Kayode Ibukunoluwa-Micah's Blog

It is important to situate the locust of planning, coordination, and control in the organization because identifying these would enable us understands the structure and how the organization intends to achieve its objectives. Building on this, the first question would then be

Who owns the Business Or Company?

There are different types of organizations and depending on their types so also is their ownership and control structure.

1) Sole Proprietor: This is a business type that is own and majorly control by one man. He or she takes all the profits and has unlimited liability for the entire business obligation. The sole proprietorship is not a legal entity because the business is the same with the owner and has no separate existence from the owner. The owner will be held personally liable for any debt that the business incurs.
He can hire people to manage the company but the burden of control lies with him. Here he provides the capital and work towards the success or otherwise of the business. He is also known as a sole trader.

LOCUS OF CONTROL AND COORDINATION

By its name, the sole trader or proprietor is solely in charge of the coordination and control of this business. He or she takes action aimed at enhancing the economic interest of the organization. And to a reasonable extent, the success of the business is dependent on the owners ability to take appropriate decision and at the same time be disciplined enough to execute such decision. In some instances, the business can afford to hire experts and individuals with adequate knowledge to run specific aspect of the business such as bookkeeping, human resource management, procurement and so on, in all, however, the decision rest with the sole proprietor.

THE ROLE OF HR IN A SOLE PROPRIETORSHIP

For an expanded understanding of the role of Human Resource Management as a Competitive Edge, please see

HUMAN RESOURCE AS COMPETITIVE ADVANTAGE

Unquestionably, Human Resource Management function is one critical responsibility that consumes the time and energy of small business owner; it is such that if it is not handled properly the ability of the business to meets its obligations to the consumers will be impaired. Whether it is one or two people that are employed by the business it automatically means that HR function has been performed “ recruitment, selection, placement and management of staff functions must have been carried out.
Though unconsciously done, the woman that employed a shop Assistant has performed human resource management function and if such decision as to the quality of the hired is not properly thought out that might end up being the major problem of the business.
But because the sole proprietor takes the entire decision for the organization it has been recommended that any business that requires the involvement of one or two people should consult an HR expert or a human resource management company for proper guidance. Whether a business is employing one or two persons it is the same process and procedure that will be required when engaging hundred people for a multinational company. For example, Darach Associate and Marketing Consulting Company of Nigeria Limited (www.darachassociate.com) which I represent has given extensive support to the organization in the area of HR Management functions and in some instantly directly run such functions for organizations.
In the words of Harmeet Singh, published on August 14, 2014, in Business, Technology, As a small business Manager, youll always be involved in human resource management. Good or bad, it will always be there for you to handle. It can become the single largest consumer of your time and energy if you dont know how to handle things well. And, its still a big consumer of your time and energy, even if youre adept at handling such things.

2) Partnership: This is a business type that involved two or more people that come together to carry on a business or practice within a legal jurisprudence and specific commercial and legal requirements. Each party contributes money, labor, skills, property and expects to share in the profits and losses of the business.
Partnerships are common in professional services such as law, medicine, consultancy businesses etc, the common ground here is shared expertise, skills, and workload aimed at promoting the business.

Typically there are two types of partnership namely:

1) General Partnership (GP): In this type of business, all partners have unlimited liability, where partners share the legal and financial liability of the company equally. In this partnership type, there is no difference between the personal assets of the partners and the company as creditors can legally take possession of the personal assets of the partners in order to recover debts owed to them.

2) Limited Liability Partnership (LLP): Simply puts a limited liability partnership limits the liability of partners to their stake in the company and makes a distinction between the personal asset and the companys liabilities. The advantage of this form of partnership arrangement lies in the fact that a partner is protected from the misdemeanor or negligent of another partner since such business can only be sue without extending such suit to partners personal assets.

3) Limited Partnership (LP): Though this is not common it is seen as a hybrid of the general partnership and a limited liability partnership. The major distinguishing characteristic of this type of partnership is where one partner is classified as a general partner with full personal liability for the companys action or inaction.

THE LOCUS OF CONTROL AND COORDINATION IN PARTNERSHIP

Unlike the sole proprietorship business, the partnership provides a better blend of skills, knowledge, and expertise brought together by members in order to advance the interest of the organization. All over the world, the major reason for business partnership is the leverages that it provides so that each partner can bring onboard resources that other partner may not have and allow the fusion of such skills that the partners have to full advantage and competitiveness.
In partnership, control and coordination are jointly shared, all investors take an active role in management except where you have a passive partner. Ideas are shared and roles are well streamlined and coordinated. Partnership structured should be stated in a partnership deed to avoid misunderstanding and conflict of interest which is the bane of most partnership businesses.

THE ROLE OF HR IN PARTNERSHIP

The size and the nature of the business in which the partnership is engaged in will automatically determine the human resources requirements to meet its production, services and customers expectations. For example, a partnership that is made up of two people and has limited clientele might not require a huge workforce and the employment of a human resource manager or assistant, may not necessarily be required. However, a partnership with a sizeable workforce would definitely require the services of an HR practitioner or a human resource management company.

Human resource management functions are quite diverse and because of the centrality of the human asset in the success or otherwise of an organization, it is required that diligent attention is paid to their engagement, integration, and motivation for productive purposes. HR experts are trained to handle such duties and it cannot be left to someone without HRM knowledge. A well-motivated workforce fully engaged will drive organization successfully and ensure that goals and objectives are achieved.
Except where one of the partners is a trained HR professional otherwise, it is profoundly recommended that such role is given to a professional that is trained in the art and science of human resource management. In todays business, it is apparently clear that human resource is the single most important asset of the organization and it will require skills and tact to successfully manage employees expectations adapt the workforce knowledge to changing technology and effectively get them engaged by managing their mindsets in the best interest of the organization.

3) COMPANY: The third business type is called company or Corporation. This type of business can be divided into Private Company and Public Company. A company is defined according to Wikipedia As a legal entity made up of association of persons be they natural, legal or a mixture of both, for carrying on a commercial or industrial enterprise.

The term company commonly uses in English and in Commonwealth countries Nigeria inclusive while Corporation is an American connotation of a company. So it is used interchangeably in this article.
A company or corporation is distinct and separate from its owners, companies enjoy legal personality, it can enter into contracts, it can borrow and loan out money, and it can sue and as well be sued. The company enjoys similar rights like the natural human being and it can be sued for violation just the same way that it can sue for the violation of its right. Ownership is by shareholding right and the management of a company is different from it owners. Usually, they are managed by a board of directors elected or appointed by the shareholders.

Section 21, 22, 23 and 24 of C.A.M.A. made a distinction between private company and public company. Section 21 subsection (2) states Every private company shall by its articles restrict the transfer of its shares. Also, section 21 (3) states that the total number of members of a ¦ private company shall not exceed 50, not including persons who are bona fide in the employment of the company.

A public company can have its share subscribed to by members of the public also a public company can be limited by guarantee and this will include commercial, art, science, culture, education, research, charity, religion, sport or other companies with similar objects. See section 24 to 26 of the Company and Allied Matters Acts 2004.

In company or corporation, shareholders cannot be held personally liable as their stake is limited to their shares. They participate in company profit by earning dividend and suffer lost if the company failed except the company that is limited by guarantee where its income is to be used for the purpose of promoting the objects of the company.

THE LOCUS OF CONTROL AND COORDINATION IN COMPANY OR CORPORATION

A company by its very nature is bigger than the previously mentioned businesses in ownership structure and exposures to the general public. Because private and public companies play critical economic and social roles in society a lot of attention is paid to their actions and a reasonable amount of compliance and governance is demanded of them.
Control in companies is placed in the hands of members that is the shareholders through general meetings and their votes which are proportional to their share ownership. The shareholders customary do not get involved in direct control and management but act through an elected board of directors which in turn manage the organization through different committees. The day to day management of a company is run by management that reports directly to the board and not the shareholders.

Continue to: THE ROLE OF BOARD OF DIRECTORS IN PROVIDING BUSINESS DIRECTION

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