This document explores the definition, characteristics, and examples of different types of businesses, including micro, small, medium, and large organizations. It also discusses the impact of organizational structure and external factors on business productivity. The document uses Unilever as a case study to analyze these concepts.
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Business in Practice
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Table of Contents INTRODUCTION...........................................................................................................................1 MAIN BODY...................................................................................................................................1 SECTION 1..................................................................................................................................1 SECTION 2..................................................................................................................................3 SECTION 3..................................................................................................................................5 CONCLUSION................................................................................................................................7 REFERENCES................................................................................................................................8
INTRODUCTION Business is termed to an enterprising firm which is engaged professional and commercial related practices(Bos and Millone, 2015). In business, effective practices are set of ideas and guidelines that represents most prudent course of actions in pertaining situation. In business, best practises are framed by authorities including regulators and governing bodies for smoothly performing workings towards objectives. For the assessment, Unilever is selected company that is a large sized venture having headquarters in the city of London, United Kingdom. It is one of oldest multinational entities whose offerings are available in more than 190 nations. The assessment investigates about micro, medium size, small as well as large size business as per definition, characteristics and suitable example. Further, it explains distinct entities ranging from sole traders, limited liability entity, cooperative and partnership. It also discusses various business structures and the ways external factors impacts on practices and performance of company. MAIN BODY SECTION 1 Definition, characteristics as well as examples of different business Business is a delineated as an activity to generate living of an individual and making revenues through manufacturing and selling. In other terms, it is an organised effort of people for producing together with selling commodities for profit(Buckley and Ghauri, 2015). The definition and other details of various business that are investigated by analysts of Unilever are as follows: BasisMicro organisation Small organisation Medium organisation Large organisation DefinitionMicroenterprises are defined as units of business that hire fewerpopulation and earns for day to day living. Small company is described to a not forprofit businessthatis independently owned,operated Medium businessesare termedwithin CompaniesAct 2006as organisationwith Acompanywhich have manpower of morethan1000 people and diverse productportfolio formakinglarge 1
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and controlled.workforce of 250 peopleandis familyowned institution. number of money. FeaturesFeaturesofmicro businessesare mentioned below: Micro enterprises employ around10 people. Theseare financed through micro credit. These operated for providing goods within local communitie s. Characteristics of small organisations areas follows: Small organisati onshave annual turnover ofapprox £6.5 million. They target small market segment. Attributesof medium businessesare underneath: the employee size of the company isupto 250 people. The ownership ofthe business is separated from organisati onal manageme nt. Largebusinessis characterised as: Profit makingis main objective (Buppert, 2020). The business have diverse product portfolio. Ittargets overseas customers. The combined turnoverof the entity is nearby £ 1.7 trillion. ExampleProvizisamicro entitywhichis establishedwith goalof CafePodCoffee Co. is a kind of smallbusiness thatrunswith Verdant Leisure is a type of medium organisationthat isabespoke Unileverisan exampleoflarge businessthathave diversproduct 2
manufacturing commodities which have possibilities to makeadifference towardslivesof customers. spiritfor producingstrong aswellas excitingcoffee forcoffee drinkersthatare adventurousin nature. vacationpark operatorwhich offersself catering lodge as wellascaravan holidays. portfolioofbaby food,energy drinks,personal careandmany more to make huge profits. SECTION 2 Definition, characteristics together with examples of distinct companies In business environment there are different types of companies which are operating for the purpose of selling their products and services in contemporary environment and attaining the higher profits. For each organization it is important to analyse their situation and formulate the planning accordingly which can help to manage the business and attain profitability(McDonald and Eisenhardt, 2020). The description of different companies are as defined: BasisSole traderPartnershipLimited liability Public limited liability Cooperatives DefinitionThismeansa business whichis operating by a singleperson ashavingall responsibility andpowerto make decision in single hand isknownas soletrader Thismeansa business whichis operatingand handlingby two and more thantwo personwhich canhelpto increasethe organizational performance This means an organization whichis operatingand handlingby manypeople but up to their limitswhich canhelpto increasethe organizational performance This is public based companythat is operating by peoplewho arrangethe fundsby issuingshare publiclyand runthe business effectively. Thiscanbe definedas organization whichis authorisedby thestateas single organization and recognised forfillingthe needsand wantsof 3
(Bennettand et.al., 2019). andmaintain all activities. and profitability. societies. CharacteristicsSoletraderis ownedby singleperson asitis operatingat small level. Theperson hasunlimited liability. Thisperson enjoysentire profits. Thisbusiness doesnot followsany government regulations. Contractual relationship betweentwo andmore partners. Maintaining flexibility. Partnersare sharing mutual benefits. Designa partnership deedby decidingthe profit and loss ratio. Equal rights. Thisentails separatelegal entitythatis different. Limited liability protection that save members fromhigher losses. Management andoperation flexibility. Taxation flexibility providedin this (Füllbrunn and Luhan, 2020). Thereis separatelegal entity. Legal capacity toown propertyand incur debts. Sharesare offeredby publiclimited company whichare transferable. Fundsare collected from publichence theyhave voting rights. This corporationis ownedby many shareholders astheyare partof organization. Thishas limited liability. This has their own lifespan. Maintaining business securityand continuity. ExamplesCafePod Coffee Co. is a smallsize company whichis operatingby sole trader by offering differenttaste ProvizSports is assessed as partnership organization which establishedby twobrothers Anthonyand Rupert Langly Verdant Leisureis privatelyhold company whichis operatingby shareholders by diving their taskand Unileveris categorisedin publiclimited companythat isproviding multinational consumer goodsby arrangingall Heartof Englandis consumerco- operativein UKthatis sellingthe varietyof consumer productsand 4
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of coffee. The person who is operating businesshave power to make decisionand puteffortsto expandthe businessin challenging environment. Smithfor providing design,high visibilityof sportswear. Thepartners understand needsof peopleand bringthe productsand services accordingly. liability.This organization offersholiday homesto customers. activitiesand functions. The organization is maintaining thesalesand profitability by allocating rolesand responsibilitie sbetween members (Andrews, Ferry, Skelcherand Wegorowski, 2020). servicesin changing environment. Thisis operatingfor the purpose of fillingsociety needs. SECTION 3 Identification of distinct organisational structures as well as explanation about how structure of company affects business productivity Organisational structure comprises of relationships among multiple members of a firm. In other words, it is a framework in which managerial addition to operational practices are undertaken(Caldera, Desha and Dawes,2019). Effective organisational structure results in prompt,usefulaswellasintelligentdecisionmakingwhichassistbusinesstoimprove productivity along with raising overall efficiency. Distinct kinds of organisational structures are as identified: Hierarchical organisational structure: The structure is said to chain of command in venture wherein information from top executives to general employees. In this structure, passage of information takes huge time because of which decision making are not done promptly that leads to affecting productivity of business adversely. If administrators of Unilever uses the 5
structurethenthathavetofacecomplicatedcommandchainsandinconsistenciesin management. Divisional organisational structure: This kind of structure segregates whole business into smaller divisions based on specialised areas. If managers of Unilever follows the structure then it allows wider operational efficiency as all human resources with shared knowledge, abilities and skill sets works together for achieving productivity. However, the structure creates limitations in communication among divisional groups that decreases flexibility addition to innovation resulting in reduced productivity. From the discussion, it is analysed that managers of Unilever have adopted divisional organisational structure in which the business is divided into various components on the basis of focus (Young, 2018). The structure helps the company to manage development, production, promotion, distribution and sales of all its consumer products across international market that impacts positively on its productivity in terms of sales volume and revenues. Use of PESTLE Analysis for explaining the ways different kinds of external factors affects business performance PESTLE Analysis is used as framework to analyse macro environmental factors that have chances and capacity to affect organisational performance. Unilever is a multinational company that operates from UK and faces changes in external situations. With the help of PESTLE Analysis, analysts of Unilever have analysed together with monitored various external factors that affects its performances in the market. The factors and the way they affects performances of the company are below: Political: It is related to how political system intervenes in specific industry and influences their performances(Mougayar,2016). In UK, political leaders are responsible to execute trade restrictions and governance. For example, Brexit was a decision of political system of UK in which UK based organisations including Unilever have to close down stores in cities European Unions that affected negatively in its performances to make money. Economic: UK is a country which have highly developed economy. However, in context to Unilever, factors such as purchasing power of consumers impacts on Unilever as when its products are not in demand than consumers do not purchase them which influences its cash flows in negative manner. At same time, inflation and whims of audiences also influences performance of the entity largely. 6
Social: This kind of external factor scrutinise social surrounding of a market as well as gauges elements such as population analytics, cultural trends, attitudes of consumers and hence forth. In UK, population have desires for innovative and distinguished commodities. In context to various of Unilever's products, they emphasis more on personal care together with well being. The entity expresses powerful desires to assist society feel good(Zellweger, 2017). However, the attitude of citizens of society changes rapidly that affects performances of Unilever widely. Technology: Within consumer market of UK, technology is changing fastly so that new products as per desires of target audiences are manufactured and delivered promptly. In relevance to Unilever, the entity is focusing to improve its digital marketing addition to selling methods. The business have higher automation level that allows it to supply commodities to far storelocationsquickly.However,managershaveanalysedthatadoptingorupdating technologies Legal: The factor is related to legislations and governance that affect environment of company in a nation as there are various policies which are maintained for the business themselves. In UK, changes in laws such as Minimum Wages Act, Data Protection Act and many more affects productivity of Unilever as the managers have to made key modifications in their policies that matches the changes. It takes huge time and results in hampering organisational productivity to large extent(Zizlavsky, 2016). Environmental: It comprises all the influences which are related to natural environment of a nation. In UK, environment factors is crucial for the industry in which Unilever operates as there are various initiatives which are mandatory for the company to adhere. Some includes reducing carbon emission, improving greenery and so on. When Unilever fails to protect the environmentanditsactionsleadstohamperingenvironmentalaspectssuchasclimate, environmental offsets and so on them it have to make its all focus towards improving them. Becauseofthis,thefocusofcompanylackstowardsbusinessactivitiesthataffectsits performance largely. CONCLUSION From the report it can be concluded that different types of business are exists in the environment which are operating by different person such as sole trader, partnership, public limited liability, and corporation. The structure of organisation is used to maintain effective communicationandattainbusinessgoals.Organisationalstructureassistineliminating 7
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duplication of activities, faster decision making, better communication, improving operational efficiency,reducing employee conflicts and greater productivity. PESTLE analysis is used to analyse how external factors influences a business. There are various elements of macro environmental factor that leads to affecting productivity of firm. REFERENCES Books and Journals: Andrews, R., Ferry, L., Skelcher, C. and Wegorowski, P., 2020. Corporatization in the Public Sector: Explaining the Growth of Local Government Companies.Public Administration Review.80(3). pp.482-493. Bennett, R. J., and et.al., 2019.The Age of Entrepreneurship: Business proprietors, self- employment and corporations since 1851. Routledge. Bos, J. W. and Millone, M., 2015. Practice what you preach: Micro finance business models and operational efficiency.World Development.70.pp.28-42. Buckley, P. J. and Ghauri, P. eds., 2015.International business strategy: theory and practice. Routledge. Buppert, C., 2020.Nurse practitioner's business practice and legal guide. Jones & Bartlett Publishers. Caldera, H. T. S., Desha, C. and Dawes, L., 2019. Evaluating the enablers and barriers for successful implementation of sustainable business practice in ‘lean’ SMEs.Journal of Cleaner Production.218.pp.575-590. Füllbrunn, S. and Luhan, W. J., 2020. Responsibility and limited liability in decision making for others–An experimental consideration.Journal of Economic Psychology.77.p.102186. McDonald, R. M. and Eisenhardt, K. M., 2020. Parallel play: Startups, nascent markets, and effective business-model design.Administrative Science Quarterly.65(2). pp.483-523. Mougayar, W., 2016.The business blockchain: promise, practice, and application of the next Internet technology. John Wiley & Sons. Zellweger,T.,2017.Managingthefamilybusiness:Theoryandpractice.EdwardElgar Publishing. Zizlavsky,O.,2016.Innovationperformancemeasurement:researchintoCzechbusiness practice.Economic research-Ekonomska istraživanja.29(1). pp.816-838. Online: Young.J.,2018.Unilever'sOrganisationalStructure.[Online].Availablethrough: <http://panmore.com/unilever-organizational-structure-product-innovation> 8