Business Organizations

Handling Conflict and Commitment

The attitudinal approach may be the best approach to handle employees-manager conflicts, because it focuses on the process by which people come to think about their relationships with the organization (relationship between the employees and the management or relationship between employees with each other).

Yes, this approach can increase commitment, because studying the employee-manager relationship and knowing what each party think about the other can help analyze the weaknesses in the relationship that help develop ways to make a better and a stronger relationship between both parties, which in turn helps develop a stronger organizational commitment.

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Role of Communication in Conflict!

Yes, it can lead to conflict because of different goals, aims, ideas, beliefs, and actions each employee in the organization take or believe in, that takes place when employees or groups meet together either in business meetings or in their daily working life.

Conflicts occur when two employees’ aims, actions or issues tend to disagree with each other, or when one group disagrees about a certain matter, or if two or more groups tend to have contradictory ideas or actions.  Conflicts might occur between management and employees or between units or employees at the same level.

Conflicts can easily show in a multinational or multicultural organization because of the difference in language, norms, personal style, and other personal characteristic which usually hinder the effective communication and set the stage for conflict.

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Discuss the role that conflict plays in affecting organizational commitment.

Organizational conflict plays a vital role in influencing the employees’ behaviors and their working outcomes, and has a major affect on the organizational commitment of the employees in the company.

Intra-individual conflict is one of the conflicts facing employees in an organization, it occurs when an employee faces different and mutually exclusive goals and roles, or is obstructed from achieving a certain need.

There are three factors of the intra-individual conflict:

  • Role conflict; occurs when an individual faces different and somewhat contradictory expectations from different parties.
  • Goal conflict; occurs when an individual faces the choice between mutually exclusive goals, which could be positive or negative or both.
  • Frustration; occurs when the individual is prevented from ding a desired action or achieving a certain goal.

These three factors of intra-individual conflict are negatively related to commitment, the higher the levels of role conflict, goal conflict and frustration, the lower the levels of commitment.

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Independent Vs Franchisee

Independent businesses are hard to start up. They require the new businessperson to find financing sources, identify and determine a proper location, “set up shop,” design and place advertising (mostly only on a localized basis) — all on his or her own. The expenses involved in this type of activity are tremendous, and the risk of failure is great.

To open a franchise business has the following benefits:

combining the benefits of owning a small business with the management skills available from a big business; not having to start the business from scratch (i.e., all the equipment is known and will be furnished by the franchiser to the franchisee); a decreased chance of failure because the franchise is likely to be a carbon copy of another business, thus allowing the franchisee to take advantage of a proven track record.

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Buying AnExisting Business

The advantages of buying an existing business include:

  • The purchase of an already established business with an existing track record;

  • The existence of consumer “goodwill”;

  • An existing record of sales and license requirements;

  • The existence of fixtures and inventory, meaning that the new owner does not usually have to replace these items — at least in the time immediately after the purchase when cash may be tight;

  • Possibly a greater willingness on the part of suppliers to extend trade credit to the new business purchaser.

Starting from scratch has its own advantages which include:

  • Not inheriting any consumer “ill-will” that might exist in a going business;

  • The ability to lay out the facility in a way that the purchaser feels will be most conducive to doing business;

  • Purchasing will new fixture, if desired;

  • Choosing surveyors and suppliers on the basis of negotiation rather than inheriting them;

  • Purchasing inventory based on the new owner’s perceptions and knowledge.

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Business Ownership

Appropriate form of business ownership should include a consideration of the relative advantages and disadvantages of the three forms of business ownership, i.e. sole proprietorship, partnership, and corporation.

Sole proprietorship advantages include freedom, simplicity, low start-up costs, and tax benefits.

Sole proprietorship disadvantages include unlimited liability, lack of continuity, difficulty raising money, and reliance on one person.

Partnership advantages include larger talent pool, larger money pool, ease of formation, and tax benefits.

Partnership disadvantages include unlimited liability, lack of continuity, the difficulty of ownership transfer, and the possibility of conflict.

Corporation advantages include limited liability, continuity, greater likelihood of professional management, and easier access to money.

Corporation disadvantages include shareholder revolts, start-up costs, regulation, and double taxation (note: double taxation is not applicable in Hong Kong).

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What does it mean by “limited liability”

  • Limited liability means that investors’ liability is limited to their personal investments in the company.

  • It is one of the major advantages of corporations.

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Preparing the Derivative plans

Derivative plans involve short rang operating plans that are useful in day-to-day operations these plans are developed through the

1 Schedules

2 Budgets

3 Programmes

4 Procedures

5 Methods

6 Rules & Polices etc.

These plans are prepared in different departments ,and their timings and sequence are also specified .

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Basic Definition
Basically, an organization is a group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from two people to tens of thousands.


An organization that learns and encourages learning among its people. It promotes exchange of information between employees hence creating a more knowledgeable workforce. This produces a very flexible organization where people will accept and adapt to new ideas and changes through a shared vision.

Members of the organization often have some image in their minds about how the organization should be working, how it should appear when things are going well.

An organization operates according to an overall purpose, or mission.

All organizations operate according to overall values, or priorities in the nature of how they carry out their activities. These values are the personality, or culture, of the organization.

Strategic Goals
Organizations members often work to achieve several overall accomplishments, or goals, as they work toward their mission.

Organizations usually follow several overall general approaches to reach their goals.

Systems and Processes that (Hopefully) Are Aligned With Achieving the Goals

Organizations have major subsystems, such as departments, programs, divisions, teams, eta. Each of these subsystems has a way of doing things to, along with other subsystems, achieve the overall goals of the organization. Often, these systems and processes are define by plans, policies and procedures.

How you interpret each of the above major parts of an organization depends very much on your values and your nature. People can view organizations as machines, organisms, families, groups, eta. (We’ll consider more about these metaphors later on in this topic in the library.)

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Business Organizations

There are basically three types of business organizations

  • Sole-proprietorship

  • Partnership

  • Joint stock company


When a business is owned and managed by a individual or single, he is known as the sole trader or individual entrepreneur.

Characteristics of Sole-proprietorship:

a) Formation: No restriction in formation. There is no registration of any sort. Any body can start this business according to his will and time at any place.

b) Capital: In this business the businessman himself provide capital, but his resources are limited. Some time he borrows money from his friend or relatives.

c) Unlimited liabilities: Businessman has unlimited liabilities. If the business gets losses, sometime he has to sell his personal property.

d) Management of the business : He is the single person to manage the business. He is singly responsible for the decision making and for policies.

e) Secrecy Every business has its own secrets, which is the basis of its success. Trade secrets such as secret formulas, special accounts are very important. This type of business has more security as compared to other types.

f) Personal Relations : As in this type of business, the businessman has direct contact with the customers therefore, he knows the likes and dislikes and the need of the customers.

g) Saving in Expenses The same members of the family usually run single person business, therefore, saving in expenses is highly observed.

h) Legal Entity: It has its legal entity

i) Distribution Of Profit He is the only person who enjoys the profit.

j) Business On The Small Scale It is a small scale and usually he does not extend due to the reason of control.

k) No Need of Agreement

No need of agreement with second or third parties.

l) Adminstrative And Contrl Of Business

He is responsible for whole business administrative and control process.

Merits /advantage of Sole-proprietorship:

1. Easy formation

2. Secrecy

3. Personal interest

4. Immediate decision

5. Personal contracts

6. Saving in expenses

7. Publicity

8. Satisfaction of individual liking and interest

9. Flexibility

10. Free in depended

Demerits/disadvantages of sole-proprietorship:

1. Limited capital

2. Limited management ability

3. Unlimited liabilities

4. Unsuitable for large-scale business

5. Lack of continuity

6. Wrong decisions

7. Less public interest

9. Danger of loss

10. Lack of expert services

11. Insolvency

12. Business success depends upon personal ability

13. Limited life

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