Solution

1.1 Different reasons why organisations are established

An organisation can be identified as different people including institutions or association coming together to attain a particular set purpose. Through this, they are able to attain collective goals and different functions in a coordinated manner. Therefore, some of the reasons why the organisations are established include;

Working collaboratively for increased achievements- this is evidenced by the existence of inter-relationships and cooperation for achieving the already set purpose of an organisation.
Synergy- Synergy can be identified as a practice of using multiple efforts from different people to come up with a single outcome. The combined efforts are better than single-person efforts. This is since a collection of people in an organisation focus on undertaking different roles for assisting their organisations in meeting their entire purpose.
Specialization and Division of labour-This are evidenced from the defined responsibilities, active communication and authority all divided based on specialization and need to divide roles. this creates efficiency as less time is spent in challenging tasks and low costs of finding and training people to do repetitive and specific tasks
Sharing Skills and Knowledge- through an active allocation of roles and activities, skills and knowledge are shared from the top administrative management to the lower-level employees for a positive gain to the organisation.

1.2 Different ways of Categorizing Organisations

As a modern best practice, organisations can be categorized on the basis of the following aspects;

Purpose
Size
Relationship
Ownership

For the purpose, this includes for-profit and not-for-profit organisations. In this case, non-profit focus on assisting the community while the for-profit focus on making profits. For the size, small organisation have a maximum of 49 employees, medium-sized business has less than 250 employees with large companies exceeding all these parameters. In regard to the relationships, formal organisation is created by top management with informal formed by members. Lastly for ownership, corporations are owned by the government, private by individuals and the public by the members of the society.

The category of an organisation determines the management principles to be followed and the control of all their departments. Also, it guides the organisations to maximize their stakeholder’s value which is the primary objective of the majority of the organisations. Also, resources allocation in different departments would be possible as the strategic goals of an organisation and the targeted objectives based on their category would determine the resources allocated. For instance, for-profit organisations would plough back their profits hence limited resources allocated as opposed to not-for-profit organisations.

1.3 Different ways organisations are structured and the reasons

In any organisation, a structure is critical as it establishes the flow of power and information in an entity. As shown in figure 1, an organisation is comprised of structure and functions, culture and processes which are further grouped into different factors.

Figure 1: Organisational Context

The different structures include;

Functional- Leadership and the flow of information by major functions of the company divided

Divisional-

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