Different Types of Companies and Their Operations

This report discusses the different types of companies based on their scale of operations and how they work. It also explores the impact of external factors on organizational culture and provides a PESTLE analysis of Marks and Spencer.

Business in Practice

Table of Contents
INTRODUCTION ..........................................................................................................................3
Section 1...........................................................................................................................................3
Different types of companies and how they work......................................................................3
Section 2...........................................................................................................................................4
Different companies operate at the environment .......................................................................4
Section 3...........................................................................................................................................5
Organisational Structure..............................................................................................................5
PESTLE Analysis of Marks and Spencer...................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9
Books and Journals.....................................................................................................................9

INTRODUCTION
Business is an activity which involves production, manufacturing, and selling of products
to gain profit out of it. In a business activity, the owner is liable for the debts incurred in this
process. Business also explains the organised efforts of an individual owner towards achieving
the goals and earning increased profits. Businesses can be classified on the basis of scale: small,
medium and large-scale businesses. This report will discuss the PESTLE analysis of Marks and
Spencer and impact of external factors on business environment. The present report will depict
the effect of different factors on organisational culture (IONUȚ 2017).
Section 1
Different types of companies and how they work.
Business environment comprises of many types of enterprises which can be classified on
the basis of their scale of operations. Every business has sole objective of earning profits through
dealing in goods and services and satisfaction of customers is another motive. Over the past
years in the international environment, the classification of businesses has been developed which
are as follows:
Micro or Small Businesses: Micro enterprises generally get started with their funding source of
micro credit and their scale is small which is limited up to 10 people. Micro businesses sell their
goods and services in local markets and this depicts their narrow scope of operations. The
government encourage these micro businesses as this will help in growth and development of
economy. This also help the country to fill the niche in developed countries. These enterprises
come under those who have a turnover less than £2 million (Mannion 2018).
Medium Size Business: Medium size enterprises are those who sets a personnel limit of not
more than 500 workers in US. These enterprises cover the large employment sector of the
economy. These enterprises are also responsible for driving innovation and maintaining
competition in different sectors of the economy. Medium size enterprise generally try to maintain
a balance sheet total of £18 Million and income level of £36 Million.

Large Size Business: Large scale enterprises operate at in international level in the economy.
TESCO is favourable example of this type of organisation which operates their grocery chain
network across the globe. Generally, their turnover exceeds 1.5 billion and their staff members
include 5000 employees working for the attainment of goals.
Section 2
Different companies operate at the environment
Sole Trader Business: A sole proprietor business is operated by the sole owner who liable for all
the operational activities of the business. There is no compulsion for sole proprietor business to
get incorporated or registered due lack of government involvement. There are no entry barriers
for this type organisation which provides them competitive advantage and market captivation
(Erthal 2018).
Partnership: A partnership is formal legal agreement between two or more people to operate
business and share profits. In this type of business, the responsibilities and liabilities associated
with business gets divided among the partners. The partner has unlimited liability and they have
mutual business motive which they have to achieved to get success. It is necessary to get the
partnership firm registered from the registrar to ensure the legal existence of business.

Limited Liability Partnership: Limited liability partnership is an alternative corporate business
which provides the partners to organize their internal structure like traditional partnership firm.
The liability of partners is limited which gives them advantage that each partner is only liable for
their code of conduct and have no relation with others partners misconduct. LLP has an
advantage of perpetual succession in which the business can continue its existence even after the
death, retirement, or insolvency of partners (Shtal 2018).
Public Limited Liability Business: A public limited company is registered under the Companies
Act 2013. It can be defined as the company who can issue their shares to general public. The
company has the advantage that it can raise capital by issuing shares to general capital. The
company has separate legal existence but its operations are strictly governed by the government.
The members limit start with a minimum of 7 and have no maximum limit for the members.
Cooperative: A cooperative business is owned and controlled by the peoples who consumes their
products and supplies. These businesses are formed and operated for the benefit of the members.
People generally join the cooperatives with the aim of pooling the risks and to become
empowered to develop a sense of responsibility.
Section 3
Organisational Structure
Organisational structure can be explained as a way through which workflows in the
organisation. it defines how the activities, roles and responsibilities of employees are directed
towards the achievement of organisational objectives. A successful organisational culture defines
its employees’ duties efficiently to maintain the growth level of the company. It also helps in
flow of information in the right direction towards the completion of work on time (Nandonde
2019). There are certain types of organisational culture which are as follows: Line Organisational structure: It is a commonly used structure which follows chain of
command from top to bottom. a line organisation has direct relationship with every levels

of organisations. This helps in achieving primary goals which enhances the productivity
of the organisation.
 Staff or Functional Authority Organisation: It involves two position: line and staff
position. In line position, an employee is solely responsible for achievement of objectives
of the organisation. In staff position, an employee is liable to provide expert and support
to line position employees. The employees of both the position work as a team for the
attainment of organisational goals. This encourages motivation among employees and
enhances the productivity level of the organisation.
 Divisional Organisational Structure: In this type of structure, the departments are
classified on the basis of function, product, geography territory and project. This
classification helps in dividing the employees on the basis of their field of expertise. Due
to this they can work smoothly and effectively towards achieving the highest level of
productivity.

 Project Organisational Structure: It is a temporary organisation designed for specific
projects completion. The employees selected for this organisational structure are from
different functional organisation who have expertise and knowledge about the operation
of the project. The operation of these structure depends on the abilities and talent of the
employee. Through the completion of project timely the employees achieve a high level
of satisfaction and it enhances the organisational productivity (Dellyana 2017).
 Matrix Organisation Structure: Matrix organisation structure is a permanent
organisation designed to achieve results from a team of employees specializes in different
field areas. This ensures their overall growth and development and ultimately enhances
the productivity of the organisation in a positive way.
These are the different organisational structure used by different companies in different
situations. This helps in completion of their short-term goals and makes their workforce efficient
and dedicated towards the work. This also enhances the productivity level and helps in
increasing the growth of the organisation across the globe.
PESTLE Analysis of Marks and Spencer
Political Factors: Political factors basically mean that how the government impacts our
company or industry. Factors like taxes, political stability or instability, trade policy etc. comes
under political factors. Marks and Spencer has the benefit of having head quarter in UK but other
centres in many countries which helps to import at less price because of which they earn high
profit margins. They also have benefit of working in European market where they can trade
freely without any restrictions of tariffs and taxes. They believe that it is important to maintain
good relations with government to ensure smooth working and that's why they reply timely to the
queries of government which are posted on to their site. So the government is in full support of
them as they maintain good holistic values and a fair way of working (Bankvall 2017).But the
decision of Brexit in which UK left the trade policies of Europe have impacted Marks and
Spencer as they used to trade freely without any problem of taxes and tariffs. Political stability
and taxes are the two political factors which have deep impact on Marks and Spencer.
Economic Factors: Economic factors are those who impact the business significantly such as
inflation, economic growth, exchange rates, interest rates etc. These factors have direct or

indirect long term impact on the operations of business. The factor that impacted Marks and
Spencer was the prices they are offering as the company deals in quality products with high
prices if compared to competitors and at the same time competitors are providing discount which
led to problem for them, and at time of financial crises people don't spend on quality products.
The company got impacted by the crisis as it made led off 2% of the staff and drooped the idea
of giving 20% discounts that were initially decided. So, in 1999 they decided to switch to foreign
suppliers (Akpoviroro 2018).
Social Factors: Social factors are also called socio-cultural factors these basically means what
are the beliefs and attitude of the population it is important for the marketer to understand these
factors to launch a product according to the needs of customers. Marks and Spencer is a name
from 1800 and every one in UK know about it very well but the thing is people have started
thinking it as an old band which need some new styles mainly for young people as many new
retail chains are coming every year. When the Credit Cards were launched Marks and Spencer
took the opportunity and allowed people to use credit cards at their stores which was a profitable
affair for them at that time. From last 10 years the demand for ready meals is also increasing so
they captured the market by providing ready foods. It is important to understand what society
needs and providing it at the right time is equally important.

Technological Factors: New technology is always required for any business to work effectively
and efficiently. The level of innovation, research and development and technological changes
come under technological factors. Marks and Spencer use the system self-check out for food unit
which has not only saved time but also money which would have spent on cashier. They have
announced technological transformation programme which will help the company to become
first digital business and would result in growth of the business. They have a strong e-commerce
platform for clothing.
Environmental Factors: These factors have come into existence in past few years due to scarcity
of resources and increase in pollution level. As Marks and Spencer want to create a good brand
image they focus of sustainable way of collecting and using resources. They also believe in fair
trade which also leads to sustainability. in 2019 November when there were climate issues in UK
they established their own policy called “Green Policy” for well-being of the community as well
as planet. They also worked with Better Cotton Initiative which was in support of sustainably
procuring cotton.

Legal Factors: There are some laws that companies need to follow for trading ethically and
successfully. The laws are employment laws, consumer protection laws, discrimination laws etc.
As the laws of every country keep on changing Marks and Spencer conduct training programmes
every year to keep their employees up to date but once a store was getting renovated and a cancer
causing chemical fall down which caused risk for employees and workers and company didn't
even take the charge of incident so was charged under Health and Safety at Work Act 1974 and
were told to take measures and make norms for safety of employees and were also finned
500,000 pounds for each offence (Peutere 2020).
CONCLUSION
From the above report, it can be analysed that there are many forms of business
organisation which are currently in operation in the international environment. These business
enterprises can be classified on the basis of scale and other factors which influence their external
and internal environment. Furthermore, there is a PESTEL analysis performed on Marks and
Spencer which has impacted the growth of the organisation in different ways.

REFERENCES
Books and Journals
Akpoviroro 2018. Effect of participative leadership style on employee’s productivity.
Al Issa 2019. Organisational Culture in Public Universities: Empirical Evidence. AJBA, 12(1),
pp.41-70.
Bankvall 2017. Conceptualizing business models in industrial networks. Industrial Marketing
Management, 60, pp.196-203..
Dellyana 2017. Business model types associated with network structure changes in the music
industry. International Journal of Business Innovation and Research, 13(1), pp.112-
129.
Erthal 2018. National culture and organisational culture in lean organisations: a systematic
review. Production Planning & Control, 29(8), pp.668-687.
IONUȚ 2017. The Importance Of Different Types Of Companies With Foreign Capital For
Economic Development.
Mannion 2018. Understanding organisational culture for healthcare quality
improvement. Bmj, 363.
Nandonde 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), pp.54-61.
Peutere 2020. High-involvement management practices and the productivity of firms: Detecting
industry heterogeneity. Economic and Industrial Democracy, p.0143831X20961155.
Shtal 2018. Methods of analysis of the external environment of business activities.