Business Types & Functions: Examining Organizational Structure Impact

This essay examines various business types, including sole proprietorships, partnerships, limited liability companies, and corporations, highlighting their advantages and disadvantages. It delves into organizational structures like tall and flat hierarchies, analyzing their impact on communication, employee motivation, and decision-making. The essay further explores essential business functions such as production, finance, and marketing, emphasizing their interrelation and influence on organizational success. Finally, it underscores the significance of organizational culture, emphasizing its role in employee engagement, productivity, and brand identity, ultimately contributing to a company's competitive advantage. The document is available on Desklib, a platform offering a wide range of study resources for students.

Business types
and
functions

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

INTRODUCTION
This aim of this essay is to examine the different business types and its functions,
importance of organizational structure, business functions and impact of organizational culture.
A business organization is defined as an entity that is structured for the purpose of carrying on
the commercial enterprise such as buying and selling of goods or services and meet the consumer
needs. There are four types of business organizations partnership, corporations, sole
proprietorship and limited liability company. The main goal of an business organization is to
provide value to the customer and make profits. The business organizations objectives should be
SMART ( Specific, Measurable, Achievable, Realistic and Time specific) to achieve the aim of
the organization where business want to see itself in future (Han and Luo, 2022). In this essay we
will discuss about the type of businesses and their advantages an disadvantages, the
organizational structures, business functions and their impact, and impact of the organizational
culture in success of the business.
MAIN BODY
There are different type of business from which a businessman can choose to form a
company such as sole trader, partnership, limited liability company, and corporation. The Sole
Trader is a self employed person and the business owned and run by one person. These are
small unincorporated businesses. These individuals generally provides specialist services like
photographer, hairdressers or plumbers. The advantages of being sole trader are; it is the most
basic type of business and do not need to register the business, owner has the complete control,
and this is less expensive. The main disadvantages of sole trader are; the owner has unlimited
liability for the debt, these face difficulties in raising funds, the sole trader have the full
responsibility and work for long hours. Examples of sole trader are Princess Hotel, Hays travel.
Partnership is the business in which two or more people chooses to own and operate the
business together (Wang and Li, 2019). The advantages of partnership are; business is easy to
establish and costs low to start, the capital raising is easy as there are more partners and there
will be better decision making from partners. Disadvantages of partnership are; less profit as the
profit will be shared, the partners are liable for each others actions and decisions, in decision
making the disagreements will be there. Examples of partnership are Marriott and Cosmopolitan
resort Las Vegas, Southwest and Volaris etc.
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Limited liability is the type of business in which the company has an separate entity from its
owners and shareholders (Zhang and Fang, 2018.). The owners are liable up to what they have
invested in the business (Jirek, 2020). The advantages of limited liability business are; it is easy
to transfer the business to someone else, the owners and shareholders have limited liability,
raising of finance is easy for the company. The disadvantages are; corporate informations will be
disclosed for public record, the company must be registered at company house and pay the
incorporation fees and the company records must be maintained and available for public
inspection. Examples of limited liability company are Mitchells and Butlers, Premier Inn
The organizational structure defines how the activities are directed to achieve the goals
of the organization. There are different type of organizational structure that a organization can
choose. Tall structure in an organisation defines the structure in which the CEO sits at the top
position in the chain, and have various levels under him. These businesses use “top-bottom”
approach with big chain of command. The level below the top level understands the roles and
responsibilities that can increase the efficiency and productivity of the organisation. The
advantage or having tall structure are; the managers have more control over the employees,
more opportunities can motivate the staff, the business can be closely monitored as managers
have limited number of subordinates. The disadvantages are; the communication is slower as
there are many levels, as there are many levels or hierarchy the response might be slower, the
employees might feel demotivated as there is no autonomy of decisions and the managers have
the narrow span of control. The examples of this structure are; Premier Inn, Holiday Inn express
Flat structure is in which there are fewer levels of management and it has short chain of
command. In this structure the managers have a wide control on subordinates. This structure
empowers the employee and encourage them to work together and solve the company issues
(Maggi, 2019). The advantages of flat structure are; the communication is faster within the
organization as there is less layers or hierarchy, The managers have more autonomy it can result
in better performance, the organizational changes can be implemented fast. The disadvantages
are; there are less opportunities for employees to progress or promotion, managers have more
subordinates as it is hard to provide extensive supervision to everyone, the managers have more
workload in this structure. Examples of this structure are; Intercontinental hotel group, G
adventures, exodus travels.
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There are various business functions that a business performs such as production human
resource, marketing finance, operation, research and development etc. These function are inter
related with each other. The Production function deals with the creating goods or services
through the production process. The production depends on several factors like money, material,
labour, facilities. The production management has to supervise and organize the workforce for
better production. Planning and controlling of the production process is also essential to meet the
quality and and cost requirements of the production it, it can impact the success and progress of
the company. Deciding the production quantity high or low according to demand can also impact
the organization in term of finance need and more workforce. The G adventures, exodus travels
is using the function to enhance the tourist experience and services. The Finance function
involves the management of funds , it plans for obtaining and spending of funds for
organization's short term and long term needs (Morched, and Jarboui, 2020). The finance
function allocate the funds to the departments it can impact the organisation if more funds are
spend on an unnecessary department. This provides information regarding finance to the
management for better decision making, if wrong information is provided it could impact the
organization in negative way. This function also keeps the records or financial transactions such
as salaries and expenses, if not the functionality of the organization might be impacted. The most
important activity of this function is to deal with taxes. The Premier Inn is using this function
very effectively to manage the funds and expanding using it. The Marketing function is most
important for business this function is responsible for sales, after sales services, marketing,
market research, advertising, and customer service. The marketing team is responsible for;
identifying the consumer needs and wants and developing appropriate marketing mix. This
function also makes competitive and marketing strategies according to market research of
consumer needs and market competition. This function is impacting intercontinental hotel group
positively it is making the customers loyal towards the company, and increasing the sales.
The Organizational culture is the collection of beliefs, expectations, values and
practices that informs and guides the actions of the employees of the organization. It defines the
proper way of behaviour within the organization. The organization's that follows a proper
organisational culture are tend to be more successful. The positive culture in an organization can
increase the employee engagement, this inspires and motivates the employees and creates
atmosphere of positivity (Shemyatikhina, Shipitsyna and Usheva, 2020). The productivity of
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employees is also increases if they have the proper resources and tools. If the employees feel
respected and valued at the workplace they will stay in that company for longer, this will result
in less expanse in hiring and save of time. This also results in increased turnover. A company's
organization culture can improve the brand identity and it will attract more businesses and
employees who have similar values and beliefs. Companies which recognises the efforts of
employees this can make a change in employees as they might experience sense of
accomplishment. Organizational culture also encourages healthy team environment and also
helps to improve the decision making process. The companies open communication can
improve employees clarity, miscommunication is the main reason for peoples dissatisfaction
(Tykkyläinen and Ritala, 2021). Positive environment also encourage employees to embrace
new ideas. The health care expenditure of the organization can be reduced as the stress level of
employees is less in the positive work culture. This provides an competitive advantage to the
organization as the consumers trusts the organization. The positive culture can reduce the
disagreements and enhance cooperation between employees. For example the Intercontinental
hotel group's organizational culture is very positive and the employees are satisfied with their
team. It is encouraging more talents to work with the group. This positive work culture is
increasing the performance of their employees and building trust among people.
CONCLUSION
By the above study it can be concluded that company is a legal person and have separate
entity from its owners. The organizations needs the organizational structure to operate
systematically and it provides guidance to the employees and improves workflow of the
company. The business functions in an organization makes sure that the organization functions
properly. The business functional management identifies and improves the business activities
that are important. The business functions needs to work together with the information flow to
increase the productivity of the overall organization. The organizational culture is an integral part
of an organization. The positive organizational culture helps to retain and attract the best talent,
also it fuels the employees to reach their maximum potential and improves the efficiency and
productivity of the organization thus it helps the organisation to achieves success and the overall
goals.
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REFERENCES
Books and Journals:
Han, J. and Luo, X., 2022. Inter-state Political Risks, Types of Corporate Political Ties and
International Joint Ventures. In Academy of Management Proceedings (Vol. 2022, No. 1,
p. 10277). Briarcliff Manor, NY 10510: Academy of Management.
Jirek, S.L., 2020. Ineffective organizational responses to workers’ secondary traumatic stress: A
case study of the effects of an unhealthy organizational culture. Human Service
Organizations: Management, Leadership & Governance, 44(3), pp.210-228.
Maggi, B., 2019. ICT stochastic externalities, technology innovation and business services: is
there an evidence of missed opportunity growth?. Economics of Innovation and new
Technology, 28(3), pp.265-278.
Morched, S. and Jarboui, A., 2020. Is business performance linked to organizational culture? A
study from Tunisian SMEs through subjective measures. Qualitative Research in
Financial Markets.
Shemyatikhina, L., Shipitsyna, K. and Usheva, M., 2020. Marketing management of a nonprofit
organization. Ekonomicko-manazerske spektrum, 14(1), pp.19-29.
Tykkyläinen, S. and Ritala, P., 2021. Business model innovation in social enterprises: An
activity system perspective. Journal of Business Research, 125, pp.684-697.
Wang, S.L. and Li, D., 2019. Responding to public disclosure of corporate social irresponsibility
in host countries: Information control and ownership control. Journal of international
business studies, 50(8), pp.1283-1309.
Zhang, S. and Fang, Y., 2018. Research on construction project organization based on social
network analysis. Wireless Personal Communications, 102(2), pp.1867-1877.
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