A Study of Different Types of Businesses and the Business Environment

Introduction

An organization is defined that it exists because of groups of people working together to meet a need or to pursue commercial goals. There are many types of organizations, but common are public, private and voluntary sectors and legal structures. All types of organizations have a management structure which sets up roles and positions within the organizations, and execute strategies to benefit that ultimate goal. FPT Joint Stock Company is one of the largest technology companies in the world and established in 1989 by Vietnamese Government. In the 2000s, FPT Joint Stock Company determined to extend its business to other countries looking for more potential markets such as Japan, Nigeria, Laos, the USA, Cambodia, Myanmar.

The growth of the business environment in the global world refers to the performance of business activities by companies across national borders. Technology is always a leading industry which has been invested widely by a lot of countries in the world. Therefore, the international business environment makes a competitive market for technology firms, at the same time, it requires the continuous improvement strategy of the organizations that really helps them to get a reliable place in the international technology market. This report will assist FPT Group which is an example to understand about organization structure and different functions in different organizations.

Types of Organizations

Most of the organisations operate to make profit. Enterprises set up with the primary motive of profit generation do not necessarily need to be large multinational corporations with a huge workforce. They can be large, medium, small, and micro. The different factors between these types of organizations are the number of owners and shareholders, the number of employees, their market share and their legal structures. Size, and scope of organization connect with the objective of the organization. If the size of the organization is vast, they will invest huge money, and then they set the big target as their business objective (Wardet al.2011). Every organization has the same objective which is considered as serving customers and getting profit, but the profit level differs with the size. Companies set their business goal by reviewing their scope because the scope depends on their product types. If the scope of a firm is serving national customers, they will set business objectives accordingly. If the scope of organization is huge, this organization creates massive size, otherwise, they create a small sized organization.

There are different types of organizations in general such as public, profit organizations, voluntary sectors and private organizations.

Public organizations:

The public organizations are the firms that are owned and operated by the government and exist to provide services offered to the citizens such as school, police, petroleum, road administrations. The firms in the public sector do not aim to generate profit. The capital of those firms is taken through a lot of methods, including taxes, fees and financial transfer from other levels of government. The vision and mission of public firms depend on the demand from the citizens and requests from the government. They look to serve a community or specific niche in the community. Money raised by the public organizations should serve this mission with the bulk of revenues going towards that rather than toward big salaries and employee perks.

Public Health Association which was set up in 2002 is one of the popular public organizations in Vietnam. They are official member of the World Federation of Public Health Associations (WFPHA) The mission of this organization is Gathering and uniting people working in the field of public health; Cooperating with, helping and contributing to the care and protection of the people's healthy; Developing public health in the country, integrating with the region and the world. Their vision to 2020 is developing a model of public health practice, Journal of Public Health and Research Centers. They have built up a channel about Health care around Vietnam and their number of employees is about 2000 people.

Profit organizations:

The profit organizations exist primarily to generate a profit and to take in more money than it spends. They meet the demands and needs of customers and relate to customers through the market. Commercial organizations get used to the environment in which they operate and adjust their operations so that they can deliver their goods and services as efficiently and competitively as possible. Their mission is making money by selling a product or service to a specific demographic or niche. The surplus of all the revenues after paying all costs is returned to the shareholders who are investors in the company.

Voluntary sectors:

Voluntary sectors is the duty of social activities undertaken by organizations that are non-profit organizations and non-government (NGOs). The Voluntary Sector is usually organizations with their purpose being to benefit and enrich the community, often without profit as a motive and with little or no government intervention.Financial resource of these organizations is usually invested back into the community or the organization itself. They are reliant on external funding that comes through donations, membership dues and grants. Their main stakeholders include: beneficiaries, donors and funding sources, community, employees and volunteers, federal, state and country administration.

It has been noticed that Volunteer House Vietnam is one of common NGO and non profit organizations for the youth in Vietnam. This organization was established in 2014. They set up their vision as working for the development of Vietnam’s Young Generation, helping them improve their English skills so they and our nation can confidently integrate with the rest of the world. Their goal is to set up at least one free English class in each province of Vietnam by 2020 for children, especially for disadvantaged ones from 9-12 years old, to be taught by our volunteers and travelers.Their mission is a combination of tourism and educational benefits to travelers, Vietnamese children and communities. They open classes in which travelers can stay for free while teaching English for children. They expect that children can improve their listening and speaking skills, which are their main weaknesses. Volunteer House Vietnam runs their organization in Hanoi and Ho Chi Minh City with more than 2000 volunteers who are Vietnamese and overseas people.

Private organizations

The private organizations are the firms run by individuals and companies for profit and are not state controlled. The private organizations’ fundamental goal is creating a market to enable earning profit. In the private sector, organizations must answer to their stakeholders, customers, investors, and board of directors. Private sector activities include production and services. Companies that produce products and/or supply service with the aim of selling these products/services and making profit for organizations or individuals. The companies mix between selling products and supplying services for their promotions with the intent of making more profits. There are different types of private organizations such as sole traders, partnership, limited company and cooperatives.

Sole Traders

Sole traders (sole proprietorship) are, as opined by Shetzeret al.(2014), owned and controlled by an individual. This owner is not officially separate from the business and they are legally responsible for all aspects of the business. Sole traders are set up easily and they only require a small initial investment. Business costs are often minimal due to the small size of the enterprise, but if the business can not make money and keeps accruing debt, the owner is legally responsible for any outstanding debts.

Partnerships

Partnerships are enterprises which are owned by two or more parties. The relationship between the parties is managed by actions of partnership that defines the scope and structure of the partnership. The parties of partnership will share the responsibilities, investment obligations of each partner, how to distribute the profits, and the sharing of losses. Partnerships have unlimited liability, it means that the partners are personally liable for the debts of the business. When some small firms that start as sole traders expand, they have to decide to set up a partnership structure. The advantage of this is the sharing of responsibility between partners that something that cannot be done in a sole trader.

Limited Companies

Limited Companies are that owners are able to separate legal entities and have legal status. When companies are established, they will have a constitution that will help maintain relationships between the shareholders and directors. A limited company can own assets in its own name, brand. The owners are protected by limited liability. Therefore, the debt of these companies which the owners are responsible for appropriates with the sum of the owners’ initial investment into the company. Companies that are limited by shareholders, and shareholders have financial limited responsibility to the amount and value of the shares they hold. The size of these companies are usually small and medium-sized.

Corporation

Corporations are much larger than the previous three. It can have unlimited owners owning to stock ownership and transfer ability. These owners are not liable for any claims against the business. It is near boundaryless because of its size that it can produce goods and ship internationally. It can sell goods within the host country or internationally as demand warrants. Corporations usually have large size. It has been noticed that FPT started their business as a limited company in 1990 but when they changed their business field from Food Processing Technology to Information Technology, they decided to expand their firm. Therefore, in 2006, FPT stock listed on the Ho Chi Minh City Stock Exchange. The firm has been at least one director in every branch of the organization. They have arranged annual general meetings with their shareholders once in a year. Their shareholders will choose the individual who makes important decisions such as investment, financial plan.

The concept of business organizations like FPT Group, which was given by Werbach and Hunter (2012), covers different types of sectors such people, objectives, management and resources. FPT owners or the center head have total control of FPT's business. Their management itself chooses business activities and patterns of working for them. Therefore, it has been observed that the business type of FPT belongs to Private organizations, specially cooperatives. Their mission is making available the latest technology and information that makes it possible for each person to reach their potential, contributing to address the socio-economic issues. The vision is that they have strived to provide clients with optimal technology services, products and solutions. At the same time, FPT’s goal is that they have pioneered in new technology trends, helping to confirm Vietnam’s position on the world technology map.Their revenue in 2017 is USA 1.93 billion and they have 32,092 employees who are working in 33 branches around the world.

Functions in Organizations

Organizational functions are the different areas of a firm: marketing, HR, sales, customer service. The organizational structure is the relationship between those functions. All functions of organizations use organizational objectives to prepare and make a functional strategy. The organizational structure might be influenced in a way that to the detriment of other organizational functions. For a business to operate efficiently, it needs a structure which is planned and fits the style, size, and scope of the organization. The structure is considered as the guidelines on a hierarchy, relationships in the firms such as relationships between the owners and shareholders, and linkage of different functions in organizations. FPT’s structure is a corporation because they have to have annual general meetings with their shareholders once in a year. Their shareholders will choose the individual who takes important decisions, even these shareholders can decide short term objectives and long term objectives of FPT. Supervisors work with the board of directors and managers to ensure that directors apply procedures and practices consistently. Managers will operate and plan their departments to go above the expectation of customers. They work closely with other managers across the company to improve processes continuously, improve accuracy, reduce the need to repeat work and drive up efficiency year on year. However, to operate effectively, they need the support of another functions such Finance, HR and Marketing:

Finance

In order to maintain organizational structure and achieve organizational objectives, firms need a stable and reliable money flow. Therefore, Fiance provides details regarding the merged money related articulations, valuable reports on financial performance, position in relation to business plan and give explanations of benefit or misfortune, far reaching pay, changes in value and money streams for the year then finished and an outline of huge bookkeeping approaches and other illustrative data. It produces financial and management accounts not only to ensure legal compliance but also to contribute to the strategic decision-making process by forecasting financial performance. Budgets enable management to have the resources such as raw materials, equipment and people to carry out processes. It has been noticed that the financial report of FPT ensures that all financial activities of FPT are always clean and shareholders get a value that is commensurate with the amount of money they spent for FPT.

Human Resources (HR)

Most firms need employees to run business activities effectively, especially companies as FPT, they have a huge number of workers who contribute for FPT day by day. The HR department’s activities include planning and forecasting staff requirements and managing recruitment and selection. The HR team ensures the working management aims to ensure that the employees achieve highly efficient and good performance. On the other hand, they concern HR policies and procedures consistently across the business. The development of staff is a key priority within the FPT business. Without the right people, FPT may not be able to achieve their targets.

Marketing

Marketing promotes business and drives sales of its products or services. It provides the necessary research to identify target customers. By understanding customer needs, the marketing function can inform the overall business strategy and ensure the FPT’s image and brand. Thanks to the Marketing function, FPT can get customer information which will support the quality of FPT’s products and services. Hence, FPT are able to set up a competitive business environment through their promotions. The high demand of FPT’s products and services such as telecommunication services, software, films allow the firm to grow, expanding their operation and collecting more profit from Vietnam’s and oversea market. Marketing strategies from Marketing functions also help to create a friendly image of FPT in customers’ mind.

Main objective of companies as FPT is meeting the customers’ needs to sell more products and get more profit, therefore, Marketing function is considered as a bridge between the firms and customers. Figure 1: FPT Corporation’s Organization Chart

Conclusion

In conclusion, the report has shown the different types and purposes of organization such as public, profit organizations, voluntary sectors and private organizations. On the other hand, it also has discussed the size and scope of the different types of organizations. At the same time, the relationship of organizational functions has been given and how they link to organizational objectives and structure.