Classifying Business Organizations Business organizations can be classified in a variety of ways depending on its size, sector, legal status etc. These classifications differ from one firm from another. Legal status has an important bearing on the environment in which the business operates. It is important to have a comprehensive knowledge of the advantages and disadvantages of the several legal forms so that managers and directors can decide which legal form their firm should adopt. The sole trader is the simplest business to develop and has very little legal formalities, obligations or constraints. A sole trader or sole proprietor is one who individually runs business with personal funds. Remaining as a sole trader has many advantages, mainly being that you are able to give a more personal service to your customers and you are able to make changes within your business very quickly due to there is little or no bureaucracy there being only one person to make the final decision. Other advantages include having complete control over the business and its profits. However, as the expansion of the business depends on the amount of capital you are personally able to inject, one may find investing in the growth of my business very difficult, as capital is often difficult to find. Thus competitors have greater access to investment and are able to adapt more quickly to market demands. A sole trader is also fully liable financially and thus losses may lead to bankruptcy or loss of personal possessions. A partnership is an unincorporated business that is carried on by two o... ... middle of paper ... ...asing and joint ventures are other two legal forms similar to franchising. Licensing is when one country (the licensor) authorizes a firm in another country (the licensee) to use its intellectual property. Joint venture describes a jointly owned business venture involving more than one organization. Therefore when choosing a desired legal form firms need to realize the degree of personal liability as in sole trader, the willingness to share decisions as in partnership, the legal requirements required in limited companies and the need for separate identity as in a franchisee. In the end whatever legal status a firm undertakes it is ultimately the environment the business entity functions it that influences the decision of the manager or director about which legal form to choose and implement in their organization.
Partnership – “A legal entity formed by two or more co-owners to operate a business for profit.” (Longenecker, Petty, Palich, Hoy, Pg. 202) In a partnership, the advantage for the owners is the capability to reduce the workload and the financial burden, especially if each partner has management skills that enhances the business. The disadvantages of a partnership such as personal conflicts and leadership expectations, therefore this organizational form should only be chosen once all other options have been considered.
This section of our business plan discusses the planning, leadership, organization and control of Uncommon Ground. The management team was presented in the previous section; Uncommon Ground’s corporate structure, governance, functional structure, and management support will be detailed in this section.
As defined by Geringer (1988), a joint venture (JV) is when two or more distinct companies come together and form a new entity. Geringer and Hebert (1991) extend this definition to include IJVs and stated that if the headquarters of one of the partners is outside the country where the JV is set-up or if it has operations in multiple countries, it is an IJV.
There are many different types of business structures, but if you own and operate a business that it is a sole
In their 2005 book, Understanding and Managing: Organizational Behavior, Jennifer George and Gareth Jones define organizational structure as "the formal system of task and reporting relationships that controls, coordinates, and motivates employees so that they cooperate and work together to achieve an organization's goals." A logical consequence to an organization's structure is the resulting culture, which George and Jones further define as "the set of shared values, beliefs, and norms that influences the way employees think, feel, and behave toward each other and toward people outside the organization." Finding the right structure for one's organization is vital to its strength and longevity. Appropriate structures are commonly found by trial and error; most continue to evolve as the organization enters different stages of its existence. Structures are defined and redefined in accordance with the organization's strengths and weaknesses, maximizing one while attempting to decrease the other. Over the course of change of structural eras', so too will the culture change.
A Sole Trader is a business that is owned by only 1 person. They are
The term Industrial Classification refers to the system by which companies and industries are organized or classified by in the United States. It uses a label system called the Standard Industrial Classification (SIC) that is composed of four digits. This system started in 1937 with a four digit code in which has been modified to a six digit code and renamed to the North America Industry Classification System (NAICS). This system is used by governmental agencies to classify the different industrial areas, for example: Agriculture, Forestry, Fishing, Mining, Transportation, Construction, etc. The classification of industries was created by the United States government to be able to analyze measure and share this data with other agencies. (Pearce, 1957)
An organizational analysis is an important tool to become familiar with how medical businesses and organizations are able to meet standards of care, provide services for the community and provide employment to health care providers. There are many different aspects to evaluate in an organizational analysis. This paper will describe these many aspects and apply the categories to the University Medical Center (UMC) as the organization being analyzed.
fish, oil, or coal from the land or sea or growing using the earth to
The three perspectives can be compare and contrasted by using the organization structure which is the social and physical structure. Social structure is defined as connection and interaction between employees each department in an organization whereas physical structure is the actual layout of organization (Lecture slides, week 4, 2014, structure, culture and design). The social structure concept is developed by Max Webber for the purpose of looking through the division of labor, hierarchy of authority and corporate rules and procedures (Hatch and Cunliffe, 2009, p.103). Therefore, from a modernist perspective, it is clear that, structure differentiates through characteristic such as a flat or tall organization structure. Tall organization structures are those with divisions of labor through having many vertical hierarchy levels from top to bottom with only a few departments. Tall organizations on the other hand are those structures with a big number of divisions while having less hierarchical levels (Lecture slides, week 4, 2014, structure, culture and design). Modernists believe ...
Sole tradership is when the business is fully owned and managed by one person, though others can be employed to help run the business. As the sole traders only financial income is from the business and/or bank loan, they do not have the resources to expand and cover regional or national areas. These types of businesses are located in the small business sector and usually cover local areas. Such businesses could be hairdressers, corner shops or market stalls etc. Sole traderships have unlimited liability so if the business fails to pay its debts the financial responsibility falls on the owner/s to pay the debts in full even if they have to sell their business, personal possessions and assets.
Organizational identification (OI) within the business model provides a structure that represents a framework of task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. This model provides the context to address OI within this business dynamic, allowing researchers to address the larger OI phenomenon within more narrowly-defined areas of an organizational edifice such as individual, team, and network.
There are many advantages and disadvantages when owning your own business. When you own you own business, it’s known as a sole proprietorship. But with any type of business, there will always be advantages and disadvantages.
Organizational structure refers to the way that an organization arranges people and jobs so that its work can be performed and its goals can be met. When a work group is very small and face-to-face communication is frequent, formal structure may be unnecessary, but in a larger organization decisions have to be made about the delegation of various tasks. Thus, procedures are established that assign responsibilities for various functions. It is these decisions that determine the organizational structure.
1.LIABILITY: There are no limits on liability with a sole proprietorship, the owner is responsible for all the businesses debts and obligations. The earning power of a sole proprietor can be limited due to lack of capital. The sole proprietor is only able to obtain personal credit to expand the company, the bank will not treat the company as its own entity