Evaluation of Partnership as a type of Business Organization

This report provides a detailed analysis of partnership as a type of business organization, including its features, advantages, and disadvantages. It also discusses the use of Porter's 5 forces and macro-environmental factors in business organizations. Case study on Little Dessert Shop is used as an example.

Assessment 1

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Evaluation of Partnership as a type of Business Organization....................................................1
Use of Porter's 5 forces................................................................................................................2
Macro-environmental factors.......................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business Organizations are those firms which are focused at making the use of different
types of products and services in order to earn higher-level of profits in the future (Lauring and
Klitmøller, 2017). Therefore in this way these organizations make sure that they are able to attain
a strategic and competitive advantage in the future over the competitors without facing problems
and issues. In this report, detailed focus will be made on Case Study on Little Dessert Shop. It is
a business which provides different types of dessert to the customers. In this assignment, detailed
analysis will be made on recognition of different types of evaluation of partnership as a type of
business organization, use of Porter's 5 forces. Additionally, detailed focus on discussion of
macro factors and the way they can help in the improvement of business will be discussed as a
part of this project.
MAIN BODY
Evaluation of Partnership as a type of Business Organization
Partnership- Partnership refers to a type of Business Organization in which two or more
people come together in order to start a business (Li and et.al., 2018). They set a Profit-Sharing
Ratio in which the profits of the organization are divided among the partners. Therefore in this
way they are able to make sure that they can make use of the combined resources so that the
customers can be targeted in a highly effective manner. The Little Dessert Shop which is run by
Mary and Sue is an example of a Partnership business which has been set up by these two
businesses.
Features of Partnership business-
 Two or more members- In a Partnership business there is a presence of two or more
members in the organization (Morakanyane, Grace and O'Reilly, 2017). Therefore these
partners ensure that they are able to run the business together effectively and efficiently
without facing problems and issues. The Little Dessert Shop has two partners Mary and
Sue who run this business.
 Agreement- In a Partnership business, there is a presence of an agreement which ensures
that the members are bound by the rules and regulation of the partnership (Morozko,
Morozko and Didenko, 2018). Thus in this way the partners are able to make sure that
they can abide by the rules of their agreement and thus can carry out their business
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effectively and efficiently. The Little Dessert Shop's partners have done an agreement in
which they have agreed to run a partnership to ensure that the partnership is able to attain
the different types of goals and objectives.
 Profit-sharing- In a Partnership business, there is a ratio which can be set so as to ensure
that the sharing of the profits can be done in a highly effective manner. In the context of
Little Dessert Shop it is quite important that this profit sharing is done correctly by the
partners so that they are able to attain the goals and objectives.
 Unlimited liability- In a Partnership business, there is unlimited liability of the partners
who are running the business and due to this reason a charge on the personal assets can
be created in the business which can impact the partners. Little Dessert Shop's partners
have Unlimited Liability which is created on them and thus due to this reason the partners
of this business can face various difficulties if their business faces losses.
Advantages of Partnership Business-
 Access to more capital- The Partnership Business can help the management in ensuring
that they are able to access more capital. This therefore can help Little Dessert Shop in
having the access to more capital.
 Better decision-making- The Partnership Business can lead towards better decision-
making. Thus, in this way it can be said that this can be quite helpful for the management
of Little Dessert Shop in ensuring that better decisions are taken.
Disadvantages of Partnership Business-
 Unlimited liability- There is unlimited liability in the Partnership Businesses. Therefore
this can create a disadvantage for the managers of Little Dessert Shop.
 Limited Business Development- In a Partnership Business there is Limited Business
Development. Therefore, in the context of Little Dessert Shop this creates a disadvantage.
Use of Porter's 5 forces
Porter's 5 forces refers to a model in which the impact of the different types of forces is
seen on the businesses (Nobles, 2018). Therefore, In the context of Little Dessert Shop it is quite
important that this model is analysed effectively and efficiently to make sure that the impact of
these forces can be assessed.
The various forces in the context of Little Dessert Shop are as follows-
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Potential of new entrants- This refers to the force which is created by the potential of
new entrants in the organization. Therefore in the context of Little Dessert Shop this force has a
high power because in the industry in which its operates the new entrants can enter the business
easily and therefore provide tough competition to the existing players in the market.
Power of suppliers- This refers to the force which identifies the potential of the suppliers
in the market effectively and efficiently. Thus, In the context of Little Dessert Shop this force has
high power because the suppliers in this industry can put an impact on the overall level of profits
which is earned by the organization.
Power of customers- This means the force which is created by the customers in the
market. Therefore, In the context of Little Dessert Shop this force has a high power because the
customers are quite important for businesses and it is important for them that they are able to
give a higher-level of priority to the demand of the customers so that the different types of goals
and objectives can be attained.
Threat of substitutes- This refers to the force which is created by the substitute products
within the market. Thus, for Little Dessert Shop this is the force which has a low power because
the industry in which this business operates does not has much scope for the substitute products
because the customers here give a higher-level of preference to the quality products and are
willing to pay more price for obtaining them.
Justification- 4 out of 5 forces have a high power and only 1 force has a low power.
Therefore it can be said that Little Dessert Shop operates in a highly competitive market and thus
has to make sure that it is able to operate its business in the right manner to target the different
types of customers effectively and efficiently. Little Dessert Shop has to make sure that it makes
all the relevant adjustments according to the influence created by these forces so that the
Business is able to make sure that it enhances its profitability level and is able to attain a strategic
and competitive edge over the various types of competitors in the market.
Macro-environmental factors
Macro-environmental factors are those factors which exist in the external business
environment of a business organization (Schleich and Fleiter, 2019). Therefore it is important
for businesses like Little Dessert Shop that it takes these factors into consideration so that it is
able to achieve its different types of goals and objectives effectively and efficiently. They are
required to be considered by the businesses because these factors are quite dynamic in nature and
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thus are able to create an impact on the different organizations. The different types of macro-
environmental factors which are considered by the business are as follows-
Political factors- These are the factors like Government policy, Political stability, Tax
policy etc. For a business like Little Dessert Shop it is important that these factors are considered
by it so that it is able to ensure that it can attain the goals and objectives without problems and
issues. It has to abide by the government policy and make sure that it is abiding by the rules and
regulations put in by the government of the country. Also if the country in which the business
operates has political stability then it will be able to maintain an efficiency and effectiveness in
its level of operations. Further, the tax policy of the government must be in the favour of the
business which will allow it to target a higher-level of profitability. In the situation of COVID-19
pandemic, the Little Dessert Shop can make use of the furlough offered by the Government. This
is a scheme where there is 50% support which is being provided by the Government. Therefore,
in this manner it can be said that the managers of Little Dessert Shop can make sure that they
make its use so that they are able to get the required assistance for the business.
Economic factors- These factors like Economic Growth, Exchange Rates, Interest Rates
etc. should be considered by the businesses (Sharma, Agrawal and Khandelwal, 2019). Thus for
a business like Little Dessert Shop it becomes highly crucial that these factors are considered so
that the assessment of the way higher-level of profits can be earned can be made. Economic
Growth is important for the countries and if the country in which the business operates has a
higher-level of growth then it will be helpful for the business to achieve its goals and objectives.
Exchange Rates are required to be set up in the right manner in the countries. This will help a
business like Little Dessert Shop to be able to ensure that it can identify the scope of attaining
higher-level of profits through effectively conducting foreign exchange transactions. Interest
Rates are also required to be set up correctly in the organizations so that they are able to make
sure that the attainment of the goals and objectives in the future can be done by them without
facing problems and issues. Due to the influence of the COVID-19 pandemic, the economic
situations of the most of the countries have been impacted and thus this will also affect Little
Dessert Shop. The reason is that the management may not be able to target very high-level of
profits as it wants to in such a situation. Thus, it will be required to make sure that it makes a
steady progress and therefore is able to enhance its overall profits slowly but steadily.
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Technological factors- These are the factors like Technology incentives, Level of
Innovation, Technological change etc. Therefore it is important for the businesses like Little
Dessert Shop that it is able to give consideration to these factors which will be helpful in the
attainment of higher-level of profits. Technology incentives are required to be given to the
business to make sure that their use is made properly. Level of innovation has to be used in the
right manner so that the business can target the achievement of goals and objectives. Also,
technological change has to be considered by it so that its effective implementation can be
helpful for it in the long-run. These factors can create a particular level of impact on the
Business. This is so because due to the situation created by the COVID-19 pandemic the
Businesses are required to ensure that they are able to make the required adjustments with the
changing technology so that the attainment of higher-level of profitability can be done in a
proper manner.
Influence of these factors on the Business- All of these macro-environmental factors
can create a particular level of influence on the Businesses. This can therefore help Businesses
like Little Dessert Shop to be able to make sure that they are able to make all the relevant
adjustments required to be able to ensure that the attainment of the future goals and objectives
can be carried out in a proper manner. Thus, in this way it can be said that the Businesses like
Little Dessert Shop will be able to make sure that they can attain a higher-level of efficiency and
effectiveness.
CONCLUSION
From the above report, it can be concluded that Business Organizations are the ones who
are required to make sure that they make the use of specific strategies so that the attainment of
goals and objectives can be done by them. A Partnership is a type of business organization in
which there is a presence of two or more partners. The use of Porter's 5 forces is important for
the businesses to analyse the impact of external forces on the business organizations. The
different types of macro-environmental factors are important to be considered by the businesses
so that the impact which they put can be assessed. Therefore, it is highly essential that the
Businesses are able to conduct a proper analysis which helps them in taking of the right decisions
and ensuring that they can manage out their wide range of needs and requirements in a proper
manner. This will be helpful for them in enhancing their profitability level and thus ensuring that
a strategic and competitive edge can be obtained over the competitors in the market.
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REFERENCES
Books and Journals:
Lauring, J. and Klitmøller, A., 2017. Inclusive language use in multicultural business
organizations: The effect on creativity and performance. International Journal of
Business Communication. 54(3). pp.306-324.
Li, Y. and et.al., 2018, January. Blockchain technology in business organizations: A scoping
review. In Proceedings of the 51st Hawaii International Conference on System
Sciences.
Morakanyane, R., Grace, A.A. and O'Reilly, P., 2017, June. Conceptualizing Digital
Transformation in Business Organizations: A Systematic Review of Literature. In Bled
eConference (p. 21).
Morozko, N., Morozko, N. and Didenko, V., 2018. Rationale for the development strategy of
small business organizations using the real options method. Academy of Strategic
Management Journal. 17(2). pp.1-11.
Nobles, C., 2018. Botching human factors in cybersecurity in business organizations.
HOLISTICA–Journal of Business and Public Administration. 9(3). pp.71-88.
Schleich, J. and Fleiter, T., 2019. Effectiveness of energy audits in small business organizations.
Resource and Energy Economics. 56. pp.59-70.
Sharma, A., Agrawal, R. and Khandelwal, U., 2019. Developing ethical leadership for business
organizations. Leadership & Organization Development Journal.
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