Business in Practice

This report provides an overview of different types of businesses based on size and type, such as micro, small, medium, and large businesses. It also explains various organizational structures and how they impact business productivity. Additionally, it discusses the influence of external factors on business performance, using Sainsbury as an example. The report offers valuable insights for understanding the business landscape.

Business in Practice

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
SECTION 1......................................................................................................................................3
Definition, Characteristics and example of micro business, small business, medium size
business and large size business..................................................................................................3
SECTION 2......................................................................................................................................5
Definition, characteristics and example of sole trader business, partnership, limited liability
business, public limited liability business and cooperative........................................................5
SECTION 3......................................................................................................................................7
Identify different organisational structures and explain how organisation structure affects
business productivity...................................................................................................................7
Explain how external factor affecting the performance of the business.....................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
A business is a activity that is performed by the organisation to manufacture and sell the
products and services in order to earn maximum profit. Business is something that processes for
the motive of profitability. There are various types of business that can be categorised on the
basis on their size and type of business(Anthopoulos,Fitsilis,Ziozias2019).The business may be
involve in industrialization, Commercialization or may be engaged in social welfare activities. In
order to run the organisation successfully, Business should analysis the impact of external factor
and their impact on themselves. Sainsbury is the chosen organisation for this report, It is the
second largest chain of supermarket in United Kingdom and owned 16% share in this sector.
Company is established in Drury Lane, London in 1869. It is the largest retailer of groceries and
become the market leader. This report will explains the different organisation on the basis of
their size and type with their characteristics, also covers the different type of organisation
structure that is followed by the various organisation.
MAIN BODY
SECTION 1
Definition, Characteristics and example of micro business, small business, medium size business
and large size business.
Business is the activity that is conduct for the individual living or earning profit by
manufacturing or selling of goods and services(Bačić,Fadlalla2016).Simply it is the activity that
is concerned with profitability. There are various types of organisation that is categorised on the
basis of their size and these are follows:
Micro size businesses
These are the organisation which is small in term of market share and number of
employees. It also run the business in Insufficient funds and investment. Generally there are 0-9
employees and yearly turnover is less than £2 million.
Characteristics of micro business-
 Target market is small and get minimum profit and revenue.
 Market segment of these business in limited.
 Number of employees working in small business is 0-9.

Example- Boss brewing
Small size businesses
This is the business which is owned by the owner itself with the 10-49 employees in the
business. Company generates £10 million turnover.
Characteristics of small business-
 The company operates less funds and investment.
 Business is run by Sole proprietor as it involve less investment.
 Authority is given to single owner.
Example- Broadsword Event House.
Medium size businesses
These are the businesses which has more investment and large market share in caparison
to small business and worked with 50-250 employees and generate a annual revenue of £10
million(Bonnitcha,McCorquodale2017).
Characteristics of Medium size business-
 It involve partnership in the business.
 It require large investment in order to run the business.
 Market size of the organisation is large and expanded in different countries.
Example- Captify
Large size businesses
This is the business, which work on a large scale with approx £50 million revenue. The
number of employees working in such organisation is more than 250 employees. It involve huge
investment and liabilities.
Characteristics of large size business-
 These business focuses on advancement of technology in their operations.
 These types of businesses works on international level with high share of profit.
 These organisation are specialised in IT skills with efficient staff.
Example- River Island
Basis Micro Small Medium Large
Employees 0-9 50-250 More than 250
Revenue Under 2 million Under 10 million Under 50 million More than 50

euros euros euros million euros
SECTION 2
Definition, characteristics and example of sole trader business, partnership, limited liability
business, public limited liability business and cooperative.
Categorise of the business is done on the basis of their size and type and consideration of
other factor like owner, liability and many other. The businesses that is differentiate on the basis
of its types are follows:
Sole Proprietorship
A sole proprietor is one who is the individual owner of their business and run all the
activity by single handed(ChristBurritt,2018). It is the unincorporated business with owner, who
pay personal income tax of their profit earned by the business. Owner is also liable for its
liabilities in the business with all the profit and losses.
Characteristics-
 The owner have full control over its profits and revenue of the business.
 There is unlimited liabilities in these business.
 These business require less legal formalities in the business.
Example- Mom and Pop stores.
Partnership
It is a kind of business which is operated on the legal agreement between two or more
people are agreed to share their profit and losses and distribute responsibilities for the running of
organisation(DohLuthans,Slocum2016).All the function of partnership is associated under, “The
Indian Partnership Act 1932”.
Characteristics-
 There is a agreement between the partners and they are liable to follow that agreement.
 The profit sharing of partners varies, It may share in equal amount or can be share in
agreed ratio.
 There is unlimited liabilities of the every partner.
Example- Whatsapp
Limited liability partnership

In this, All the partners have limited liabilities . Each partner is responsible for own profit
and loss and accountable in a same manner.
Characteristics-
 It involve both the partnership and the company.
 All the tax is being paid by the all the partners not by the firm. This is a transparent tax
system.
 Liabilities of the partners is depended on capital contribution of by the partners.
Company
This is a separate legal entity, which is incorporated at the companies house. All the
rules is followed according to the company act of UK.
Characteristics-
 It is a separate accounts from their owners.
 It is a artificial person created by law and rules.
 Company has its conman seal for each department.
Cooperatives
These are voluntary sector organization, which focuses on social welfare rather than a
motive of earning profit(Gamble,Brennan,McAdam2017).These organisation are formed by the
group of people, who are agree to do some charity.
Characteristic-
 This is non profit organisation.
 This is controlled by its members.
Example- Bawing Energy.
Basis Sole
proprietorship
Partnership LLP Company Cooperative
Number of
owner
one Two or more Two or more Private- At
least 2
Public- At
least 7
Two or more
Liabilities Unlimited Unlimited According to Limited- Unlimited

their capital
invested
limited
liability of
owners.
Unlimited-
Unlimited
liability of
owners.
SECTION 3
Identify different organisational structures and explain how organisation structure affects
business productivity.
The organisation system is outline that how business activities are to be done in right
direction. It simple explain the flow of work in the company. There are different types of
organisation structure which is by business are as follows:
 Flat organisation structure- This the structure which is followed by the organisation
which have less level between the upper management and the staff. This structure is
useful in such business, who wants less involvement of their supervisors in the
operational activity of the business(Gorissen,Vrancken,Manshoven2016).
 Hierarchical organisation structure- This structure stated the strict code of conduct in
their organisation that is starts from top to bottom. It is a pyramid shaped structure, where
every employee is answerable to their senior.
 Divisional organisation structure- This structure stated that Company's division have
control over their resources. Each division have their own marketing team, sales team, IT
team. This structure is favourable for large organisation.
Basis Hierarchical Flat
Level of management It involves different level of
management.
It involves minimum level of
management.
suitability It is good for large
organisation.
It is suitable for both small and
large organisation which help

in decision making.
Supervision Every employees is
accountable to their
supervisor.
Less supervision is needed.
Sainsbury is using Hierarchical organisation structure as it is the big company needs
more control over each factor of production in order to run its business successfully.
Explain how external factor affecting the performance of the business.
PESTLE analysis is a systematic tool that is help in measuring the external factors of the
organisation that affects the performance of the company. Sainsbury is a large organisation
which faces many factors that affects the performance of the business and the factors are as
follows:
 Political Factor: These are factors which includes the government fluctuations taxation
policy, and trade policy imposed by the government(Miklian,2016). In 2016, The United
Kingdom voted to leave the EU. This move, have affected the Sainsbury with serious
consequences among other English supermarket chain. High increase in the cost of
import of product from abroad. Company is facing high taxation rate on sell of their
products.
 Economical Factor: These are the factors which concern with the interest rate, inflation,
exchange rate and wages rate; minimum wages and working hours of the employees.
There is a recession in the UK and affecting the profitability and growth of Sainsbury.
This makes slow down of economy with huge losses and liabilities on business. Due to
recession, country is facing inflation in the economy with few market profitability. Rising
cost of fuel also affects the profit margin of the Sainsbury.
 Social Factor: Socio-culture factors includes shared beliefs of the individual and their
culture, tradition and behaviours(Neubaum,2018).Also include growth rate, age
distribution, career attitudes, health and safety. Sainsbury is offering junk food their
customer and affecting the health of the populations. Customers are also concern from
where they are getting food. Customers are ready to pay more in return of getting good
food. These impact effects the company to earn more profit.

 Technological Factor: These factors includes the innovation in the existing products and
services, getting new ways of delivery and advancement and improvement in their
products. Artificial Intelligence principles is helping the Sainsbury to develop their
services and finding new ways of innovation. Sainsbury is offering Online shopping to
their customers.
 Legal Factor: These are the factors which includes accessibility for material,
import/export polices and taxations. These are the strict code of conduct which company
needs to follows them in order to sustain in the market and create good brand value.
(Stott,Stone,Fae2016).Sainsbury is a large organisation working on global basis and
sometimes this is difficult to follow all the rules and taxation policy of the government.
This can down the brand image of the company and customer will shift to other brands.
 Environmental Factor: these are the factors which includes the safety of environment by
not polluting the environment and take a initiative to follow the environmental laws. This
is concern with the pollution, global warming. Sainsbury is organising seminars and
campaigns in order to recycle the plastic waste and use of natural resources.
CONCLUSION
This is concluded from the above report that there are different types of business which
have their specific characteristics and advantages. Business have a significant impact on
economy for industrialization. There are micro, small, medium and large business which serve
the society. Business is also categorised on the basis of type like sole proprietorship, partnership,
company, Limited Liabilities Partnership and cooperative. Different organisation uses different
organisational structure in order to run the business in a efficient way and Sainsbury is using
Hierarchical organisational structure as it is a big company and needs more control over its
operations. Furthermore external factor have affected the Sainsbury. There is positive impact of
technological, social and environmental factors and political and legal factor have negative
impact on Sainsbury.

REFERENCES
Books and Journals
Anthopoulos, L., Fitsilis, P. and Ziozias, C., 2019. What is the Source of Smart City Value?: A
Business Model Analysis. In Smart Cities and Smart Spaces: Concepts, Methodologies,
Tools, and Applications (pp. 56-77). IGI Global.
Bačić, D. and Fadlalla, A., 2016. Business information visualization intellectual contributions:
An integrative framework of visualization capabilities and dimensions of visual
intelligence. Decision Support Systems, 89, pp.77-86.
Bonnitcha, J. and McCorquodale, R., 2017. The concept of ‘due diligence’in the UN guiding
principles on business and human rights. European Journal of International Law, 28(3),
pp.899-919.
Christ, K.L. and Burritt, R.L., 2018. Current perceptions on the problem of modern slavery in
business. Business Strategy & Development, 1(2), pp.103-114.
Doh, J.P., Luthans, F. and Slocum, J., 2016. The world of global business 1965–2015:
Perspectives on the 50th anniversary issue of the Journal of World Business:
Introduction to the special issue.
Gamble, J.R., Brennan, M. and McAdam, R., 2017. A rewarding experience? Exploring how
crowdfunding is affecting music industry business models. Journal of business
research, 70, pp.25-36.
Gorissen, L., Vrancken, K. and Manshoven, S., 2016. Transition thinking and business model
innovation–towards a transformative business model and new role for the reuse centers
of Limburg, Belgium. Sustainability, 8(2), p.112.
Miklian, J., 2016. Mapping business-peace interactions: five assertions for how businesses create
peace. Available at SSRN 2891391.
Neubaum, D.O., 2018. Family business research: Roads travelled and the search for unworn
paths.

Stott, R.N., Stone, M. and Fae, J., 2016. Business models in the business-to-business and
business-to-consumer worlds–what can each world learn from the other?. Journal of
Business & Industrial Marketing.