Entrepreneurs

Business Organization: Definition, Examples, Components and Forms

Business Organization – A business process consists of a series of activities designed to produce certain outputs for certain customers. In order...

dimashandy Written by dimashandy · 4 min read >
Business Organization

Business Organization – A business process consists of a series of activities designed to produce certain outputs for certain customers. In order for a business process to run smoothly. It is necessary to form a business organization to manage the business process accompanied by the delegation of tasks for the personnel involved.

Definition of Business Organization

A business activity can be said to be a business process if it has fulfilled the following things, namely: it has a clear goal, there are inputs and outputs, there are resources used, there is a series of activities divided into several stages, can affect more than one unit in the organization. organization, and there is added value for consumers.

A business process must have a business organization to regulate its performance. As for what is meant is a form of organization that carries out a process of economic resources and involves the expertise of the personnel in it so as to create an output aimed at consumers for profit.

Every ongoing business process must produce output as the final result. This output can be in the form of goods or services. Here are some examples of business organizations that have output in the form of goods and services:

Business Organization Example

A business organization can produce output in the form of products or services. Here are some examples:

1. Manufacturing Company

Factory is an example of an organization that produces output in the form of goods. The goods produced will go through several stages before finally reaching consumers.

2. Hospital

The hospital is an example of an organization that produces output in the form of services. Hospitals earn profits from health services provided to patients. Some economists often have difficulty regarding the types of products that can be classified as services because in reality many products are a combination of goods and services.

A business organization must have important components that will support its business activities. The following will review the important components that must be present in every profit organization.

Components of Business Organization

There are at least 7 components that are needed in an organization. These components must be aligned and support each other’s performance. Components within an organization can be used to monitor and provide an assessment of the internal conditions of the organization. Here’s the explanation:

1. Strategy

Business strategy can be interpreted as a series of decisions and guidelines for actions that must be taken by a business organization in achieving business goals. The business strategy must be set for various business objectives with long-term and basic goals.

It is very important to determine the focus and goals of the organization in advance. Strategies are then drawn up and implemented to achieve the stated goals. Business strategy is also needed to maintain and expand the organization’s activities in new fields.

What Is Definition of Business?

Carry out a strategy for expanding the activities of business organizations in response to various changes such as changes in demand, changes in raw materials and resources, economic conditions, technological developments, and changes in competitor activities in the market. After developing a strategy, the organization develops steps to achieve it and allocates the resources used.

2. Organizational Structure

A sustainable structure is structured to carry out the strategy in order to achieve the objectives. The structure can also be arranged based on the function of the units involved.

An organization can structure flexibly when it comes to available resources and the size of the budget.

3. Organizational System

Creating a system is very important for running a business organization. A system is structured to reflect the interests of the organization and for the organization to run efficiently. The system created can be in the form of articles of association, special regulations, procedures, and other regulations.

The system used must be able to integrate and support each other. The organizational system is divided into inseparable components, namely input, process, output, and feedback.

Examples of systems that have been used include Human Resources Information System (HRIS), Management Information System (MIS), Online Systems, Call Center System, and so on.

4. Human Resources

The main component in a business organization is human resources as business people. HR must be managed through human resource management with the following objectives:

  • Develop work effectiveness
  • Improving the quality of human resources
  • Provide effective and productive work rules
  • Balancing individual goals with organization
  • Help managers to manage human resources more effectively

5. Skills

All parties involved are expected to have skills and competencies that can support work so as to provide the best results for the organization. For human resources, guidance is needed, regular training for a certain period of time, and motivation to improve their quality.

6. Style

This relates to the style applied in a business organization. Every organization has its own differences in terms of communication, leadership, and decision making. The style applied depends on the conditions of an organization, including social culture and resources.

7. Values ​​Embraced

An organization must determine its values. Organizations usually embody this value in the form of a vision and mission. All decisions, regulations and actions taken must be based on these values.

This value will later be used as the main basis for guiding the workforce in terms of determining their attitudes and behavior.

The implementation of a must refer to its form. This is related to the applicable regulations. Here are some forms of business organizations in Indonesia.

Business Organization Form

The following describes several forms of organization according to the business entity. Each business entity has different criteria and different legal regulations. Please look at some of the forms of organization that run in Indonesia.

1. Private Company

A sole proprietorship is an organization that is managed and supervised by individuals. There are advantages and disadvantages to having a business entity like this. The advantage is that the manager will get all the profits from the organization but must bear all the risks if there is a loss in his business.

2. Firm

Is a form of organization founded by several people under one name. The gains must be shared together, and the losses suffered must be shared. The firm will immediately disband if one of its members resigns.

3. Commanditaire Venootschap (CV)

Is a form of organization founded by several people and each of them will deposit a certain amount of capital with a value that does not have to be the same. There are two kinds of allies in this organization, namely complementary and limited.

Allies in a complementary form mean the people who are joined are willing to help manage the company. While limited partnership means that the partner only submits a certain amount of money as capital and is limited to the assets and assets owned by the company.

4. Limited Liability Company (PT)

In a Limited Liability Company, there are separate rights, obligations and assets between the founder and the owner. A person can participate in this business entity after purchasing a membership certificate in the form of shares. The larger the shares owned, the greater the share and position in the organization.

Thus a brief explanation of the business organization that can be conveyed. Hopefully it can provide an overview of important things related to business processes and their organization.

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