Types of Companies: A Comprehensive Analysis

This report provides a comprehensive analysis of the different types of companies in the business sector. It discusses micro, small, medium, and large businesses, as well as sole traders, cooperatives, and limited liability partnerships. The report also explores the impact of external factors on business performance through a PESTLE analysis. Additionally, it delves into organizational structures and their influence on business operations. Gain valuable insights into the diverse landscape of companies and their functioning in the market.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
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Table of Contents
INTRODUCTION......................................................................................................................2
MAIN BODY.............................................................................................................................2
Section 1: Discuss several kinds of companies and how they work......................................2
Section 2: Different companies from sole traders to cooperatives and Limited Liability
Partnerships............................................................................................................................3
Section 3: Explain organizational structures & external elements impacting business.........4
3.1 Examine various organizational structures......................................................................4
3.2 Analyze effect of external factors on performance of business– PESTLE Analysis.......6
Conclusion..................................................................................................................................7
Reference....................................................................................................................................9
Books & Journal:....................................................................................................................9
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INTRODUCTION
Market is wider and has number of organization on the basis of its activities and other
processes are being carried out by entrepreneurs (Azka, 2019). Main purpose of this report is
to understand the different types of enterprises in business sector. It is important for every
entrepreneur to be aware about different forms of business is on the basis of which it become
easier to implement decisions and strategies in most efficient manner. Asda, a multinational
supermarket chain headquartered in United Kingdom. Company deals in basic grocery
products and daily consumable items etc. This report comprises of various types of
companies, different forms of organizations and several types of structures and impact of
external factors.
MAIN BODY
Section 1: Discuss several kinds of companies and how they work
Market consists of different types of organizations like micro, medium, small and
large businesses. It is critically important to focus on these different types of companies so
that resources are used and operations as well as functions are carried out thoroughly.
Micro business:
Micro business is defined as those types of businesses in which employee size is not
more than 10 and also their main focuses on living life in the market in proper manner. This
kind of businesses operates at very small scale and also so they have a limited amount of
investment within a business sector (Bouwman, 2018). For example there are many different
micro businesses like Amazon suppliers, freelance graphic designers are some of the micro
startup businesses.
Small business:
Small businesses are those in which business activities are being carried out at small
scale but bigger than the micro businesses and also turnover amount is more than 6.5 billion
and do not have more than 50 employees. There are many small businesses in United
Kingdom like salons, cafes and restaurants, etc.
Medium size business:
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Medium size businesses are those in which organizational execute their business
activities at medium scale and there main focus on developing innovative and inventing of
new products and services in market. It is also stated that medium size based organizations
and startup contributes at larger scale. The size of medium organization is increasing which
is generating employment opportunities at wider context (Dziobczenski, 2018).
Large size business:
Large size businesses referred to those kinds of organizations which operates at global
scale and has employee size of more than 500 and with investment amount of more than 25.1
million. Balance sheet is also more than 13 million and they focus on developing their
business into foreign and international countries. Large size organizations focuses on
entering into other countries and then distribute their goods production services to consumers
with larger quantity (Connell, 2019).
From the above explained paragraph, it is seen that there are different types of
companies in market and they worked on the basis of there are different formation. It is
critically important for manager of this business is to be active in in field so that it helps them
to manage all the activities in proper manner.
Section 2: Different companies from sole traders to cooperatives and Limited Liability
Partnerships
Business sector is developing at rapid scale and expanding its activities globally.
Moreover, it has been also seen that there are basically different types of companies on the
basis of which entrepreneur carry out its functions and operations. Different form of
comparison of further explained as follows-
Sole trader business:
Sole traders are those businesses in which entrepreneur execute their activities as an
individual and also they do not need to consult with anyone while making decisions.
Moreover risk related with these types of diseases is also low. For example salons
restaurants, cafes, comes under sole trader business.
Partnership:
Partnership is defined as form of agreement in which two person come up with same
business idea in order to achieve common desired goal. It is important for individual to adapt
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this type of business as because it is to be viewed as a most effective type of business
formation in which profit as well as risk is being shared at equal parts. Main benefit of
partnership is that it helps in in expansion of business at larger scale into efficient way.
Limited liability business:
Limited liability business is a kind of a company in which limited liability is about
reducing the personal exposure to financial risk for example if the organization fails then
amount of money for which a person is liable is limited by the business formation structure
(LIU, 2017).
Public limited liability business:
Public limited liability company are defined as a an form of a profit incorporated
enterprise where ownership is being admitted into shares that are publicly traded in form of a
stock exchange. There are various Public limited liability companies Tata motors, Reliance
industries etc.
Cooperative:
Cooperative is defined as a type of a formation of bases which comprises of
association of persons with the united voluntary in order to meet the needs and demands of
social economic and cultural needs (Perboli, 2021).
Therefore this has been analyzed that it is critically important focus on different
formation of organizations so that decision making process are executed in most appropriate
way. This has been further analyzed that it is critically essential to have a relevant
information of these different companies so that it become easier for both managers and
leaders to achieve desired goals within time period.
Section 3: Explain organizational structures & external elements impacting business
3.1 Examine various organizational structures
In business, organization structure is crucial to be understood as because it is defined
as a process through which workflow is being processed within the management. It is duty of
a manager to make sure that most appropriate organizational structure is being carried out on
the basis of which it become convenient to execute market activities properly. In context of
selected organization, there are different types of structure which are further discussed below-
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Functional
Functional structure is defined as a kind of a structure in which business divide its
workflow into different departments based on their functions. Each and every individual as
well as department is well known about their roles and responsibilities and accordingly they
carry out their work. In relevance of chosen enterprise, they have a different form of
functions like marketing, human resource department and many more (Sergeevich, 2017).
Benefits
 Main benefit of this structure is that with the help of this organization is capable of
analyzing the skilled employees who are capable of delivering positive productivity.
Limitations
 Drawback of this structure is that it is not easy to carry out the communication
process in these function units. Also it leads to lack of understanding among the
departments and employees.
Divisional
Division is a kind of structure one which every group and employees are divided into
different departments like marketing finance, IT and many more. In reference of selected
enterprise, their doctor and carry out their work process by following the divisional structure
in management (Trad, 2021).
Benefits
 Main advantage of this organization structure is that employees are aware of their
roles and responsibilities in a specific department.
Limitations
 Drawback of this structure is that employees limits their potential ability into a
particular department which negative impact upon the attitude and behavior.
It has been seen that there are different types of organizational structures through which
enterprise implement their business formations and accordingly they make decisions as well
as a process the other activities.
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3.2 Analyze effect of external factors on performance of business– PESTLE Analysis
Business environment comprises of external and internal factors which have a wider
impact on performance of business. External factors are those which occur outside the basis
and are non-controllable which also makes it difficult for organizations to boost their sales
and profit ratio.
PESTEL Analysis
It is a type of a tool which is adopted by enterprises with purpose of determining and
analyzing the external factors that affect overall business structure and operations.
Implementation of this analysis is not easy because it requires detailed information and
proper research of market (Yu, 2018). This method is also a time consuming process because
wide range of skilled and knowledge is needed to execute this analysis in context of
organization.
Political factor
It is the first element of analysis in which it focuses on different factors like
environmental law, labor Law, foreign exchange rate policy etc. In viewpoint of chosen
entity, brexit created a massive impact on business which makes it difficult for them to take
decisions (Zeuli, 2017).
Economic
This is another component of PESTEL in which it includes elements such as inflation
rates, tariff and non-tariff etc. Due to changing rules and policies in food and beverages
sector of economy Asda is unable to expand its business into many Asian countries.
Social
Social factors are those which consist of elements like behavior, attitude, disposable
income of group of people, etc. In relation of selected company, this segment their market on
basis of these factors and a properly analyses and determine the behavior of people towards
their product.
Technological
Technological sector comprises of use of internet technology and advanced software
as well as tools. It is seen that each and every week customers are mostly active on internet.
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In consideration of Asda, they regularly update their official website and ensure that it uses as
well as customers are able to shop their products and services through online ecommerce
channels easily.
Environmental
Environmental elements are those which focus on green agenda, waste management,
etc. Due to the increase awareness of environmental practitioners, it is becoming necessary
for each and every enterprise to protect the environment. So, ASDA has focus on reducing
the emission by 30% till 2025 (Azka, 2019).
Legal
Legal factors are those which include rules and regulations, policies etc. It is
important for business to execute their activities with properly following all rules and
regulations link to with country e and government association so that problem does not
occur. So, selected company follows all the food and beverages industry and ensures that
high quality of product is being distributed in market (Bouwman, 2018).
It has been examined to that external factors are needed to be properly determined
through which company is able to implement strategies in effective manner.
Conclusion
After a brief analysis of above report, it has been further analyzed that it is critically
crucial for every entrepreneur to have relevant information about different types of market
and companies so that all goals are accomplished in appropriate manner. So discussions have
been made about different types of company’s structures and their impact on business. Also
PESTEL analysis has been described. So it is seen that this is environment has a deep impact
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on organizational structure as well as productivity which is properly to be analyzed in order
to achieve competitive advantage
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Reference
Books & Journal:
Azka, 2019. Assessing the impact of external debt on economic growth in Sri Lanka: the
period from 1987 to 2017.
Bouwman, 2018. Achieving agility using business model stress testing. Electronic Markets,
28(2), pp.149-162.
Connell, 2019. External factors influencing length of stay in forensic services: A European
evaluation. Psychiatria polska.
Dziobczenski, 2018. Requests from Companies and Requirements for Design Education in
Brazil: where do they meet?. In Design Research Society International Conference
(pp. 2823-2835). Design Research Society.
LIU, 2017. SWOT and PESTEL Analysis on the Coordinated Development of New
Urbanization and Agricultural Modernization in Heilongjiang Reclamation Area.
DEStech Transactions on Economics, Business and Management, (eced).
Perboli, 2021. Assessment of Post-Crisis Financial Performance and Actions in Italian
Companies.
Sergeevich, 2017. Zubarev IS Analysis of the stability of modern enterprises in conditions of
instability of external factors. LBC 72, p.6.
Trad, 2021. The Business Transformation Framework and Enterprise Architecture
Framework for Managers in Business Innovation: An Applied Holistic
Mathematical Model. International Journal of Service Science, Management,
Engineering, and Technology (IJSSMET), 12(1), pp.142-181.
Yu, 2018. PESTEL Model Analysis and All-for-One Tourism in Luoping. Journal of Qujing
Normal University, 37(5), p.60.
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Zeuli, 2017. Small business growth. Economic Development Journal, 16(1), pp.15-21.
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