Types of Business and Organization Structure: A Study on Marks and Spencer

This report explores different types of businesses in the UK, including micro, small, medium, and large businesses. It also discusses the organization structure that Marks and Spencer may follow to increase productivity. Additionally, the report includes a PESTLE analysis of Marks and Spencer to identify external factors that may impact its performance.

BUSINESS PRACTICES

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
SECTION 1......................................................................................................................................1
Explaining types of business with their characteristics and examples-......................................1
SECTION 2......................................................................................................................................2
Defining sole trader, partnership and company's with examples- ..............................................2
SECTION 3......................................................................................................................................3
Organization structure that Marks and Spencer may follow- ....................................................3
PESTLE analysis of Marks and Spencer....................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business practices are activities that company used to attain its objectives. Similarly, the
present report will shed a light upon different business run in UK. For the present report Marks
& Spencer has been selected which deals in clothing and other retail products or services. The
report will explain about types of businesses along with their examples. Further, the study will
also describe about sole trader, partnership firm, limited liability and public limited company.
Moreover, it also explains different types of organization structure that may follow by
organizations and also identify how it assists to increase its productivity. Lastly, it identifies
different external environment factors that might affect the business performance.
MAIN BODY
SECTION 1
Explaining types of business with their characteristics and examples-
Micro businesses- this refers to business which are small production activities and need
small capital to start business these are known as “ micro Enterprise”. Some characteristics to
list under micro business- Employees less than 10 on an average or less than 10, total of balance
sheet should not exceed more than 3,16,000 euro dollar and turnover not more than 2 million
euro dollar. Micro business have chance to achieve success due to less capital to maintain, fewer
employees to guide and control. Some micro business become less productive due to less
employees and extra burden on them. Example of micro business is 'The Willoughby book club'
it is subscription provider books in UK. characteristics of small business-they are small of
capital and employees but in references to country like UK, where less attraction of businessmen
towards large business has more contribution to economy.
Small business- This is defined as a company that have annual turnover exceeding 2
million but less than 10 million dollar and employee count between 10 and 50. like-'Marshfield'
Bakery it is a family- founded bakery to made handmade goods in United kingdom (Braunholtz-
Speight and et.al., 2020). Like micro business people are more focused on small businesses
because they are small but have large no. of small contribution will make big impact on
economy.
Medium business- in medium enterprise the employees size is between 51 and 250,
turnover over 10 million and under 50 million. Such as- 'John good shipping' founded in 1983
dealing in logistic of goods through ships. Some characteristics of medium business are they
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need not higher capital and employees size is also less will lead to become more efficient and
control on business. This types of business provide better opportunities for success.
Large business- business that have more than 250 employees and turnover must be over
50 million. Business have large production capacity. Copmany need to follow many rules and
regulation to get success just because in larger businesses employees count is very high and need
extra effort to maintain retention in employees. Some time control become difficult due more
production activities and less collaboration between employees. Example of large business is
'Unilever' since 1929 In FMCG business and have more than 400 brands in respective industry.
SECTION 2
Defining sole trader, partnership and company's with examples-
Sole traders- sole trader is a person who is self-employed and is the owner of own
business with nun of employees based. in sole trader individual is not liable to fulfill all
direction that are imposed on limited liabilities' company. It needs not to follow any rules and
regulation that are imposed on companies. Example of sole trader can be as shopkeeper, hair
stylish, art studio or IT consultation service etc. there are some benefits of sole trader like they
are not in need to fill any regulation that is made for company's, Full control, profit to owner and
less chance privacy breach.
Partnership- It is the deed between of two or more partners to undertake any business
activity and decided all the parts like profit and loss sharing, ratio of capital to be put, interest on
drawing and loan to be given to partnership firm. This is a process of making partnership firm
under act of partnership1890.
Characteristics of partnership firm-
All partner will share profit and loss according to predetermine ratio and capital
structure. Imposed by law partnership firm has some law to follow and if any things gone with
firm they need to follow law applies on partnership. Partnership firms have unlimited liabilities,
partners have liabilities to the extent of loss means is partner need extra money to fulfill his
liabilities than he need to put extra capital/money. We can look to firm like
NotOnThehighStreet.com this is a partnership firm of Holly Tucke and Sophie Cornish.
limited liability business- name of business reflect its definition, liability of director and
shareholder will be limited too only extent of debt of business. Characteristics, company need to
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register it as artificial person or as statutory body in this type of company personal assets of
director and shareholder is protected. In limited liability company's share can not be transfer or
traded out of company, however company may issue new share but only to existing shareholder.
Reduce control unlike partnership firm control is less in this company because all shareholder
and director has right to take part in decision-making. Some example of limited liability are
Greenergy pvt. Ltd which deals in fuel industry, Setemcor Pvt Ltd works in commodities market
etc.
public limited- public limited company is allowed to issues new share to public and
existing share can be transfer. This types of company' director and shareholder has liabilities up
to the extent of their invested money, PLC need to right word 'Ltd' at the end of their name..
Company need to register is self in company Act and followed all the rules and regulation that
are imposed on them.
Some basic characteristics of PLC are as follows-
Minimum two directors to be appointed, company secretary need to be appointed,
certificate of in corporation is mandatory to start business. Public limited company has no
limitation of issue of share and transformation of share, but minimum capital value should be
maintain and that is 50,000 euro dollar. These type of companies are not very much popular in
united kingdom there are only 5% of company are public listed rest are private limited
companies. Examples are BHP Ltd in mining sector, HSBC Ltd in financial sector, British
American Tobacco Ltd as in Food and tobacco etc.
Cooperative- Cooperative society is a group of member working as commercial
organization in fever of member. This type of societies need not to follow rules and regulation
that need to followed by companies. Some cooperatives are Daily Bread Co-operative,
Edinburgh Bicycle Co-operative, Highburton Co-operative Society etc.
SECTION 3
Organization structure that Marks and Spencer may follow-
Functional organization structure- In this structure a department must be made and
follow, all works and instruction is being followed in predetermine hierarchy. In means all
functions are divided is small department and manager/ leader is appointed, if any buddy need to
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give feedback than they need follow hierarchy. Similarly, if some instruction is provided form
top management than it will flow according to the function areas.
This type of structure gain employees focus towards their job role given to them, all
employees function are fixed, and they are in position to better understanding and focused to
their role. It makes an environment where employees fell more comfortable and self-motivated,
it also allows organization to make easy scale ability to enhance its size (Li, Hemar, and Zhu,
2021). Some time its became difficult to follow the hierarchy pattern to some urgent work, it
will create disagreement between department. Some functions are dependent on each other so it
will make delay is work and productivity. Many organizations where functional structure is used
some small group being developed in department by reason or by some less attraction in
department this group start making their personal goal and want to achieve them first that will
reduce their faith in company. Some times many departments more complexity because
dependence of each will make work difficult to achieve. So leader need to provide consideration
to these point to increase overall productivity of organization.
Divisional Organizational structure- in this structure organization create its division on
the basis on their geographical location or products. In all division necessary resource and
support is provided to fulfill work that is a sing to division. This type of structure enable large
companies to make flexibility to independence for working as one production unit.
Every division is working as independent unit so every division is liable for work that is assign
to them so it will make better accountability. It leads to increase team working because in
division employees are in position to get interaction with each other that will create more
collaboration and unity. Some times it also helps in better responsive towards frequent change in
external change, every division can find out factor that will impact them and need action. This
all will lead to increase in productivity and work efficiency.
PESTLE analysis of Marks and Spencer
PESTLE analysis- this is a tool of analyzing external factors that can effect production
and administrative function, so it is need of organization to find out that factors and make
strategies to talc them. In PESTLE in according to “Marks and Spencer”
'Political factors- every organization is working in and under some government rules and
regulation that are directly related to political condition in that country. It means if organization
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is planing to make some expatiation they firstly need to look political condition. Some time this
factor lead to unsuccessful activities. In company like M&P which is working in retail industry
necessary to evaluate political factor it can be change any time.
economical factor- This actor very important factor to analyzing external factor because
all business can be grown if economical condition of that country is getting growth or slow
going up. If overall condition of economy is decline that company need to make some effort to
survive and stability in functioning it is directly related to purchasing power of people of that
country.
Social-cultural factor- all organization is working to get more profitable that can be
achieved by providing more customer satisfaction (Bhattarai, Kwong, and Tasavori, 2019). For
that organization need to follow social factor, in reference to Marks and Spencer, they need to
follow new trends that are in demand to increase customer and being more profitable. In retail
industry where more competition is to be faced in is more important to retain old customer and
attract new that can be possible through analyzing social and cultural factors.
'Technological factor- in company which is working is retails industry where innovation
in technological factors happen very quickly that can be in anything like change in machinery,
logistic pattern and many others. So company need to adopt that change to avoid reduction in
production and productivity. Some trend in technological factors are online shopping and
customers review use of solar energy in production.
Legal factor- another external factor that will need to make consideration is legal factor,
some time legal law that have impact company. There are two factors that have impact that are
Sustainable produce and Fair trade first is to maintain brand image as luxury brand, second is
fair trade that is company is need to maintain fair trade.
Environmental factors- In organization like marks and Spencer, which is working in
macro environment because it has working in retail industry (Singh, and et.al., 2021). That is
more reliable on environment for natural resources and other activities. So in is important for
them to timely look for analyzing environmental factor that can be change due to reason natural
disaster.
CONCLUSION
From the above study, it has been concluded that there are different types of businesses
within UK which includes small, medium and large, and they all have their own objectives.
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Also, among them, large business are not successful in the terms of finance. Study also
summarized about organization structure that can Improve productivity and work efficiency by
selecting specified organizational structure. Further, it has been summarized from the report that
PESTLE analysis is used to determine the external environment of Marks and Spencer that
impact upon its production directly.
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REFERENCES
Books and Journals
Bhattarai, C.R., Kwong, C.C. and Tasavori, M., 2019. Market orientation, market disruptiveness
capability and social enterprise performance: An empirical study from the United
Kingdom. Journal of Business Research.96. pp.47-60.
Braunholtz-Speight, T. and et.al., 2020. Business models and financial characteristics of
community energy in the UK. Nature Energy. 5(2). pp.169-177.
Singh, P. and et.al., 2021. A Study on Nestle Promotion Strategy. International Journal of
Accounting & Finance in Asia Pasific (IJAFAP). 4(1). pp.60-70.
Wang, F. and Shao, Z., 2020. Study on the variation law of bamboo fibers’ tensile properties and
the organization structure on the radial direction of bamboo stem. Industrial Crops and
Products. 152. p.112521.
[Online]
PESTLE Analysis of Marks and Spencer. 2021. Available through:
<https://pestleanalysis.com/marks-and-spencer-pestle-analysis/>
Types of Organizational Structures. 2021. [Online]. Available through:
<https://online.pointpark.edu/business/types-of-organizational-structures/>
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