Types of Businesses and Business Structures

This document provides an overview of the different types of businesses and business structures, including small organizations, micro organizations, medium organizations, and large organizations. It also discusses the importance of organizational structure and its classification, such as functional structure, divisional structure, and matrix structure. Additionally, it includes a PESTEL analysis of Vodafone Group and how external factors affect businesses. Read more on Desklib.

BUSINESS
PRACTICES
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Table of Contents
INTRODUCTION:- ........................................................................................................................3
MAIN BODY:-................................................................................................................................3
SECTION A- TYPES OF BUSINESSES:.............................................................................3
SECTION B- TYPES OF BUSINESS STRUCTURE:........................................................5
SECTION C- CLASSIFICATION OF ORGANISATIONAL STRUCTURE.....................7
PESTEL ANALYSIS OF VODAFONE GROUP.................................................................8
CONCLUSION: ..............................................................................................................................9
REFERENCES:...............................................................................................................................9
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INTRODUCTION:-
Business refers to an activity which provides goods and services in the market. It only
succeed with the help of group or individual efforts, commencing of a business requires great
knowledge about the market it is situated in. It involves planning, setting up a vision,mission
statement and having a core objective which a company wants to attain through the course of
time (Vashchenko, 2017). A business also involves a lot of risk, it depends on the proprietor that
how well he/she overcomes the drawbacks.
Vodafone is a multinational telecommunication company situated in Newbury,Britain. It is
worlds second largest telecommunication company and third largest mobile operating company
in UK. The name is derived from voice data fone. It also operates in Asia, Africa and Europe. It
provides IT and telecommunication services in more than 150 countries. It is also listed in
London stock exchange.
The following report is the study about how external factors in the market affect the working of
the businesses.
MAIN BODY:-
SECTION A- TYPES OF BUSINESSES:
There are different types of business around the world, differ on the bases of size ,
ownerships, geographical areas, capital and etc. other than this there are business which is being
commenced for social motive and not just for profit maximisation ( Obeng, K., 2020). A
business can be classified as small, micro, medium and large organisations. They are
differentiated on the bases of their legal position, employee strength and number of shareholders
the firm has.
There are four types of businesses:
 SMALL ORGANISATIONS:- These organisations are owned private cooperation,
public, and sole proprietors. The organisation consist of less number of employees and
generate low level of revenue in the market (Kim, and Lee, 2020). They are termed as
small because these company does not receive good government support and the
qualifying for tax policies varies from country to country. However these organisations
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are open for change and tries to adapt with the new technology in order to have a strong
hold in the market. The owners of small businesses often tend to seek advice from the
experts in the marketing and are able to focus on the positive and real impact on the
business. For example- Marshfield bakery, London.
 MICRO ORGANISATIONS:- This is a type of small business which consist of fewer
number of employees, less than 10 employees. These organisations are usually owned by
sole proprietors. Irrespective of their size, micro businesses have contributed a lot in the
economy. It is the foundation of the creation of an economy, it also require less capital to
operate a business. They certainly require same level of planning, dedication and work
efforts similar to that of large organisations. These include freelancer, independent
contractor, small stores, etc. The business earns a higher level of returns on owner equity
then large organisations. It also develops and helps an individual grow and expand
according to the situations. For example- Little Wait-rose, UK.
 MEDIUM ORGANISATIONS:- The ownership is determined by the management. The
medium sized business are majorly owned by in house professionals. These organisation
usually consist of 250 members, the financial requirements of medium sized businesses
can be covered with short term cash-flows and adjustment in the balance sheet. These
organisations should look for opportunities for long term contract and access to products
and technology plans. A company needs to adapt with the change in technology. For
example- Verdant Leisure, UK.
 LARGE ORGANISATIONS:- This involves large scale business activities, these
organisation employ more than 250 members in its organisation. These organisation
create a big amount of turnover and involves huge transactions (Khvesko, T.V. And elt.
2017). Large organisation can lead the government in terms of tax policy, trade policy,
environment policy, foreign policy, etc. In the market big firms has power over the
economy therefore it is considered as an important part of the industry. They are also
responsible for misdeeds such as exploitation of working class and politicians. The
organisation may earn profit in millions and have a large market share. These businesses
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contributes to the development of the country by providing employment. For example-
Unilever, UK.
The scale of the business vary in term of the ownerships and its purpose. A business men needs
to be resilient and deal with the setback cleverly. The risk in a business increases with the
increase in the scale of business.
SECTION B- TYPES OF BUSINESS STRUCTURE:
There are different types of ownerships in the business, a business can be owned by an
individual as well as a group of individuals. Business structure can further be classified as Sole
Proprietor, Partnership, Limited Liability Business, Public Limited Liability Business And
Cooperates (Hunjet Makopek-Pusec, , 2017). There are legal theories related with the ownership
in a business organisation.
Following are the description on the business structures:
 SOLE PROPRIETOR: These businesses are owned and commenced by an individual in
the market. In this type of businesses the owner is the only one responsible for all the
losses and bare all the gains earned by the business. The capital can be invested according
to the status of the proprietor but all the debts of the business are considered as owners
personal debts. Decision making is quick as compare to any other business structure as
there is only one sole owner in which the business is dependant on. Small scale
businesses are generally owned by sole proprietor as it is easy to set up a small
organisation. For example- Hackney restaurant, London UK.
 PARTNERSHIP: This business structure involves two or more partners to setup and run
a business organisation. Partnership businesses consist of a partnership deed which
includes all the rules and regulations that needs to be followed by the partners in order to
setup a business. The deed consist of information such as each partner's capital share,
profit sharing ratio and work and responsibility divisions. In some partnership businesses
liabilities and profits are shared equally and in some the liabilities are limited to the
partners. In professions like medical and law they have limited liabilities within the
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partners. The partners involve in the partnership are personally responsible for all the
debts of partnership. For example- Marks and Spencer, UK.
 LIMITED LIABILTY BUSINESS- It is a sub division of partnership business where the
partners have limited liabilities, they are also addressed as L L P' s . it is a collection of
both sole proprietorship and general partnership. A person with minimal knowledge
about the business can also invest in a L L P as they are more concerned with the profit
share than the business knowledge of a partner. In L L P the partner has less say and
decision making power in the management. The partner can contribute according to
his/her capabilities, no minimum capital required. For example- Oxfam, UK.
 PUBLIC LIMITED LIABILITY BUSINESS- In this business ownership can be bought
from the stock exchange market. In UK the companies are first registered in the London
stock exchange market and then traded by the shareholders or the partners of the firm.
They have limited liability and are not responsible for any losses in the business. For
example- The Unilever group, UK.
 COOPERATIVES- It consist of a group of individual who come together with a
common desire, social, economical needs and tries to achieve organisational goal. It is a
type of business in which the company is owned by the shareholders, with a purpose to
attaining profit maximisation. It consist of a variety of individual irrespective of how
weak and strong an individual is, it motivates the weaker section of people to succeed and
helps to attain their individual interest. The profit earned by the company is distributed
equally among the members of the association. For example- 2 sisters food group, UK.
Before the commencement of any business organisation, it is required to set up a good business
structure in order to proceed with business processes. Ownership plays a vital role in a business
structure. An individual needs to have knowledge about the legal structure of any business
structure.
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SECTION C- CLASSIFICATION OF ORGANISATIONAL STRUCTURE
Organisational structure refers to the framework of the activities of a company. It informs
about the working of an organisation and what a company is required to do in the business
processes (Franceschelli, Santoro, 2018). It shows how an data is passed in an organisation, it
defines the hierarchy within an administration. The organisational structure can be classified as
follows:
 FUNCTIONAL STRUCTURE- It is a very common structure, in this organisational
structure the management groups or divides employees on the basis of their skills and
work knowledge. This structure helps employees improve and specialise in their field,
specialization leads to achievement of organisational gaols. Communication plays a vital
role in functional structure, without proper communication within the department the
company would not be able to achieve organisation goal.
 DIVISIONAL STRUCTURE- These structures are expensive, in this organisational
structure an organisation is divided into different units that has enough resources within it
to aid the production of that product line. The organisation organizes business activity
around geography, market, and service group. It helps in decision making, these are very
helpful for organisation which has a lot of division such as regional, production, etc.
 MATRIX STRUCTURE- According to this matrix employees has to report to more than
one superior or boss. The organisation has more than one line reporting manager. This
structure is very complex but helps organisations to attain supreme goals.
Vodafone follows Matrix organisational structure, this enables the company to supervise over its
expertises.
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PESTEL ANALYSIS OF VODAFONE GROUP.
1. POLITICAL FACTOR- The company's business was declined due to the sale and after
number of agreement received financing from UK . The company later earned growth in
UK. The company had to reposition as it was facing price competition in the market.
2. ECONOMIC FACTOR: The company is trying to change their cost by adapting new
technologies. The company has designed its strategies in such a way that it is fit to get
better returns on capitals and have decided to reduce its net expenses.
3. SOCIAL FACTOR: The change in sociocultural factor results in increase in demand of a
commodity. Due to the increase in the use of internet with the help of consumerism, has
enabled the company to provide its customers with good internet services has helped the
company grow.
4. TECHNOLOGICAL FACTOR: The companies main motto is to change with the change
in technology, it has implanted high targets through focussing on functional excellence.
High competition in the market forces the company to provide better services in order to attract
its customers towards their services.
5. ENVIRONMENTAL FACTOR: The company has decided to cut down their
environmental causes by 50% by 2025. The company has decided to switch on using
renewable resources of energy for environment friendly surrounding.
LEGAL FACTOR: The company tries to follow all the rules and regulations of the country it is
working in . The company has faced a lot of major stakes, however the company focuses in its
business strategy to avoid any chances of violation and non-compliance.
Vodafone is a multinational company and there are various factors affecting the production and
services in the international market. PESTEL analysis of Vodafone highlights various elements
impacting its business performance.
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CONCLUSION:
In conclusion, every company in the market faces different types of elements of factors.
The external factors can be determined with the help of a proper business and organisational
structure. The organisational structure depends on the scale of business, the type of ownership a
company has. Vodafone is worldwide company owned by partnership agreement and follows
matrix structure to supervise its expertise smoothly. The organisational structure plays a vital
role in a growth of any organisation and thus needs to be studied properly before implementing
it.
REFERENCES:
Franceschelli, M.V., Santoro, and elt., 2018. Business model innovation for sustainability: a food
start-up case study. British Food Journal.
Hunjet, A., Makopek-Pusec, and elt.., 2017. FACTORS AFFECTING ORGANISATIONAL
DESIGN: THE CASE OF FRANCK TEA. Economic and Social Development: Book of
Proceedings. pp.126-139.
Khvesko, T.V. And elt. 2017. THE ASSESSMENT OF THE MAJOR FACTORS AFFECTING
THE FINANCIAL PERFORMANCE OF ENTERPRISE. In Open innovation (.pp. 47-
50).
Kim, S.S. and Lee, H.Y., 2020, September. A Study on the Factors Affecting the Performance of
SMEs. In European Conference on Innovation and Entrepreneurship (pp. 798-807).
Academic Conferences International Limited.
Obeng, K., 2020. Accounting for factors affecting cost and technical inefficiency. Case Studies
on Transport Policy, 8(3). pp.963-970.
Vashchenko, M., 2017. An external perspective on CSR: What matters and what does
not?. Business Ethics: A European Review, 26(4). pp.396-412.
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