Types of Business and Organizational Structures

This report provides an overview of different types of businesses, including micro, small, medium, and large businesses. It discusses the characteristics and examples of each type, as well as various organizational structures such as hierarchical, functional, horizontal, divisional, and matrix. The report also explores the impact of external factors on business performance through PESTLE analysis.

Business in Practise

Table of contents
INTRODUCTION...............................................................................................................3
MAIN BODY.......................................................................................................................3
Micro business...............................................................................................................3
Small business...............................................................................................................3
Medium business...........................................................................................................4
Large business...............................................................................................................5
Sole trader business:.....................................................................................................5
Partnership:....................................................................................................................6
Limited liability business................................................................................................6
Public Limited liability business......................................................................................7
Corporative.....................................................................................................................7
Types of organisational structures.................................................................................8
PESTLE analysis...........................................................................................................9
CONCLUSION.................................................................................................................11
REFRENCES...................................................................................................................12

INTRODUCTION
The report consists of the different types of business such as small, medium,
micro and large business. The report provides with their definition, characteristics and
examples. The definition of the business like the partnership, limited liability business,
sole trader business public limited liability business and corporative business are
discussed. Different types of the organisational structure are identified and their impact
on the productivity of the business is discussed. The PESTLE analysis is used to
discuss the external factors impact on the performance of the company.
MAIN BODY
Micro business
The business that have very few employees, less than 10 people and the
business is started in small capital taken as a loan from the bank is called micro
business (Kovalenko and Kuzmenko, 2020).
Characteristics
 Willing to take the risk.
 Driven to succeed.
 Confident, passionate and enthusiastic.
 Main focus is on achieving the goals.
 Self- reliant as well as self-motivated.
 Have a work life balance.
 Expert advice is taken.
 The processes are automated by using the technology.
 The finances are monitored closely.
Example
 Castle Hill Fire Protection Ltd
 Boss Brewing Company
Small business
The small business is generally a privately owned corporation, or partnership
having less employees as well as less annual income than the regular sized business.
They may have 50 employees depending on the type of industry.

Characteristics
 Single ownership
 Management is controlled by the owner.
 Limited reach for the operation.
 Labour intensive and have low reach to the technology.
 Open and flexible to sudden changes.
 Utilize the immediate and local resources.
Example
 Broadsword Event House
 CafePod Coffee Co.
 Davison Canners
Medium business
The medium size businesses can be owned and managed by family or they can
be managed by other people. The business is generally well- established along with the
observable tracking record that facilitates the financial decision making by the lender or
the investor (Bouey, 2020, March). They have approximately 250 or less employees in
the business.
Characteristics
 The customers are evaluated.
 Salient features are reacted upon.
 Partnership as well as strategic alliance is used.
 Quality is focused upon.
 The employees are treated well.
 Use of internet.
 Sharing of information.
Example
 Verdant Leisure
 Smith Brothers
Large business
Large size business are the mostly in the mining and manufacturing industries.
The business employs 500 or more individuals. The business other than the

manufacturing industries is the able to get annual revenue of $7 million. There are
exceptions to these standards in some large businesses.
Characteristics
 Large capital is required.
 Involve in the secondary and tertiary production.
 Large market is required due to large output of goods.
 Employee large number of employees.
 Heavy techniques with machinery as well as equipment are employed.
 Easily benefitted from the internal and the external economies of scale.
 Embark on extensive research along with the publicity for enhancement in their
efficiency.
Example
 Swire
 McLaren Technology group
 Laing O’Rourke
Sole trader business:
It refers to a business that is being own by single and sole trader and owner. The
whole business is being performed and run by that single trader (Glabiszewski and et.al,
2018). In short when a business is own and run by single individual it is called sole
trader business.
Characteristics:
 Unlimited liabilities.
 Area of operation is limited.
 Independent decision making.
 There is no legal existence.
 Non sharing of profits and loss.
 Full controlling and management.
 Sole ownership.
 Example: Allen and Wright company of UK.

Partnership:
When business is being performed not in individual mode but in sharing and
inculcation of partnership then it is called partnership. Under partnership business there
is a need of minimum two partners. A partnership deed containing all rules, regulations,
liabilities and various other terms are being written and agreed by partners before
coming into partnership.
Characteristics:
 Here sharing of profit and loss will be done as per agreed percentage.
 There is an existence of an agreement.
 Liability will be unlimited. However, it may be limited if it is limited liability
partnership.
 Here controlling and ownership all is shared.
 There is an existence of business in the eyes of law.
 Example: NotOnTheHighStreet partnership business of UK.
Limited liability business
The business structure where the owner of the business is not liable for the
company’s liabilities and debts personally is called the limited liability business. These
businesses are the hybrid entities that have the combined characteristics of the
partnership or sole proprietorship and the corporation (Neubert and Van der Krogt,
2018). The features of the business are like the corporation but the flow-through
taxation availability to the members is a feature of the partnership.
Characteristics
 Filing of the documents by the Secretary of state is required.
 Have one or more owner referred as the members.
 Business can be member-managed or manager-managed.
 The liability of the member is limited.
 The flow of the profit and loss among the members is in accordance to the
operating agreement, local law, and their capital accounts that is generally
proportional to the contributions.
Examples

 Anheuser- Busch
 Blockbuster
 Westinghouse
Public Limited liability business
It is public company in UK; it is equivalent to the publicly traded company of US
that carries the corporate designation or Inc. Using the abbreviation after the name of
the company is a necessary thing as it helps the investors to communicate and anyone
who is dealing with the company that is a publicly traded corporation.
Characteristics
 Separate legal existence for the people except the member who made it.
 The operations are strictly governed by the rules and the regulations.
 The revenue is collected by selling the shares and the buyers become the
members. The amount collected is called the share capital.
Examples
 British Petroleum Company Limited
 HSBC Holding
 Rolls-Royce Holding
Corporative
Corporative business is owned and operated by the people who are using the
products and the services of the company as well as gets benefit from the company
(Djuwendah and et.al). Ownership feature and other features make the cooperative
different from the other business.
Characteristics
 Voluntary membership.
 Open membership
 Finances are contributed by the members by purchasing the sales.
 Can be based upon the limited or unlimited liability.
 Cooperative is controlled by the democracy.
 There is limited interest on the capital.

Examples
 Channel Island Co-operative Society
 East of England Co-operative Society
Types of organisational structures
Hierarchical org structure
It is the most common type of structure and have pyramid shaped organisational
that is called the Hierarchical org structure. The chain of commands goes from the top
of the pyramid such as the manager to the bottom of the pyramid such as the low-level
employees. Every employee has a supervisor. A strong Hierarchical org structure
ensures that the policies and the procedures are followed, the job specialisation
encourages the standardization and together all of these characteristics promote to the
productivity.
Functional org structure
The functional org structure put the highest level of the responsibility on the top
and then put the responsibilities in the decreasing order from there. The employees are
positioned according to their skills along with their function in the company. The
departments are managed independently (McLaren and et.al, 2017). The structure
allows the employees to focus on their role as well as encourages the specialisation and
the structure is easily scalable for any size of the company making the company to be
productive.
Horizontal or flat org structure
In this structure the companies are fit in fewer levels between the upper and the
lower level staff. Start-up business uses the structure for growing into large business
with different departments. The structure is used because it requires less supervision
and more employee involvement. More responsibility is given to the employees, foster
open communication and improves the coordination as well as implementing speed that
increases the productivity of the company.
Divisional org structure
In this structure the divisions of the company have the control on the resources of
their own; they work on their own as a company but are a part of the larger company.

The structure works well for the large companies and the departments can have their
own sales, IT and marketing team (Perera, Gunawardana and Gunarathna, 2020). The
structure can be divided into:
Market-based divisional org structure, geographical divisional org structure and product-
based divisional org structure.
The structure increases the productivity as it helps the company to stay flexible,
allow quicker changes for the customer needs and promotes independence, customised
approach and autonomy.
Matrix org structure
The structure looks like a chart having the cross-functional teams that are formed
for the special projects. This structure allows the managers to choose from the
individual that are best suitable for the project, give dynamic view along with
encouraging the employees to use their skills in different fields aside from the main
roles, this helps in the productivity of the organisation.
PESTLE analysis
Hypothesis under the marketing principles that ensures the business growth as well as
profitability is called the PESTLE analysis.
Political factors
The authoritative power of the government is indicated by the political factors in
the economy or for the industry. The factor includes the political stability, policies set by
the government, foreign trade policies, trade tariffs, fiscal policy, health regulations,
environmental laws, labour laws, education system, corruption, infrastructure and more.
All these aspects are taken under the consideration while evaluating the performance of
the company.
Economic factors
The crucial determinant of the economy that plays an important role in the
performance of the company is the economic factors. The success and the failure of the
company are decided by these factors. The pricing pattern of company’s products and
the services are highly affected by the surge in the inflation rate of the economy. The

purchasing power of the customer is also impacted by this factor that result in changes
in the demand and supply in economy.
Social factors
Social environment is pin point by the social factors for the companies and
constitute the customs, norms, demographic features and values of the population in
the periphery of the operation of the organisation (Sari and et.al, 2021). The population
trends of the social factors are considered such as cultural barrier, age distribution,
income distribution, growth rate and more, for the measuring the performance of the
organisation.
Technological factors
Modernization of the technology is relevant to the technological factors that
influence the performance of the company. The factors include research, development
and level of innovation activities along with the technological awareness, automation
and technological incentives. The decision of entry in an industry, new product launch
and outsourcing production-related activities are influenced by the technological factors.
The knowledge of the technology by the organisation is very important as the amount
spend on obtaining the technology can go in vein if the innovative and newer
technologies are introduced in the near future.
Legal factors
The legal factors includes the laws such as discrimination laws, health and safety
laws, safety standards, copyright, employment laws and patent laws, antitrust laws and
consumer protection laws. The organisations present have to be aware of all these laws
for conducting the business ethically. The organisation also needs to be aware of any
changes in the laws that may affect the business in the long run.
Environmental factors
The environmental factors have become very valuable due to the set government
rules to reduce the carbon foot print target, pollution and scarcity of raw materials. The
environmental factors include the weather conditions, climate change, agriculture,
farming industries and environmental offsets that govern the tourism. The operation and
the production of the organisation are changing due to the burning issue of the climate
change.

CONCLUSION
It can be concluded from the report that the characteristics of the micro, small,
medium and large business are different from each other and they impact differently in
the market. Business structures of the businesses such as the sole trade business,
limited liability business, public limited liability business and corporation are provide with
the characteristics and examples for their impacts on the market. Different types of
organisational structures like Hierarchical org structure, functional org structure,
horizontal org structure, divisional and matrix org structures are discussed with their
impact on the performance on the organisation. The impact of the external factor on the
performance of the organisation is explained by the use of PESTLE analysis.
REFRENCES
Books and Journals
Kovalenko and Kuzmenko, 2020. Online marketing impact on micro-enterprises: An
insight through visibility in search engines. Management & Marketing. 15(1).
pp.38-58.

Glabiszewski and et.al, 2018. The impact of business environment institutions on the
innovation of Polish small and medium-sized service enterprises. Economic and
Environmental Studies (E&ES). 18(2). pp.577-589.
Neubert and Van der Krogt, 2018. Impact of business intelligence solutions on export
performance of software firms in emerging economies. Technology Innovation
Management Review. 8(9).
Djuwendah and et.al, Role And Impact Of Cooperative Coffee Producers Margamulya
In The Development Of Java Preanger Coffee Farming. Jurnal Social Economic
of Agriculture. 6(2). pp.1-8.
McLaren and et.al, 2017. Evaluating the impact of functional genetic variation on HIV-1
control. The Journal of infectious diseases. 216(9). pp.1063-1069.
Perera, Gunawardana and Gunarathna, 2020. Networking within Divisional Secretaries
and its Impact on Organizational Performance (Special reference to Divisional
Secretaries in Sri Lanka).
Bouey, 2020, March. Assessment of COVID-19's Impact on Small and Medium-Sized
Enterprises: Implications from China: Testimony of Jennifer Bouey, Before the
US House Committee on Small Business, March 10, 2020. In RAND Corporation.
Rand Corporation.
Sari and et.al, 2021, April. Sustainability of the climate village program to prevent the
impact of climate change on water supply and sanitation: a perspective from the
PESTLE analysis. In IOP Conference Series: Earth and Environmental
Science (Vol. 708, No. 1, p. 012086). IOP Publishing.