Western Governors University

D078: Business Environment Applications I: Business Structures and Legal Environment

A study guide to WGU's course on organizational structure and effectiveness and the legal environment of business, from entity types to contracts and ethics.

Updated October 2026 · 5 min read

D078 looks at two foundations every business relies on: how an organization is structured, and the legal environment it operates in.

WGU's program guide describes the course in two parts. The first covers organizational theory, structure and effectiveness: how people operate within organizations. The second gives an overview of the legal environment of business and prepares students to consider specific legal situations and make legal and ethical decisions about them.

The course is listed at 2 competency units in the B.S. Accounting standard path, so it is compact. Students mainly find it challenging when scenarios mix structure and law, and an answer must connect both.

Course at a Glance

ItemDetails
UniversityWestern Governors University (WGU)
CodeD078
LevelUndergraduate, business core
Competency units2
Subject areaOrganizational structure and business law
Typical workScenario analysis and concept study (check your course page for the assessment format)

What D078 Covers

Competency (summarized)What it means
Explain how an organization's structure affects its effectiveness in critical circumstancesWhy a structure that works in calm times may fail in a crisis, and how to adapt it
Describe common legal considerations for creating and operating a businessEntity choice, liability, contracts, employment and regulatory duties

Key Concepts Explained

Organizational Structures

Functional structures group people by specialism, such as finance or marketing. Divisional structures group by product, region or customer. Matrix structures combine both, with people reporting to a functional and a project manager. Flatter structures speed decisions; taller ones add control.

Example: A functional manufacturer faces a product recall. Each department handles its own piece and decisions pass slowly up separate chains. A temporary cross-functional recall team with one leader cuts the delay, showing how structure shapes effectiveness under pressure.

Business Entities

EntityOwner liabilityKey point
Sole proprietorshipUnlimitedSimple to set up; owner and business are legally the same
General partnershipUnlimited, sharedA partnership agreement is strongly advisable
LLCLimitedFlexible management and tax treatment
CorporationLimitedSeparate legal person; more formalities

Contracts

A valid contract generally needs an offer, acceptance, consideration, capacity and a lawful purpose. Many scenario questions turn on whether one of these is missing.

The course asks you to consider specific legal situations and decide what is both lawful and ethical. Legal compliance is the minimum; ethics asks what is right even when the law is silent.

A simple framework keeps answers organized:

  1. Identify the facts that matter legally.
  2. Name the area of law involved, such as contract, agency, employment or liability.
  3. Apply the basic rule to the facts.
  4. Consider the ethical dimension and the stakeholders affected.
  5. Recommend a course of action.

Example: Two friends start a catering business without registering an entity. A customer is injured by a faulty serving unit and sues. As general partners, both may be personally liable. The recommendation: form an LLC, buy liability insurance and put a written agreement in place, while treating the injured customer fairly.

Typical Tasks and How to Approach Them

Task typeWhat it testsHow to approach it
Structure analysisLinking design to effectivenessDescribe the current structure, the problem it causes and a better fit
Entity recommendationLiability and practicalityCompare two or three options against the owners' goals
Legal scenarioSpotting issues and applying rulesUse the five-step framework above

Judging Organizational Effectiveness

The first competency is about effectiveness "in the context of critical circumstances", so scenario questions often describe a crisis, rapid growth or a merger. Effectiveness can be judged by a few practical tests:

Organizational theory also distinguishes mechanistic structures (centralized, rule-based, suited to stable environments) from organic ones (decentralized, flexible, suited to fast-changing environments).

A strong answer names the current type, shows where it fails under the scenario's pressure and proposes a realistic adjustment, such as a cross-functional team or clearer decision rights, rather than a complete reorganization.

Where Students Get Stuck

Study Tips for D078

How We Help with D078

Send your task, scenario and rubric. A business law tutor can explain structures and legal concepts, prepare a model scenario analysis or review your draft. We provide general educational help, not legal advice.

GradeEssays is independent of Western Governors University. Use our material to learn the approach, then submit your own work under WGU's academic integrity rules. Every order is written from scratch, includes free revisions within the scope of your original request and is refunded in full if it is late.

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Share your scenario and rubric. We prepare custom analyses of structure and legal issues you can learn from.

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Frequently Asked Questions

What does D078 cover?

Organizational theory, structure and effectiveness, followed by an overview of the legal environment of business and legal and ethical decision making.

How many competency units is D078?

The B.S. Accounting program guide lists it at 2 competency units.

Is D078 a law course?

Partly. It combines organizational structure with an introduction to business law; it is not a detailed law course.

What is the difference between an LLC and a corporation?

Both limit owners' liability. LLCs are usually more flexible to run; corporations have more formal governance requirements.

What comes after D078?

Many programs continue with D079, Business Environment Applications II, on processes, logistics and operations.

Can you give legal advice for my own business?

No. We provide academic tutoring and model material only.