Understanding Different Types of Companies and Their Structures

This report provides an understanding of different types of companies and their structures, including micro businesses, small businesses, medium-sized businesses, and large-scale organizations like Tesco. It explains the characteristics and functioning of each type of company. The report also discusses different business structures, such as sole traders, partnerships, companies, and public limited liability businesses. Additionally, it explores how external factors like political, economic, social, technological, environmental, and legal factors impact businesses, using Tesco as an example. Overall, the report highlights the importance of considering external factors and choosing the right organizational structure to achieve business objectives.

Individual report

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Understanding of different type of companies and how they work.......................................3
You are required to explain different companies from sole traders to cooperatives and
Limited Liability Partnerships................................................................................................3
Different business structures and how external factors affect businesses..............................4
COCLUSIONN..........................................................................................................................6

INTRODUCTION
There are different kind of companies in a business environment which are dealing
with different intentions, objectives, aims and visions. Each company has its own functional
structure which depends on the scale and level of operation (Dangelico, 2017). This report is
based on study of Tesco. It is the British multinational organisation which is populated in
1919. Companies performing as retail chain within the market of UK and global word where
it sell different kind of products and services to its customers. In this report there is
discussion about different type of companies according to their size. This will also discuss
different types of business according to their legal structure. Along with this, there is also a
discussion about different external and internal factors as well as structure which is adopted
by the firm to achieve its objectives.
MAIN BODY
Understanding of different type of companies and how they work
Micro business: Micro business can be defined as a business organisation which is
operating with limited number of resources and their functioning include not more than 10
employees. The main characteristic of this kind of business is their size and scale where they
work as a sole proprietor and are less than 250000 dollar annually. The main example of this
kind of business is grocery shops, stationery shop and many more.
Small business: Small business can be defined as a business which is privately
owned by individual sole proprietor partnership or a corporation (Lichtenthaler, 2020). Main
characteristic of this kind of business is that it has fewer employees and less annual revenue
than a regular size business or a corporation. Some common example of small scale
businesses are local grocery shops bakery hair dressers tradespeople like carpenter and
electrician.
Medium size business: Medium size business can be defined as a business enterprise
which is dealing with adequate amount of resources and proper workforce. Main
characteristic of this kind of business is that it involve employees more than 50 in number.
Some common examples of medium sized businesses are banks, enterprises working
infrastructure and many others.

Large size business: Large scale organisation or organisation which are performing
at large level with large number of resources and employees. the main characteristics of this
organisation is that they use large number of resources and employees with more than 1000
employee within organisation Tesco, ASDA, Sainsbury and many other the organisation of
large scale enterprises (Raguseo, 2018).
You are required to explain different companies from sole traders to cooperatives and
Limited Liability Partnerships
Sole trader business: Sole trade business can be defined as a business organisation
where a single person worked as a self-employed who runs their own business as an
individual. In context of this business they don’t have any legal identity separate to its owner.
The main characteristics of this business are that the sole trader has absolute control over the
business assets and profits after the tax. Some example of sole traders is local organisation,
retailers, wholesalers at local level (Molodchik, Fernandez-Jardon and Barajas, 2016).
Partnership: Partnership is an arrangement where different parties are agreed to
perform of business with common objective. Example of partnership business is our
individual businesses interest based organisation schools government and other combination.
A main characteristic of a partnership business is that there is an agreement between two
people to share the profits and losses in equal manner so that they can achieve objective in a
timely manner.
Company: A company can be defined in separate legal entity which is the presenting
an association of the people where they are natural legal or mixture of both with some
specific objectives. In context of company, memory shares a common purpose and you need
to achieve the goals. The major characteristics of the organisation is that a company can
create a legal person so that the company itself has a limited liability as members form of fail
the discharge to their duty they can easily change. Common example of company are Tesco,
Unilever and many more (Brogi and Lagasio, 2019).
Public limited liability business: Public limited company is that kind of company
under the United Kingdom company law it is a limited company to share may be freely sold
and traded to the public. The minimum share capitals of this company are usually more than
50000 Euro. The main characteristics of this kind of company are that day is limited liability
is government has to pay their debts. Some common example of public limited company is
government companies.

Different business structures and how external factors affect businesses
Organisational structure defines how the activities such as task allocation coordination
and supervision will be flow within the organisation to achieve the goals and objectives of the
firm. There are different kind of organisation structure which directly related to profitability
and productivity within the organisation. Some of these are discussed below:
Bureaucratic structure: Under this structure organisation will follow a mechanism
which compared with the other organisation exactly as the machine compared with the non-
mechanical models of production. This kind of structure organisation will focus on clearly
defining the roles and responsibility as the issuing a hierarchical structure and respecting for
the merits within the structure. This kind of structure is consist of different levels of
management ranging from senior executive to regional manager according to the ways of
working and productivity within the firm (Perera, 2017).
Functional structure: Functional structure can be defined as a structure within the
firm which consists of different activities such as coordination supervision and task
allocation. This kind of organisation structure is helpful in determining how the organisation
perform and operated function in relation to long-term objectives. In relation to this it will use
production marketing human resources and accounting as a base within the firm to locate the
functions.
Divisional structure: Divisional structure can be defined as a structure which is
consists of self-contained divisions. This structure is used by the organisation to divide and
collect the functions which help in producing the products. The structure it utilizes the plants
to complete and operate as a separate business or a profit centre (Gondek, Boessenkool and
Star, 2018).
In context of Tesco, is using functional structure within the organisation to perform its
operations in effective way. These functions are performed according to the requirement and
dividing the functions in relation to the available resources.
Pestle analysis of Tesco
Factor analysis can be defined as a Framework which is used by the organisation to
perform its function in the external sources which impact on the profitability and productivity
of organisation. In context of this, there are different kind of factors impact on the

organisation profitability and productivity. All these factors are discussed below in context of
Tesco.
Political factor: Political factors are those which include all the rules and regulations
which are formulated by different legal authorities and government within the nation where
organisation is working and performing its operation. Tesco is global performing
organisations which make it essential for the firm to identify the political factors in an
effective way for achieving its goals and objectives. In relation to the current situation,
political factor like Brexit and terrorism are impacting on the working of retail industry as
well as test at global level. Terrorism is impacting negatively on the performance of Tesco
because it is reducing the chances of expansion of firm (Leonard, 2018). Brexit impact and
positively on the performance of Tesco this is because it opening various kind of
opportunities to the firm which can be used by the organisation.
Economic factors: These are those factors which are related to the economic
condition of the area where the organisation is working. It includes different factors like GDP
growth, employment ratio and many other factors. In relation to Tesco, this impact directly
on the performance of organisation as well as decision making abilities of manager within the
current market (Kangwa and Mutambo). In relation to UK there is economic stability which
is helpful to the Tesco in managing its function and using effective price strategies to
improve profitability. It can also see that due to lack of global demand organisation is facing
difficulty in managing its revenue. Revenues of organisation are continuously decreasing
because of improper GDP growth at global level. Environment has equal impact on the
organisation which has to be identified by the manager before taking decision.
Social factor: Social factors are those factors which include different kind of factors
related to the society. These factors are social trends, social changes and many more. In
relation to Tesco, organisation is facing you changes with the trends of society related to the
customer in UK. Here the bulk shopping in one stop shopping are continuously trending
which increase the number of non-food items. This impacting the organisation decision-
making ability within the environment as it has to attract customers while raising their
decisions. Customers are now being more aware about the health issues due to which
organisation has to change its approach by selling more health related goods and services.
Technological factors: practice which are directly related to the performance of
organisation in relation to use of technology within the environment. There are continuous

with technological advancement within the business environment where organisation like
Tesco has to use these changes for their benefits. In context of present situation, Tesco is
using advanced technology in comparison to its competitors because organisation has
introduced RFID technology to increase the in-store experience for customers. This
technology is helpful to the organisation by managing the customer experience. Use of this
technology customer can easily pay according to their want. Tesco is also developing a
mobile app named as PayQwid. This technology helps the organisation in managing the
payment system by using a proper interface and bank to bank transfer (Božanov, 2018)
Environment factors: It is the most important external factor which directly
influences the decision making ability of the organisation in relation to the external
environment. This factor includes all those systems which are related to the natural
environment surrounding it to the business organisation. Here it is liability of organisation to
fulfil its obligations towards natural environment. In context of Tesco, organisation is using
zero plastic waste policy as well as 0 carbon emission policy which help the firm and fulfil its
obligation towards natural environment. This will also help in building Goodwill with the
market and attracting the customers because a fulfilling social corporate responsibility.
Legal factors: Legal factors of those factors which are related to the rules and
regulations formulated by the legal authorities in relation to managing the business of firm. It
covers different kind of rules and regulations such as employment law consumer law and
many others. In context of Tesco, organisation follows all the rules and regulations according
to the needs and requirements of legal authorities. Company followed employment contract
law and various other laws to benefit the customers and firm in effective manner.
It can be evaluated from the above-mentioned information that there are various
functions with the external environment which impact the organisation in direct. This
function has to be performed by the firm to achieve the objectives and managing the
functions in a better way.
COCLUSIONN
It can be concluded from the above mentioned information that external factors play
important role in development of the organisation. There are different kind of businesses
according to the size which help in identify the characteristics of a business and using it
according to the requirement. Each and every type of business play important role in shaping

the economic environment. Along with this, it can also concluded that different structure and
impact of environment has to be considered by the firm to achieve its objectives in timely
manner.

REFERENCES
Books and Journals
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