Business in Practice: Types of Companies, Organizational Structures, and PESTLE Analysis

This report by Desklib discusses various types of companies, including micro-enterprises, small businesses, medium organizations, and large companies, as well as sole proprietorship, partnership, limited liability business, public limited liability business, and cooperative business. It also explains the divisional and functional structures and the impact of political, economic, social, technological, legal, and environmental factors on businesses through PESTLE analysis. The report provides examples of each type of company and structure and highlights their characteristics and roles.

Business in practice

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................3
TASK 3............................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business is an enterprise or an organisation that is engaged in dealing with industrial,
commercial or professional activities to earn and maximise the level of profits. Every business
has separate legal entity which is structured in economy for determining innovations within it to
gain more customer-base and growth of organisation (Ahlemeyer-Stubbe, A. and Coleman, S.,
2018). It not only includes profit organisations but also involves non-profit organisations whose
motive is to serve social welfare. Business practice is developed by keeping financial records,
setting objectives, monitoring trends, motivation to staff, using business strategies and many
more. It also involves implementation of new procedures and methods to organize business
activities. Within present report, various kinds of companies are discussed along with their
functioning. Explanation of organisational structures and external factors with their impacts on
business is also going to be considered. Furthermore, companies from sole traders to
cooperatives and limited liability partnerships will also be explained in this report describing
their characteristics and roles.
MAIN BODY
TASK 1
Various kinds of companies and their functioning:
Company is defined as a separate judicial entity of association that represents individual
having a common purpose to achieve goals of the organisation. There are several types of
companies that are included in business entities to earn and maximise the level of profits. Some
of them are financial enterprises, voluntary organisations, profit organisations and many more.
There are various companies that are classified on the basis of their size such as micro
enterprises, small businesses, medium organisations and large entities (Bevan, D. J. and Wolfe,
R. W. Eds., 2019). These various types of companies are described below with their functioning:
Micro-enterprises:
These types of enterprises are considered as fresh start-ups from family businesses having
human resources between zero to nine and their turnover is accounted up to 2 million.
Profitability within economy as well as social cohesion is managed to sum up the value in
economy. Owners within this kind of enterprise are pressurised to maintain and achieve the
requirements of short-term facing complexities because of size and capacity of business. The
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level of employment as well as investment is low within micro-enterprises. The entrepreneurs of
this business takes decision by taking participation in an effective manner and are also
responsible for all profits and losses that occur within the organisation. Examples of this type of
company includes Boss Brewing Company, Issoria, Mantons Cards, etc (Gray, D. E., 2019). For
acquiring investment returns, the period of gestation is short and involved in operations of
routine like spaza shops.
Small business:
These types of business offer support from economy and job opportunities on both local
as well as national level. The size of employees within small business is ten to forty-nine who are
having annual turnover of 10 million. This type of business is independently operated by nature
and along with this, it owns organisation having limited income and size. It is considered as a
sole proprietorship, corporations and private of partnerships. The motive of small business is to
expand the volume of sales and to maximise the level of profits by working with small number
of workforce. Examples of this type of companies include local bakeries and architectural firms
such as Marshfield bakery, Cafepod Coffee Co. Only the entrepreneur within this type of
organisation has power to take better business decisions. Flexibility in business is provided when
there is sudden change in operations of organisation requiring restricted investment as well as
manpower.
Medium organisations:
This type of company involves employees size of 250 and annual turnover of 50 million.
The growth within these kinds of businesses is associated with the growth of small businesses
after earning more profits as well as income. The bridge between small and large companies is
emerged because of medium sector enterprises. The management within medium organisation
helps in saving some amount of capital that can be further used in future development like
recruiting human resources and expenses associated with machinery (Guo and et.al, 2018). The
growth of respective company is ascertained by the entrepreneur who takes all the business
decisions in an effective way. Examples of this type of business are Verdant Leisure, Captify,
Smith Brothers, etc. In this type of company, the administration has limited resources and intense
dependency on the capabilities of entrepreneur in the process of resource generation. Informal
management takes place when manpower performs their responsibilities without having
knowledge of division of task. In this situation, only the owner is liable to operate all the
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functions of business and is also responsible for facing the challenges that occurred within
business.
Large companies:
Large enterprises within national as well as international markets have employees size of
more than 250 human resources and having turnover exceeding 50 million. In this kind of
company, the working of subordinates are relied on voluntary membership and business growth
extends at a rapid rate (Manasakis, C., 2018). The level of employment as well as investment is
extreme high as of the multinational organisations. It is because of capital intensive strategy that
requires investment in acquiring highly technically developed machines and skilled human
resources. Examples of this kind of business includes Tesco, HSBC Holdings, Sainsbury,
Morrisons, etc. Large multinational organisations have an immense and complex hierarchy of
management including business communications at high level. This type of company offers
sustainability to environment through promoting and maintaining international relationships.
TASK 2
Various organisations from sole proprietorship to cooperatives:
Sole trader: It is an individual who is self-employed as well as run the business on its
own and is liable for all kinds of debts within the organisation. In this type of business, the
entrepreneur bears all losses and enjoys all the profits that are generated within the business and
hence, is considered as sole proprietor. Sole trader have unlimited liabilities and monitor as well
as controlling power on organisational activities is only in the hands of owner as this entity is not
considered as a isolated lawful entity. Sole proprietorship's business is controlled and owned by
one individual who takes participation in capital as well as takes fast and better business
decisions by maintaining secrecy of the business. Examples of sole proprietorship involves
Lescott. Novas Accountancy Ltd., etc.
Partnership: It is a business in which two or more persons are involved in a single firm
to work together by creating a partnership deed and having a common purpose. The profit
sharing ratio of partners within this type of business is on the basis of their capital investment
and duration. This kind of organisation has unlimited liability by nature and all the partners of
the company are individually liable for corporate losses as well as responsibilities (Mosbah, A.,
Serief, S. R. and Abd Wahab, K., 2017). There is an existence of agreement between the partners
presented within the business and transfer of interest is based on mutual agreement and all
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decisions are taken jointly by the partners within the organisation. Examples of this type of
business includes Twitter, McDonald, etc.
Limited liability business: This type of business is also considered as hybrid business
arrangement that shows ease of partnership management as well as firm protection liability.
Limited liability business has separate legal entity and is considered as an incorporated company
to monitor and control the relationship of director as well as shareholder (Nikolskaya and et.al,
2017). This type of organisation is having restricted shares as well as limited guarantees In
context to restricted shares, the responsibility is restricted to the share's amopunt that are not
paid. In context to restricted by guarantee, the amount of guarantee is compensate by the
associates in case of bad debts. Characteristic of this business describes that entrepreneurs within
this business are not liable for the responsibilities of company as they are having separate legal
entity, persons within the business have restricted liability. The certification is easy and
negotiable within this business for uninterrupted business activity of the organisations. Example
of Limited liability business is Oxfam, Blockbuster, etc.
Public limited liability business: In this type of company, shares are purchased and sold
to public within the stock exchange market that provides assistance to entrepreneur of business to
enhance the capital by issuing shares to general public along with the risk associated with it.
Public limited liability helps in growth and expansion of business by offering opportunities
through transferability of shares. There are several characteristics of this type of business and
some of them are described here. This business has advanced level of opacity level with
abstracted judicial presence in its functioning and decision making process of business. In this
business, the shares are freely transferred from one entity to another and through this procedure
the capital is accumulated and profit is generated within the organisation. These fiscal
organisations are consenting the expansion of finance of the one who are recorded (Schaltegger,
S. and Wagner, M. eds., 2017). Examples of this kind of business are Rolls Royce Holdings,
HSBC Holdings, British Petroleum Company Limited, etc.
Cooperative business: This type of organisation is considered as a judicial body or
unorganized system in which services are rendered to the person and businessmen. The main
motive of cooperative business is to earn and maximise the level of profitability by generating
restricted return on interests. The necessities of social, economical and cultural factors are
voluntarily meet through associated owned undertakings. The characteristics of this type of
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business includes building and developing human values and user are secured with democratic
management. Persons within the business have general interest and regulations of society are
remained continue because they are having self-imposed bodies. The responsibilities of the
persons in cooperative business is limited to the extent of capital invested by them.
TASK 3
Various organisation structures and PESTLE Analysis:
Organisation structure is defined as a systematic way in which business activities are
properly divided, arranged and coordinated (Schauer, C. and Schauer, H., 2021). The process
within business ascertains flow of information in which there are several levels of hierarchy and
roles as well as responsibilities along with the authority is dispersed. The interaction and
relationship is defined between various departments of organisation. There are different types of
organisational structure and each structure determines the manner of business operations and
performance. Some of them are described below:
Divisional Structure: In this type of structure the functions within the organisation are
grouped together into a division. Each division of this structure includes all essential resources
and functions that supports product line in the organisation such as department of finance, IT,
marketing, human resources, etc. The business functions and activities in this type of structure
include diverse branches that are related to groups of customers, market or product. The
divisional structure is suitable for large multinational companies in which team is built and
developed to bring efficiency in the organisation. Divisional structure is useful within the
business because the failure of one division does not hamper the functioning of another division
and offers organisation a greater flexibility in operations.
Functional structure: To coordinate the activity, functional organisation structure is
used in business concern. According to this structure, activity is sorted on the basis of skills,
abilities as well as general knowledge of human resources present in organisation. Every section
is organized with duties comprising differentiated departments that are reported to individual
authority of topmost level management. Hard-hitting determinations and human actions are
considered in this type of organisational structure (Secondi, L., Principato, L. and Mattia, G.,
2019). In this, the administration power structure is easy that makes workforce assured as well as
fast working. The structural fields are tiny groups centralized on specialization such as IT,
finance, human resource department.
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PESTEL Analysis:
A tool which is used to analyse the impact of macro environmental factors that influence
functioning of industry is defined as Pestle analysis. To analyse those impacts HSBC is also
conducted Pestle analysis which is described as follows:
Political factors: It determines long term profitability which impacts business and market.
Changes in government policies and new rules as well as procedures influence business
performance (Wang, W., Indulska, M. and Sadiq, S., 2018). HSBC consider several factors
before taking entry or investing in market which is having political stability, trade
regulations and tariffs, taxation.
Economic factors: HSBC is influenced with the competition norm of micro environment to gain
competitive advantage. The other factors that impacts HSBC are interest rate, inflation,
saving, employment rate, etc. The factors considered by HSBC are type of economic system,
financial market efficiency, economic growth rate etc. The respective organisation gains
opportunities and do effective performance with stable economy.
Social factors: The factors that are associated with consumer demographics and society culture
which impacts organisation are social factors. HSBC considers the factors of educational
level, shared beliefs and attitudes. Customer needs are determined by the respective
company by using innovative technologies to meet the demands of their potential customers.
Technological factors: The companies have opportunities to expand their business at global
level through the process of technology advancement and digitalization. Technological
analysis involves understanding the impact regarding cost structure, rate of technological
diffusion etc. Factors which influence HSBC holdings consists of social media marketing,
research and development on technology.
Legal factors: Study of legal environment and regulatory structure of new market-share is
required to analyse this type of factor. The factors considered by HSBC holdings that
influence on business employee protection law, consumer protection law, and intellectual
property law. These factors are associated with the government and state laws as well as
legislations related to market and organisation (Manni, F. and Faccia, A., 2020). The
respective company adheres the legal policies and procedures, legislations and laws that are
made by legislative system of the country.
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Environmental factors: The changes in climatic conditions,laws and regulations related to
environment, standards of environment impact functioning of HSBC holdings. To reduce
environmental pollution, the adoption of waste management practices is crucial for the
respective company. The other environmental factors affecting business are weather, climate
change, recycling. In renewable technologies, subsidies are offered by countries to
encourage investment which is beneficial for HSBC to ensure long term profitability.
CONCLUSION
From above explanation, it is concluded that there are various types of business that
perform functions in different ways. The types of business included in this present report are
micro, small, medium and large enterprises that have different functions as well as
characteristics. Several kinds of companies are also considered in the report along with the
features and examples such as sole trader, partnership, cooperative, limited liability and public
limited liability. Furthermore, different organisational structures are explained within the
portfolio along with their features. For analysing the impact of macro-environmental factors on
business operations, Pestle analysis is conducted so that managers of organisation can take better
business decisions.
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REFERENCES
Books and Journals
Ahlemeyer-Stubbe, A. and Coleman, S., 2018. Monetizing Data: How to Uplift Your Business.
John Wiley & Sons.
Bevan, D. J. and Wolfe, R. W. Eds., 2019. Systems thinking and moral imagination: rethinking
business ethics with Patricia Werhane (Vol. 48). Berlin: Springer.
Gray, D. E., 2019. Doing research in the business world. Sage.
Guo and et.al, 2018. Strategic positioning, timing of entry, and new product performance in
business-to-business markets: do market-oriented firms make better decisions?. Journal
of Business-to-Business Marketing. 25(1). pp.51-64.
Manasakis, C., 2018. Business ethics and corporate social responsibility. Managerial and
Decision Economics. 39(4). pp.486-497.
Manni, F. and Faccia, A., 2020. The business going concern: financial return and social
expectations. In Sustainable Development and Social Responsibility—Volume 1 (pp.
201-213). Springer, Cham.
Mosbah, A., Serief, S. R. and Abd Wahab, K., 2017. Performance of family business in
Malaysia. International Journal of Social Sciences Perspectives. 1(1). pp.20-26.
Nikolskaya and et.al, 2017. Boosting the competitiveness of hotel business operators in current
conditions. Journal of Environmental Management & Tourism. 8(8 (24)). pp.1617-
1622.
Schaltegger, S. and Wagner, M. eds., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Schauer, C. and Schauer, H., 2021, March. Opening the Minds of Upper Secondary School
Students for Business Informatics: an Exploratory Study and an Outline for a Dedicated
Teaching Program. In International Conference on Wirtschaftsinformatik (pp. 477-491).
Springer, Cham.
Secondi, L., Principato, L. and Mattia, G., 2019. Can digital solutions help in the minimization
of out-of-home waste? An analysis from the client and business perspective. British
Food Journal.
Wang, W., Indulska, M. and Sadiq, S., 2018. Guidelines for business rule modeling decisions.
Journal of Computer Information Systems. 58(4). pp.363-373.
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