BUSINESS ORGANIZATION

A business organization is an individual or group of people that collaborate

to achieve certain commercial goals. Some business organizations are
formed to earn income for owners. Other business organizations, called non
profits, are formed for public purposes. These businesses often raise money
and utilize other resources to provide or support public programs.
Organization Meaning
The best way to derive the meaning of the term "business organization" is to
focus on each word separately. Organization is a broader term, as it includes
businesses and other groups of people not organized for commercial
purposes. Clubs and sports teams are examples of non-business
organizations. Organizations have a specific structure and hierarchy. People
and systems create a culture within the organization and guide its operation.
Different organizations have different policies, work flows and objectives.
Business Meaning
All businesses have commercial objectives. For-profit businesses sell
products or services to generate revenue and earnings. Success depends on
the ability to gain more in revenue than is spent on fixed and variable
expenses. Non profit businesses must bring in enough revenue to pay
employees and cover the costs to administer or support programs. Any
money they have left over after expenses is put back into the organization.
System View
Definitions of organizations typically emphasize the systematic
approach used to achieve goals. Businesses typically begin with a
hierarchy that establishes structure and order in communication and
workflow. Business leaders work to establish a business mission,
vision, values, objectives and strategies. These establish the direction
for the organizational system. People, processes and policies are used
to fulfill the mission and strategies. The effectiveness of a business
organization often relates to the ability of leaders to get all
departments and employees to work together toward company
objectives.
Organizational Culture
An organizational culture reflects the shared values within the
organization that impact employee morale, communication and,
ultimately, success. Companies use formal processes and activities to
influence culture, such as social activities to promote teamwork.
However, much of an organization's unique culture evolves through
informal channels. For example, a company's culture can be affected
by the way employees communicate during lunch, breaks and other
informal encounters.
TYPES OF BUSINESS
ORGANIZATION
All business entities are not the same. Some provide owners a lot of
flexibility in management and control and some do not. Some provide
owners a significant degree of protection from liability and some do
not. And some are heavily regulated, and some are not. On top of
these differences is the fact that our tax code provides different tax
treatments for different business entities. All of these factors should
be considered when an entrepreneur is selecting the type of business
entity she or he wishes to use for her or his business.
Okay, let's take a look at the primary choices an entrepreneur has by
breaking them down into two broad categories. First, we'll take a look
at unlimited liability entities, or those business organizations that
don't provide the owner or owners any protection from personal
liability, such as sole proprietorships and general partnerships. Then,
we'll examine limited liability entities, which are business
organizations that usually limit an owner's liability to his or her
investment in the business, such as corporations, limited liability
companies, and limited partnerships.
Unlimited Liability Organizations
 Sole proprietorship
If you're the only owner, you can keep it very simple and run your business as a sole
proprietor. In a sole proprietorship, you are the business, as there is no legal
distinction between the business and you.You're completely personally liable for any
debts, contracts, negligence, or wrongful acts done by the business. On the plus side,
the business is very easy to operate, isn't subject to a bunch of organizational
regulations, and you simply report profits and losses from the business on your
personal tax return. A kid's lawn mowing service is an example of a sole
proprietorship.
 General partnership
A general partnership is a business owned by more than one person. Partners
often enter into a partnership agreement, which outlines the rights and
obligations of the partners. Just like a sole proprietorship, general partners are
completely responsible for the liabilities of the partnership. In fact, partners usually
have joint and several liability, which means that a partner can be dinged for 100%
of the partnership debts and will have to pursue his partners for their share.
On the positive side, partnerships are very flexible to manage as long as the partners
agree. Also, partnership law isn't that complex. The primary law for partnerships is the
Uniform Partnership Act as enacted in each state. Partnership profits and losses
are reported at the individual partner level because partnerships are considered
flow-through entities, in which profits and losses flow through the entity to its
owners where it is taxed. The classic example of a general partnership is a law firm.
Limited Liability Organizations
 Corporation
The corporation is the original limited liability entity. Most publicly traded
companies, such as Apple, General Motors, and General Electric, are corporations.
Corporations are highly regulated by state statutes and are rather inflexible in the
manner they can be organized and managed. The shareholders (or owners) select a
board of directors by election. The board then develops corporate policy and
strategy. The officers of the corporation run the day-to-day operations.
Shareholder liability is limited to their investment in the corporation, which means
the most shareholders can lose is their investment in the corporation. It should also
be noted that there is a special type of corporation called a professional
corporation where the shareholders are all members of a profession, such as
lawyers in a law firm or doctors in a medical practice. There are even special liability
rules regarding professional corporations, but they're beyond the scope of this
lesson.
Additionally, corporate taxation can be very complex. You've probably have heard of
C corporations and S corporations which are federal tax designations. C
corporations are basically your typical big corporations that are taxed at two
levels: the corporate level and the shareholder level. In other words, Uncle Sam
taxes the corporation on its income and then taxes the shareholders on the income,
known as dividends, that the corporation distributes to its shareholders. An S
corporation does not pay federal income tax. Instead, the income flows through to
its shareholders where it is taxed. Not all corporations can elect to be S
Corporations.
LEADERSHIP IN AN
ORGANIZATION

Leadership is an important function in business.

Leadership and management represent two
completely different business concepts. Leadership
is commonly defined as establishing a clear vision,
communicating the vision with others and
resolving the conflicts between various individuals
who are responsible for completing the company’s
vision. Management is the organization and
coordination of various economic resources in a
business. Leadership can have a significant impact
on an organization performance.
Leadership Styles
that effect
organization
environment
Generally, three broad management styles have been acknowledged. They are:
Autocratic, Paternalistic, and Democratic styles.
 Autocratic managers supervise subordinates very closely. They like to make all
the decisions and they are very controlling. This leadership style derives from the
work of Taylor on work motivation.
 Paternalistic managers act as a father figure to employees. They are very
concerned about the social needs of their subordinates. They consult employees
over organizational issues and then they make decisions based on the best
interests of the employees. This management style is closely linked with Maslow’s
social theory.
 Democratic managers trust their subordinates and they encourage them to
make decisions. Managers who embrace this management style delegate authority
to their subordinates and they listen to the advice given by subordinates. This
style requires good two-way communication and it suggests that managers are
willing to encourage leadership skills in subordinates. The ultimate democratic
system occurs when actual decisions are made based on the majority view of all
the employees.
TABULAR VIEW
Description Advantages
Disadvantages
1.No two-way
Senior managers 1.Quick decision
communication, which
make all the making
can be de-motivating
Autocratic important decisions 2.Effective when
2.Creates “them and
with no involvement employing many low
us” attitude between
from workers. skilled workers
managers and workers
1.More two-way
Managers make 1.Slows down decision
communication, which
decisions based on making
Paternalisti is motivating
best interests of 2.Still quite a dictatorial
c 2.Workers feel their
workers after or autocratic style of
social needs are being
consultation. management
met
1.Authority is
Workers are allowed
delegated to workers,
to make own 1.Mistakes or errors
which is motivating
decisions.Some can be made if workers
Democratic 2.Useful when complex
businesses run on are not skilled or
decisions are required
the basis of majority experienced enough
that need specialists’
decisions.
skills
THE IMPACT OF LEADERSHIP IN
ORGANIZATIONAL PERFORMANCE
 Setting the Tone
Small business owners usually set the leadership tone for their organization. Owners accomplish this by developing a
mission or set of values by which they operate their company. This creates a minimum level of acceptance for employee
behavior. Business owners often create company policies or guidelines from the company mission or values. Policies
and guidelines also give business owners the ability to remove under-performing employees from the company.
 Types
Three types of leadership are common in business: authoritarian, democratic and laissez-faire. Each type of leadership
impacts organizational performance differently. Authoritarian leadership is commanding and sets clear expectations for
employees in the organizational. Democratic leadership encourages feedback and input from managers or employees
regarding organizational performance. Laissez-faire is a hands-off approach, where managers and employees work
according to their own preference and schedule. This leadership style can lead to poor motivation and work practices.
 Features
Successful organizational performance relies on the proper behavior from managers and employees. Leadership can be
an evolutionary process in companies. Business owners who provide leadership can transform an employee from a
worker completing tasks to a valuable team member. Leadership skills can help change an employee’s
mentality by instilling an ownership mindset. Employees who believe they have a direct owner-style relationship with
the organization often find ways to improve their attitude and productivity.
 Function
Leadership can help a business maintain singular focus on its operations. Larger business organizations can suffer from
too many individuals attempting to make business decisions. Business owners can use leadership skills to get managers
and employees on the same page and refocus on the original goal. Leadership skills can also help correct poor business
practices or internal conflicts between employees.
 Warning
Leadership can have a negative impact on organizational performance. Leaders who are overly dominant or become
obsessed with achieving goals can overlook various details in the business organization. Managers and employees may
also be less willing to help dominant or extremely critical leaders with accomplishing goals and objectives. Dominating
leadership creates difficult business relationships. Other companies and business owners avoid dominant leaders who
consistently request financial benefits.
EMPLOYEES PERCEPTION TOWARDS
THE ORGANIZATION
An organization implements the performance system to allocate rewards for the employee, provide
development advice as well as to obtain their perspectives, and justice perception about their jobs,
department, managers, and organization. Prior studies reveal that employee perception is a significant
factor in employee acceptance and satisfaction of job. A good perception will create a positive working
environment in the organization, while a negative perception will affect the company performance.
These perceptions depend on the manager or supervisor’s actions and behaviors toward the employee.
If the organizations are perceived as unfair, therefore, the benefits can diminish rather than enhance
employee’s positive attitudes and performance.
Perception strengthens the relationship between performance and the expectation of a satisfactory
outcome through a better understanding of what the desired outcomes are and how they can be
achieved as well as directs the energies of employees/work group towards the goals and objectives of
the organization. Commitment to organizational goals may result from the sense of ownership or
Proprietary rights achieved through employee’s perception.
Specifically, the perceptions of procedural unfairness can adversely affect employee’s organizational
commitment, job satisfaction, trust in management, performance as well as their work related stress,
organization citizenship behavior, theft, and inclination to litigate against their employer. During the
last ten years, the number of studies which examined the effect of perception on employee had
increased. In a study, revealed that there was a direct relationship between employee perception and
employee outcomes, which is mostly job satisfaction among employees.
Employee’s perception can affect organizational productivity positively when they are willing and
committed to organizational goals. Willingness and commitment can be exhibited by employees
towards their job if they are perception are taken into consideration in decision making in the
organization. Thus, for management to win the commitment of employees to get their job done
properly, individual employees should not be treated in isolation, but must be involved in matters
concerning them and the organization. When employee’s perceptions are considered, staff absenteeism
is reduced, there’s greater organizational commitment, improved performance, reduced turnover and
greater job satisfaction.
Employees’ perception has been widely recommended as one of the means of improving the quality
of work life.The implied goal is to provide an environment where an individual will have the freedom
and autonomy to make choices which are related to his work environment and to improve the fit
between his personality and the job demands as well as between his work and non-work domains.
According to one report, employees’ perception of performance
review does indeed impact an organization. Specifically, three
major factors are impacted. They are:
 Performance
 Commitment
 Turnover
 Performance
The report defines employee performance in two ways. In this context, performance
encompasses both:
 Achievement of designated tasks
 An employee’s specific behavior
According to the report, employees who feel that the company is trying to fulfill their
needs are more likely to perform better. This directly relates to performance
management, because taking a continuous approach is the only way to show
employees that their managers are there to coach them, help them develop, and
ultimately, fulfill their career needs. Such a relationship cannot be accomplished
through an annual review.
The report also states that “when employees feel that organizational feedback is
directed to support them, their commitment towards the environment will be
enhanced.” Feedback is identified as one of the most critical aspects affecting an
employees’ performance, and when employees feels that performance appraisals are
effectively providing adequate feedback, it has a positive impact on their performance.
  Commitment
Commitment is referred to as the employee’s ability to identify with the organization, and his/her
participation and involvement in it.
The ways in which an employee views performance management affects his/her commitment in a few
ways. For one, if employees feel that the performance reviews show that their roles in the
organization are valued, they are more likely to be committed.
Also, if performance appraisals are conducive to employees’ overall development, that also increases
the likelihood that they’ll be more committed. With that being said, development opportunities should
not be discussed only once per year – development should be a topic that’s discussed between
managers and employees on a continual basis as part of an ongoing performance management system.
 Turnover
This study specifically examined employees’ turnover intentions in relation to their perception of
performance review. It defines turnover intentions as employees’ thoughts about voluntarily leaving
the company.
The aspect of performance evaluations that employees deem most critical in relation to turnover is
fairness. If employees do not believe that their appraisals are based on a fair set of standards (or, if the
process isn’t standardized at all), their turnover intention is more likely to increase. While increased
turnover intention could initially result in a change in attitude or disengagement, it might ultimately
lead to voluntarily leaving the company.
There are multiple ways to ensure fairness for performance appraisals. For starters, managers should
use data to back up their points during performance evaluations. Also, performance management
should always be approach as an ongoing process – even with the most practical set of standards in
place, employees will never feel as if the process is fair if it’s only conducted once per year. Revisiting
performance on an ongoing basis affords employees the opportunity to continually improve, celebrate
accomplishments, and discuss development strategies with management.
PICTORIAL VIEW
TRAINING AND ITS EFFECTS
The effectiveness in realization of an organization’s set goals and objectives is within the framework in
which it was set up. Human and material resources in every organization should not be over-
emphasized, and therefore, must be harnessed and oriented for the achievement of the set goals and
objectives. It is true that material resources form an integral part of the desired goal but human
resource is more important in the sense that they help in achieving organizational goals and objectives
in an effective and efficient manner, this need arises as a results of the need for the improvement in job
performance. And this method depends on the type in which the organization adopts to achieve her
goals.
The success of an organization is determined by the quality of its labour force, since the labour
determines the output of the organization by the labour-inputs. Human resources can be improved
through a graded and systematic process of development that includes education, training and the
appropriate motivation.
Training: This can be described as a short-term systematic process through which an employee
acquires technical knowledge, skill and attitude required to perform a specific task or job
adequately. Worker must be trained and developed in order to get the best from them and this also,
has to be a continuous bases and in various fields.
“money spent on training and development of employee in an organization is money well
invested. Employees who have received adequate training before being assigned with responsibilities
have the necessary confidence with which to carry out the job”.
TRAINING EFFECTS ON WORKERS
PERFORMANCE
 Saving Time and Costs
Investment in training can improve a company’s financial standing. Poor performance often results
when employees don’t know exactly what they’re supposed to do, how to do their jobs or why they
need to work a certain way. Training can help solve these performance problems by explaining the
details of the job. This should reduce duplication of effort in the workplace, the time spent correcting
mistakes and the problem solving necessary to correct bad performances. Improved performance from
employee training can reduce staff turnover, lower maintenance costs by reducing equipment
breakdowns and result in fewer customer complaints. Better performance from employees typically
creates less need for supervision and brings increased worker output.
 Employee Satisfaction
Job satisfaction generally increases and self-esteem improves when employees better understand the
workings of the company. Training can also enhance morale on the job and loyalty to the company.
Workers who believe their company offers excellent training opportunities are generally less likely to
leave their companies within a year of training than employees with poor training opportunities,
according to Howard Community College in Maryland, which points to a poll of employees by Louis
Harris and Associates.
 Expectations and Needs
Training plays a key role in employee commitment, according to Scott Brum of the University of Rhode
Island. The training program must meet expectations and needs of the employees, though. Companies
are more likely to retain employees who view their training as relevant to their jobs and subsequently
have a positive commitment to their company. A successful training program consists of management
providing employees with accurate information and communication about the training as well as a
program that ensures that training is relevant to their jobs.
  Turnover Costs
Keeping well-trained employees pays off significantly for companies because the cost of employee turnover can be
high. Costs include separation costs, such as exit interviews, administrative functions related to termination, severance
pay and unemployment compensation. Replacement costs consist of attracting applicants, entrance interviews, testing,
travel and moving expenses, pre-employment administrative expenses, medical exams and employment information. A
study by the University of Wisconsin found that 75 % of the demand for new employees was related to replacing
workers who left the company.
 Training Factors
Many factors determine whether a training program will be effective for a company that has lost employees,
depending on how many workers are leaving. For example, using temporary workers to fill in for former employees
on occasion might actually save costs. Management can determine if a training program will work out by looking at
the increased workloads for employees caused by vacancies, the stress and tension from turnover, declining employee
morale and the decreased productivity that results from high loss of employees.
Women leaders in business can play a particularly important role in making
the transition away from business as usual. According to the Eurobarometer
poll, 41 percent of respondents believe that women responsibility for
tackling climate change lies with business and industry. For women to lead in
taking such responsibility they have to hold positions of power and influence
in the business world, a world where women continue to be in the minority.
Empowering women, improving their representation and participation in all
walks of life, but particularly in the male-dominated world of business, is a
critical step in tackling the climate crisis. Empowering women in an
organization, improving their representation and participation in all walks of
life, but particularly in the male-dominated world of business, is critical to
demonstrate that women have the power to choose and define themselves,
not only when it comes to keeping a family together and organizing the
household, but also in selecting their career path. When female leaders
globally get engaged more jobs are created. Women Leadership can provide
in reshaping our societies for a sustainable, inclusive and resilient future.
Gender diversity, particularly in leadership, has become a priority internationally. A wide selection
of reports on women in leadership reinforce the significant benefits in having women in leadership
roles, as they have:

 Diversity of thoughts.
 Better governance
 Multitask orientation

 Self-Branding Attitude- Women are extremely passionate by nature and enthusiastic about
their choices, talking about them and sharing their thoughts.They emphasize the benefits of their
services to their services to their potential clients and are aware of how to highlight the positive
features.
 Empathy – sensing the thoughts and feelings of others and responding in some appropriate way.
 With the evolution of markets, the high educational and skills levels of women and their growing
role in an organization is growing, women today hold a wealth of talent and resources that can be
tapped by companies large and small. Organization can play a key role on creating greater
awareness among their members of this potential and advising on how to adapt policies and
practices at the company level for women’s talent to be optimized and for women to participate
in decision-making and so improve business outcomes. Women, men, and organizations can work
together to improve women participation levels throughout the corporate hierarchy. As more
and more women continue to enter in the business world and experience the obstacles and
elements that men do not face, solutions to these hurdles must be found.
Thus, profound changes taking place in women's roles and in the cultural construal of good leadership,
it is clear that women will continue their ascent toward greater power and authority. The 20th-
century shift toward gender equality has not ceased but is continuing .The presence of more women
in leadership positions is one of the clearest indicators of this transformation.
WOMEN EMPOWERMENT IN A
BUSINESS ORGANIZATION
Empowerment of women in the workforce means allowing women to
have more control over their lives. It means giving them the freedom
to make their own schedules, learn new skills and gain self-reliance.
Empowerment is created when the strengths that women already
bring to the company are recognized and utilized. Research provided
by the United Nations has shown that businesses that promote
women empowerment and gender equality are more profitable. As
more businesses take part in gender equality measures and see their
revenue increase as a result, the case for empowering women in the
workplace is likely to become a more recognized goal.
The business of empowering
women: Where, why, and how
Gender Equality
The importance of gender equality is documented in "The Business of Empowering Women," a survey
of 2,300 business executives.The survey found that the companies who focused their efforts on
empowering women reported significant business benefits. A third of the businesses surveyed reported
that their investments in women resulted in increased profits; another third reported their investments
were expected to grow in the short-term. In order to help business incorporate gender equality into
the workplace, the United Nations organization, UN Women, has established "Women's Empowerment
Principles," which recommends that businesses establish gender equality goals that should be
incorporated into manager performance evaluations.
Equal Opportunity and Non discrimination
Research by the University of California, Santa Barbara suggests that allowing women more power and
control in the workplace allows businesses to diversify decision-making, resulting in higher revenue. In
order to provide equal opportunity for women in the workplace, UN Women recommends that
employers ensure each employee receives equal compensation to that of other employees of similar
rank, experience and tenure. The organization suggests implementing gender-sensitive recruiting
practices and appointing women to management and board of directors positions.
Health and Safety
Investment in safe working conditions and health policies is good for business. Research by the
Massachusetts Institute of Technology found that violence and harassment are disruptive in terms of
lower productivity; they often result in litigation and bad company publicity. UN Women suggests
employers adopt and emphasize a zero-tolerance violence and sexual harassment policy at work.
Businesses should invest in health insurance policies that include counseling; they need to respect all
workers' rights to medical leave and counseling for themselves and their dependents.
Education and Training
"The Economist" estimated that, over the past 10 years, women in the workforce added more to the global economy
than the country of China. To benefit from this valuable resource, UN Women recommends that businesses provide
equal access to company-supported education and vocational training programs. Employers should encourage women
to pursue non traditional jobs and ensure that all employees have equal opportunities to get involved with mentoring
programs.
Community Leadership
Getting the word out about the company's women empowerment initiatives promotes the case for gender equality; it
also means good publicity for the business. In order to promote women's empowerment, UN Women suggests that
employers spread the word within the community about the their commitment to inclusion and women's
empowerment principles. Employers should partner with other businesses to advocate for gender equality and more
opportunities for women. It is also important to recognize women who contribute and work in leadership roles within
the community.
Benchmarks and Reporting
The Gender Equality Project is an organization which creates gender assessment methods and allows employers to
apply for gender equality certification. Benchmarking helps hold businesses accountable for their gender equality
efforts, leading to acceleration in growth of these changes. Businesses should make benchmarking reports and
certifications available to employees and the public, a practice that allows businesses to be held publicly accountable
and stand out from the competition, according UN Women.
THANK YOU