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Basic Functions Of Business Organizations You Should Know

I will talk about basic functions of a business organization in this article. Many people say there are 3 basic functions of business organizations, others say there are 4 basic ones, I say it all depends on the definition of the word basic. There are so many functions of business organization and it all depends on which ones you mark as basic ones. I will put out and describe the ones that I think are the main ones, the basic ones.

The first basic function of a business organization by my opinion is shield against taxes. Even though I believe that this is one of the most important functions of business organization, many people don’t even know of it. All your personal income is taxed (at least in most countries in the world), while the income in organizations is not taxed, only profit is. So rich people make corporations (business organizations) not to pay taxes. How? They get some money in a company and they spend it before the end of the business year. And that’s how they spend it before it goes into profit and before they have to pay taxes from it.

Second very important function of business organization is “trust on the outside”. If you try to make business as an individual, you are less likely to succeed as if you were doing business as a business organization.

Next function of a business organization is cooperation. People are stronger when they work together as a team and not as individuals. That is why people who work inside corporations have an advantage against those who work alone.

Next function of business organizations (this time for customers) is producing value. Companies search for profits and by doing that, they add value to our world. At least they should in theory…

There are many more functions and many more of them are described on our site. Please search around say economy if you would like to learn more about basic functions in business organizations.


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