[SOLVED] Understanding Business Structures and Market Equilibrium

The assignment delves into various business structures, including public and private sectors, and their unique characteristics. It also explores the concept of market equilibrium and how it can be achieved through microeconomic policy, fiscal policy, and supply-side economy. Additionally, the impact of globalization on businesses is discussed, highlighting its effects on competition, innovation, and growth.

Course Title: Global Business (Management)
Module Title: Business Environment
Level: Four
Lecturer:
Student Name:
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Contents
Introduction......................................................................................................................................3
Forms of organization..................................................................................................................3
Legal structures of organization..................................................................................................3
Public and private organizations..................................................................................................4
Competition policy......................................................................................................................5
Exploring the functions of CMA.................................................................................................5
Macroeconomic objectives and policy instruments.....................................................................6
Concept and Scope of the Globalization of Business..................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Introduction
The report seeks to find out different forms of business structure and how they operate according
to organizational preferences and differentiate between certain forms of business. There will also
be a brief discussion about how governments and states have allocated different policies to
assure competition and stability in markets and how globalization helps companies to outgrow
themselves. The aim of the report is to find out the interrelationship between business structures,
different policies and globalization.
Forms of organization
Forms of business organization is a dependable variable where the independent variables are size
and nature of the business structure (Arco‐Castro ET & all, 2020). However there are basically
four types of business structure which are for-profit, not-for-profit, charities and cooperatives
which will be discussed below.
 For-profit: Organizations that functions and revolves around making profits and their
own interests are of this kind. Most companies fall in this category and their primary
intention is to encash products or services to consumers
 Not-for-profit: The organizations that do not only have the intention of making profits
rather attempt to work for public service and participate in helping people are categorized
as not-for-profit business structure.
 Charities: The organizations that have the specific objective of ascertaining social well-
being of people with special needs or requirements and are philanthropic reckoned as
charitable organizations.
 Cooperatives: Cooperative business or co-op is a structural business where the
organization is owned and operated by the people working in it and meanwhile they use
the commodities and services produced by the company.
These are the most common structures of business seen everywhere.
Legal structures of organization
Legal structure or also defined as business ownership structure is basically the form of the
business and here four primary types of structure will discussed which are sole proprietorship,
partnership, private and public companies.
 Sole proprietorship: Sole trading is the simplest straight forward business where the
owner control and monitor all the functions of business and these are primarily home-

based business or consulting firm and the owner only is responsible for the capital, debt
or taxes.
 Partnership: Businesses where more than one individual acts as co-owners and shares
investments, profits, losses, responsibilities and risks are of partnership business structure
(Luhtala ET & all, 2021). These type of business structure get more capital resources or
loans than sole traders thereby have a better chance of growth.
 Private (Ltd.) company: A private limited company cannot be listed in the stock
exchange and can possess at most fifty shareholders. This type of company has limited
liability and professional reputation but also require more paperwork and at least one
director.
 Public (PLC) company: A public limited company has the rights to sell their shares to
general public in public offerings. It’s not mandatory for them to sell their company
shares but if they want to then they can.
Most of the organizations seen in today’s world are partnership businesses.
Public and private organizations
Public sectors are monitored, controlled and financed by governments and owned by states
whereas the private sectors is basically administrated by individuals and intended to make profit
or enhance organizational growth (Lee, 2017). Public and private organizations have some key
differences.

Public sector Private sector
 Deliver public goods and services
 Owned and controlled by government
or state
 Driven by social well-being and public
service
 Financed by government or state
 Entities are publically traded or
transparency in trading.
 Deliver produced goods by company
consequent to company preferences.
 Owned and governanced by
individuals.
 Driven by profit and profit only.
 Capital resources come from loan or
individual investments.
 Not a transparent business structure.
There are various causes of market failure but the main ones are monopoly or power abuse where
one organization sets all the prizing, inappropriate parceling of information, externalities and
lack of public goods. Government intervenes when things get out of control and need to bring it
in favor of public.
Competition policy
The competition policy primarily focus on the rules and regulation need to be maintained by
markets and monopolies. The principles of competition policy are to interdict two or more
companies to involve in any kind of anti-competition agreement, constrict free trading, embargo
currish behavior of a dominating firm and all types of anti-competitive practices.
Collusion is a type of business agreement that promotes anti-competitive behavior among rivals
to shatter market equilibrium and most of these agreements are illegal and secret. Collusion has
two categories which are explicit and implicit. Explicit collusion is when two or more firms in
same industry formally decide to control a market and implicit is when the agreement happens
when the agreement happens formally (Stverkova & Pohludka, 2018). Monopolies and cartels
can cause market failure or increase the price of products in a level that is harmful for the
consumers which is why government tries to wield monopolies and cartels to keep balance in the
market so that the market power do not go to the wrong hands
Exploring the functions of CMA
The primary aim of CMA (Competition and Market Authority) is to discover and investigate
those mergers that try to annihilate competition from any marketplace or if there are consumer
problems and domination in a marketplace. A merger is investigated only when it possess more

than 25% of the market share and have a probability of being a monopoly or dominate the
marketplace (Calvano ET & all, 2019). They play the role of creating a transparent and efficient
market where entrepreneurs can boost up their confidence and consumers will not face any
complications.
There are many industry regulators in UK such as FCA (Financial Conduct Authority), PSR
(Payment System Regulator), PRA (Prudential Regulator Authority) etc. These regulators
ascertain best services for the consumers but if there is a monopoly or anti-competitive situation
in a market, consumers are the primary victim of it and they get worse products and services for
more money which is quite frustrating for them and less efficient for the market which is why
government intervenes.
Macroeconomic objectives and policy instruments
Macroeconomic policy is simply put the operations embraced by governments to assure efficient
allocation of resources among industries and firms to maximize the output level of a
marketplace. The objectives of macroeconomic policies are to maximize national income to
encounter economic growth, minimize the probability of inflation, decrease unemployment rate,
ensure low government borrowing, minimize inequality and protect the market environment.
On the other hand the conflict between growth and inflation, employment and unemployment,
trade cycle, stagflation, exchange rate and balance of payments can result from microeconomic
policy. Monetary policy is operated by central bank and involves the management of money
supply and interest rate (Eichenbaum ET & all, 2020). Fiscal policy indicate government
spending and taxation policy to maintain economic stability and economic growth. Supply side
economy refers to increase in the supply of goods to increment economic growth.
Concept and Scope of the Globalization of Business
The connection between people all over the globe which can be politically, economically or
socially and easy transportation of goods, people, services and resources are defined as
globalization (Ghemawat, 2017). Globalization affects both businesses operating in single and
multiple countries and it has made easier for the companies to produce goods at lower cost with
imported resources and reduced the cost of delivery of the product or service. Globalization has
resulted into more competition in most industries which lowers the price giving consumers
diverse choice of purchasing a product or service.

Due to more competition companies are investing more on R & D which diversifies products and
new products attract different set of customers (Cartwright, 2017). As a result businesses are
growing it people can get any products nowadays that is produced at any part of the globe.
Globalization has made expanding and sustaining business easier than ever.
Conclusion
There are several of business structures that operate in different ways and many policies need to
be followed so that there exists market equilibrium and competition among rivalries. Different
sectors have different way of operating business and different motives like public and private
sectors have opposite motives. Globalization has made business expanding and reaching
maximum number of consumers easier which is why multinational companies are growing a
huge rate. Overall as there are variety of business structures they need to be monitored so that
balance in every industry and market exists.

References
Arco‐Castro, L., López‐Pérez, M.V., Pérez‐López, M.C. and Rodríguez‐Ariza, L., 2020. How
market value relates to corporate philanthropy and its assurance. The moderating effect of the
business sector. Business Ethics: A European Review, 29(2), pp.266-281.
Luhtala, H., Erkkilä-Välimäki, A., Eliasen, S.Q. and Tolvanen, H., 2021. Business sector
involvement in maritime spatial planning–Experiences from the Baltic Sea region. Marine
Policy, 123, p.104301.
Lee, C.Y., 2017. Product diversification, business structure, and firm performance in Taiwanese
property and liability insurance sector. The Journal of Risk Finance.
Stverkova, H. and Pohludka, M., 2018. Business organisational structures of global companies:
Use of the territorial model to ensure long-term growth. Social Sciences, 7(6), p.98.
Calvano, E., Calzolari, G., Denicolò, V. and Pastorello, S., 2019. Algorithmic pricing what
implications for competition policy?. Review of Industrial Organization, 55(1), pp.155-171.
Schut, F.T. and Varkevisser, M., 2017. Competition policy for health care provision in the
Netherlands. Health Policy, 121(2), pp.126-133.
Coppock, L. and Mateer, D., 2017. Principles of macroeconomics. WW Norton.
Eichenbaum, M.S., Rebelo, S. and Trabandt, M., 2020. The macroeconomics of epidemics (No.
w26882). National Bureau of Economic Research.
Ghemawat, P., 2017. The laws of globalization and business applications. Cambridge University
Press.
Cartwright, R., 2017. Mastering the Globalization of business. Macmillan International Higher
Education.