Types of Companies: Micro, Small, Medium, and Large Scale Businesses

This document provides an overview of different types of companies, including micro, small, medium, and large scale businesses. It discusses their characteristics, such as the number of employees and market share. The document also explores the impact of external factors, such as political, economic, social, legal, environmental, and technological factors, on business performance through a PESTLE analysis. Overall, it highlights the importance of understanding different company structures and external factors for business success.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
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Contents
Introduction 2
Section 1: Different types of companies and how they work
2
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships 5
Section 3: Different businesses structures and internal factors
affecting business 6
Conclusion 8
Reference List 9
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Introduction
In the business activity there are various form of company are organized to
perform business activity to raise the level of economy for example public, private
limited company. It will count as a effective role play that produce creative and
effective goods and services in order to accomplish insist of the economy (Yadav
and et.al., 2020). This will ensure all appropriate completion and satisfying particular
market demand that is most required by the target consumer. In some context of
scenario types of company fail to accomplish actual requirement that may impact
whole economy of the country. This will majorly influence the level of profitability of
the company that is why most of the leading company try to develop diversified
qualitative products that will fulfill the demand of each category of consumer to
increase the economy of the country. The company can count as a small, medium as
well as large scale of business which aims to serve large portion of the economy
through delivery of most valuable services. This will act of updating more productive
lifestyle while raising the standard of living. The report combines of different forms of
company as well as internal, external forces which affect company profitability. The
report also includes overall impact that affect performance level of company through
proper identification.
Section 1: Different types of companies and how they work
Micro business:
The micro business is one type of company that act combining of small scale
of business to aim few employee in order to execute business operation. This will
ensure to accomplish basic type of requirement of specific potential consumer. This
will facilities proper arrangement of need that will achieve desirable set objective of
market in more significant way (Pelz, 2019). It will put in more effective raise and
development of economy that is most essential for company in sustaining within
competitive edge. For example company like Amazon or Etsy is a type of micro
scale business that fulfill necessary needs of its potential audience. The rate of
revenue and profitability is very low in comparison to other companies. As its target
audience are not that much aware so demand id comparatively low. This type of
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business is perfect for starting face for individual person as they are much proficient
enough to accomplish necessary item for consumer as well as market. But micro
business has to compete with high level of competition and has to bring more
qualitative product.
Characteristics
 Less number of employees: The business of micro scale has only few
employee that operate in accomplishing productive service of market in order
tom raise the level of economy. The services they deal are very few in variety
so no large number of employee is required.
 Smaller area: The micro business operate is only small section of its business
activity that is why they are much able to give full attention to target audience.
It will leads to cover fundamental requirement of market and consumer
through their effective and productive services within country particular. The
overall profit in respect of micro business covers more improvised and focus
service with competing competitive edge.
Small business:
Small business is known as private company that owned employee at very
few number as these type of company does not operate at large scale in the market
place. This will have only chance of less facilities with few employee, revenue from
other company (Musimenta and et.al., 2017). Example- Grocery, bakery shop etc.
This is are totally concern with the small business that complete demand of goods
and services in respect of market as well as potential purchaser. Through this it will
create more profit while satisfying demand of each category of consumer. The small
business is generally operated in Urban area that is why this will ensure high level of
revenue to update the economy and development of community. Most of the basic
requirement gets accomplished with target audience. They try to hire more number
of employee for its expanding business activity and operations. It will successfully
sustain itself in running it daily expenses.
Characteristics
 Ownership: Small business owner has to manage on own all operation and
business activity for completion or motive of the company. Most of the
services they are dealing with are generally known as sole proprietorship.
There are various function is performed by the individual owner that manage
several activity of business.
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 Labour intensive: Generally small type of business are not much aware or
linked with high quality of technology. Small business is depend on the worker
intensive that fulfill lost of requirement in respect of technology. It will leads to
more utilization of investment that cover small business and mainly working
upon. But these type of business must think about use of economical as well
as technological so that company can run for the long period of time. This will
involve more profit and revenue level which has to invest more amount of
money in company progress.
Medium size business:
In comparison from small business large employee is associated with medium
scale business (Laitinen and Kadak, T., 2018). Generally it is operated in particular
area of geographical just example capco, clif bar. These develop more level of
revenue in comparison other scale of business in market place. But medium scale
industry are very less in number as it does not cover large area of market through
high profit revenue.
Characteristics
 Unorganized labor: Employee are less as it is one type of un organized
business from comparison to large business where major function or
services are operated in marketplace.
 Local areas of operations: It only operate in area of local and does not cover
wide market place.
Large size business:
The large scale of business combines of large portion of the market with the
enhancement of economy in country (Adorno, 2017). This will appoint more number
of employee such as 500 that leads to maximum coverage of business profitability.
Large scale business deal in best and productive service in their respective industry
that will boost the economy level. It will brings the concept of more innovative and
creative feature in the respective economic country. Example company such as
Microsoft and Apple act as large scale industry that continuously raise its market
share with innovative concept.
Characteristics
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 Large number of employees: This will cover Large employee that facilitates
economy while completing basic requirement industry demand and consumer
through developing more rate of profitability.
 Large numbers of marketshare: Large business combine large area of market
share that promote advance economy through proper evaluation while
exploring different market sector.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
Sole trader are act as a self employed person who concern with individual
owner that handle all types of business activity and operational level. Most of the
decision are only decided by the owner and contain major right (Bołkunow, 2019).
This leads to separate legal indentify as owner. Just like business of Micro and
small.
Characteristics
 Here owner has full right to decide business action.
 This will refers as own boss and cover more freedom towards right decision of
company.
Partnership:
Here partnership involve only two or more number of people who are equally
responsible for loss and profit through proper distribution while operating (De
Spiegeleire, 2017). Example are company like red bull as well as go pro joined
among and formed partner while divisible loss as well as profit.
Characteristics
 In this suitable arrangement has been formed among its members and act as
per the decided norms in agreement.
 Most of the profit is equally shared as well as loses while performing business
activity.
Limited liability business:
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In this business, here personally liable does not included to form the debt and
liability. It also known as hybrid entities such example company like Nike and
Blackberry that contain low or limited liability.
Characteristics
 This will count as separate legal of ownership in business.
 It has only limited liability and totally responsible of its business action.
Public limited liability business Cooperative:
The cooperative and public limited liability will leads to voluntary association
of employee that contain few or limited liability that act as a separate legal entity. It
will collect valuable information in the source that will spread into the large context of
sale (Hillary, 2017). Example company like Oil gas.
Characteristics
 This will cover major portion of separate legal entity from the part of owner.
 Here shareholder has ability not to convert its share in form of public.
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
These are some types of structure business that covers major responsibility
through operating high level of business that is given below-
 Functional structure: The functional structure mainly combines employee that
contain same structure skill, knowledge and leads to one type of department
so that they can synchronies their effort for growth and effective market share
so that company can earn more earning. Here for forming employee similar
type of skill is essential so that they can communicate in more organized way
while sharing each level of business.
 Divisional groups: The divisional group contain structured level of employee
and form cluster in the creation where same product has been develop that
meet all requirement so that consumer demand can accomplish its demand
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on the other hand company also raise the level of profitability through
improving consumer experience.
 Matrix structure: This is concern with appropriate collection in respect of
functional as well as divisional type of structure. This will brings major portion
of innovation by applying method of decentralization in business decision
making (Jincharadze, 2019). This will raise productivity and accomplishing all
the demand of target audience that cover more profit. This will facilitates
more completion of demand in successful mode.
 Hybrid structure: It is more same as with matrix structure that contain divisible
business in form of two concept with respect of functional as well as
divisional. Here overall goal gets accomplished in the form of effective
operation. This is one type of more sustainable business for long run in
organized way.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
 Political factor: Sometimes government raise the rate of tax so that major
business operation and services get highly affected just like import and export
within its market place (Jordão, 2017). It also affected the level of profit in the
business operation.
 Economical factor: This will refers as boost in inflation rate so that major
demand of market services and goods gets fluctuated within the market place.
 Social factor: The demand of social factor is keep on changing and influence
the demand and services of business within respective market. That is why it
influence the revenue level of the company at greater context.
 Legal factors: The government has developed major policy that is essential for
each business to follow otherwise it will affect business progress and act as a
hindrance for long period of survival. When business does not implement
these laws or policy then it influence its operational and function along with
major penalty.
 Environmental factors: This will count as suitable surrounding which has to be
manage within proper condition of environment. This will remove actual
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carbon footprint in order to build proper functioning in smoothening way in the
respective industry specific.
 Technological factors: This will update the level company demand if they
implemented appropriate technology use in its business. This will deliver more
opportunity in respect of sustainability with enhancement of consumer
experience. It will convey more productive and creative services with optimum
utilization of resources.
Conclusion
From the above report it has been concluded that most of the business
company contributes its own share to boost the level of economy through introducing
concept of innovation and creativeness. This will try to complete overall demand of
market and consumer in order to create more profit and revenue level. The
surrounding of macro environment majorly impact whole operations of the business.
As a result most of the company implemented effective strategy to reduce the
impact of it on business to compete with the competitive edge.
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Reference List
Books and Journals
Adorno, E., 2017. Historic Preservation: Incentivizing Companies through Tax
Credits. J. Corp. L., 43, p.143.
Bołkunow, W., 2019. Internationalization of European Small and Medium-Sized
Companies. In Eurasian Business Perspectives (pp. 39-51). Springer, Cham.
De Spiegeleire, S., Maas, M. and Sweijs, T., 2017. Artificial intelligence and the
future of defense: strategic implications for small-and medium-sized force providers.
The Hague Centre for Strategic Studies.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment:
business imperatives. Routledge.
Jincharadze, S. and Karchkhadze, T., 2019. Examining the role of social network in
recruitment: Results of a qualitative study among Georgian small, medium and large
companies and Generation Y (Doctoral dissertation, Ilia State University).
Jordão, R.V.D. and Novas, J.C., 2017. Knowledge management and intellectual
capital in networks of small-and medium-sized enterprises. Journal of Intellectual
Capital.
Laitinen, E.K. and Kadak, T., 2018. Does the company size affect performance
management system? PMSs in small, medium-sized, and large
companies. International Journal of Management and Enterprise
Development, 17(3), pp.281-305.
Musimenta, D and et.al., 2017. Tax compliance of small and medium enterprises: a
developing country perspective. Journal of Financial Regulation and Compliance.
Pelz, M., 2019. Can management accounting Be helpful for young and small
companies? Systematic review of a paradox. International Journal of Management
Reviews, 21(2), pp.256-274.
Yadav, G. and et.al., 2020. Development of a lean manufacturing framework to
enhance its adoption within manufacturing companies in developing
economies. Journal of Cleaner Production, 245, p.118726.
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