BUSINESS ORGANISATION AND

STRUCTURE
Qualification Context: An understanding of business
structures is important with regard to higher level
accounting papers as well as P3 (Business Analysis)
Business Context Appreciating why organisations are
structured in different ways will help with an understanding
of how they should be managed.
An Organisation is...
• a group of people who work to
gether in an organized way for
a shared purpose:
• the way in which something is
done or arranged- Cambridge
advanced dictionary

• Example. World Trade

Organisation.
 Definition
• An organisation is a social arrangement
which pursues collective goals,
which controls its own performance and
which has a boundary separating it from its
environment'.

• Boundaries can be physical or social.

 How are they formed?
• Organizations exist to achieve goals.
• These goals are broken down into tasks as the
basis for jobs.
• Jobs are grouped into departments.
• Departments in organizations may be
characterized by marketing, sales, advertising,
manufacturing, and so on.
business goals describe what a company expects to
accomplish over a specific period of time. Goals might pertain
to the company as a whole, departments, employees,
customers, or any other area of the business.
 Linked to form a structure!
• Within each department, even more
distinctions can be found between the jobs
people perform
• Departments are linked to form the
organizational structure.
• The organization’s structure gives it the form
to fulfill its function in the environment
 The term organizational structure refers
” to the formal configuration between
individuals and groups regarding the
allocation of tasks, responsibilities, and
authority within the organization”

Galbraith, J. R. (1987). Organization design. In J. W. Lorsch (Ed.). Handbook of organizational

behavior (pp. 343-357). Englewood Cliffs, NJ: Prentice Hall;
Greenberg, J. (2011). Behavior in organizations (10th ed.). Upper Saddle River, NJ: Prentice Hall.
Purpose
 Types/Key categories:

• Commercial
• Not for profit
• Public sector
• Charities
• Trade unions
• Local authorities
 Local authorities
• Local government is a form of public
administration which, in a majority of
contexts, exists as the lowest tier of
administration within a given state.
 Mutual associates-
• Saving and loan association owned by its
depositors and (in some cases) borrowers, both
collectively referred to as members.
• Mutual associations do not issue shares (stock)
and their members have no direct claim to
their earnings, but the members have
the right to elect directors to its board of
trustees.
• Credit unions are a type of mutual association.
 Mutual associates-
• association, also known as an industry trade
group, business association or sector
association, is an organization founded and
funded by businesses that operate in a
specific industry.
• An association participates in public relations
activities such as advertising, education, political
donations, lobbying and publishing, but its focus
is collaboration between companies.