MGBBTOUBN: Understanding Business Organisations

Introduction:

The purpose of this essay is to being aware of the environment a business operates in, will be
beneficial. The word "business organization" refers to the organizational structure of businesses
and how such structure aids in achieving their objectives. In other words, “business organization”
is an organization created for the goal of conducting business, it specifies how enterprises are set
up, how to generate goods or services, and how to cater to the demands of clients. The goal of the
business organization is to concentrate on either making a profit (for profit organization) or
enhancing society (not for profit). This essay will assist in understanding the many forms of
commercial organizations, their comparative benefits and drawbacks, as well as the varied roles
that each type of company plays in society and their culture impacting positively in the success of
the organization (Simon et al.,2013)

Businesses often fall into one of three categories. They are:

1. Partnership
2. Sole proprietorship
3. Limited liability company

Partnership: A partnership is a type of business where two or more persons formally agree to be
co-owners, divide management duties, and split profits and losses. The key benefits of partnerships
are that

a) They require less paperwork and legal documentation to form than other business
structures
b) There are more chances to develop their cooperation abilities when there are several others
with similar interests

Some of the drawbacks of partnership businesses are

a) Partners may differ on specific business decisions if more than one person is engaged in
the decision-making process
b) A firm may stall if partners disagree and decide to dissolve their partnership without a
formal agreement that specifies methods
Sole proprietorship: A n unincorporated business with one owner is known as a sole proprietorship.
Some of its advantages are

a) The sole controller of all financial and commercial decisions

b) Owners only need to submit the Schedule C (Profit or Loss from Business) form to the
IRS, no further specific tax forms are required.

Some of the drawbacks are

a) In accordance with this business arrangement, the owner is liable for all company
obligations and decisions
b) Fundraising is difficult

Limited liability company: It is defined as a separate legal entity and may have an unlimited
amount of owners. Some of the advantages are

a) Owners and managers are only partially personally liable for business debts
b) Owners have the freedom to decide how to run their enterprises

Some of the disadvantages are

a) Unlike sole proprietorships, which are less formal, LLC owners must be careful to keep
their personal and business costs separate, including any corporate records
b) Owners may be required to cover the cost of unemployment benefits themselves

A company's employees is organized according to an organizational structure to represent the

various management tiers. Tall and Flat organizational structures are the two basic forms
employed in enterprises (Schneeman et al., 2012).

Tall Structure: Businesses with a "tall" structure sometimes employ a "top-down" approach with
a lengthy chain of command. This structure has numerous leaders and levels of administration
(Zaridis et al,.2014). The benefits include

a) Closely managed company areas

b) Tight staff management by managers
c) Excellent chances for advancement
The drawbacks are that

a) Communication is slow because of the lengthy chain of command

b) Lack of autonomy may demotivate workers
c) Organizational changes can take time to adopt

Flat Structure: A "flat" organizational structure has few layers of management. Its advantages
include the following:

a) Better communication is enabled by fewer levels

b) Giving employees more freedom and accountability
c) Employees might feel more driven, which would make them more productive.

It has some drawbacks like

a) Few prospects for advancement

b) Increased managerial workloads
c) Managers have more subordinates (Fouraker et al.,2015)

Consider booking.com, a travel agency, as an illustration. The organization is comparatively flat,

and many managers take delight in managing people with exceptional intelligence. The goal of
Booking.com is to make travel more accessible to everyone. Booking.com connects millions of
travelers to unforgettable experiences, a wide range of transportation options, and amazing places
to stay, including houses, hotels, and a lot more, by investing in technology that removes the
friction from travel. TUI is another another travel agency. The flatter organizational hierarchy at
Tui is supported by innovative and learning organizations. Employees feel more comfortable and
confident and have greater access to information when there are fewer managerial levels between
them and more access to senior management and leadership. Furthermore, the flatter hierarchy
speeds up Tui's decision-making and promotes employee loyalty to the company.

There are various levels of administration in a commercial organization, and each is responsible
for overseeing its department. Following are some of them and their functions:

Management of human resources: HR's responsibility is to see to it that new hires are equipped
with the knowledge and abilities necessary to effectively carry out their duties. It increases the
workforce's general effectiveness and productivity, which eventually leads to better profitability
for the company. Again, a key component of every organization is employee engagement. The
best agent to manage employee engagement effectively is HRM. Both the organization and the
personnel will benefit much from effective communication and engagement. Employee
engagement determines their level of commitment and motivation (Sharma et al.,2009).

Production Management: Choosing the appropriate product for manufacturing and a functional
design for the product are both assisted by production management. For businesses to survive, it
is crucial to have a thorough understanding of their customers in order to design products that
completely meet demand. For businesses dealing with market competitiveness, production
management can be a very useful instrument. Increased productivity and the ability to deliver
high-quality goods and services are both made possible by improved process flow. The
development of new, high-quality products is made easier by production management strategies,
which also play a part in effective product innovation (Ham et al., 2012).

Operation Management: Maintaining operational efficiency is the responsibility of operations

management. In order to eliminate bottlenecks and enhance their operations strategy, operation
management must constantly be on the lookout for new developments. Monitoring daily output,
managing and regulating their inventory, and keeping an eye on team member performance and
well-being all contribute to a positive workplace culture that benefits the company (Bayraktar et
al., 2017).

An organization has their own culture and beliefs. An organizational culture exists within a
corporation. All team members' behavior is influenced and guided by the values, expectations,
and practices that make up the organization's culture. The company's characteristics collectively
define who it is. While a dysfunctional workplace culture brings out tendencies that can impede
even the most successful firms, a great workplace culture showcases beneficial features that
result in enhanced performance (Shahzad et al.,2012). Press releases or policy statements don't
build culture; consistent and genuine behavior does. Positive organizational culture has a bigger
impact on the business. Employee productivity will increase in a setting with a positive
organizational culture. People will feel empowered and more productive when they have a sense
of belonging. Employee engagement is higher and retention is longer when organizational
culture is robust and healthy (Schein et al.,2011). High turnover rates, a significant expense for
many firms, are avoided by organizations with healthy cultures by keeping more of their top
personnel on board. Again, Employees often need to feel important in their work and like they
have a good influence on it. An employee's work ethic and attitude toward the company will
reflect an organization's strong values, beliefs, and procedures. This can help improve employee
health and wellness by making them feel more connected to their work (Frost et al., 2013).
Customer satisfaction increases with a positive culture. The more satisfied your customers are,
the more money your company makes. Customer satisfaction will rise as a result of a strong
organizational culture. Customers are more likely to remain loyal to a business that has a positive
company culture and happy employees as a result (Hatch et al., 2014). So, healthy organizational
culture is required.
Conclusion:

The number of business entities is growing daily. There are numerous business types, each with
advantages and disadvantages. Business entities can be classified as either tall or flat and can have
both good and bad qualities. An business has many layers of management, each of whom is
obligated to carry out their duty and guarantee the advancement of the company. A corporate
organization should strive to maintain a positive workplace culture because this will have a greater
effect on the company's bottom line. The number of business entities is growing daily. There are
numerous business types, each with advantages and disadvantages. Business entities can be
classified as either tall or flat and can have both good and bad qualities. An business has many
layers of management, each of whom is obligated to carry out their duty and guarantee the
advancement of the company. A corporate organization should strive to maintain a positive
workplace culture because this will have a greater effect on the company's bottom line. The number
of business entities is growing daily. There are numerous business types, each with advantages
and disadvantages. Business entities can be classified as either tall or flat and can have both good
and bad qualities. An business has many layers of management, each of whom is obligated to carry
out their duty and guarantee the advancement of the company. A corporate organization should
strive to maintain a positive workplace culture because this will have a greater effect on the
company's bottom line. The number of business entities is growing daily. There are numerous
business types, each with advantages and disadvantages. Business entities can be classified as
either tall or flat and can have both good and bad qualities. An business has many layers of
management, each of whom is obligated to carry out their duty and guarantee the advancement of
the company. A corporate organization should strive to maintain a positive workplace culture
because this will have a greater effect on the company's bottom line. The number of business
entities is growing daily. There are numerous business types, each with advantages and
disadvantages. Business entities can be classified as either tall or flat and can have both good and
bad qualities. An business has many layers of management, each of whom is obligated to carry out
their duty and guarantee the advancement of the company. A corporate organization should strive
to maintain a positive workplace culture because this will have a greater effect on the company's
bottom line. The number of business entities is growing daily. There are numerous business types,
each with advantages and disadvantages. Business entities can be classified as either tall or flat
and can have both good and bad qualities. An business has many layers of management, each of
whom is obligated to carry out their duty and guarantee the advancement of the company. A
corporate organization should strive to maintain a positive workplace culture because this will
have a greater effect on the company's bottom line.

References:

Simon, H.A., 2013. Rational decision making in business organizations. The American economic
review, 69(4), pp.493-513.

Schneeman, A., 2012. The law of corporations and other business organizations. Cengage
Learning.

Zaridis, A.D. and Mousiolis, D.T., 2014. Entrepreneurship and SME's organizational structure.
Elements of a successful business. Procedia-social and behavioral sciences, 148, pp.463-467.

Fouraker, L.E. and Stopford, J.M., 2015. Organizational structure and the multinational
strategy. Administrative Science Quarterly, pp.47-64.

Sharma, S., Sharma, J. and Devi, A., 2009. Corporate social responsibility: the key role of human
resource management. Business intelligence journal, 2(1), pp.205-213.

Ham, I., Hitomi, K. and Yoshida, T., 2012. Group technology: applications to production
management. Springer Science & Business Media.

Bayraktar, E., Jothishankar, M.C., Tatoglu, E. and Wu, T., 2017. Evolution of operations
management: past, present and future. Management Research News.

Shahzad, F., Luqman, R.A., Khan, A.R. and Shabbir, L., 2012. Impact of organizational culture
on organizational performance: An overview. Interdisciplinary journal of contemporary research
in business.

Schein, E.H., 2011. Organizational culture (Vol. 45, No. 2, p. 109). American Psychological
Association.

Frost, P.J., Moore, L.F., Louis, M.R.E., Lundberg, C.C. and Martin, J.E., 2013. Organizational
culture. Sage Publications, Inc.
Hatch, M.J., 2014. The dynamics of organizational culture. Academy of management
review, 18(4), pp.657-693.