Types of Companies

This report explores the different types of companies, including micro businesses, small businesses, medium-sized businesses, and large-sized businesses. It also discusses the various business structures and how they impact business productivity. Additionally, it examines the external factors that can affect a business's performance, using a PESTLE analysis.

Business Management with Foundation
BMP3002
Business in Practice
Types of Companies
Submitted by:
Name:
1

Table of Contents
INTRODUCTION..........................................................................................................3
Section 1: Different types of companies and how they work .......................................3
Section 2: Different companies from sole traders to cooperatives and Limited Liability
Partnerships ................................................................................................................4
Section 3: Different business structures and external factors affecting business........5
CONCLUSION..............................................................................................................7
REFERENCE LIST ......................................................................................................9
2

INTRODUCTION
The aim of this report to examine about the diferent types of companies such as micro
businesses, small businesses, medium-sized businesses and large sized businesses. In addition
to this, it also included about the different companies according their business structure and
how organisational structure affects the business productivity. Furthermore, it explained how
different external factor scan affect the performance of the businesses.
Section 1: Different types of companies and how they work
Micro business:
Micro businesses are those businesses which have less than 10 employees and operates at
very small scale (Chen and Lin, 2021). They are considered as an important part of the
economy as it is the foundation of creation of the country. It required less than €50,000 to
start the business and annual turnover is under €2million. They have single owner and
perform all the operations of the organization. It is difficult for them for getting loans they
have less capital. They also required the same amount of planning and execution plan as big
organization have. Micro businesses are considered to be the subset of small businesses. Boss
Brewing Company is led by women called Sarah John and this business was created with her
partner, Roy Alkin. It is beer company which is led by all the women employees.
Small business:
It is a business having less than 50 employees. It requires less capital, less labor and less
machines in order to run the business. Its annual turnover is above €2million but below
€10million (Calabrò, Campopiano and Basco, 2017). Broadsword Event House is a live event
service company, founded in 2006.
Medium size business: They have less then 250 employees an annual turnover will be less
than €50million. Decision-making is done by owner and other leaders (Andrade and et. al.,
2019). Also they have limited source of capital and industry niche. Rowlinson Knitwear has
less than 50 employees in the company. They offers a wide range of garments such as school
wear and corporate wear.
Large size business:
More then 250 employees are present in the organization and their annual turnover will be
more than €50million. Decision-making is made by the organization hierarchy and has wide
range of capital and funding. Also they have the ability to cater globally (Deer and Zarestky,
2017). HSBC Holdings plc is an investment bank providing services worldwide. It was
founded in 1865 by Thomas Sutherland. HSBC has more than 4000 offices across the globe.
3

Section 2: Different companies from sole traders to cooperatives and
Limited Liability Partnerships
Sole trader business:
This is the type of business under which an individual is self employed and in some
condition they can be a owner of their business (Farrell, Oerton and Plant, 2018). The
business and organisation which own by the one person but it can be operate or manage by
the different person. So the business's which is owned by the one person is known as the sole
trader business. Some examples of sole trader business's are restaurant, grocery shop, beauty
parlour, Gardner service and so on.
Partnership:
This is the type of business which is run by the two or more business partners, this is
done by the agreement of two or more person, where they diced to manage the single
business organisation operations and function along with the equal shearing of profit and
business liabilities. This is the type of business which manage by the legal relationship of
two or more partners. There partners invest together for business growth and productivity and
equally manage the profit and loss. Partnership business is can be vary into different
category such general partnership, limited partnership, limited liability and public private
partnership.
Limited liability business:
This is the type of business who's, directors or share holders are equally responsible
for the financial loss and company debts. If Company is not playing the cost of employment
and other assets. Then the owners are responsible for the debt. They have to pay the
employees salary at any condition. Because they are only liable for their loss. That means
there is the limited person how is responsible for financial management, such for profit and
loss. So these limited person is can be investor and partners.
Public limited liability business:
This is the type of business where shares of the company is offer the the public, but
with the limited liabilities. Such as buyers of the company shares is can not be responsible
for organisation profit and loss. Buyers can only posses the limited responsibilities and role in
organisation such as they can buy and sale shares of the organisation according to the
selective price of company sharers. The biggest benefit of this type of business is that
organisation can increase their capitals by offering their market shares in the exchange of
money (Globocnik, Faullant and Parastuty, 2020).
4

Cooperative:
This is the private type of the business which can be owned and controlled by the
selective peoples, who uses the product's and services of the company (Kwilinski and et. al.,
2019). Such as the agriculture cooperative business is Blue diamond. Basic target of this
company is to provide the appropriate services for their consumers/owners. This is the type of
customers centred enterprise, this helps the to bring the people together in equal values.
Cooperative business's is vary according to the users such as consumer cooperative, worker
cooperative, producer cooperative and so on. This is the type of business's which involves the
functions for meeting their common economical, social needs with in the democratic
enterprise.
Section 3: Different business structures and external factors affecting
business
3.1 Identification of different organizational structures and explaining how does
organisational structure affect business productivity
◦ Functional organizational structure: Functional organisational structure
refers to the grouping of employees according to their specialization such
marketing department, IT department and so on. This structure is U-form
which means Unitary form because operations are divided on the basis of
experience and skills. Here managers do not have autonomy of decisions and
also it is easy to coordinate the activities of the employees. Large scale
organisation that are present across the globe cannot adopt this structure.
◦ Divisional organizational structure: It refers to the organisational, where
organisational structure is sub- categorized into further divisions. This
structure is also known as M-form that is Multi-divisional form. Here manager
has the autonomy of decisions and it is suitable for large and dynamic
organisations. Here new divisional unit can easily be added as it helps in
growth and expansion of the organisation.
Organisational structure is designed improve the productivity of the organisation.
Managers or owners make the organisational structure to make the employee work together,
determine how the communication takes place within the organisation (Mutalimov and et. al.,
2020)(Shakeel and et. al., 2020). This enables in defining the roles and responsibilities of the
5

employees and helps organisation to achieve its goal. Productivity impacted on the
organisation depends upon the chosen organisational structure (Su and Tan, 2018).
 Functional structure: It is considered to be the most productive organizational
structure as the employees are grouped into different department such marketing, IT
and so and can also sub-categorized if necessary. Management hierarchy need to
ensure about the employees to adhere the policies of the organisation and also make
sure about the standardization and mechanization. Furthermore, it also helps in
increasing of communication and coordination. This structure helps in increasing
efficiency and productivity of the organization.
 Divisional structure: It is for that organisation where both product and serviuces are
more. Whole organisation is divided into different division and these divisions work
like another business.
 Team structure: Team structure is best when compared to functional structure in
terms of productivity. Team structure enable the functional structure to work together
as a team to tackle projects and goals of the organisation. The teams are formed by the
owner according to the need. A lot of time can be wasted in team meeting which will
impact on the productivity of the organisation.
 Virtual: Virtual structure are used by small business owners. They used this
structrure to employs small groups and outsource work to virtual teams. Small
business can be easily expanded without affecting about their permanent employees.
3.2 How different external factors affect the performance of a business –
PESTLE Analysis
PESTLE Analysis is used in identifying the macro-environment factors that impact
the organization. This tool is used when entering into a foreign market or starting of new
businesses. Tesco has been taken as the base company. Tesco is a multinational grocery and
retail store, founded by Jack Cohen in 1919. They had expended their company in 5 countries
across Europe. PESTLE analysis in context to Tesco has been explained below-
 Political Factor: It is used in determining the impact of government on the industry
(Tang and Karim, 2017). It includes factors such as government policy, political
stability, foreign trade policy and many more. In context to Tesco, in order to operate
worldwide, they have follow all the rules and regulations while establishing their
image. They keep insure about the country's political stability as it helps in carrying
out the trade.
6

 Economic Factor: These factors impact on the profitability of the organization. It
includes factors such as economic growth, exchange rates, inflation rates and so on
(Waxman, 2017). In reference to Tesco, these factors can affect the sales, revenue,
distribution and profit if the pressure on economy increases.
 Social Factor: These factors helps the company in analyzing the customer's needs
and wants. Factors such as culture, beliefs, lifestyle and many more are included.
Tesco has launched halal meat for their Muslim customers as they considered as their
belief. They also come up with their own brands in this category and also opened a
special counters for them.
 Technological Factor: The advancement in technological factors can bring huge
opportunities for an organization. It includes innovation, technological incentives,
awareness and many more. Tesco has launched self-service checkouts for customers
which enables reduction in labor costs. Also launching of online shopping facilities
helps in gaining of more number of customers.
 Legal Factor: Legal factors include factors such as copyright laws, consumer
protection laws, health and safety laws and many more. These factors enables
company in determining what is legal and non legal for trading. In order for smooth
function and operating the organization, Tesco should follow all local and
international laws as change in any government policy can create a direct impact on
the organization.
 Environment Factor: Environment factors are important due to the decreasing in
raw materials which can impact on the environment of the earth as well as
organization (Weaver, 2018). It include factors such as weather, climate change,
environment policies and so on. Tesco encourages customers to buy from their online
store. This strategy will not only save plastic bags but also fuel.
CONCLUSION
From the above discussion, it can be concluded that, business plays a vital role in
making one's living. It includes buying and selling of products and services in order to gain
profit for the organisation and achieving the organisational as well as personal goals. This
report includes about the different companies and their working in the business world. It also
includes different companies from sole traders to cooperatives and limited liability
partnerships. In addition to this, different business structure and the external factors that
7

affects the business has also explained. And at last, PESTLE analysis has been used in the
organisation to analyses the performance of the business.
8

REFERENCE LIST
Book and references
Andrade, M.S., Hartshorn, K.J., Evans, N.W. and Davis, S., 2019. Good, better, Best: English
language development practices in graduate business programs. The International
Journal of Management Education, 17(1), pp.36-46.
Calabrò, A., Campopiano, G. and Basco, R., 2017. Principal-principal conflicts and family
firm growth: The moderating role of business family identity. Journal of Family
Business Management.
Chen, Y. and Lin, Z., 2021. Business intelligence capabilities and firm performance: A study
in China. International Journal of Information Management, 57, p.102232.
Deer, S. and Zarestky, J., 2017. Balancing profit and people: Corporate social responsibility
in business education. Journal of Management Education, 41(5), pp.727-749.
Farrell, C., Oerton, S. and Plant, E., 2018. Doing a doctorate in business administration: The
case for critical reflexivity. The international journal of management
education, 16(3), pp.370-379.
Globocnik, D., Faullant, R. and Parastuty, Z., 2020. Bridging strategic planning and business
model management–A formal control framework to manage business model
portfolios and dynamics. European Management Journal, 38(2), pp.231-243.
Kwilinski, A., Ruzhytskyi, I., Patlachuk, V., Patlachuk, O. and Kaminska, B., 2019.
Environmental taxes as a condition of business responsibility in the conditions of
sustainable development. Journal of Legal, Ethical and Regulatory Issues, 22, pp.1-
6.
Mutalimov, V., Kovaleva, I., Mikhaylov, A. and Stepanova, D., 2020. Methodology
comprehensive assessment of the business environment in the regions of Russia:
introducing business environment into education system. Journal of
Entrepreneurship Education, 23(1), pp.1-14.
Shakeel, J., Mardani, A., Chofreh, A. G., Goni, F. A. and Klemeš, J. J., 2020. Anatomy of
sustainable business model innovation. Journal of Cleaner Production, 261,
p.121201.
Su, W. and Tan, D., 2018. Business groups and tax havens. Journal of Business
Ethics, 153(4), pp.1067-1081.
Tang, J. J. and Karim, K. E., 2017. Big data in business analytics: implications for the audit
profession. The CPA Journal, 87(6), pp.34-39.
Waxman, K. T. ed., 2017. Financial and business management for the doctor of nursing
practice. Springer Publishing Company.
Weaver, M. W., Crossan, K., Tan, H. B. and Paxton, S. E., 2018. A systems approach to
understanding the perspectives in the changing landscape of responsible business in
Scotland. European Journal of Operational Research, 268(3), pp.1149-1167.
9