Types and Forms of Business Organization Essay Sample

There are millions of successful businesses around the world. One common trait all these businesses is that they have some sort of organization. But “What is Organization? ” – it is the first topic I would like to speak. Then I will tell you about “Structure of an Organization”. After that we consider the “Types and Forms of Business Organization” and the variety of “The Names of Companies” (plc, Ltd, etc. ) and, finally, I will tell some words about “International Business”. As I said before, I start with the definition of the organization.

Organization is an open, dynamic, purposeful social system of cooperation designed to enhance individual effort aimed at goal accomplishment. It consists of the human element, the physical element, the work element, and the coordination element. Also it transforms resources into outputs for users. It is important to examine the various parts or components of organization theory in order to outline its broad scope. These components are: goals, work, power and authority, delegation, structure. The goal, or purpose, in organization is an objective or target to be achieved, generally by a specific date.

For example, corporation may set a goal of doubling revenues in five years. Once the goal of an organization is established, it is time for the members to decide on the type of work activity that will be necessary to accomplish these goals. There are two fundamental types of work: primary and secondary. The primary (line) work consists of production and distribution of goods and services that will satisfy consumer needs. The secondary (staff) work consists of all those activities that support and extend the operations of primary work.

What consists power and authority, power is the ability to influence others successfully and authority is a kind of power that has been given official recognition by the organization. Speaking about delegation, it may be defined as the process of transferring an obligation (responsibility) and an accompanying right (authority) from a superior to a subordinate position in the organization. It is this basic process that enables an organization to grow. Without delegation, an organization simply cannot exist and prosper. Now I tell you about the last component of organization, called structure.

Structure is the hierarchical pattern of authority, responsibility, and accountability relationships designed to provide coordination of the work of the organization. There are two types of organizational structure – formal and informal. Organizations have a formal structure which is the way that the organization is organized by those with responsibility for managing the organization. They create the formal structures that enable the organization to meet its stated objectives. Often these formal structures will be set out on paper in the form of organizational charts.

However, in the course of time an informal structure develops in most organizations which are based on the reality of day-to-day interactions between the members of the organization. Sometimes the informal structure may conflict with the formal one. Where this is the case the organization may become less efficient at meeting its stated objectives. However, in some cases the informal structure may prove to be more efficient at meeting organizational objectives because the formal structure was badly set out. Now let’s consider the types and forms of business organization.

Speaking about types of business organization, I can say that there are three types of business organization: service, merchandising and manufacturing companies. Service companies have a type of business which can be described as selling “intangible” goods or selling one’s self – one’s expertise, one’s capabilities, one’s reliability, and one’s skills. Examples are a hair salon, an accounting firm, or a child care center. Merchandising companies have a type of business that purchases merchandise at wholesale cost and sells it at retail cost.

Examples of merchandising businesses include a bridal boutique or a jewelry store and so on. Manufacturing companies are the companies in which one creates the product, in whole or in part, that one is selling. Examples of a manufacturing business include a furniture factory, an automobile factory, or even a small specialized business like a recycled products business. These three types of business organization may be organized as a single (often sole) proprietorship, partnership and corporation.

A sole proprietorship has a type of business which is unincorporated and owned and managed by one person. This organization style has a low cost of organizing, is used by small business, and is limited to the financial resources of the owner. Partnership is a type of business in which more persons, called general partners, manage the business and is equally liable for debts. While other individuals, called limited partners, may invest, they are not directly involved in the operation of the company and are liable only to the extent of their investment.

Corporation is business that is a legal entity created through the laws of its state of incorporation. Anyone who operates a business, alone or with others, may incorporate. It includes ownership divided into shares of stock and sold to shareholders. There are various types of business entity throughout the world. The abbreviations “GmbH” in Germany, “Inc. ” in the United States, or “Ltd. ” in most other English-speaking countries indicate that the firm is a limited liability company and investors have nothing more to lose than the money invested in their shares. The “S. A.

” in French and Spanish-speaking countries also refers to limited liability by defining shareholders as “anonymous. ” Since the identity of shareholders can be kept secret, the creditors of a bankrupt company have no right to pursue them for the company’s unpaid debts. Talking about business, it is hard not to say about international business. International Business conducts business transactions all over the world. These transactions include the transfer of goods, services, technology, managerial knowledge, and capital to other countries. It involves exports and imports.

International business has many options for doing business, it includes: exporting goods and services, giving license to produce goods in the host country, starting a joint venture with a company, opening a branch for producing & distributing goods in the host country and so on. To finish up my topic I would like to say that there are a lot of types and forms of business organization, not only those, which I mentioned, and every type and form has its advantages and disadvantages. I think if you let your business work for you, you will be a very successful person.