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Organizational development is one of the major areas of the organization, where its development depends on the organizational management process. In this assessment, the main discussion will be on the different types of organizational structures, where different organizational legal structures will be discussed. There will also be a discussion of the key legal features of the different organizations, key functional areas of the business, interrelations of the key functional area of organizations, different ways of business growth, the impact of organizational functions growth, different types of organizational structures and their merits.
There are four different types of organizational legal structures, which include sole proprietorship, general proprietorship, LLC, and corporations. These different types of legal features will be discussed below in detail, where the public limited company, a private company, and not-for-profit companies will be enhanced.
A sole proprietorship is one of the most effective types of legal structures, where it is considered as one of the most common legal structures of the business. In this type of business legal structure, there is one individual who plays the role of owner and runner, where there is no such legal distinction between the business and the business owner. In this business legal structure, there is no tax return, where the income passes through and is reported to the personal tax return policy of the owner. The liability in this business legal structure is unlimited, where the business owner holds unlimited liability for the business (Ellerbrock et al. 2018). Formation of this business legal structure is simple and easy, where there is less cost related to the formation of this type of business legal structure.
2.2. General partnership
A general partnership is also another major business legal structure among the four business legal structures, where it refers to the association between more than one person for profit. It can be formed with a less formality where an agreement needs to be created as there is more than one party and in this contact agreement there are rules of profit sharing. In this business legal structure, there is a need to file an annual return to report the losses and income from the organizational operation, though there is no place for federal income tax. In this business legal structure, both partners are unlimited liability holders in this partnership. In this business legal structure, the formation takes place for agreement, where it includes different topic areas such as contributions of the capital, distribution of the losses and profits, responsibilities of the management, banking procedures, dissolution of the organization, and others (Ordonez?Ponce, and Clarke, 2020). This type of business legal structure is easy to manage and the losses and profits are passed through the personal tax returns of the owner.
LLC or the limited liability company is the mixed method of combination of both the business legal structure that contains general partnership and the sole proprietorship. Here the members could be individuals, and corporations, wherein in many places only the owner is the member of this business legal structure called a single LLC member. In this business legal structure, the taxation purpose includes a pass-through entity, which refers to business income that needs to pass through the LLC members of the business who will report their losses or the profit on the individual tax return. The LLC members of the company are protected from the business' personal liabilities that are also called limited liability. Formation of this type of business legal structure needs a filing fee of 100-800 dollars. Here operation agreements are highly recommended and not required by every state. By law, it is like a partnership agreement where the setting of the rules for operation and business ownership are included (Huggins, 2019). This business legal structure includes the interest of the owner for the members, responsibilities and the rights of the member, voting power of the member, structure of the management, provision of the buyer and seller, and others.
The corporation is one of the major business structures, and it is considered as one of the complex structures of the business organization. Corporation refers to the legal entity which is separated from the people who run or own the organizations, especially the shareholders. They have the ability to enter into new contracts though it also contains responsibility for paying taxes (Battaglia et al. 2017). They are more appropriate for the establishment of the larger organization, where multiple employees provide the service of the business. There are two types of corporations such as C-Corporation, and S-Corporations, where the main difference between them is in tax treatment. Taxation of the C-Corporation refers that this is recognized as an entity of separate tax-paying, and entity files in its own tax return. Here shareholders pay taxes on the corporate profit that is distributed through the owners and resulting in double taxation. S-Corporation taxation is different from the C-Corporation taxation, where they need to pass the corporate income taxes along with the deductions, losses, and profits through the shareholders to federal tax purposes. Shareholders of the S-Corporation report the losses and profits of the organization, where the personal tax returns pay the federal income tax to their rates of individual tax and they avoid the double taxation. Liability of the corporation is a legal entity, where refers that it does not terminate the shareholder's death (Adetoyinbo and Otter, 2021). They do not lose the money rather than the extra amount of their investment in the corporation, as it was seen in the LLC. The formation of this business legal structure is complex, where there is a need for more accounting and legal requirements.
In a business organization, there are several functions of the business, where there are some key functional areas of the business. Different functions of the human body are performed by different organs for better development of the human body, where in the same ways different functions of the business organization are performed by the different parts of the business organization. The key functional areas of the business organization include some key functions of the business such as operational management, operational functions, marketing operations, accounting operations, and finance operations. These different business functions of the business are discussed below in detail.
Operational management is one of the most essential key functions of the business organization that helps the organization for better management of the organizational processes (Lobova et al. 2021). Operation management refers to the management of different activities of the organization that includes planning of the organization, organizing the operations of the organization, controlling the activities of the organization, and leading the organization in a practical way, through that the organization will be able to lead the organization towards a great profit level.
Operational functions refer to the input or the production factors that are converted to the services and goods of the organization. Operational functions are one of the most essential key functions of the business organization that helps the organization for better management of the organizational processes. The operation of the organization is the heart of the business organization where the goods and services are needed to meet the criteria of quality and quantity (Novikova and Hamse, 2021). Through this, the needs of the customers will be fulfilled and organizational business will be improved. This operation management includes different stages that encompass everything from raw material ordering to workers scheduling for producing tangible goods.
Marketing operations is one of the most essential key functions of the business organization that helps the organization for better management of the organizational processes. Marketing operations refer to the identification of customers' needs and expectations in relation to the product's design and services. This also includes the promotional way of promoting organizational goods and services, along with the determination of delivered services and goods through providing a pricing strategy for the organizational marketing process (Pártlová, 2017). In today's technological era marketing of the organizational products and services are responsible for attracting the maximum number of customers and increasing organizational sales for improving organizational functions and management.
Accounting operations refers to the information related to the making decision of resource allocation of the organization. This specific area is mainly responsible for the accurate representation of the organizational financial transactions for both the internal and external parties along with the investors and governmental agencies. Accounting operations is one of the most essential key functions of the business organization that helps the organization for better management of the organizational processes. This is also responsible for the organizational access to the company's financial strengths, as it includes budget, costs, asset allocation, and the performance appraisal for the management decision-making process.
Finance operation is one of the most essential key functions of the business organization that helps the organization for better management of the organizational processes. Finance operation refers to the account-related information, where the function of the finance includes planning for the organizational funds, along with the managing resources for the organizational better management. It also helps to include both short term and long-term capital needs of the organization and the impact of borrowing the business well-being of the financial areas (Adetoyinbo and Otter, 2021). There is also a space for answering the questions related to organizational fundraising, fund borrowing, the implications of the financial decisions, and the implications of long-term decisions of the organization.
Ellerbrock, C.R., Main, K., Falbe, K.N. and Pomykal Franz, D., 2018. An examination of middle school organizational structures in the United States and Australia. Education Sciences, 8(4), p.168.
Ordonez?Ponce, E. and Clarke, A., 2020. Sustainability cross?sector partnerships: The strategic role of organizational structures. Corporate Social Responsibility and Environmental Management, 27(5), pp.2122-2134.
Huggins, J., 2019. Developing an organizational decision making model: the impact of organizational structures, decision types, and the social network.
Battaglia, D., Landoni, P. and Rizzitelli, F., 2017. Organizational structures for external growth of University Technology Transfer Offices: An explorative analysis. Technological Forecasting and Social Change, 123, pp.45-56.
Adetoyinbo, A. and Otter, V., 2021. Organizational structures, gender roles and upgrading strategies of smallholders: A qualitative study of the local value chain in the Nigerian fishing sector. Business Strategy & Development, 4(2), pp.187-202.
K?ibíková, P., Tichá, M. and Poczatková, B., 2017. ORGANIZATIONAL STRUCTURES CHANGES AS BUSINESS REACTION TO ECONOMIC REFORMS (THE CASE OF THE CZECH REPUBLIC). The EUrASEANs: journal on global socio-economic dynamics, (4 (5)), pp.19-27.
Lobova, E., Postnikov, V., Rybin, S. and Reshetnikova, I., 2021. Determining the potential of organizational structures models of a high-tech cluster. In SHS Web of Conferences (Vol. 116, p. 00018). EDP Sciences.
Novikova, I.V.?. and Hamse, L., 2021. Modern organizational structures: transformation from vertical to flexible.
Pártlová, P., 2017. Indication of Changes in Projecting Organizational Structures under the New Economy. Studia Commercialia Bratislavensia, 10(38).
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