Types of Companies and Their Organizational Structures

This report discusses the different types of organizations and their legal entities, including micro, small, medium, and large size enterprises. It also explores various business organizational structures and the external factors that affect business operations. The report uses the PESTEL analysis model to explain the impact of political, economic, social, technological, environmental, and legal factors on company performance.

Business in Practices- Types
of companies

Contents
Introduction.................................................................................................................................................3
Main body...................................................................................................................................................3
Section 1: Definition, characteristics and examples of micro, small, medium and large size of business
enterprises................................................................................................................................................3
Section 2: different companies from sole trader to Cooperative and limited liability partnership...........4
Section 3: various business organisational structure and the external factors which affect the business..5
There are several types of organisational structures and how these structures affect the productivity
of the organisation...............................................................................................................................5
Using the PESTEL analysis model it is explained the several external factors which affect the
performance of the company...............................................................................................................6
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

Introduction
Business is a Enterprise in which entrepreneurs produce and sell their goods and services
into the Marketplace which helps them to generate revenue from it. The report is being discussed
about the different types of organisations and their legal entities which are present in the current
scenario (Ardolino and et. al., 2018). The companies are differentiated with respect to their size
and scope in the Marketplace. The different types of organisation and their structure are also
discussed and the external factors which affect the operations of an organisation are mentioned in
the report.
Main body
Section 1: Definition, characteristics and examples of micro, small, medium and large size
of business enterprises.
Micro business organisation
It is this type of enterprise where the single people up to 9 employees are engaged in
order to attain the common goals. They have a turnover of £ 2 million. These are such
organisation which is developed in order to maintain the economic viability and social cohesion
of several regions in the nation. These kinds of organisation used to face unique challenges as
they are small in size and capacity(Shimoda, 2019). The owners of these kinds of companies
have to put more time and effort in order to meet and manage the short-term necessities of the
company. For example: hairdressers, bakery stores and many other small stores.
Small business enterprises
These kinds of organisations used to employ 10 to 49 employees and their ultimate aim is
to attain £10 million revenue from their products and services. The small business organisation
used to provide job opportunities for the local people as they are operating their business at the
small scale and in small areas (Medda, 2020). These organisations can be seen into the
competitive market and some of the examples are gravity on restaurant architecture firms, hotels
and many others. These kinds of organisations usually have informal management style. They
have limited financial resources that's why these types of companies face difficulties in order to
survive in the competitive market.

Medium size business
These kinds of companies use to give employment opportunities for more than 50 people
but less than 250 individuals. Their turnover is £50 million. When the companies get successful
into the small business then in the shift to the medium size business because they have gained
more profits and incomes from the existing ones. For example, factories, manufacturing units,
etc.
Large size of business organisation
These types of organisations used to employ more than 250 employees and their turnover
is also more than £50 Millions. These kinds of organisations have captured a large area in the
competitive market which helps them in order to attain the common goal of the organisation.
These organisations have a characteristic which talks about the complex management here key as
they are working into the large competitive market. These kinds of companies help in the
development of economic conditions of a nation. For example: Tesco, Hilton Hotel, Fairmont
hotel and many other companies.
Section 2: different companies from sole trader to Cooperative and limited liability
partnership
Sole trader business enterprise
A sole trader organization is formed by the owner where he is self employed and runs his
own business in order to satisfy the needs and wants of his target customers. He is the one who is
responsible for all his debts and liabilities. It can be also said that the owner and business are
effectively one and the same as the losses will be borne by the owner himself because he has an
unlimited liability over it (Crutzen, Zvezdov and Schaltegger, 2017). For example computer
repair services, catering companies and many other organisations.
Partnership
When two or more people come together with the common intention to attain the set
targets of an organisation under an agreed agreement is called partnership. In such an agreement
the partners are agreed to share the losses and profits with respect to the specified ratio (Vera,
Ochoa and Perovich, 2020). The partners can be Limited or unlimited level towards the liability
with respect to the agreement which is duly signed by them. The partners can transfer their

shares with the mutual approval as it is required to transfer the interest into Corporation to any of
the new parties. For example, twitter, McDonalds etc.
Limited liability business
It is the kind of a business organisation where the partners are agreed upon the said ratio.
These kinds of agreements between the partners praise an important role as they used to protect
their personal assets. The agreement helps the partners to decide the sharing of profits and losses
between them. Designs of organisation as flexible in terms of taxes and also beneficial for the
partners to take several benefits from the firm. For example, blockbuster, Westinghouse etc.
Public limited liability company
It is the kind of organisation which is divided into different shares and such chairs can be
availed by the public as they are available in the general stock exchange market. The benefit
from such kinds of companies is that we can easily raise their capital by issuing shares to the
general public. The shares the organisation can raise their funds which can be used by them in
order to expand their business into the competitive market. For example, holding plc.
Cooperative
It is another type of company which is held and administered all those goods and services
in the competitive market. The main aim of these kinds of organisations is to provide their goods
and services to their users and earning the profitability from the competitive market is their
second priority. They are such organisations which are working in order to develop the economic
conditions of the nation. For example: weaver street market.
Section 3: various business organisational structure and the external factors which affect
the business
There are several types of organisational structures and how these structures affect the
productivity of the organisation
Organisational structure means such movement which can be adopted by the Enterprises
in order to achieve the common goal in a better manner (Gatti and et. al., 2019). There are
several organisational structures which help in allocation, coordination and supervision of
resources within an organisation.

Types of organisational structures
 Hierarchical organisational structure: it is the pyramid shape of a chart which can be used
by the companies to manage their affairs into the competitive market. Which context to
this kind of structure the top level of management used to give commands to the lower
level of management. In this kind of structure every employee has a supervisor and they
have to report their day to day tasks which are assigned to them (Müller, Buliga and
Voigt, 2018). This structure helps the company to motivate their employees which results
in the better performance of them.
 Functional organisational structure: it is another type of organisational structure which is
similar to hierarchical organisational structure. In this the highest level of employee. The
company is divided into different types of departments and the employees are distributed
with respect to their skills and knowledge and corresponding to their functions for which
they are appointed (Paulson and Sundin, 2019). Beneficial for the organisation as it helps
them in order to focus on their respective goals and also used in order to motivate them to
get specialisation with respect to any of the subject matter in which interest.
 Flat organisational structure: it is such a kind of business structure adopted by the small
organisation as it is used in order to maintain their operations so that they can encourage
Their employees in order to enhance their productivity (Przychodzen, Gómez-Bezares
and Przychodzen, 2018). This helps the employees in order to develop their skills and
knowledge and makes them more responsible towards their work (Normamatovich,
2018). This helps the organisation in order to extend its business into the competitive
market.
Using the PESTEL analysis model it is explained the several external factors which affect
the performance of the company
Sainsbury is the second largest Supermarket chain in the United Kingdom. It was founded in
the year of 1869 by John James Sainsbury. The headquarters is located in London. It is essential
for the organisation to pay close attention towards the immediate business environment and how
that might affect the internal and external factors. It is essential for the organisation to pay close
attention towards the immediate business environment and how that might affect the internal and
external of the company. With the help of the PESTEL model the external factors are determined

which affects the operations of an organization (Wang and et. al., 2021. The model is explained
below:
 Political factors: in 2016 the United Kingdom voted to leave the European Union. Due to
brexit it is difficult for the organisation to conduct their fair trade practices and the
international platform. As it has a impact on import products from abroad. While
enhancement in the cost of foreign products would likely be passed on, the consumer and
Sainsbury used to ensure that customers continue spending their money in order to attend
the satisfactory products and services from the organisation. This helps them to maximize
their profit from the competitive market.
 Economic factors: from the last few years there is a rise in the fuel cost which has an
impact on the products and services. Ultimate high fuel prices make the transportation
more expensive which makes it more difficult for the organisation to provide their goods
and services without increasing the cost. This resulted in lower down the profit margins
and the higher price tag for the customers this is likely to decrease the overall
profitability for the firm.
 Social factors: in the current scenario every person is likely e to take healthy food and try
to avoid junk food as it is no longer in fashion. The customer is in today's scenario trying
to get more body-conscious food shakes (Smith and Parrotta, 2018). This organisation
used to track and try to adopt such products and services into their Supermarket chain
which helps them to satisfy the needs and wants of their targeted customers and helpful in
order to attain the sustainable long-term share in the competitive market.
 Technological factors: there are several advancements in the Technology Sector such as
big data and artificial intelligence e principles which must be adopted by the organisation
as it helps them during their operations (Murmura, Bravi and Palazzi, 2017). The
company is also using search accurate models so that they can give better products and
services to their targeted customers and be helpful in order to improve their profitability.
The latest online shopping option is adopted by the organisation in order to provide
comfort shopping to their targeted customers. This helps the organisation to reach at the
global level.
 Environmental factors: the supermarket chain is responsible for large carbon footprints.
As the company has to make sure that it creates its fair share of carbon dioxide and helps

in order to reduce the carbon footprints from the environment (Vogel-Heuser and et. al.,
2017). This helps them in polluting less the surrounding which can be used in order to
attract the targeted customers.
 Legal factors: there are many legal Publications which are dealt by the organisation as it
affects their performance and becomes a hurdle in order to conduct their proper
operations into the competitive market (Zashev, 2019). It is important for the organisation
to follow each and every rule and regulations from which they are avoided as that helps
them in order to have smooth functioning.
Conclusion
It can be analysed from the above report that every business organisation is aimed to to
generate revenue from its functions it can be divided with respect to their size and scope. These
organisations have direct or indirect impact on the economic condition and working in order to
uplift the standards of the society. The organisational structure must be adopted by the
companies in order to better function so that they can attend to the common goal in an effective
manner. Lastly, the spin discussed the external factors with the help of a PESTEL model. The
model is also beneficial for the organisation in order to determine the strategies which can be
adopted by them so that they can overcome the issues.

References
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