...Week 3 Assignment 1 1. Functional structure in business works best for smaller companies and is the most common type of structure. Smaller companies that tend to have one product or service and one leader such as an owner or president. Advantages of a functional structure include having a single authority, employees with similar knowledge and a defined chain of command. It is a vertical structure with a hierarchy where information flows to the top of the chain (Daft, 2013. p. 318). Disadvantages of functional structure include things such as being more Bureurocratic and employees tend to overlook the larger picture of the organization. Daft explains that because these type companies are divided into departments, communication and coordination are slow and decision making may be poor (2013). 2. Another structure is the divisional approach. As opposed to the functional way, there are several teams across the same level that works on their own single product or service. Each of these teams has their own leader or manager. Pros of the divisional approach allow teams to be more focused on their own product or service. This allows them to be flexible and more reactive to changes (Daft, 2013. P. 320). Cons of this structure include higher overhead since it takes more employees to make up the teams and there may be a rivalry between teams due to competition. 3. The matrix is a combination of both functional and divisional (Daft, 2013 p. 321). There may be multiple higher leaders...
Words: 712 - Pages: 3
...This report outlines the acquisition of GTCL, issues relating to market share increase, the launch of new products and improvement of quality of service rendered in order to reduce external failure costs such as warranty etc. Human resource issues such as appraisal of staff and performance, motivation and reward as well. The flow of information from top management to operational areas and how they are implemented shows the type of hierarchy the organization is practicing however with GTCL it is highly bureaucratic hence the challenges it is facing. However GTCL has a lot of goodwill this can be anlysed by the use of the SWOT analyses. Strength: This gives the Organization a competitive advantage over others. - A large number of loyal customers and the range of services it provides. - A wide coverage area of operations. - A loyal customers and a good reputation due to many years of operations. Weakness: This shows weaknesses within the organization. - Poor quality of service. - Poor employee relations and lack of specific skills - Lack of funds due to over-reliance on government for subsidies. - A highly bureaucratic system being operated by the organization Opportunities: In the organization’s external market. - A large market ready to consume the organization’s services. Threats: This may be from outside the organization such threats Include: - Political interferences - Competition from other service...
Words: 690 - Pages: 3
...globalised business environment, structure serves as an important operational vehicle through which a firm can effectively achieve its strategic goals. Miller (1988) asserts that a firm’s structure must be aligned with both its strategy and environment in order for efficient performance to be realised. Growth options, types of ownership, business processes and information systems are all underlying foci embedded within the analysis of business structure. Child (2005) believes that at the core of structure lays a number of choices including the degree of specialisation and the nature of control mechanisms (cited in Needle 2010). A major determinant of these factors is the firm’s type of ownership or legal structure. Sole traders, traditionally associated with smaller firms, have unlimited liability and carry no legal distinction between themselves and the business. Conversely, larger corporations carry the advantage of limited liability while partnerships can have either limited or unlimited liability (Soyref 2012). The size of a business may also determine its structural class, with ‘many small firms having no apparent structure at all beyond a centralised control system’ (Needle 2010, pg. 181). Miles and Snow (1992) identifies three major types of organisational structure- functional structure, which operates through centrally coordinated specialisation; divisional structure, which diversifies operations by either product type or geographical region; and matrix structure, which...
Words: 1622 - Pages: 7
...Business Structure FIN 571 Professor Charles Marchand August 25, 2014 Each business structure has it advantages and disadvantages, however each one structure may or may not be advantageous. An advantageous structure is a structure that is beneficial and has favorable circumstances. In choosing business structure, one must choose the structure that best fits their business plans. There are three types of business structure, which consists of partnership, sole proprietorship, and corporation. A corporation is considered to be a standalone entity. In a standalone entity, no one person is liable for the assets or debts of the company, and separates tax liabilities. Another beneficial advantage is since the corporation is its own entity the corporation does not end once the owner is no longer there but continues on through shareholder. A disadvantage of corporations is corporations have to pay taxes twice which occurs during when the corporation turns a profit and pays dividend to shareholders. A sole proprietorship is the most inexpensive way to start a business. Within this structure, the owner has complete control over operations and responsible for business decision-making. Far as taxes, no specific business taxes are paid, but the owner pays taxes on the income of the business as part of their personal taxes. The major disadvantage of sole proprietorship is the business owner is personally responsible for all obligations and debts of the business. If the business...
Words: 384 - Pages: 2
...Abstract There are 3 common forms of a business structure. When deciding on beginning a business, you must consider these 3 forms and analyze them according to the type of business you would like to open. In this paper, we are going to consider that you and your classmate wish to start a business together selling candies and baked goods prior to and during breaks between scheduled classes on school grounds. We will analyze all three major forms of business structures to find the one that would be the most effective with this business. Business Structure You and your classmate wish to start a business together selling candies and baked goods prior to and during the breaks between scheduled classes on school grounds. Before making this decision, there should be a couple of steps taken to make this business profit. You and your friend should determine what kind of candies and baked goods you want to sell. To have a better judge of what would be a major seller for the business, a survey should be done amongst all peers. Research should be down on the prices of goods and how much each good should be priced. Also, both the classmates and school schedules should be looked over to determine the best time according to the amount of traffic. There are three common forms of a business structure. A sole proprietorship is the most informal of the three common forms. In a sole proprietorship, the owner(s) are in complete control of the business. The owner of the proprietorship is...
Words: 497 - Pages: 2
...investigation into business studies, this author will explain her take on the different kinds of business entities. The three different kinds of entities are: Sole-Proprietorship, Partnership, and Corporation. She will then take the information given to her and make a decision on the scenario given to her. The scenario states that she is an inventor with no financial or management skills but would like to bring her product out in the world, out of the three business entities, which one should she pursue? Structures of Business As businesses come and go, there are three main entities that got them started, Sole-Proprietorship, General Partnership, and Corporation. I will be explaining the three entities as well as comparing them, as a positive outlook and also a negative outlook. I will then explain why I chose General Partnership as my choice of starting the business stated in my scenario. First I will be explaining Sole-Proprietorship. As defined by Dion (2005), “Sole Proprietorship is simply an unincorporated individual starting a practice, with assets he or she owns in his or her own name alone.” In other words, someone who starts his or her own business by themselves and anything that becomes successful will be their own profit. Although they will be acting alone for their profits, they must understand they are going to be liable in every way during their road to success. This entity would probably be the easiest to handle because if the person who owns that business wanted to...
Words: 891 - Pages: 4
...Business Structures LaGloria Williams FIN/571 April 9, 2015 Travis Hayes Every business in the world has a structure to it. It could be a small local business like a boutique or a large corporate business like a popular bank. Having a business structure to your business is what helps determine what type of ownership takes place. There are three main business structures, they are known as; sole proprietorship, partnership, and corporations. These three business structures are important to know when opening a business. This paper will describe the business structures and discussed the advantages and disadvantages that take place in each one. The first business structure is sole proprietorship. Sole proprietorship is a business that is owned by only one person. An example of a sole proprietorship business is a local floral shop; this is because it is a small business. When having sole proprietorship over a business it comes with a lot of positive and negative responsibility. It is very easy to start a small business for someone wanting sole proprietorship. The owner has complete authority of all of the decisions made for the business. The income taxes are lower than other business and easier to handle. The sole proprietor of the business also gets to keep all profits made from the business, meaning they do not have money to pay out to anyone unless there are employees of the business. The negative part of being a sole proprietor of a business is that the owner...
Words: 805 - Pages: 4
...Business Structures July 4, 2011 George Bray Business Structures Starting a new business can be an exciting yet challenging time. One of the important decisions new business owners have to make is, which business structure to use. The three business structures new owners typically chose from are sole proprietorship, partnership, and corporation. This paper will not cover a fourth type of business structure the limited liability company (LLC). Choosing the structure that fits best will help any business achieve its goals and run smoothly. A sole proprietorship is a business owned by one individual. Spouses starting a family business should be aware that only one of them can be considered the sole proprietor of the business, so this should be taken into consideration when choosing a business structure. Transferring ownership of a sole proprietorship can be very difficult but sole proprietorships are easy to set up and maintain. This type of business is totally owner controlled. For tax purposes there is no distinction between the owner as an individual and the business. This means the owner has total liability for the business. Taxes for the business are paid through the owners personal taxes so there is a tax advantage to a sole proprietorship because the total taxes are generally tax total tax paid is lower. The next type of business structure is partnership, which is a business owned by two or more people. Like a sole proprietorship it is easy to set up and maintain;...
Words: 544 - Pages: 3
...Business Structure Basics With this basic guide, you'll be able to select the structure that suits your business best. VIEW COMMENTS (0) How To Business Structures Starting A Business Startup Basics 30 Days ENTREPRENEUR STAFF ENTREPRENEUR STAFF Of all the decisions you make when starting a business, probably the most important one relating to taxes is the type of legal structure you select for your company. Not only will this decision have an impact on how much you pay in taxes, but it will affect the amount of paperwork your business is required to do, the personal liability you face and your ability to raise money. The most common forms of business are sole proprietorship, partnership, corporation and S corporation. A more recent development to these forms of business is the limited liability company (LLC) and the limited liability partnership (LLP). Because each business form comes with different tax consequences, you will want to make your selection wisely and choose the structure that most closely matches your business's needs. If you decide to start your business as a sole proprietorship but later decide to take on partners, you can reorganize as a partnership or other entity. If you do this, be sure you notify the IRS as well as your state tax agency. Sole Proprietorship The simplest structure is the sole proprietorship, which usually involves just one individual who owns and operates the enterprise. If you intend to work alone, this...
Words: 581 - Pages: 3
...Business Structures LaShondra Dyer BUS311: Business Law I Instructor: Peter McCann April 13, 2016 Selecting a business structure comes with a number of variables. Are you going into business alone? If so, how will you fund it and run it? Will you join forces with others to build a business? If so, what agreements need to be made, for the business to run effectively and efficiently? I have spent over a decade in the nightclub industry in various positions. I started as a waitress, became a bartender, moved up to management, and now I am a club owner. The decision to become an owner was not made overnight, but by having the dreams of becoming a successful entrepreneur by watching those who owned the clubs that I had previously worked. I did not have all of the funds necessary to go into business alone so; I teamed up with another individual that I worked with, and we created a business plan, and now we are in a partnership. Throughout this paper, I will discuss the following business structures: sole proprietorship, LLC, a corporation, and partnership as well as give an analysis of each. I will also discuss my partnership in the nightclub industry and explain why it was the best organizational option for me. Even though the liability of the partners for the debts of the business is unlimited, a partnership may benefit from the combination of complementary skills of two or more people because with more than one owner, the ability to raise funds may be increased...
Words: 2632 - Pages: 11
...Business Structure Belinda Sintim FIN 571 March 14, 2016 David Johnson Business Structure When one decides or proposes to start a business, they must decide on the type of business structure that would best benefit the needs of their business. Each business structure has its advantages and disadvantages. The three different business structures are Sole Proprietorship, Partnership and Corporation. Each structure has different set of rules and regulations that the owner or owners have to abide by. The Sole Proprietorship has the least amount of regulations from federal state or local government that owners would have to follow (Carter, 2016). This form of business structure has one owner. It is considerably the easiest structure to partake in, because there are not any documents needed to legally start Sole Proprietorship. Many people favor the fact that this structure gives the owner a great deal of control over the business. The biggest disadvantage is the fact that the Sole Proprietorship does not have any protection for the business owner in liability of the company’s debts and obligations. Which means that the owner’s personal assets are not protected when the company is liable for any type charges or debt. (Carter, 2016) A Partnership is structured with two or more people who own the business. Unlike the Sole Proprietorship the Partnership allows the burden or the responsibility to be shared among all the owners not just one. Just as sharing the duties...
Words: 458 - Pages: 2
...Business Structures Myriah Shanks ACC/537 July 4, 2011 George Bray Business Structures Starting a new business can be an exciting yet challenging time. One of the important decisions new business owners have to make is, which business structure to use. The three business structures new owners typically chose from are sole proprietorship, partnership, and corporation. This paper will not cover a fourth type of business structure the limited liability company (LLC). Choosing the structure that fits best will help any business achieve its goals and run smoothly. A sole proprietorship is a business owned by one individual. Spouses starting a family business should be aware that only one of them can be considered the sole proprietor of the business, so this should be taken into consideration when choosing a business structure. Transferring ownership of a sole proprietorship can be very difficult but sole proprietorships are easy to set up and maintain. This type of business is totally owner controlled. For tax purposes there is no distinction between the owner as an individual and the business. This means the owner has total liability for the business. Taxes for the business are paid through the owners personal taxes so there is a tax advantage to a sole proprietorship because the total taxes are generally tax total tax paid is lower. The next type of business structure is partnership, which is a business owned by two or more people. Like a sole proprietorship it is...
Words: 550 - Pages: 3
...Business Structures Sabrina George – York FIN/571 July 11, 2015 Prof. Susanne Elliott Abstract In connection into what an individual or a group of individuals wants to achieve – would determine the appropriate business structure for the expected goal. To explore cases where there is a bigger risk but higher profit for an individual or individuals they will want to look into the structure of a sole proprietorship or partnership. However, there could be a group of people who share a business interest who can obtain major investors and retain very little if any liability – they would explore the options of creating a corporation. Business Structures One of the most basic and riskiest business structures is a sole proprietorship, which is where an individual owns a business alone and they are responsible for all liabilities and assets of the company. The advantage with this business structure is that the owner will consume all profit – however, the owner will also have unlimited liability, which means all of the owner’s assets are not limited if the company goes under. Sole proprietorship is also similar to a partnership, although with a partnership there is two owners who split the liabilities and assets – which the advantage in this case is that the risk will be split in half. “An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership,” which means that the company is treated...
Words: 436 - Pages: 2
...Business Structures When someone is deciding to start a new business, several questions must first be answered before anything else can happen. One of the most important aspects to consider is the structure of the business. Business structure must be carefully chosen as each has its own advantages and disadvantages and can drastically alter how the company does business. The following details the various structures for businesses and the pros and cons involved with each. Sole Proprietorship In this structure, the business is owned and operated by one person. The good thing about a sole proprietorship is that the owner has complete authority to do what he or she pleases. There are no arguments over how to spend money improving the business, there is also very little regulation from government. With complete authority, however, comes complete liability for the businesses actions. Being the only owner of a business means you can do what you want but when something backfires the blame will be placed squarely on your shoulders, meaning the owner has the responsibility to take care of all debt and other obligations. Partnership Partnerships involved two or more people teaming up to further their business interests. In this scenario, partners share the responsibility of operating the business and also share liability. This can be a gift and a curse, while it is nice to not have all the blame fall on one person, if one partner makes a mistake the other partner can also be held...
Words: 465 - Pages: 2
...Business Structure Advice Dear John Owner Starting a new business is not an easy decision to take. At first I would like to coagulate you for taking this decision and it will be my pleasure to explain to you the different business forms that exist, along with each business form advantageous and disadvantageous so you can choose the business form that is best suits your new business. There is more than one form of business structure such as: Sole Proprietorships, Partnerships, Corporations, and the Limited liability corporations (LLCs) which are a hybrid form of Business organizations. The sole Proprietorship is owned by one person, and it’s the simplest way to start a business as it’s less regulated than other forms of business. Sole proprietor does not have to share the decision-making authority with anyone else and keeps the profits and the advantage of this form that the person subjected to lower income tax than other forms. The disadvantage that the business life ends by the death of the owner, and it’s hard to transfer the ownership of this form and it’s hard to raise the capital of this form of business, as the financing options for this form depending on entrepreneur equity contributions, lease and debt financing (ENTREPRENEUR, 2014). In partnerships, partners come together to manage a business through an agreement that determines the capital, the contribution of each partner in the capital, the role of each partner in the partnership, and the agreement can determine...
Words: 775 - Pages: 4
