Course: Diploma in Business Management

Module Code: Unit_01

Module: Introduction to business and its structure
Student Name: M. Vishwa Vimukthi Jayawardena

Task 01
1.1 Select two organizations of your choice (one from the service sector and one from the
manufacturing sector) and identify their respective organizational structures. Compare
and contrast organizational structures to understand their differences and similarities.
Microsoft (Service Sector)
The organizational structure of Microsoft's service sector divisions is based on functions and
engineering groups. The organization continued to use a hybrid model across functions,
engineering teams, and management even as it grew and became more hierarchical.
Ford Motor Co. (Manufacturing Services)
Utilizing a matrix organizational structure, Ford Motor Company is able to effortlessly
coordinate and operationalize its extensive activities. The organization features a vertical
management structure that goes from the chairperson, the president, to the executive vice
president, followed by a horizontal model made up of vice presidents, who are the heads of the
many departments.
In a divisional structure such as Microsoft, the clients, outputs, as well as the demography and
geographic areas, all influence how the employees are organized. In contrast, a matrix
organization which is Ford Motor Co. creates two lines of authority. Functional and
departmentalization are merged into one in the matrix structure.
As each employee solely reports to the structure in which it is placed, Microsoft's divisional
structure offers better control. An illustration would be a human resources division that is based
in and answers to the China office. The Ford Co. uses a matrix structure where one person may
report to two different authorities, allowing for more utilization but a more complex operation.
For instance, a sales employee may report to both the sales manager and the manager of the
manufacture of Product A.
1.2 Explain the impact of existing organizational structures you have identified on the
organizations based on their advantages and disadvantages.
For a company such as Ford Motor Co, to use the matrix structure they do face disadvantages as
much as they face advantages:
When a matrix organizational structure is used, everyone is continuously busy. Workers can be
relocated from one location to another as needed, as opposed to being restricted to their own silo.
That indicates that you are juggling several projects at once rather than working on one at a time.
Although multitasking has some drawbacks, employees won't be idly fiddling with their devices
on a dull day when performing their primary duties.
Uneven distribution of work is one of the main problems in the modern manufacturing
workplace. When both teams are paid equally yet one team is perpetually busy while the other is
not, the team with perpetual busyness will have poorer morale. The workload becomes steadier
as you have more possibilities for assignments. Assignments at work are less ambiguous. To
avoid communication problems, everyone must operate in the same manner. Even though a
matrix organizational structure has two chains of command and two types of managers, the
power dynamics between these two "groups" are typically not specified. To make sure that
employees are fulfilling their work assignments as planned, numerous supervisors must
collaborate and operate in teams of their own. Because information transparency is the only
method to guarantee that each manager is aware of what is happening with certain employees,
this further eliminates the silo notion from the workplace.
Two departments may have competing measurements even though they both work for the same
corporation. A worker who is transferred from one department to another for a manufacturing
product could be expected to do tasks that conflict with the demands of their current position.
When that happens, the result is almost invariably a message from those in control that is
contradictory. The employee loses productivity at the end of the day due to confusion.
In a matrix organizational structure at a company as well reputed as Ford Motor Co, several
employees drawn from various departments are working on projects; these modifications must be
made right away. If they are not, it may be very challenging to reassemble a project team after it
has broken up. That puts the future of your business, your people, and your clients at risk. The
pros and cons of a matrix organizational structure make it simpler to direct resources toward the
most crucial tasks that need to be accomplished. They can foster uncertainty at work because
employees might not be aware of who needs to be informed about the work they've completed.
Because of this, constant and clear communication within this framework is required.
And then on the other hand, a Service sector company such as Microsoft uses a divisional
structure:
The main benefit of a divisional structure is that, because each division functions as a profit
center and because division managers have complete autonomy over their operations, they are
both accountable for and responsible for the division's performance. Simply said, if a division
does well, the divisional head will be rewarded, and if a division performs poorly, the divisional
head will be held accountable. This structure gives the divisional head of Microsoft flexibility
when it comes to divisional affairs while also giving them the authority to make decisions and
removing the need for them to consult the business head before making day-to-day decisions.
The independence of each division within a corporation and the absence of overlap gives the
company additional flexibility because issues in one division do not affect how other divisions
operate.
Apart from divisions trying to take advantage of other divisions by snatching business from other
divisions, which as we all know does not benefit the company as a whole, divisional structure's
limitation is that it can lead to animosity between divisional heads due to improper funding or
resource allocation between divisions by the company. As divisional heads' goal should be to
maximize profits of the company rather than dividing it, if the divisional manager is good, there
won't be a problem with this structure a company such as microsoft, but if the divisional manager
is biased and arrogant, he or she may use this power to harm not only his or her division but the
organization as a whole.
1.3 Based on your findings on the organizational structure of the chosen organizations,
identify the functions and explain their importance towards the overall business
operations.
Larger businesses such as Microsoft that gain from grouping their employees into relatively
autonomous units will find this to be most helpful. Companies that employ a divisional structure
may exhibit one or more of the following traits:
 selling a variety of product lines geared toward customers
 providing services for both businesses-to-business and businesses-to-customers
 marketing to a broad range of demographics
 promoting their brand in various places geographically
 serving important clients that require individualized care

A project that might need a more global approach has an outline provided by the matrix
organizational structure such as the Manufacturing products provided by Ford Motor Co. The
talents and knowledge of other personnel in other departments may also be required for this
project in order to come up with innovative solutions to challenging issues. In a matrix
organization with roles defined, the functional manager and the project manager each have equal
control over the members of the project team.
Task 02
2.1 Assuming that you are a business owner (a business of your choice), develop vision and
mission statements along with a set of objectives (using the SMART framework).
Business of choice - Streaming service
Vision- “to make people see through the screen to different wonderlands of imagery”
Mission- “to provide people the best service so they can experience everything first hand”
Objectives:
 High-speed internet is necessary for streaming high definition video, but it is
considerably more difficult to get access to in developing countries. Our streaming
service needs to figure out how to effectively provide its content to these locations if it
wants to keep expanding as investors expect.
 The approach fits with the company's business goals, which include expanding into new
regions, growing the amount of original content, and increasing subscription
membership.

2.2 Explain the importance of having vision and mission statements and setting SMART
objectives for a business.
A mission statement outlines the company's vision and values, making it easier for staff
members, managers, clients, and even suppliers to comprehend the principles that guide the
company's operations. The business's vision can be thought of as a road plan for the future of the
company. This "map" is created by taking into account the company's history, present
circumstances, and ideal position that it would like to reach in the future.
Setting goals is aided by using a SMART goal. SMART, or Specific, Measurable, Achievable,
Realistic, and Timely, is an acronym. To help you focus your efforts and improve your chances
of success, a SMART objective contains all of these characteristics.
Task 03
3.1 If you have been given the option, to start either a sole trade or a partnership business,
which business type would your pick? Justify your answer.
I’d choose partnership over having to choose being a sole trader. Being in a partnership excludes
all the liabilities that a normal sole trader would have to face and layering the ground work of
both the benefits and the risks, starting a partnership would give closure of going through a risk
with another partner rather than risking all of the assets on oneself. Moreover, Partnership brings
in more capital into the business than what a sole trader would invest initially. It also spreads the
risk across more people and also the partners bring in more skills and it also increases credibility
with potential customers and suppliers. Therefore I choose a partnership as a mode of business
type as a pick.
 Task 04
2.1 List down the differences between public limited companies and private limited
companies.
Public Limited Company Private Limited Company
Can issue the shares to its public. Cant issue shares publically, only to close
group of people.
High compliance Comparatively less compliance
Minimum seven shareholders required Minimum one member can start
Can transfer shares (buy / sellers) through Shares cannot be publically transfer in
CSE secondary market
Need to publish the financial statements to No need to publish the annual financial
general public at the end of each and every statements
financial year

Task 05
5.1 What are the ways available to measure the growth of a business?
a) Sales turnover
b) Number of employees
c) Share capital
d) Market share
e) Number of outlets
5.2 Choose two organizations of your choice and investigate their growth over the last five
years using at least 3 of those identified determinants.
Dialog Axiata
1st year 2nd year 3rd year 4th 5th year
year
Net sales (Millions) 86745 94195 109156 116827 120141
Gross profit 44.917 B 50.243 B 51.748 B 51.576 B 61.692 B

Revenue 94.196 B 109.2 B 116.8 B 120.1 B 141.9 B

Ford Motor Company

1st year 2nd year 3rd year 4th year (2022) for the
quarter ending September
(2019) (2020) (2021) (2022) for the twelve 30, 2022
months ending September 30,
2022

Net Income $0.047B $-1.279B $17.937B $9.012B $-0.827B

Gross Profit $21.207B $14.392B $21.69B $22.762B $5.038B
Revenue $155.9B $127.144B $136.341B, $151.736B $39.392B
(Sept. 30, 2022)
Task 06
6.1 Who is known as an entrepreneur? Explain the role of an entrepreneur within a
business.
Incorporate the skills required to be an entrepreneur into your answer.
Entrepreneur is a person who establishes and runs a firm or businesses, taking on higher financial
risks than usual to do so. In society, an entrepreneur's job is to take risks and be creative by
offering a solution to societal issues. The hands-on manager and the visionary founder make up
the two main sorts of entrepreneurs, respectively, in terms of their anatomy.
The idea or vision of what their startup will look like in the future belongs to the visionary
founder. They are also in charge of moving the company forward and making sure everything is
running well. On the other hand, the hands-on manager is in charge of supervising daily
activities to guarantee that their business makes money and operates well. A conventional job for
entrepreneurs is to start and develop a business until it is mature. People frequently generate new
demands as society’s advance, which an entrepreneur might meet with their business ideas. This
business concept might offer products or services that would be helpful to the neighborhood.
Entrepreneurs can start new businesses at any time by spotting a need and formulating a plan to
fill it. They must be knowledgeable about every facet of the company, including making crucial
choices, leading by example for staff members, and settling disputes.
An entrepreneur chooses which personnel they will require when starting or growing their
business. Entrepreneurs think about things like who can manage processes and carry out
administrative duties. Even if an entrepreneur doesn't directly hire employees to work in a
physical location, they may still need to think about hiring programmers, service providers, or
software salespeople.
An owner of a business must divide up the tasks among their personnel wisely from the start. It
takes a lot of care to hire skilled and competent employees, especially for small organizations. A
business owner is also in charge of setting up a workplace culture and structure that allows each
person to reach their full potential. The efforts of a company's employees are frequently crucial
to its success. In order to achieve the highest level of business efficiency, it is crucial for
entrepreneurs to clearly define the roles and duties of their teams. The distribution of
responsibilities also reduces team conflict, increases output, and improves staff morale.
In order for their business to grow, an entrepreneur must develop a workplace where partnerships
can flourish. A key entrepreneurial skill is the ability to generate and close new company leads.
A businessperson should make the most of their marketing resources, invest time in speaking
with possible partners who are qualified, and consistently contact every lead. Strategic alliances
can assist business owners in making better decisions for their organization and even in obtaining
more funding.
Task 07
7.1 Who is known as a stakeholder? Explain the importance of stakeholders for an
organization and justify why stakeholders' interests must be fulfilled?
A stakeholder is a party with an interest in a business that has the potential to influence or be
affected by it.
Any organization that has a direct or indirect impact on a company's operations, success, or
failure is considered a stakeholder in the business. Stakeholders are crucial for several reasons.
They are significant to internal stakeholders since the operations of the company depend on their
capacity to cooperate in achieving the company's objectives. On the other hand, external
stakeholders may have an indirect impact on the company.
All stakeholder interests needs to be met as they are the party that is affected and is interested by
the business. A business's success rate can be increased by taking additional stakeholder interests
into account. For instance, a cosmetic business might alter its formula to provide customers a
better product and boost sales. Before making this choice, they take into account the interests of
the investor, the employees, and the customers, but they overlook their suppliers.