Business Environment: Types of Organizations, Legal Structures, Competition Policy, Fiscal and Monetary Policies, and Globalization

This report provides an overview of the different types of organizations in different sectors, including sole proprietorship, partnership, corporation, and limited liability company. It explains the advantages and disadvantages of each legal structure and the differences between public and private ownership. The report also assesses the UK competition policy and the legislative framework surrounding anti-competitive practices. It discusses the objectives and fiscal and monetary policy instruments the government can use to regulate the economy. Lastly, the report focuses on globalization and how it impacts business, competition, and the economy.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
An introduction to provide an overview of the different types of organisations in different
sectors.....................................................................................................................................1
An explanation of the different legal structures including their advantages and disadvantages
................................................................................................................................................2
The differences between public and private ownership including the different forms of
financing used for both...........................................................................................................3
An assessment of the UK Competition policy and the legislative framework surrounding
anticompetitive practices........................................................................................................4
How the Competition and Markets Authority operates to review business practice and impact
on the consumer......................................................................................................................4
An understanding of the objectives and fiscal and monetary policy instruments the
government can use to regulate the economy.........................................................................4
An understanding of globalisation and how it affects business, competition, and the economy
................................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment is defined as collection of both external and internal components
that could impact business functions of companies. Internal environmental factors are in control
of companies whereas external components are beyond their control. The following report
explains different types of organisations that operate in various sectors (Rennung and et. Al,
2022). The different legal structure along with their advantages and disadvantages are also
mentioned in this report. This report also covers difference between private and public ownership
as well as several forms of financing these sectors use. Furthermore, an assessment regarding UK
Competition policy and legislative framework surrounding anti-competition practices is also
provided. The discussion about fiscal and monetary policies that government uses to regulate
economy is also being mentioned in this report. Lastly, the focus is paid on globalisation and
how it impacts competition, business and economy.
MAIN BODY
An introduction to provide an overview of the different types of organisations in different sectors
Sole Proprietorship
This is the most popular and simplest type of business ownership where single owner is
responsible for operating business operations. The single owner is Accountable for taking
decisions and all the liabilities as well as debts.
Partnership
Under this type of business ownership there are two types of partnerships that are limited and
general. Under general partnership, both partners are responsible for investing money com labour
and other components as well as liable towards business debts. On the other hand limited
partnership need formal agreement between both the owners (Vording, 2021). They must also
file a certificate of partnership with the state.
Corporation
Corporation are defined as separate entities and are regarded as a legal individual. This simplifies
that profits created by corporations are taxed as personal income of the organization. Any
income distributed to stakeholders as dividends a text again as personal income of the owners.
Limited Liability Company (LLC)
1

This kind of business is similar to limited partnership as it gives owners with few liability while
giving them some income advantage.
An explanation of the different legal structures including their advantages and disadvantages
Sole proprietorship
Advantages of sole proprietorship:
 The single owner is subjected to gain all the profits earned by business.
 Under this type of business ownership there is very few regulations which needs to be
followed.
 The owner is flexible and free to take decisions regarding business operations.
Disadvantages:
 The major disadvantage that this type of ownership experience is that single owner is
liable for all the debts.
 The equity of the company is only limited to personal resources of owners.
 It became very difficult for a single person to implement innovative ideas which could
impact market position of the company (Vainio and Nippala, 2019).
Partnerships
Advantages of partnerships:
 The main advantage that this kind of business include is sharing of all the resources.
 Each partner is responsible for taking decision that decreases stress and pressure from
owners.
 Both partners bring more innovative ideas and large skilled employees who could bring
productivity for the company.
Disadvantages:
 The decision have to be made and approved by both the partners as well as they are both
responsible for debts or losses.
 Selling of business to other companies become difficult part as it become complicated to
find new partner.
 The partnership of the company would only be ended if both partners agreed(Steigele and
Haeufl, 2019).
Corporation
Advantages of a corporation:
2

 This type of business limits the liability of owner to losses or debts.
 The losses of profits earned by companies belong to the corporation(Anomah, 2019).
 Personal assets of the owners cannot be seized by the government in order to pay debts
occurred during business losses.
Disadvantages:
 The operation of corporate entities are very costly.
 The launching of corporation in the market requires large Investments and complicated
paperwork.
Limited Liability Company (LLC)
Advantages of an LLC:
 Limits liability to the organisation shareholders for debts or losses.
 The profits of the LLC are shared by the owners without double-taxation.
Disadvantages:
 Ownership is limited by certain state laws.
 Agreements must be complex and comprehensive.
The differences between public and private ownership including the different forms of financing
used for both
Private ownership is defined as companies that are operated by people who want to earn profit
and maximise their market position. The profit or loss earned by business entities in private
sector is associated with their owners and they are not liable to provide details to the public. On
the other hand public ownership is defined as those business entities where there are multiple
owners and people have also invested in those organizations. Public companies are liable to give
profit and loss statements to the people who have invested in the company (El Namaki, 2019).
Private finance is defined as study of expenditure and income that are borrowed by business
organization in terms of loans and Angel investors. These finances are adjusted according to the
spending of an individual on the basis of their income. Whereas public finances are associated
with expenditure and income that are borrowed by government. Private finances take loans to
maximise their profit whereas public companies take funding in order to promote social
campaigns. Private organization could take loan from bank, investors play and other sources.
Public organization gather their funding from social campaigns and from general public.
3

An assessment of the UK Competition policy and the legislative framework surrounding
anticompetitive practices
Competition law look towards practices that restrict competition to damage of consumers.
This involves mistreatment of dominant market position, takeovers or mergers, anti-
competitive agreements among companies and any other unethical actions that could lead to
substantial decrement of competition. In the UK, the Competition and Market Authority (CMA)
is responsible for implementing competition laws. The legislative framework for the country
regime is implemented by Competition Act 1998 and Enterprise Act 2002. The prohibition in the
country law related to abusing dominant market place and anti-competitive agreements were
supported and underpinned by equivalent provision in the EU law. The CMA is presently
accountable for all anti-competitive practices that could impact the marketers and consumer of
the UK (The UK competition regime, 2021).
How the Competition and Markets Authority operates to review business practice and impact on
the consumer
The Competition and Markets Authority works to promote competition for the advantage
of customers included both internal and external people in the UK. The respective organisation
has employees in London, Cardiff, Edinburgh and Belfast. The organisation ensures that
consumers are provided with good deals during their purchasing activity of products and
services. The main responsibilities of this organisation include investigating mergers between
different companies in order to ensure that they are not reducing competition. The organisation
also investigate the whole market if they examines any consumers and competition issues. The
next accountability involves taking actions against firms and people that take part in anti-
competitive behaviour. This firm also defend consumers from any unfair trading practices. It also
motivates government and different regulators to utilise competition effectively on the behalf of
customers (About us, 2021).
An understanding of the objectives and fiscal and monetary policy instruments the government
can use to regulate the economy
Monetary and fiscal policies have a significant impact on economic activities and because of this
reason it is very important for companies to be aware of the tools related to both these policies.
Government could impact performance of their economies by utilizing combination of fiscal and
monetary policies. Monetary policies are defined as central bank activities which are directed
4

towards impacting the quantity of credit. On the other hand fiscal policies is defined as the
seasons that government takes related to taxation and spending. These two policies impact
economy through different approaches. Money used to meet three essential functions which
include medium of exchange, give strong wealth and give society with sufficient unit of account.
The main purpose of monetary and fiscal policy is related with development of economic
environment in which growth is positive and stable along with low inflation (Wadin, and
Ahlgren, 2019). Furthermore, the main purpose is to steer the underlying economy in order to
maintain economic bombs so that they do not expand periods of negative or low growth along
with higher level of unemployment. Under this stable economic environment, householders
could feel safe in their spending and saving decisions, On the other hand companies could pay
focus on their investment.
An understanding of globalisation and how it affects business, competition, and the economy
Globalization is considered as leading factor which has become important component in
business. This concept majorly impacts society, economy, business functions an environment in
several ways through which all the companies get impacted because of modifications in the
market. These modifications are mostly associated with enhancement in competition and
continuous changes of information transfer as well as technology. In order to mitigate these
changes organization are required to make strategies that could help them in enhancing their
market share on international level. Globalization results in enhancement in competition among
the companies on international level. This competition could be associated with products or
services offered by companies on the basis of cost or price, technological updating, target
market, quick production, quick response and many other activities by organizations (Seifert,
LaMothe, and Schmitt, 2022). When a company manufactured with low cost and treat those
products on cheaper rate they will able to enhance their market share.
Globalization helps organization in expanding their market share and customer base through
entering New market. It also helps them in understanding demands and market gap of certain
demographic areas which they could fulfil by providing products and services. Globalization also
help many nations in enhancing their economy through providing employment and earning
profit. Through globalization companies are also able to update their technologies and innovate
queue products or services that helps them in enhancing their profitability along with market
share. This also help them in accomplishing competitive advantage over their rivals as it assist
5

them in tapping those markets in which there other competitors are not present.
CONCLUSION
From the above report it has been analyse that there are different type of business organization
which are owned by multiple number of people according to their requirements. It has also been
analysed that these business organizations have their own advantages and disadvantages which
entrepreneurs must considered before establishing their companies in the market. Private and
public ownership are different from each other as well as they fund themselves in distinctive
manner. It has also been analysed that government of the country has taken effective measure to
reduce negative competition in the market and provide positive experience for the customers. It
could be concluded that globalization play a very important role in increasing the market share of
business an enhancing economy of the country.
6

REFERENCES
Books and Journals
Rennung, F. And et. Al, 2022. Managing Complexity in Manufacturing Service Processes. The
Case of Large Business Environments. In Sustainability and Innovation in Manufacturing
Enterprises (pp. 185-219). Springer, Singapore.
Vording, R.M., 2021. Harvesting unstructured data in heterogenous business environments;
exploring modern web scraping technologies (Bachelor’s thesis, University of Twente).
Vainio, T. And Nippala, E., 2019. Deep renovation in different business environments. In Global
Construction Data (pp. 88-96). Routledge.
Steigele, H. And Haeufl, M., 2019. Management Systems in digital business Environments:
Howto keep the balance of agility and stability while establishing governance frameworks (Vol.
3). BoD–Books on Demand.
El Namaki, M.S.S., 2019. Conceiving a Vision within Artificial Intelligence Environments.
International Journal of Management and Applied Research, 6(1), pp.41-47.
Seifert, S.G., LaMothe, E.G. and Schmitt, D.B., 2022. Perceptions of the Ethical Infrastructure,
Professional Autonomy, and Ethical Judgments in Accounting Work Environments. Journal of
Business Ethics, pp.1-30.
Wadin, J.L. and Ahlgren, K., 2019. Business model change in dynamic environments–the case of
distributed solar energy. Journal of Business Models, 7(1), pp.13-38.
Anomah, S., 2019. Modeling a systems-based framework for effective IT auditing and assurance
for less regulatory environments.
[Online]
The UK competition regime. 2021. Online Available Through:
<https://commonslibrary.parliament.uk/research-briefings/sn04814/>
About us. 2021. Online Available Through:
<https://www.gov.uk/government/organisations/competition-and-markets-authority/about>
7