Business Organizations: Structure, Functions & Culture in Hospitality

This essay provides a comprehensive overview of business organizations, focusing on sole proprietorships, partnerships, and limited liability companies, detailing their advantages and disadvantages. It compares and contrasts flat and tall organizational structures, using examples from the UK hospitality sector like Lucknam Park Hotel & Spa and Premier Inn to illustrate the practical application of these structures. The essay also examines three key business functions—production, operations, and human resources management—and their impact on the hospitality and tourism industry. Furthermore, it discusses the significance of organizational culture, highlighting how a positive culture can contribute to a company's success, using Premier Inn as a case study to demonstrate the benefits of a strong, healthy organizational culture in the hospitality sector. The essay concludes that understanding these elements is vital for effective business operations and maintaining a motivated workforce.

UNDERSTANDING
BUSINESS
ORGANIZATIONS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
Understanding business function is one of the most crucial areas of business which have to
understand in order to learn about the business operations. The impact of functional activities
over the business performance is necessary for the company to execute the business operations
perfectly (Aagaard, Saari and Mäkinen, 2021). The present study or essay will define the three
types of business such as sole trader, partnership and limited liability along with their advantages
and disadvantages. Further, the comparison and contrasting between the flat and tall structure
will also be covered in order to understand about business organization structure. The discussion
will also cover the example of hospitality organizations of UK. In addition, the essay will discuss
the three-business function and its impact over the hospitality and tourism sector organizations
and employee. Lastly, the essay will also cover the organization culture meaning and its impact
over the success of organization including hospitality and tourism industry real life examples.
MAIN BODY
A business is an organization that sells goods and service in their regular occupation with
the aim to make profit. There are three types of business such as sole trader, partnership and
limited liability. Sole trader is a business where only one person set up and carry out the business
operations. The three benefits of sole trader business are owner have 100% control over business
assets, profits as well as liabilities, cost of accounting is low and lower tax expenses. The three
disadvantage of sole trader is unlimited liability, lack of tax planning and perceived lack of
prestige (Sarja, Onkila and Mäkelä, 2021). Partnership is another main type of business where
two or more individual set and run the business via sharing ownership, income and losses. The
benefits of partnership are that it bridges the gap between expertise and knowledge, provide high
growth opportunities and easy and quick decision making due to more partners. On the other
hand, the disadvantage of partnership includes unlimited liability of partners, high valuation cost
at the time when any partner joins or leave the partnership and high risk of disagreement. Last
main type of business is limited liability which means a legal entity where the liability of owner
is limited and is operated by more than one person (Fairlie and Fossen, 2021). The benefits of
limited liability are tax benefits, simple proceedings and legal security. The three disadvantage of
limited liability includes diverse regulation of taxations, not all company can become limited
liability company as well as this might not invite investors. For example, the hospitality and

tourism sector organizations always set up limited liability company with the aim that they need
not to provide their own personal liability at the time of liquidation of business. Premier Inn is
one of the leading and largest private limited company whose liability is limited. One of the
growing businesses in UK is hospitality and tourism business and is one of the main and key
sources of revenue for the government of UK (Markovic and et.al., 2021).
Organization structure is a systematic arrangement of the human resources within an
organization with the aim of achieving the common goal. Flat and Tall are the two types of
organization structure. The tall organization structure is a type of structure where management
are basically broken down into several layer (Dahlan, Abdullah and Suhaimi, 2021). In this layer,
the executives will be placed at top and employees are placed at the bottom. This structure
provides more opportunities of promotion to staff. However, the lack of bond and collaboration
is major issue of this structure. For example, Lucknam Park Hotel & Spa is a hospitality sector
business that follow tall structure within their business to provide proper guidance and
supervision to lower-level employee such as receptionist and waiter. On the other hand, Flat is
also one of the types of organizational structure where the managers level is no or minimum
(Lee, 2022). In this, the employees are guided by the top authority and closely work with the
manager. This leads to teamwork and collaboration as well as the high creativity and employee
development. Under this structure, every employee is engaged in the decision-making process
and every employee voice is heard by higher authority. However, on the other hand, the flat
organizational structure drawback is that here management can easily lose control which make
employee retention difficult (Bhadauria and Singh, 2021). For example, hospitality and tourism
sector also uses flat organization structure in order to minimise the drawback of tall organization
structure. In case, if chefs are not able to collaborate with their juniors at the restaurants in that
case using the flat organizational structure is beneficial for them. Hence, it can be said that
hospitality and tourism sector should adopt flat structure within their business in order to
enhance collaboration as well as make decision quickly (Hurst, Lee and Frake, 2022).
Business function is basically involving the various activities that is performed by the
company. The three main and significant business activities of any type of business are
production, operation and human resources management. Production function means the
activities of producing goods and services of business in order to ultimately sell it to the final
consumer (Fernandopulle, 2021). Their functional activities involve purchase, production and

management of goods and services. The impact of their work over business is that the company
able to meet the market demand and sell the goods as per taste and preferences of customer. The
production function impact over employee is that employee able to complete their work on time
with proper guidance from management (Margherita and Bua, 2021). For example, managing
production or preparation of high-quality food and drinks for the customer are production
activities under hospitality and tourism industry. Operational functional activities involve the
management of day-to-day operation of business such as purchase, production, sales, marketing
etc. The impact of operational functional activities over business is that they cause the business
to undergo change and adjust the operational activities as per the change in the external factors
such as politics, economic, society, environment, technology etc. For example, in hospitality
sector, managing maintenance, front desk service, housekeeping is the part of operational
function activities (Anwar and Abdullah, 2021). The Human resources in a business function is
to recruit and hire new talented employee within the organization. Their activities involve
recruitment, selection, training, compensation etc. The impact of their functional activities over
the business is that their production level and sales revenue increase due to highly expertise and
talented workforce. For example, in hospitality and tourism sector, the reception of guest,
maintenance of guest records and associating services are the work of human resource services.
All of the three need to manage the work of their department or teams in order to succeed the
business and gain high market share in hospitality industry (Zhu, 2021).
Organizational culture is another most significant concept of management that plays vital
role towards the success of business. Organization culture is the belief, values company follow
and the environment it creates within the organization which affect the behaviour of its
employee. The impact of organization culture over business is depends on the fact that whether
the culture of the company is positive or negative. In order to achieve success in both local as
well as international market it is important for the business that they create positive culture rather
than negative. This is possible with the implementation of various motivation and recognition
strategies (Shet and et.al., 2021). Providing training and parties for enhancing collaboration and
teamwork within diverse workforce is have to be included in order to build positive organization
culture. The impact of strong and healthy organizational culture over the success of business is
that company will easily and quickly adapt as per the environmental changes. For example, in
hospitality and tourism sector, the employees such as receptionist, waiter, guard are need to

directly communicate with the guest and customer. Thus, it is important that hotels should
provide proper training and development to its employee so that they can interact with the
customer without any hesitation and difficulty. Premier Inn is one of the biggest and
international hotel brands having headquarter in UK (Nayak, 2021). They hire chef from all over
the world and in order to maintain the collaboration between them they always try to create
positive organization culture. Basically, they are successful in it and the impact of which they are
biggest brand of UK. The employees of hotel are highly satisfied and motivated towards their
work and even get easily ready to work overtime in peak demand for the success of its business
(Egelan, Ngui and Katua, 2022).
CONCLUSION
After summing up the above information, it has been concluded that the three main type of
business is sole trader, partnership and limited company. Further, the essay has been also
summarising the three-business function such as production, operation and human resources
management that play vital role towards the success or day to day operation of business as well
as keeping workforce motivated and engaged. In addition, it has been also analysed that the flat
organization structure is more preferable to hospitality and tourism sector as compared to flat
structure. Lastly, the importance of organizational culture over the success of hospitality industry
has been discussed in detail in the essay.

REFERENCES
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