Comprehensive Analysis of Business Organizations: Structure & Culture

This essay provides a comprehensive overview of business organizations, exploring various types such as sole proprietorships, partnerships, and corporations, highlighting their respective advantages and disadvantages. It compares and contrasts different organizational structures, including hierarchical, functional, horizontal, and divisional structures, examining their impact on communication, decision-making, and resource allocation. The essay also delves into essential business functions like human resource management, operations, marketing, accounting and finance, and research and development, emphasizing their role in achieving organizational goals and maintaining market competitiveness. Furthermore, it defines organizational culture, discussing its impact on employee engagement, productivity, and overall success, with real-world examples illustrating the importance of a positive and well-defined organizational culture. Desklib offers more resources for students.

Understanding Business
Organization

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Defining and Outlining Different Business Venture With Advantages and Disadvantages.......3
Comparing and Contrasting Organizational Structured..............................................................4
Different Business Functions and Their Impact..........................................................................5
Defining Organizational Culture.................................................................................................6
Example of industry practices.....................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
An entity which is formed and structured to carry out commercial system of enterprise
are business organization. It explains how firms are structured and how it helps in meeting the
organizational goals. There are two types of business organization, one that operates to generate
profit are for-profit organizations and one that operates for social welfare through, education,
health care, arts and many other areas are non-profit organizations. Firms take certain risks to
operate in the industry and lesser the risk through wise use of assets and investments. More
efficient use of assets ensure greater chances of monetary profit.
Profit making business organizations are also divided into different categories that will be
discussed further with their advantages and disadvantages. Organizational structures will be
compared and contrasted and different functions founded in a business that carry out all the
activities within the firm also will be explored. Lastly, organizational culture and impact of
positive culture would be defined.
MAIN BODY
Defining and Outlining Different Business Venture With Advantages and Disadvantages
There are different types of business ventures that operates in the world. Every entrepreneur has
to decide in which sector they want to operate, in order generate profit effectively (Baden-Fuller,
Giudici, and Morgan, 2017). Here are some different types of ventures discussed below:
Sole Proprietorship:
The sole proprietorship are business ventures that are operated only by single person. The
owner is known as “sole proprietor” who single handedly owns all the assets and profits in the
business.

Advantages Disadvantages
Business is easy to Form The resources are limited
Quick Decision-Making is possible The life of business is uncertain
One man ownership allows profit to be enjoyed
alone
Lack of managerial expertise increases chances
of errors.
Partnership:
When the venture is owned and managed by two or more parties and share
responsibilities and profit is known as Partnership.
Advantages Disadvantages
Minimum legal procedures are required Business has unlimited liabilities
It is easy to dissolve business on insolvency of
contract or death of member
Abrupt insolvency on member's death, and
contract ending can restrict future success.
Flexible working due to lesser legal
procedures.
Slow paced decision-making as all the
members are supposed to be present during the
process.
Corporation:
This is a form of operation in which business is identified as separate legal entity from
the owners who are known as board of directors is a Corporation (Brill, 2017).
Advantages Disadvantages
Liabilities are limited as financial resources are
available.
Setting up of the business is a complex
process, due to its larger size.
Capital is easily available to the company by
investors and public shares.
The taxation in corporation is doubler than
others
It builds credibility to lenders, creditors and
customers.
Extensive legal rules to be followed by the
firm.

Comparing and Contrasting Organizational Structured
Every company operates differently and carry out activities with different organizational
structure. Below are the organizational structured compared and contrasted:
 Hierarchical Structure: In this the chain of command flows from top to bottom. The
senior management is responsible for making all critical decision that is further passed
down to the subordinates (Lewis, and Clark, 2020). It clearly defines authority and
responsibility level and gives employees a clear path of career. But this structure can
make those on lower level of hierarchy feel less involved and important for company.
 Functional Structure: This structure is rather similar to hierarchical structure as chain of
command goes downwards, the only difference is, employees are organized according to
their skills and their function in the firm. This allows specialization and helps the teams
to become self-determined but it holds interdepartmental communication and create a
bubble for the functional departments.
 Horizontal Structure: Unlike hierarchical and functional structure the horizontal
structure fits firm within few levels between upper and lower level of management. Start-
up usually starts with this structure before they grow towards bigger firm (Fayziev,
2020). This approach of structure gives more responsibilities to employees and better
open communication could be established, it also improves coordination and
implementation of ideas are quicker. Though this rises confusion because of lack of
supervision, and produce employees with general skills only.
 Divisional Structure: In compares to other structure, this one operates and opted in
larger organization. Here, each functional division gets their separate control over
resources like marketing, sales and IT team. This is also divided into different
consideration which are not possible in others, market based, product based and
geographic divisional structure (Hsiao, and Wu, 2020). This helps larger companies to be
more flexible and promote independence, yet it can lead to duplication of resources and
competition within the company.

Different Business Functions and Their Impact
A business has to carry out different functions to reach their set goals and objectives. All
the functions makes activities efficient enough that company could retain its position in the
market. The functions are divided into different departments according to the activities they carry
out:
 Human Resource Management: This function is concerned with recruitment of
personnel with the right skills, at the right department at the right time and manage them.
In an organization they are also responsible for their training and development,
motivation, compensations and benefits. This accelerates the performance in the
organization as people management provides supervision to employees.
 Operations: Operations functions undertake production, purchasing, supply chain
management and distribution. This is the main function which produces goods or service
for the sales which leads to profit generation in the organization (Albertoni, Elia, and
Piscitello, 2017).
 Marketing: Marketing function involves identifying needs and demand of consumers
and planning for product development and selling strategies. They standardize the
product or service according to those demands and further works on packaging and
labelling. They are also responsible for creating brand image, pricing, promotions,
distribution and setting up customer service.
 Accounting and Finance: This is one of the most important function in any
organization. Every venture needs capital to carry out activities, accounting and finance
function ensure the financial management regarding assets, liabilities, investments, profit
distribution and other equity related function. This ensures smooth working of an
organization, and helps in sustaining resources like human capital and its position in the
market.
 Research and Development: This function helps the company to stay competitive and
gain competitive advantages by providing market research and developing new products
or services according to demand and trend in the market. This function also helps is
upgrading the existing products and ensures the gain of business which also leads to
employee's gain.

Defining Organizational Culture
Organizational culture is a set of value, practices and expectations that inform and guide
all the team members. It is widely shared belief that supports strategy and structure of the firm.
This helps employee to know how company wants them to respond in different situations and
that they will be rewarded if those values are demonstrated rightly. Employees play vital role in
keeping the culture alive, and they embody those values that could be seen in the firm.
Ineffective culture can impact negatively and bring down productivity of an organization, it will
create poor customer relations and directly impact lower profit. In researches, it is found that
often the mergers fail due to cultural problems (Kim, and Chang, 2019). It can also affect
leadership within the organization if not followed effectively. Suppose an organization has code
of conduct while interacting with customers, but employee misbehave and discriminate with
them. It would affect customer loyalty and bring the organization in bad light.
Organizational culture includes human nature, firm's relationship with its environment,
appropriate emotions and effectiveness. Strong company culture attracts and retain top talent in
the venture. A positive culture encourages employees to remain in the organization for long term
and reduces employee turnover which keeps the environment motivated and reduce cost of
holding new positions.
Example of industry practices
For example, Hyatt Hotels an American hospitality organization boast about their lower
turnovers in an industry which is known for its higher employee turnover. Further, it improves
productivity as healthy work culture result in better job satisfaction and employee engagement
(Bakhsh Magsi, and et.al, 2018). Firm can differentiate themselves in the marketplace as better
branding and thriving culture is stored. Also, healthy team encourages people to work better and
increase quality and motivates individual which increases overall profit making and success of
organization in meeting their goals.
Further with respect to function of operations for example, an auto-mobile company's
operational function would be manufacturing of their cars or bikes or other related commodity.
On the other hand, it will be different for some other company. Like for a retail store the
operation will involve the product of supermarket. So the function of operation depends on the
nature of business.

CONCLUSION
In conclusion, business organization is dynamic in many ways, it has different types like,
sole proprietorship where one man is the owner of business, partnership where two or more
person are the owners, corporate are larger firms where business is separate entity from their
owners. Their structure also differentiate from each other, hierarchical, functional, horizontal and
divisional contrast from each other in many terms like size of the company and flow of
command. Businesses also have different functions which eventually leads to success, functional
management like, human resource management, marketing, finance and accounting, operation,
and research and development. Lastly, organizational structure are the value of beliefs in an
organization which help them create relation with their environment, it has positive impact such
as, retention of top talent, improved productivity, differentiation in marketplace and healthyteam.

REFERENCES
Books and Journals
Albertoni, F., Elia, S. and Piscitello, L., 2017. Complementing the reshoring of manufacturing
activities: the relocation of business functions. In Reshoring of Manufacturing (pp. 57-
75). Springer, Cham.
Baden-Fuller, C., Giudici, A. and Morgan, M. S., 2017. Business models and value. In Academy
of Management Proceedings (Vol. 2017, No. 1, p. 11635). Briarcliff Manor, NY 10510:
Academy of Management.
Bakhsh Magsi, H., and et.al, 2018. Organizational culture and environmental performance.
Sustainability. 10(8). p.2690.
Brill, A., 2017. Employee Stock Ownership Plans as an Exit Strategy for Private Business
Owners. Matrix Global Advisors White Paper.
Fayziev, T.R., 2020. FUNCTIONS AND TYPES OF MANAGEMENT IN SMALL
BUSINESS. Мировая наука. (3). pp.48-51.
Hsiao, Y. C. and Wu, M. H., 2020. How organizational structure and strategic alignment
influence new product success. Management Decision.
Kim, T. and Chang, J., 2019. Organizational culture and performance: a macro-level longitudinal
study. Leadership & Organization Development Journal.
Lewis, A. and Clark, J., 2020. Dreams within a dream: Multiple visions and organizational
structure. Journal of Organizational Behavior. 41(1). pp.50-76.