Business Organization Structures: A Comprehensive Analysis

Desklib offers solved assignments and past papers to help students succeed.

Table of Contents
Introduction......................................................................................................................................2
P1 Explain different types and purposes of organizations; public, private and voluntary
sectors, and legal structures.........................................................................................................3
P2 Explain the size and scope of a range of different types of organizations.............................5
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.......................................................................................7
Conclusion.....................................................................................................................................10
References:....................................................................................................................................11

Introduction
A business works to provide product and services to the consumers for the purpose of profit
generation or doing social work. In this study, various factors concerning the business have been
evaluated such as how the economy gets impacted by the business, what are the scope of
different types of the business and how the businesses are differentiated based on their size.
There are factors which impact the business internally as well as externally. These factors are
political, economic, social, technological, environmental and legal factors that have an impact on
the business. Various factors on which the organisations are dependent have been evaluated.

P1 Explain different types and purposes of organizations; public, private and voluntary
sectors, and legal structures.
The business organisations can be differentiated based on size, structure, scope and sector. These
factors are highly dependent on the purpose of the organisations. Based on sector, the different
types of business organisations are public sector, private sector and voluntary sector.
By considering the purpose of the organisation, the organisations are of three different types,
namely, profit, non-profit and non-governmental.
Profit Organizations:
The organisations that work for the profit generation for the owners are profit sector
organisations. These are for-profit organisations with the sole purpose of generating profits with
its operations, the for-profit organisations include retail stores, insurance firms, restaurants and
real estate organisations. Some examples of these type of organisations are Marks & Spencer,
Tesco PLC, etc.
Non-profit organization:
As the name suggests, these organisations do not work for profit generation, their objective is to
work for the society welfare. The income that they generate is for the sole purpose of running the
company by paying for the functions of the business. The example of these organisations are Fair
ways, Regenda limited and Touchstone, etc. (Weerawardena, 2018).
Non-government organizations:
The NGOs have the work functions independent of the government, they provide social care and
work for the welfare of the company, and they work for the people who are not able to stand for
themselves. Their source of income is highly dependent on the charities and the funds donated to
them. The examples of UK’s NGOs are UK Aid Connect, Amnesty International UK, and
REDRESS.

The businesses are also differentiated in terms of size and structure the organisations these
include micro enterprise, small enterprise and medium-sized enterprise. The business
organisations also differ based on legal structures, these are sole traders, companies, partnership
and franchising.
Figure 1: Types of business organisation
Source: (Management&Business)
Public Sector
These are owned by the government, the working of the company is done by the process of tax
paid by the citizen, and in return, the government provide these facilities to them. The public
sector organisations work under government jurisdiction, thus providing the services for the
general public. They do not work for the profit generation. Instead they work for the citizen of
society. The rules and regulations are provided by the government that is followed in all the
public sector organisations. The funding of these organisations is done by the government that
includes taxes and the financial transfers from the central government to the state government.
The area of the public sector is varied education, postal, healthcare and law enforcement

(Domingues, et.al., 2017). The example of public sector organisation in the UK is BBC, child
maintenance service, Environment Department, Food and Rural Affairs (DEFRA) and Transport
Department.
Private Sector
The private sector organisations function to generate profit for the organisation and the owners.
These are run by individuals and are not bound to follow the government. Although, the private
sector is not controlled by the government, but it has to follow the rules and regulations set by
the government to do business. The rules are in terms of labour security, taxation rules and other
export rules. These are the major contributors to the economy of the country as in the UK, the
economy is dependent on the SMEs with a market share of 99%. The example of private sector
organisations is Tesco PLC, Bestway Group and Specsavers (Fernandez and Rainey, 2017).
Voluntary sectors
They work for social factors and do not generate profits. They work for a range of fields in social
cause such as women abuse, or some backward group of the society who needed to be uplifted
and their social issues need to be resolved.
P2 Explain the size and scope of a range of different types of organizations.
Based on size and scope, there are different types of organisations. These include sole traders,
companies, franchise and partnerships. As per the size organisations are small and medium
enterprises and large enterprises.
Sole trader:
The sole traders as the name suggests, are owned by an individual and is mostly small business
such as barber shops, café, small motels, etc. The decision-making process is done by an
individual who owns the company.
Companies:
There is paperwork incorporated in these type of organisations, these are large organisations with
different people assigned different jobs and follow the hierarchy in the management. The

decision making in this type of organisation is not done by a single individual, but all the aspects
are measured and consulted with managers and executives.
Franchise:
This is a business expansion strategy in which a brand grants permission to some other party to
use their brand name. The other party is provided with the brand name to use it to sell the
products from their franchise. Some popular example of the franchise in the UK is Spar, KFC,
Burger King, etc.
Partnership:
This is a type of business in which two or more organisations work together by sharing resources
and money and share the generated profit as well as the loss. They abide by the partnership
agreement and are bound to share every aspect that involves risk as well as rewards (Teer and
Drawe, 2019).
Corporate associations are limited companies in which the ownership of assets is of company.
Based on size, there are different organisations such as:
Small and Medium Enterprise (SME)
The number of employees working in the SMEs are below a threshold, the revenue is also
maintained under a threshold. The market share of SMEs is 99% in the UK market, and the
employability provided by these organisations are still less than the large enterprises. They have
a large impact on the economy of the UK. In the UK, the count of employees in an SME is less
than 250 (Jones and Kierzkowski, 2018).
Microenterprise
It is a small business in which very few people are employed, i.e. less than ten people. They
work to cater to a local area, without any goal of reaching the higher market. These play a very
important role in the day to day life of the people and helps to make their life easier. These
provide good opportunities for poor people as they get the stage to earn for their family to
provide them with quality of life. The number of employees in this type of organisation is below
ten, and the turnover is below 2 million pound sterling annually.

Small Enterprise
This type of enterprise works on a small scale catering only in a specific region, in which a
limited number of employees work. The small enterprises have less than 50 employees, and the
turnover is below 10 million pound sterling annually. These companies provide employability to
a large number of people in the UK. They also play a major in the economy of the UK.
Medium Sized Enterprise
The medium-sized enterprise is one of the major contributors to the economy of the UK they
have around 250 number of employees working in their company. In terms of annual turnover,
their revenue is around 50 million pound sterling. In order to provide employability, they play a
major role.
In terms of a scope which defines the requirement of a project, for organisations, the scope
differentiates them based on their scope of working.
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure
The different organisational functions are marketing, finance, size of an organization and product
design. There are different functionalities within an organisation such as research, human
resource, marketing and development. The organisational objectives are fulfilled by the
organisation after they complete their objectives. All the functions within an organisation are
some way, or the other is dependent on each other. The work of all the departments are
segregated, and if they follow the hierarchical method, then they are highly dependent on the
working of another department. The big enterprises such as Vodafone, BBC and Unilever have
different organisational functions and have a management department to manage the working of
the organisation (da Costa, et.al., 2018).
Like the analysis of the market is done by one of the departments of the organisation, then it
provides the information regarding the needs and requirement of the consumers. After knowing
the market requirement the production team design and develop the product and services as per
the demand. As the product is developed then it is the duty of the marketing department to
properly advertise the product to increase the sale of the product.

Figure 2: Organisational Structure
Source: (businesscasestudies, 2019)
For the organisations that are expanded globally, the management is a complex process they
needed to have a proper form of communication to work properly. The decision making is also
dependent on the type of organisation, in the small and medium-sized organisation the decision
is majorly taken by the owner, and in the large enterprises the decision making is dependent on
the shareholders as well as board members, this is due to the fact that the decisions impact the
business majorly. Thus before incorporating any change in big companies, all the factors are
analysed.
In every organisation, the human resource department plays a major role, they have the duty of
managing the human workforce. They need to address all the issues related to the employees so
that the employees can work in a positive environment. The employees need to be more positive
towards their work so that the productivity of the employees can increase in turn, increasing the
profit generation of the company (Bucker, et.al., 2016).
Similarly, other departments such as marketing and production are also dependent on each other.
The production team, design a product which has to be sold majorly as the organisation is
dependent on the success of that product, in this case, the marketing team plays a major role.
After the successful marketing of the product, its success or failure is dependent (Anderson, et
al., 2018).

The different level of complexity is dependent on the size, objective and scope of the
organisation. For large organisations such as BBC, Tesco and Vodafone, the organisational
structure is a bit complex. For the proper working of the organisation proper communication is
required, all the departments need to be aware of any new process within the organisation
(Shafie, et.al., 2018).
The organisation is deeply impacted by the working of the different departments, as such in case
of Tesco when their market share decreased due to the court cases and other illegal activities, it
was their marketing team that designed an ad which impacted the consumers directly.

Conclusion
In this study, different type organisations have been described, their working is also described.
The study also evaluates the working of the different departments within the organisational
structure. After following the proper business structure, the organisations get an increase in
revenue. Different types of organisations, such as SMEs, large enterprises, and micro enterprises
have been evaluated and described. The dependence of different functions of the organisation is
that when they follow the hierarchy in work, then only they need to follow the proper
communication within the organisation.

References:
 Anderson, S., Rayburn, S.W. and Sierra, J.J., 2018. Future thinking: the role of marketing in
healthcare. European Journal of Marketing.
 Bucker, J.J.L.E., van der Heijden, B.I.J.M., Benschop, Y.W.M., Peters, P., Schouteten,
R.L.J., Poutsma, F. and Poutsma, E., 2016. Sustainable organizations and the role of HR: HR
related interventions towards sustainable change processes.
 da Costa, J.C.N., Camargo, S.M., Machado Toaldo, A.M. and Didonet, S.R., 2018. The role
of marketing capabilities, absorptive capacity, and innovation performance. Marketing
Intelligence & Planning, 36(4), pp.410-424.
 Domingues, A.R., Lozano, R., Ceulemans, K. and Ramos, T.B., 2017. Sustainability
reporting in public sector organisations: Exploring the relation between the reporting process
and organisational change management for sustainability. Journal of environmental
management, 192, pp.292-301.
 Fernandez, S. and Rainey, H.G., 2017. Managing successful organizational change in the
public sector. In Debating Public Administration (pp. 7-26). Routledge.
 Jones, R.W. and Kierzkowski, H., 2018. The role of services in production and international
trade: A theoretical framework. World Scientific Book Chapters, pp.233-253.
 Shafie, N.A., Sanusi, Z.M., Johari, R.J., Utami, W. and Ghazali, A.W., 2018. Effects of
Organisational Structure on Social Value: Mediating Role of Financial
Performance. Management & Accounting Review (MAR), 17(3), pp.131-158.
 Teer, J.G. and Drawe, D.L., 2019. Size and Scope of the Market. Beef Cattle Science
Handbook, 20, p.15.
 Weerawardena, J., 2018. Non-profit marketing strategy. Transformational Leadership and
Not for Profits and Social Enterprises, pp.142-171.