Introduction to Management and Marketing: Organizational Structures and Legal Forms

Vocabulary practice flashcards covering profit-based business legal forms, organizational shapes, structural frameworks, and modern flexible work models from Tutorial 4 of Introduction to Management and Marketing.

Sole Trader

The easiest type of business to establish, where income or loss is reported on the owner's personal income tax, possessing unlimited liability and lacking continuity upon the owner's death.

Unlimited Liability

A legal condition where business owners are personally responsible for all business debts and losses with their personal assets.

Lack of Continuity

The absence of a separate legal identity from the owner, causing the business to legally terminate when the owner dies.

Business Registration by Non-EU/EEA Foreigners in Poland

Foreigners from outside the EU and EEA may start and conduct business under the same principles as Polish citizens only if they possess a permanent residence permit, an EU long-term residence permit, or a temporary residence permit issued for a specific purpose (such as university studies).

Partnership

A business structure consisting of two or more partners with shared capital investment, usually shared responsibilities, split income reported on personal tax forms, and unlimited liability for all partners.

Private Limited Company (Ltd)

A company with limited liability and separate legal personality, whose shares are held by shareholders (often family members) and cannot be sold to the general public without other shareholders' permission.

Public Limited Company (plc)

A corporation that has the legal right to sell shares to the general public via an IPO, has its share price quoted on a national stock exchange, is required to publish financial statements, and faces the risk of hostile takeovers.

Organizational Structure

The system that defines how workers within a business are organized and how they relate to each other.

Chain of Command (Scalar Chain)

The unbroken vertical line of authority and formal communication extending from the top management down to the lowest ranks of an organization.

Span of Control

The number of subordinates who report directly to a single manager or supervisor.

Tall Structure

An organizational shape with many managerial levels and a narrow span of control, offering better control, easier supervision, less manager overload, and good promotion opportunities.

Flat Structure

An organizational shape with few managerial levels and a wide span of control, resulting in lower management costs, more autonomy and motivation for subordinates, and cross-organizational communication.

Functional Structure

An organizational arrangement where workers are grouped into departments based on specialized roles or business functions, such as accounts, production, sales, and purchasing.

Divisional Structure

An organizational design structured according to specific products, services, or markets (e.g., Product 1, Product 2, Product 3), each supported by its own dedicated functional units like finance and marketing.

Matrix Structure

An organizational framework where employees have dual reporting relationships, intersecting traditional functional lines of authority with specific project or client groups.

Horizontal Structures

Flexible organizational frameworks built around multi-functional project teams and employee multi-skilling to improve responsiveness.

Chunked and Unglued Structures

Modern flexible organizational trends characterized by outsourcing non-core business functions and adopting agile working patterns such as home working and temporary roles.

Handy's Shamrock Organisation

An organizational model responding to cost pressures and the need for flexibility, composed of three distinct workforce leaves: the central core, independent contractors, and temporary hires.

Central Core (Handy's Shamrock)

Leaf 1 of Handy's shamrock model, consisting of permanent, full-time, critical employees who form the vital center of the organization.

Independent Contractors (Handy's Shamrock)

Leaf 2 of Handy's shamrock model, made up of outside contractors and external specialists who carry out key jobs and services.

Temporary Hires (Handy's Shamrock)

Leaf 3 of Handy's shamrock model, comprising part-time employees who are hired or released according to fluctuating business demand.

Handy's Fourth Element

The consumer, who performs part of the work themselves as an integral component of the business model, exemplified by IKEA's self-service and self-assembly approach.