MGBBT0UBN Understanding Business Organizations Assignment Sample

Business organizations, different types and their advantages/disadvantages

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Introduction Of Understanding Business Organisations Assignment Sample

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Business organizations refer to formation of entities for carrying out the purpose of commercial enterprise. There are only three forms of customization of a business enterprise such as partnerships, limited liability companies, or sole proprietorships (Guerard Jr, et. al. 2022). The essay discusses the different types of businesses which three types are explained along with their advantages and disadvantages. The tall and flat structure of an organization is also considered in the essay with the discussion of their comparisons in context with advantages and disadvantages. The essay also discusses the three different functions of a company which include marketing, human resource management, and production function. The business functions are elaborate along with the impacts of their management activities on an organization and also on the employees within the organization. At last, the organizational culture is deeply explained in the essay, and all the above points are discussed in the view of tourism and hospitality industry examples.

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Different business types have different organizational structures and environments to establish a good position in the market (Cappellino, 2020). For explaining types of business, three businesses are considered to discuss in the essay. The explanation of three business types is as follows:

Partnership refers to the business type in which the business is structured or established by two or more partners. Any corporation, legal entities, individuals, or other partnership may become partners for a business (Kiss, 2020). Talking about the advantages of the partnership business is that it is easy to establish, the burden is shared, and more capital is introduced for the business. The UK has a diversified market for tourism and hospitality business but this business requires more investment along with many partners to share the burden as the tourism industry has a huge profile in the UK. The business also has some disadvantages such as unlimited liability, potential conflicts, and difficult and slow decision-making.

A sole trader is a single owner or self-employed individual who establishes and operates the entire business. The advantages of a sole trading business are such as immediately getting started, wholly control, and total privacy (Bruwer, 2019). And disadvantages of the business are sole responsibility, financial barriers, and unlimited liability. The sole trader will get less market share in the hospitality industry in the UK as the facility provided by tourism companies is on a high range and it is difficult to handle by a single person.

Limited liability refers to a legal structure of a company in which invested amount in Limited Liability Company or partnership will always be greater than corporate loss. It can be said that, if an organization fails then the private assets of owners and investors are not at any risk (Nainggolan, 2022). Advantages of this business type are such as it is tax efficient, capital can raise from lenders, limited liability as the name suggest to a business type. And disadvantages of the business is be that the company must stick around by companies act, delay in decision making, and complex accounting for business operations.

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The structure of an organization is made in two ways tall and flat. Tall structure refers to various managerial levels which show a pyramid structure and long chain of command with top, middle, and lower level managers (Nekovee, and Pinto, 2019). Whereas flat structure refers to few or no managerial levels that separate organization employees and leaders in general and a free reporting structure is provided by this organizational structure (Lee, 2022).

One of the advantages of fast decision-making in a flat structure because of the few levels of management, is the disadvantage of the tall structure of a company. As with many levels of management in a tall structure, the decision is taken with the approval of every managerial level which leads to slower decision-making. The costs that occur in a flat structure are relatively lower than in a tall structure a company. Also, the flat structure has a wide span of control in the company in comparison to the tall structure, as in the tall structure control span is narrow (Marasi, et. al. 2018). The tall structure of an organization includes one advantage in which it provides huge opportunities for the promotion of a company's products and services in different markets. While the flat structure comes up with a disadvantage in the opportunity profile, as flat structures perform in small companies there are limited or few opportunities for promotion available.

Generally, tourism and hospitality companies have a hierarchal structure which refers to a tall structure of an organization. But few companies also have flat structures for operating business smoothly. For instance, if a tourism company is dealing across the world hence it is a big company that operates its business in various countries, a tall structure is better for that company. But if the hospitality or tourism company is dealing across one country boundary like the UK only, so than flat structure is better for that organization.

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Business functions mean the grouping of a firm's processes and capabilities that describe the business work. The functions of business ensure that an organization does well for its leaders, shareholders, employees, and customers (Macchi, et. al. 2020). An organization has different functions forever going and the survival of the business. Business functions include sales, marketing, finance, customer service, production, human resource management, operations, etc.

The human resource management function in a business is diversified into many roles such as recruitment and selection, training, and performance appraisal of employees of a company. Human beings are a crucial asset of every business, so the HR department's work is only related to the employees and workers of an organization (Laser, 2021). In the tourism industry, HR management integrates specific needs by incorporating principles of management. The function of this department helps in the continued flow of talented and skilled employees for the company to bring business to the heights of growth and expansion.

Production function refers to the process of making a company's product in which raw materials are converted into output or finished goods. The production department is performing differently in the tourism and hospitality industry (Yankovyi, et. al. 2019). The work production function of a Tourism Company is to attract more tourists by providing them with local foods and managing all the key work related to the package provided by the company to tourists. The role performs by the production department ensures the continuous improvement in the products of a company which leads large consumer base for an organization.

The marketing function of a company includes personal selling strategies management, market research, and promotional plan development. In the tourism industry marketing is one of the main functions performed by the company which includes increasing customer awareness, promoting local brands, growth of the local economy, etc (Obih, and Baiyegunhi, 2018). The marketing function offers various opportunities to a business, helps in formatting strategy, and creates market awareness for a business to perform better in the market.

Paragraph 4

Organizational culture refers to beliefs, attitudes, customs, and rules in the form of unwritten and written which are developed in an organization over time. The culture of an organization also includes the company's values, experiences, expectations, as well as philosophy to guide the inner working members in a way to interact with the outside world of a company (Paais, and Pattiruhu, 2020). A qualitative culture of a company is made by the appreciation of different cultures of workers, trust, good teamwork, and support of employees' basic and psychological needs.

A positive culture of an organization impacts the greater success of a business in an industry or consumer market. An effective culture attracts more talented and skilled employees to the company as everyone wants a peaceful and wealthy working environment. As talented persons are attracted to an organization and the creation of a healthy working environment will lead the improved effective productivity level in a company. A good culture reflects healthy teamwork in an organization which pushes a company to the top of a market or industry.

Every company has to create a good and effective culture for their business in both internal and external environments. In the tourism industry, the culture is being concentrated on problem-solving skills, team formation, decisions making to provide a sound look at team functions to hospitality industry professionals. The organizational culture in this industry reflects the team factors and concepts which affect the interactions between all group members of the company.


From the above-discussed essay, it is concluded that a proper business organization is made only with the help of a good environment and culture of a business according to the structure and type of business. The customization form of a business enterprise shows the area and boundaries of a company establishment. Discussion of three different types of business increase a piece of knowledge about the merits and demerits and basic requirements to introduce a new business in the market. Partnership, sole trader, and Limited Liability companies are the top types of businesses in the market, so these types should be studied in deep. It is also concluded that any company must have to opt for one structure of an organization from the two introduced structures. The tall and flat structure of an organization is adopted by the company according to the type and culture of a business. Business functions reflect the performance of an organization in the market, as every function has different tasks and teams in a company, so every department has to perform well. It is also concluded that the organizational culture prepares a company to get long-term growth and profit and gain a competitive advantage over its competitors. The essay concludes the pathway of a successful organization in the market.



Bruwer, J.P., 2019. Critical innovation skills required of sole trader Small, Medium and Micro Enterprise (SMME) management and its influence on perceived business profitability.

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Lee, S., 2022. The myth of the flat start?up: Reconsidering the organizational structure of start?ups. Strategic Management Journal, 43(1), pp.58-92.

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Obih, U. and Baiyegunhi, L., 2018. CONSUMERS’ACCEPTABILITY OF LOCAL RICE BRANDS IN NIGERIA. WHICH MARKETING FUNCTIONS REALLY MATTER?. Journal of Agribusiness and Rural Development, 48(2), pp.183-196.

Paais, M. and Pattiruhu, J.R., 2020. Effect of motivation, leadership, and organizational culture on satisfaction and employee performance. The Journal of Asian Finance, Economics and Business, 7(8), pp.577-588.

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