Types of Companies and Business Structures: A Study on Business in Practice

This report examines the various types of organizations contributing to the growth of the economy, including micro, small, medium, and large businesses, as well as different business structures such as sole traders, partnerships, and cooperatives. It also discusses the impact of external factors on business performance through PESTLE analysis.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
Contents
1

Introduction 2
Section 1: Different types of companies and how they work
P
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships p
Section 3: Different businesses structures and internal factors
affecting business p
Conclusion p
Reference List p
2

Introduction
In today's world, Business environment is becoming dynamic as well as
competitive and there are various type of organisation that exist in this environment.
The main aim of the project is to examine the various organisation which are
contributing in the growth of the economy. Business in practice refers to the
information related plan for business, financial information, products and services,
methods and many more (Ohiomah, Benyoucef and Andreev, 2020). In this practice
individual gets occupied in work which requires strategies with the purpose to
achieve the goals. With respect to the company, it applies code of conduct which
assists them to influence and motivate the employee to perform the task under
certain laws and regulation in business environment. This report deals with factors
based on internal and external aspects that impact the overall operation of the
business.
Section 1: Different types of companies and how they work
Micro business:
Definition: Micro business can be defined as small business which requires
less amount of capital and have few number of employees. With the purpose to run
the business, limited amount of resources is needed (Ouro-Filho, Olave and Barreto,
2021). This type of business add value to the local economy as well as improves the
living standard of the people.
Characteristics: These types of business are basically under the ownership
of single individual. It also provides employment opportunities to 0-9 people. They
generally use the resources which are readily available that leads economy to utilise
resources effectively and efficiently.
Example: Issoria is one of the example of micro business that can assist in
changing mindset of the individual.
Small business:
Definition: These type of business organisation perform activities on a small
level but are larger in comparison to the micro business. These business invest in
machineries and plants once in a while. As this type of business are small, they have
flexible strategies for the sudden changes in business.
3

Characteristics: In this type of business all the operation are controlled by
the owner. In addition to this, their operation are restricted to certain areas. This type
of venture provide employment opportunities to 0-49 people. In this they create small
group of worker to generate profit.
Example: Davison Canners limited is one of the leading manufacturer of
bakery and dairy products. The company is focusing on providing customer with
organic and healthy products with the purpose to attract large number of customers.
Medium size business:
Definition: These type of venture are larger than micro and small business
and is well managed. In order to run the business effectively and efficiently, this
business requires sufficient amount of capital and fund (AlaukhanovImazhev and
Azhimetova, 2018). Through this they can make appropriate decision related to
investment. They operate business with the number of employees between 50-250.
This type of firm give more focus on expanding the business to the new location. So
that they can gain more profitability as well as success.
Characteristics: In an effort to gain competitive advantage in the market this
type of business run with sufficient amount of capital along with more than 50
employee. These venture also take high risk in order to expand the business in new
geographical area.
Example: Best example for the medium size firm is Captify which are
involved in the conducting research intelligence as well as they are concerned for
taking decision for media within the UK market.
Large size business:
Definition: Large business organisation is defined as the category of
business having large operation and high economical scale. They have unlimited
resources and capital in order to carry out the business operation in a productive
manner (Kannan, 2021). With the purpose to gain profitability, this type of business
give more focus on satisfying the needs and wants of the customer so that good
brand image can be developed among the market. They rely on advance technology
and machineries in order to gain success in the competitive market.
Characteristics: These type of organisation hire the employee who are highly
skilled and have more 250 employees working. The business also provide different
job opportunities to people so that individual can enhance the living standard. To
expand the business they require better access to the finance so that they can
4

sustain for the long term in competitive market. They basically earn the revenue
more than 2 million Euros.
Example: Mark and spencer is the suitable example for large organisation as
it is the British multinational company which is established in 1884 by Michael Mark
and Thomas Spencer. The company is providing customers with the clothing, food
products as well as home products. The are having more than 75000 employees
and generating the revenue of around £ 10 billion.
Section 2: Different companies from sole traders to cooperatives and Limited
Liability Partnerships
Sole trader business:
Meaning: This type of business is owned and operated by a single individual and it
have no interference of other people. In this type of business owner is only
responsible for the losses and risk connected with the business. These business
also requires less funds for creation and maintenance.
Characteristics: Sole trader business is not a separate legal entity and the
one who runs the business is responsible to carry out all the operation and manages
all the task. Here in this business owner have to bound to enter in the legal obligation
to start their business. The owner enjoys all the profit earned through the business.
Example: Plumbers, Electricians, carpenters and many more.
Partnership:
Meaning: Partnership business can be defined as the business entity where two or
more individuals come together under the agreement in order to carry out the
business operation. Through agreement the partners agree to share profits and
losses. Here, the partners are also liable to pay tax of company to the government.
In this type of business its is very important that necessary decision are made after
the mutual agreement. The partners have limited liability.
Characteristics: This type of business have partners who are under the
certain contract (Sivers, 2018). In this business partners have to share profits and
loss. There is no legal separate entity of the owner and the company is having
limited life as the objective can be effectively achieved.
Example: Starbucks and Spotify are the best example for partnership firm. As
Starbucks is an American multinational chain of coffee and Spotify is a Swedish
5

audio streaming and media services provider. They both come together to attract
large number of customers.
Public limited liability business:
Meaning: This type of business are operated under law framed by the UK
company's law. By selling their share to the general public, this type of organisation
can easily trade in the market. In order to show that company is legal organisation, it
is basically based on the voluntary association.
Characteristics: This type of firm is separate legal entity from their share-
owner and manager who are concerned with the formation of the enterprises. The
business operation are carried under the systematic code of conduct imposed by the
authorities.
Example: Tesco, Rolls Royce are the examples of Public limited company as
they are working with the purpose to generate higher profit as well as meet the
needs and wants of target customers.
Cooperative:
Meaning: These are the structure of business that is associated with the
private firm as they are privately owned by the individual and are controlled by the
group of people without any interference of government. They are basically running
the business for the satisfaction of their consumer in order to develop the good brand
image in the large marketplace.
Characteristics: Cooperative business is the business entity in which they
are conducting their business operation without any intervention of governing
authorities (Cuérel, Loots and Lavanga, 2019). The main dimension of such firm is to
render higher profits as well as revenue so that they can sustain for the long term in
the market.
Example: Dyson limited is one of the leading company that is dealing in
electric appliances like vacuum cleaner, blade less fan and many more.
Section 3: Different business structures and external factors affecting
business
6

3.1 Identification of different organizational structures and
explaining how does organisational structure affect business
productivity
Organisational structure
organisational structure is referred as the effective team for the business that
assist in formulating the overall performance as well as the strategies of the
business. They interpret how the organisational structure is being manageable and
controlled with the purpose to gain higher profit and success (Sta, 2018). This also
include certain pattern and rule so that they can transfer the data is a productive
manner as it may have clear structure in the company. In addition to this, it also
involves different types of organisational structure which are hierarchy structure,
divisional structure, flat structure. Therefore, they can follow the proper structure of
business as per the operation of the company.
 Divisional structure- It is the organizational structure that aids in grouping
the different structure of organisation into smaller units. These are the crucial
administrative division of the organisation as they all have particular resources
as well as functions on the foundation of the products. In context to Dyson,
they are using this structure in order to generate high revenue and to have
smooth functioning of their operations. This also assist the organization to
have the broad outcome which can lead them to gain competitive advantage.
7

 Functional structure- This is the Organisational structure which is
specifically adopted by the organization with the purpose to start new project
(Valcik, Sabharwal and Benavides, 2021). This structure have restricted level
of management and have full control to the top level of management. They
take all the major decisions in order to meet the goals of the company.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
External analysis
PESTEL analysis is a framework that helps business concern to evaluate the
macro environment in order to make strategies and achieve success. With the help
of this business can run their operation effectively and efficiently. Along with this
PESTLE analysis is conducted to enhance the productivity as well as profitability of
the organization. The PESTLE analysis of Dyson is mentioned below:
 Political factor- These are the factors that includes political stability,rate of
tax etc. There is political stability in the UK as government doesn't make
frequent changes in rules and regulation. So this can help the business to run
8

effectively and efficiently (van Steenbergen, Ramos and Sousa, 2021). In
context to Dyson, company can sustain for the long time period in the market
due to political stability.
 Economical factor- This factor includes inflation rate, interest rate,
employment rate etc. As the economy of UK is stable and people have good
purchasing power and they can spend on goods and services in an
appropriate manner. With respect to Dyson, if the inflation rate increases than
it can directly affect the profitability of the company. Due to this the company
may have face some financial problem.
 Social factor- Demographic change, income, taste and preference of
consumer are included in this factor. In United Kingdom, individuals are
modern and use advanced electric appliances which can instantly impact the
function and profitability of the Dyson. So, the company should develop the
product according needs and wants of the customer.
 Technological factor- This factor alteration in the technology or progression
in the technology (Roman and Nelson, 2021). In this context, Dyson, the
company is using advance machinery in order to increase their sale and
profit. This can positively affect the overall profitability of the organisation.
 Legal factor- These factors are associated with the law which is developed
for the welfare of consumer and worker. In relation to Dyson, they are
following effective rules and concept with an effort to influence their
employees for the better working. This can lead the company to increase their
customer base.
 Environmental factor- In this factor, Dyson is giving more concentration on
getting rid of the use those elements which are harmful for the surroundings
such as use of plastic bag. Through this they can influence large customers
towards their brand.
Conclusion
From the above report it can be concluded that business in practice is the
essential factor that assist the organization to meet their targeted objectives and
goals within the certain time period. There are various kinds of organization such as
small, medium and large organisation which assure their operation as per the
9

available resources, finance and investments. This also consider several legal
structure such as sole proprietorship, legal corporative, partnership and many more.
Along with this, PESTLE analysis is being conducted in order to understand the
external environment.
Reference List
Ohiomah, A., Benyoucef, M. and Andreev, P., 2020. A multidimensional perspective
of business-to-business sales success: A meta-analytic review. Industrial
Marketing Management, 90, pp.435-452.
Ouro-Filho, A.M.D., Olave, M.E.L. and Barreto, I.D.D.C., 2021. Impact of Inter
organisational Learning Factors on the Performance of Micro and Small
Businesses. Journal of Information & Knowledge Management, 20(01),
p.2150002.
Alaukhanov, Y.O., Imazhev, B.Y. and Azhimetova, Z.A., 2018. LEGAL SUPPORT
FOR OPTIMUM WORK OF SMALL AND MEDIUM-SIZED BUSINESSES.
In INDUSTRIAL TECHNOLOGIES AND ENGINEERING (ICITE-2018) (pp.
74-79).
Kannan, D., 2021. Sustainable procurement drivers for extended multi-tier context: A
multi-theoretical perspective in the Danish supply chain. Transportation
Research Part E: Logistics and Transportation Review, 146, p.102092.
Sivers, C., 2018. Working in Partnership. In Entrepreneurial Learning City
Regions (pp. 359-362). Springer, Cham.
Cuérel, M., Loots, E. and Lavanga, M., 2019. Not from, but in, the same
organisation:: cooperation, collaboration and competition in creative
coworking spaces. Journal of Creativity and Business Innovation, 5, pp.132-
156.
Sta, H.B., 2018. Organisational structure for the e-government coordination and
interoperability framework: a case study of Tunisia. Electronic Government,
an International Journal, 14(1), pp.51-77.
Valcik, N.A., Sabharwal, M. and Benavides, T.J., 2021. The Functional Areas
Utilizing HRIS in a Public Organization. In Human Resources Information
Systems (pp. 115-124). Springer, Cham.
10

van Steenbergen, D.I., Ramos, P.G. and Sousa, B.B., 2021. Key Drivers of
Performance and Profitability in a Social Business. In Sustainable and
Responsible Entrepreneurship and Key Drivers of Performance (pp. 264-
281). IGI Global.
Roman, H. and Nelson, A., 2021. A RECENT LOOK AT BUSINESS PROCESS
REENGINEERING WITH RESPECT TO INTRICACIES OF
ORGANIZATIONAL CULTURE. International Journal of Business Research
and Information Technology, 8(1), pp.92-105.
11