daniellaurence | Student

Krishna your answer makes more sense here.

But why are business organization formed and what type of business organization do we have?

I am getting confuse cuz in an answer for types it says; commercial, non-for-profit, public sector, non-governmental and cooperative. So what about limited-liability company, partnership and sole proprietorship, does it fall under types of business organization also.

krishna-agrawala | Student

The question is worded in very general terms and therefore open to different interpretations. The previous two responses have classified organizations based on two different criteria. First is the primary motive of the organization - profit versus non-profit. Second classification is based on ownership structure of the organization. In my response I will describe some major parameters of organizations that are generally used in design of organization.

Major parameters of organization design include the following.

  • Size of the organization in terms of total number of people in the organization. While the size of the organization depends largely on the nature and quantity of work to be performed by the organization, at times management does try to limit the size of the organization as the the complications in managing an organization increases exponentially with its size.
  • Number of organizational levels in terms of boss and subordinate relationships. An organization can have minimum 1 level where everyone working in the organization is a member of a team in which every one is equal with no boss and subordinate relationships. There is no upper limit on number of organizational levels, but organizations with more that 10 levels are very few.
  • Span of control: This refers to number of people supervised by one managers. The span of control together with the total organization size determines the number of levels in an organization.
  • Centralization versus decentralization: This refers to the extent to which decision making power is delegated down the organizational hierarchy. In Centralized organizations, most of the decision making is concentrated at higher levels of management. In contrast, decentralised organizations have such functions delegated to lower levels of organizational hierarchies to a much greater extent.
  • Criteria for departmentation: This refers to the basis on which the organization is grouped in different departments. Departmentation takes place in the organization at every level of organization except the lowest. Departmentation may be done based on various considerations such as: (1) function or nature of work performed, (2) product, (3) geographical division, and (4) time period such as a shift.
  • Nature of relationships between different people in the organization. This particularly refers to the the direct supervisory authority versus advisory relationships that exist in the organization. Based on this there are two basic organization types called line and staff organizations exist. There are some other variations based on combination of these two - like matrix organization. Typically an organization follows a mix of these different types of organization, with the different organization structure applied for different departments and organizational levels.
sangeetha27 | Student

Forms of organisation:

Organisations are classified into different category based on the size of organisation and the amount of capital required.  The following are the  main type of organization in practice.

Sole trading organisation

The capital is contributed by a single person. The level of operation and size of operation is very low. Whatever may be the result owner has to bear.

Partnership Firm

Two or more persons join together to carry out a business. They will share the profit equally or as per the agreed ratio.

Company form of organisation

Capital is formed by issuing shares to the general public. But the procedure is comparatively difficult in establishing this type of organisation. But the benefit will be more. Shareholders will be given dividend based on the profit of the company.

Co-operative form of organisation

It is an organisation to provide some service to the local area people. It is a voluntary organisation. The main objective is to solve the problems faced by the local area people.

I hope this will give you some idea about the various forms of organisation.

ekmattke | Student

There are two types of organizations, but all have one thing in common, and that is money.  They need money to survive and thrive.

- For-Profit-  Secular non-religious organization run by a CEO.  Such as Microsoft or Google.  These organizations help the community through their marketing techniques, and sponsoring athletic or community events with their funding.

- Not-For-Profit also known as "non-profit"- are usually religious organizations that help the community through offering service, such as feeding the homeless.  These organizations have to raise support for their money, like a church.  However, the members of a church know that they are to tithe in order to bring others to Christ as well as to be good stewards of their money.

I hope this clarifies it for you, and an excellent question.

Access hundreds of thousands of answers with a free trial.

Start Free Trial
Ask a Question