,
both the structures have their advantages but for hospitality industry it would be better if they use
the flat structure because hospitality staff need to take fast decision to provide good customer
service. Organisational culture also plays a important part in business, it decides how employees
behave in the organisation.
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REFERENCES
Books and Journals:
Church, A.H., 2020. The Meaning of Commercial Organisation. In The Contributions of
Alexander Hamilton Church to Accounting and Management (pp. 3-10). Routledge.
Friesen, E., 2020, June. Organisation and Activities. In The World Economic Forum and
Transnational Networking (pp. 21-49). Emerald Publishing Limited.
Gorbunov, V.K. and Lvov, A.G., 2018. Effective production funds and production functions of
regional small business. Ekonomika Regiona= Economy of Regions, (2), p.502.
Ismanto and et.al., 2020. The impact of risk and financial knowledge, business culture and
financial practice on SME performance. Calitatea, 21(179), pp.3-9.
Marcus, J. and Van Dam, N., 2019. Handbook Organisation and Management: A Practical
Approach. Routledge.
Shenkar and et.al., 2020. National culture and international business: A path forward. Journal of
International Business Studies, pp.1-18.
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