Understanding Different Types of Companies and Business Structures

This report provides an in-depth understanding of different types of companies, including micro, small, medium, and large businesses. It explores the characteristics and examples of each type, along with the various business structures such as hierarchical, functional, horizontal, divisional, and team-based structures. The report also discusses the external factors affecting businesses using PESTLE analysis, with a focus on Sainsbury as a case study. Gain valuable insights for your business studies with Desklib.

REPORT WRITING ON BUSINESSES

Table of Contents
INTRODUCTION...........................................................................................................................3
Section 1 Understanding the different types of companies and their working...........................3
Section 2: Different companies from the sole traders.................................................................5
Section 3:- Different business structures and the external factors which affect the business.....6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment- It is the collection or sum of the external and internal factors
such as customer need, their expectation, supply and demand, employees, management, owner,
activity by government, technology, social trends, market trends, innovation etc. The business
environment word indicated the aggregation of the people in the organisation where they gives
the outstanding power to the industry production. They are consisting of the macro environment
factors which effect the business organisation. This report is based upon the evaluation of
different types of companies from the sole traders and the understanding of the different business
structure and eternal factors which affects the business.
Section 1 Understanding the different types of companies and their working
Micro business- These are the business which are smaller in size and having nor more than 9
employees. They are having a balance sheet and having turnover is limited to a certain amount
say less than 2 million (Vargo and et. al., 2017).
Characteristics- They are having the lower revenue and profitability. In this small scale
business revenue is always lower than the companies which have the larger scale in business.
They are allowed to show the revenue in set of 21.5 million dollar per financial year. They are
having the smaller team in context of employees. They generally having the small market are for
the business. These types of business generally having the sole or partnership business.
Example- Issoria is one of the micro business which was launched in 2016, it is rapidly in the
way of disrupting in the change of Management consulting Industry. Its founder is Ibi Thomson.
The company has retaining the ow cost base, agility and the speed of an SME. Its long term
ambition is to serve half of the world's largest company over by the year 2030. The company has
already recovered its 178% of the growth.
Small business- It is the type of business which re having on the small scale and which involves
the less capital investment, having fewer machines and less number of the labour or employees.
Small business are either having the retail operations like medical stores, bakeries, small
manufacturing units, grocery shops, tradespeople etc. These type of business are generally
serving the local communities by their business (Hausberg and et. al., 2020).
Characteristics- They are having the ownership which are the single owner which can also be
said as the sole owner. Here, all the management work is controlled by the owner, They are

having the limited area for their business. They are less dependent on the technology and are
majorly dependent on the manpower and labour. They have the flexible for the sudden change
due to their small business, and they uses the local available resources and reduces the wastage.
Example- Marshfield Bakery is the small business in the U.K. Which is a family founded bakery
which are providing the handmade goods. They have started as the family based business where
they grew more and expanded their business.
Medium sized business- It is the business which are having the employees not more than the
250 and which comes under the Companies Act 2006. They are not having more than 12.9
millions pound overall turnover. They should need to comes under the criteria of medium
business income.
Characteristics- It is having some of the characteristics which are like they need to be prepared
to work very hard, need to passionate about the business at any cost, to be good at dealing with
the customer specially when its difficult to manage them, needed to upgraded the skills on
regular basis, ready to learn form the mistakes, continuous improvement, able to handle the high
pressure, adapting quality for changing market, and they need to be a well financial manager
(Weissbrod and et. al., 2017).
Example- Captify is the medium sized company which is a data-driven company which
specialising in the media decisions and search intelligence. There founder name is Adam
Ludwin & Dominic Joseph. This company was launched in the year 2011. There goal is to put
search intelligence at the high level for the every single market, marketing, business and media
decision around the world.
Large size business- It is the business which are having at-least 5000 employees, having the
annual turnover greater than 1.5 billion euros and having the balance sheet total of more than the
2 billion euros.
Characteristics- They are having more than separate power of distribution between the manager
and owner. They are having all the business function which includes the different department in
the company like marketing department, sales department, Human Resource Management etc.
The business is operated from a number of interstate, intrastate and overseas venue.
Example- Apex Hotels is a four-star, family-owned and independent hotel. Their headquarter is
in Edinburgh and operating about to 10 hotels in Dundee, Glasgow, London etc. They are
growing very well and open a new property on average of every two years (Mijid 2017).

Section 2: Different companies from the sole traders
Sole Traders- It is also known by the sole proprietorship, it is also can say the single
business owner who runs the business individually. It is a unincorporated business which is
having one owner who pays the income tax on the business profit. Here, the company and the
owner is a single unit.
Characteristics- There are many characteristics like in such case there is only one man who
have the ownership. They have the freedom of work and is able to take the quick decision due to
having their own business. When they are not able to pay the business debt they need to pay
from their personal property which is highly risk in this characteristics but also enjoys the entire
profit by itself which is the positive effect of this characteristic (Kirkwood and et. al., 2016).
They are easily able to maintain their business secrecy due to working as individual in the
business.
Example- Columbus photographed is one of the example of sole trades where only one owner is
there in the business which are having the total profit from the business and is itself responsible
for the loss in the company.
Limited Liability Partnership- It is the typical partnership business form in which they suffers
from the problems of unlimited liabilities for their company. LLP is an alternate corporate
business form which gives the flexibility of a partnership and the limited liability of company. It
is called Hybrid between the company and a partnership due to having contain the both corporate
structure as well as a partnership firm structure.
Characteristics- There are many characteristic of the Limited Liability Partnership. Some of
them are like they are taxed as partnership, they must having the two designated members, they
must be registered as the company house, having the ability for creating floating charges (Coad
and et. al., 2016).
Example- The Hands UK. Ltd. Is one of the Limited Liability Partnership company.
Cooperatives- This is the association of persons which are owned and controlled by the people
to meet the social, cultural, aspiration and economic. Here, profit are returned back to the
cooperative members.
Characteristics- They includes the voluntary membership. Open membership, Finances,
Liabilities of members, Democratic control, Limited interest on capital, Distribution of surplus,
service motive, Registration and legal status and education and training (Dwipriyoko 2020).

Example- Ace hardware is the one of the corporative in UK.
Section 3:- Different business structures and the external factors which affect the business
Business Structures
 Hierarchical Organisational structure- This is having the pyramid-shaped structure which
is common organisational structure. Chain of command goes here from the top to bottom.
On top there is CEO and on bottom there are low-level employees or staff. Due to easy
structure the productivity of the business goes high. It is easy to find out which type of
assignment is done by which department (Derbyshire and et. al., 2017).
 Functional organisational structure- In this type of structure is similar the hierarchical
structure. Where higher authority is one top and rest of them are going in down manner.
Here, each of the department is managed individually. They focuses in their employee
role for imposing the productivity of the business.
 Horizontal or Flat structure- It is the structure is adopted generally by the start-up types.
Which are having the number of employees which are having the authority to give the
ideas and work on it. In this everyone is valuable and having the responsibility for
growing the business (Poeser and et. al., 2017).
 Divisional organisational structure- In this company having the control on the business
resources. Each division having their own sale, marketing, Human resource team and IT
team. In this division have the authority to take decision. Geographical division, product
based division, market based division are some of the distributed division through which
company able to full fill the need or any change.
 Team based organisational structure- In this team are created for performing different
types of task. By performing their individual task they completes the common goal of the
business. This is a flexible structure which includes the reinforce decision making,
problem solving and teamwork.
PESTLE analysis of Sainsbury
It is the tool used for monitor and analyse the macro-environmental factor which gives
the impact on the organisations (Guandalini and et. al., 2017).
 Political Factor- This is one of the most important factor in macro-environment where
the company business is totally affected due to any difference in stability of the political
environment. Sainsbury is largest super market in the UK. Now a days imminent Brexit

is the one of the biggest political factor that affects the Sainsbury business. This will
effect the business by increasing the pricing of the product. This will leads to loss of
customer to their competitors.
 Economic factor- Sainsbury is highly dependable for their shipment on the road-based
transport in all over the country. With the rising in the fuel pricie will also increase the
cost to the company. This will effect directly for the lower income customer who are the
customer of Sainsbury. The rise in supermarket chain has the cause of economic factor in
all over the UK.
 Social factor- It is the factor which is related to the society. Now a days most of the
customer are like to have the healthy product which make the company to put the healthy
products. Customers are attracted towards the organic food which are healthier and
having no side effect on their body. Sainsbury is needed to have the most organic food
product to maintain their customer need and satisfaction.
 Technological factor- The world technology is changing continuously and the
Sainsbury need to get updated regularly where, they need to have the latest technology
for the payment method which customer are able to use them and get some more option
for the safe and fast payment. This technological change helps in increase the business.
 Legal factor- Any changes in the law and policies for bushiness in the country which
effects the company business. As the new Sugar -tax has introduced, the company needs
to improve in their products to deny such type of tax which can effect the business in
large scale (Blut and et. al., 2018.
 Environmental factor- In this, company need to be eco-friendly with the environment.
Sainsbury supports the sustainability goals of the government, so in response to it,
company has started to reduce the wastage in supply chain. Company also need to have
the good packaging quality so can't effect the environment.
CONCLUSION
From the above discussion, it can be said that there are many types of business are there
like micro, small, medium and big business where all have their own definition with different
characteristics are there which effects the business environment. There are also some sole traders
which are having their business and liable to get the profit and losses themselves. There are also
partnership business which are able to effect the business. There are many functions in the

organisation which have their own role in the business. Here, PESTLE analysis has done on the
company Sainsbury for the analysis of macro-environment.

REFERENCES
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