Business in Practice: Definition, Characteristics, and Examples of Different Business Sizes

This document provides an overview of different business sizes, including micro, small, medium, and large businesses. It explains the definition, characteristics, and examples of each type. The document also discusses the impact of organizational structure on business productivity and the influence of external factors on business performance through PESTEL analysis. It offers insights into the business environment and its dynamics.

BUSINESS IN
PRACTICE
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
State definition, characteristics and example of micro, small, medium and large business......3
TASK 2............................................................................................................................................4
Define sole proprietorship, partnership, limited liability, public liability and cooperative
business, state their characteristics by using examples...............................................................4
TASK 3............................................................................................................................................6
Identify different organisational structures and explain how organisational structure affects
business productivity...................................................................................................................6
Using PESTEL analysis and impact of external factors on business performance.....................7
CONCLUSION................................................................................................................................8
REFRENCES ..................................................................................................................................9
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INTRODUCTION
Business environment is a composition of all individuals, business entities and other
factors which can directly or indirectly affect performance, business growth and profitability.
Business environment can be dynamic in nature, it can be uncertain and it is complex due to
regular changing market trends. HSBC Holdings is one of the biggest company which is
operating in UK market and company was founded by Sir Thomas Sutherland. This organisation
was founded in 1865 and is providing services to 39 million customers in 66 countries around the
globe. HSBC Holdings is a banking corporation and provides financial services in marketplace.
This market research is based on different size of business, organisational structures and how
several factors affect business environment.
TASK 1
State definition, characteristics and example of micro, small, medium and large business
Business environment comprises of two factors which can influence operations of
company. The two responsible factor of change in a business are internal and external
environment in which external environment also comprises micro and macro factors which can
influence functions of management. There are several scale on which a business operates these
different business size are explained below:
Micro business: Micro or small business are those business entities which operates with
maximum 10 employees. These business entities are owned by sole proprietors or are self-
employed. The turnover of small scale business in under £ 2 million. These businesses operates
on small scale level by less capital investment, less machines and fewer number of employee's.
The general characteristics of micro or small business organisations are: single ownership
and limited liability. They are more self-motivated and focus on achieving their targets. They
are more enthusiastic and passionate. Such business owners are more willing to take risk.
For example, ETSY is operating as a micro and small scale business which provides a
medium to buyers and sellers to provide recycled and upcycled products while keeping all rates
in mind. The business focus on using various social media platforms through which many buyers
and sellers can provide and purchase products from their media platforms(Atiku, S.O., 2019).
Medium business: Medium scale business are those companies which operates as SME
business and such business operates with less than 250 employees and turnover of medium scale
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business is under £25 million. These business en6tities focus on slow and steady business
growth.
The general characteristics of medium scale business organisations are: such business
owners are passionate and persistent. These business help in enhancing skills. Such business
entities focus on improving regularly. These business focus on analysing changing market trends.
These organisations can also operate under high pressure of work.
For example, Smith Brothers Farms is a medium scale business which provides dairy
services and the company also focuses on providing home delivery services to their customers.
Large business: These business enterprises are big corporations and they have more
number of employees who are working all around the globe. These industries use more
manpower and also use huge amount of capital. These business organisations help to enhance
growth of economy and provide more employment opportunity.
The general characteristics of large scale business organisations are: these are high tech
industries which focuses on enhancing employment opportunity, Such organisations include
huge and big investments. These industries analyse all changing market trends through which
their competitiveness can be enhanced. Several measures of quality control are opted by such
business to enhance quality of their products and services(Kerzner, H., 2018).
For example, HSBC Holdings is a large business entity which provides financial and
banking services to customers through which they can attract numerous customers and build
their goodwill in marketplace.
TASK 2
Define sole proprietorship, partnership, limited liability, public liability and cooperative
business, state their characteristics by using examples
There are different types of business entities through which a business operates, such
business entities are stated below:
Sole proprietorship- These business entities are owned and managed by single owners
and such business do not have any legal entity. The person who are single owners of such
business entities are personally responsible for their own debts. All the taxes which need to be
payed and al profits which will be earned are into owners account through which a business is
managed. These business entities lacks government regulations.
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The general characteristics of sole proprietorship business are stated below: Unlimited
liability, no legal formalities, single ownership and sole management. Some examples of sole
proprietorship are OPC, HM tech,lab solution and many others(Shurrab and et .al., 2019).
Partnership- These business entities are based on formal agreement between two or
more individuals who will manage all operations and functions of management. The partners of
such business entities share all profit and liabilities equally and some members acts as silent
members in the organisation. These members are involved in all day to day activities of
management(Piscicelli and et .al., 2018)
The general characteristics of partnership business are stated below: profit sharing,
existence of agreement, non-transferability of interest, fusion of ownership and control and firm
registration. Some examples of partnership are GoPro and Red bull, Apple and mastercard,
Vuitton and Uber and various other companies.
Limited liability- Limited liability company (LLC) are those business structures where
owners and business members hold limited liability in functions of management. These business
are created and functions under state law. The dissolution of business are governed by state law.
The general characteristics of limited liability business are stated below: they have
separate legal entity, hold flexibility in taxation, owners acts as members also and they hold
limited liability. Various examples of limited liability are Blockbuster, Anheuser , Westinghouse
and many others are there.
Public liability- These business entities are voluntary associations which is incorporated
and thus such business entities hold separate legal entities. The members of such public limited
companies holds limited liability in operations of management.
The general characteristics of public liability business business are stated below: it is
separate legal existence from members of business. All Business activities are governed by rules,
laws and regulations. Such business require minimum 7 members and no limit for maximum
members in an organisation. These business have freely transferable shares with prior consent or
notice to organisations shareholders. Some examples of public liability are Lloyad banking
groups, Anglo America plc, United banks etc(Loosemore and et .al., 2018)
Cooperative businesses- These business entities are association of limited individuals
who join together for welfare of society and to accomplish common economic end by forming
democratically controlled business. These business organisations enhance better living standards.
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The general characteristics of cooperative business business are stated below: it is
voluntary association and is a democratic management. They have fixed return on capital. Some
of the examples are England co-operative banks, islands co-operative society and many more are
there.
TASK 3
Identify different organisational structures and explain how organisational structure affects
business productivity.
In every structure of an organisation a hierarchy of duties and obligations are set within
an organisation. The manner and selecting the ways which are adopted have direct on the
affectivity of the production. There are various factors which are taken into consideration
which affects the productivity of the business they are as follows:
 Managerial influence: The efficiency and productivity of the company is measurably
affected by broad managerial influence. The managerial decision affects the other
department also as mangers are responsible for the functioning in a company. Bad
managerial decisions can effect the production and profitability of the company
negatively(Chaturvedi and et .al., 2017)
 Structural Flaws: Flaws in a organisation structure can cause breakdown and harm to
the organisation. Flaws in performing the duties and mis-communication in the
organisation can cause hatm to the productivity of the organisation.
 Creativity: It is the duty of the employer as well as employees to adopt such kind of
organisational structure which is helpful in increasing the productivity of an organisation
rapidly. Ideas must be given by the employees which must be taken into consideration by
the employer which can increase the profitability and must ensures that cost suffered by
the companies must be decreased.
 Growth: It is the motive of all the organisations which are made with the intention to
work fort the motive of profit. A strong organisational structure is designed and managed
in a way that can maintain corporate productivity and allows the structural improvement
to expand the organisation(Balon, V., 2020)
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Using PESTEL analysis and impact of external factors on business performance
Pestle analysis is a tool of marketing principles which is used by the companies to
analyse the external factors which influence the effects of business environment. Before
launching of any product or services of the company considers the external factors to analyse the
external environment which will effect the upcoming products and services in the market. It is a
method which is used to face external factors by an organisation. A pestle analysis in context
with HSBC is given below:
 Political factors:It is a significant factor as it impacts performance of businesses in terms
of changes in government policies and regulations. In context with HSBC a British
multinational banking corporation have to face political factors such as impact of
government, political stability and opportunities for Expanding the relations by which
HSBC can grow and expand its banking services in more countries.
 Economic factors:It is also a significant factor which impacts on development of a
business if the economic condition of a country is stable there are more opportunities for
a company to grow. In context of HSBC less wages in developing countries is an
opportunity as well as a threat for HSBC as it increases the costs for the countries. .
Developing countries are nowadays growing. Moreover economic stability of the country
is a opportunity for HSBC for global growth(Ramaswamy and Ozcan., 2020).
 Social factors:These factors refers to factors and offers which is in trend and are
practised by the various banks to influence their customers. In association with HSBC
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there are many opportunities to expand their services. As it is a multinational banking
company and people have started living modern and luxurious life by which needs of the
people needs money which becomes an opportunity for the company to grow(Moshiri
and et .al., 2019)
 Technological factors: This is a significant factor for development of countries with
increasing e- commerce practices and digitalization. Companies have great opportunities
to increase their business globally. In context with HSBC technological advancement
effect the company positively as it operates on daily basis and with the help of new
techniques it becomes easy for the company to comply with its daily tasks. But it can
effect the company negatively also if it loss its data it becomes a blunder for the
company.
 Environmental factors:Consumers have become more aware and conscious towards
adopting well environmental practices. HSBC have goal to reduce the emission of the
carbon emission by adopting various methods such as sustainability engagement, eco-
friendly funds, waste reduction and various tools are adopted to protect the environment.
 Legal factors: It concerns with factors related to government policies and state laws in
the market. In context with HSBC there are various laws which are linked and followed
by HSBC such as banking laws, insurance laws and providing loans at minimum interest
must be followed as it is a multinational banking company which if do not follow the
rules and regulations can hamper the goodwill of the company(Wang, Y. and J., 2019).
CONCLUSION
` From the above report it is concluded that there are various types of business organisation
such as sole proprietorship, partnership, limited liability and public limited liability with
examples are mentioned. Small scale, medium scale and large scale business is also explained
above. The answer is also given for how organisational structure effects the productivity of an
organisation. In last Pestle analysis the explained in the context of HSBC a multinational British
banking corporation.
REFRENCES
Books and journals
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Atiku, S.O., 2019. Institutionalizing Social Responsibility Through Workplace Green Behavior.
Contemporary Multicultural Orientations and Practices for Global Leadership. pp.183-
199.
Kerzner, H., 2018. Project management best practices: Achieving global excellence. John Wiley
& Sons.
Shurrab and et .al., 2019. Green and sustainable practices in the construction industry.
Engineering, Construction and Architectural Management.
Loosemore and et .al., 2018. A comparison of corporate social responsibility practices in the
Singapore, Australia and New Zealand construction industries. Journal of cleaner
production. 190. pp.149-159.
Chaturvedi and et .al., 2017. Evolution and adoption of sustainable practices in the
pharmaceutical industry: An overview with an Indian perspective. Journal of cleaner
production. 168. pp.1358-1369.
Ramaswamy, V. and Ozcan., 2020. The “Interacted” actor in platformed networks: theorizing
practices of managerial experience value co-creation. Journal of Business & Industrial
Marketing.
Wang, Y. and J., 2019. Like a “Frog in a well”? An ethnographic study of Chinese rural
women’s social media practices through the WeChat platform. Chinese Journal of
Communication. 12(3). pp.324-339.
Moshiri and et .al., 2019. Best practices to increase racial diversity in business schools: What
actually works according to a nationwide survey of business schools. Journal of
Education for Business. 94(2). pp.113-124.
Balon, V., 2020. Green supply chain management: Pressures, practices, and performance—An
integrative literature review. Business Strategy & Development. 3(2). pp.226-244.
Piscicelli and et .al., 2018. What makes a sustainable business model successful? An empirical
comparison of two peer-to-peer goods-sharing platforms. Journal of cleaner production.
172. pp.4580-4591.
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