This essay evaluates business organisations and their environment. According to the study by Möller, Nenonen and Storbacka (2020), businesses operate in environments that require strategic approaches to succeed. This can only happen when a business organisation understands its functions and operational strategies that can make it become competitive and achieve its goals and objectives. To do this, business managers or owners need knowledge in areas such as business types, business structures, business functions, and organisational cultures. Therefore, this essay evaluates these areas by giving industry examples.
A business must affiliate with its type. This affiliation is important because it helps to identify its registration, taxation, the number of employees and resources it can acquire, as well as its relationship with stakeholders (Shireesh and Kumar, 2018). Among the serious businesses existing in the United Kingdom (UK) today, there is a partnership. This business type can be described as a business where people – two or more come together to start a business (Rahman and Ghadas, 2018). They, therefore, contribute resources in terms of business capital and expertise. After this happens, they formulate an article of association that spells out things such as shareholding and responsibilities. A partnership has advantages like amassing huge capital to run the business and expertise, unlike the sole trader where only one person is involved. The disadvantages may come in at the time of insolvency because the personal property of the partners may be sold to pay debtors (Saussier and De Brux, 2018). The second business type is a joined venture. This is a type of business where two or more companies join their resources to operate in an industry or a number of them (Nippa and Reuer, 2019). The advantage includes amassing expertise and resources from different companies. However, sometimes the two or more companies may fail to cooperate in the long run. The example includes BHP Billiton. The other type of business is a limited liability company. As the name suggests, it is a type of business formed under the UK Companies Act. It is made up of shareholders as the owners, and directors manage on their behalf. The advantage is that it can access huge loans from banks and other lenders because it operates as a person. However, the disadvantage is that a limited liability company in case of insolvency, the shareholders may end up losing their investment because it is the debtors who are supposed to be paid first.
When a business makes a decision about the type of business to run as a typical determination of the business outlook, what may follow is the determination of a business structure. A business structure denotes the functional areas, relationships and coordination that has to happen in its operational aspects, and this requires a fundamental strategy to manage (Stverkova and Pohludka, 2018). Therefore, there are two types of business structures to be discussed here. The first is a tall business structure. This entails a business having departments and leaders within it where hierarchy in terms of operations and chain of command is preferred (Jaupaj and Jaupaj, 2021). Tesco is a company in the UK that has this kind of business structure. Given that it has numerous stores in many parts of the world, it prefers to use the tall business structure to have different leadership levels in charge of different stores and departments. The second business structure is flat. This entails a business having a horizontal form of hierarchy, wherein in some instances, there is no hierarchy at all (Clement, 2019). An example of such a business is Google Inc. there exists similarities and differences between the tall and flat business structures. For instance, both of them are structures of management and they must have people in charge of different positions. However, the difference is that as the tall business structure has a high level of internal command, the flat structure does not have a chain of command is employees and managers alike exercise freedom of expression and decision-making. Therefore, the selection of whether a business should use tall or flat structures is based on the focus the owners have concerning outcomes they want out of it. However, the study by Clement (2019) shows that businesses with flat organisational structure tend to be preferred and are progressive in the current business environment
Regardless of the type of business structure that a company can choose, it must have functional areas. Business functions denote the various areas of operations and coordination of departments to make it operate smoothly (Ellis, Zucker and Randall, 2018). For a typical business, one of the functions is operations. This function deals with carrying out numerous activities in an organisation geared towards achieving the goals and objectives (Heines et al., 2021). By doing so, the operations functions tend to oversee the daily running of the business. However, to succeed in doing so, a business requires the second set of functions, which is human resource management (HRM). A business HRM function is of great importance for a business. For instance, a business is made up of many functional areas which require people who are qualified. Therefore, the role of HRM functions is to source for, recruit, select, orient, and allocate employees to different departments and business function areas (Heines et al., 2021). This is to say that a business requires the HRM functions to supply qualified human capital that can enable it to achieve the desired operational areas. Apart from this, there is the production function. They may function of this area in a business is to turn raw materials into finished goods for manufacturing companies (Gorbunov and Lvov, 2021). It thus works closely with operations function to facilitate carrying out of small activities that amount to the overall performance of an organisation. Even amidst this, the HRM function is needed, to supply experts and labourers to the production process. An example of a company that utilises such functions is Aston Martin. The company’s HRM is responsible for supplying engineers, managers and accountants to the company. The operations functions oversee that different activities take place as required. Then, the production part of it deals with turning raw materials into components, then assembling the components to create the final product that is sent to the customers to buy.
A business requires having a trend through which it carries out its activities. Of importance is how such a trend helps in bringing together employees, creates harmony among them, facilitates cooperation in relationships, hence motivating them to improve in their performance ( ). For a business to do this, it requires organisational culture. This is an assortment of mutually accepted beliefs, norms, and values (Carvalho et al., 2019). Having these things is helpful to a business because organisational culture can be used as employees motivational tool. For instance, a strong organisational culture fosters employee cooperation, making them coordinate, work in teams, help one another, and eliminate challenges brought about by demographic challenges (Odor, 2018). For example, a company like Google has a culture where employees are given the opportunity to collaborate towards creating innovations and creativity. This provides such a company with opportunities that foster organisational growth. Therefore, the second role of a strong organisational culture is the creation of a competitive advantage (Szydło and Grześ-Bukłaho, 2020). For instance, based on the VRIO model, rarity and imitability are significant areas of an organisation to attain competitive advantage (Lopes et al., 2018). This means that when an organisation has a strong organisational culture, employees derive characteristics that are rare and cannot be copied by competitors. a company that has attained such heights of strong organisational culture is Zappos. The company ensures that it starts with observation of its organisational culture right from recruitment of employees. For instance, every job candidate at Zappos starts the process with a culture-fit interview. It is through passing such an interview those other forms of interviews follow. This means that Zappos cultivates its organisational culture by getting employees in the company who agree to the culture.
Conclusion
To conclude, this essay has discussed businesses and their organisational environments. The discussion started with the identification of different types of businesses. The identified ones include partnerships, joint ventures, and limited liability companies. These businesses have varying levels of resource accumulation and legal aspects in managing them. The second area discussed is business structures. Two types were discussed. They include a tall business structure that is based on hierarchy in an organisation. The second one is a flat structure, which is not dependent on hierarchy, but leaders and followers share similar platforms. After this, the essay discussed business function areas. Here, HRM, operational, and production functions were identified. It was also inferred that the HRM function is responsible for the success of the other two because it has to supply them with the required talent of human capital. Afterwards, the essay discussed the organisational culture. As norms, beliefs and values within an organisation, it has been identified that it can help to motivate employees and create a competitive advantage for an organisation.
References
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