Business Types and Purposes

Examples of business organizations include Limited Liability Company, Corporations, Partnerships and Sole Proprietorship. The profit entities are generally organizations working in the private region that sets goals which eventually assist the business itself. This types of corporates make ownership's shares obtainable to the overall public. Such enterprises are normally not supported by the government since they are operating for private financial benefits. Conversely, a non-profit corporate exists to offer a specific service to the society. A sole trader owns unlimited liability for each obligation experienced by the corporate, whether from judgments or operating expenses against the business. Correspondingly, the partnership is an organization possessed by two or more persons. According to Wagner, Daniel, and Tim, in many kinds of partnerships, every partner own unlimited liability for any obligation acquired by the corporate (242).

The significant categories of profit partnerships include limited liability partnerships, limited partnerships and general partnerships. Similarly, a limited liability company combines the features of the corporation as well as those of a sole proprietorship or partnership. In meeting stakeholder needs, the company should recognize that its long-term growth relies on keeping the balance between the wants of the environment, shareholders, employees and customers. This encompasses not just considering the “individual benefit” of a specific stakeholder group, but as well the combined gain of the entire groups. The primary purpose of economic activity is the creation of services and goods to satisfy wants and needs. Scarcity is a concept which implies that resources are scarce compared to unlimited wants (Jones, Alison, and David 170).

The difficulty of scarcity occurs in every dimension. It is crucial as it assists in hiring, firing as well as managing people. According to Hammer (5), the formal or the informal human resource structures should strive at being consistent and clear to ensure excellent communication of the business policies among the staff members. Finance is another critical area of the business which manages finance by strategizing the best way to use money within the company. This is important as it is expected to account for the cash flow of business. Marketing as a functional department is dedicated to ensuring that the products of the company are advertised to the customers. This impacts the operational effectiveness since without proper planning the long-term strategy of the organization cannot be attained.

Additionally, McEvily, Giuseppe and Marco (306) affirms that all business departments are directed by the operations managers to ensure that they complete their functions and attain productivity in goals and the set budget. Coordination is another function of the operation managers which tasks them to coordinate all the activities of the various department within the company. Coordination is important as it improves efficiency and facilitates good relations between the various functional departments within the business. Organizational structure The organizational chart is a diagram that displays the relationship hierarchy which shows the structure of a business. This is represented as below. Fig. 2: Functional organization structure according to Petro and Paul (1717) The divisional structure shows how a company can be organized along product line.