Understanding Different Types of Companies and External Factors Affecting Businesses
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This report provides an understanding of different types of companies and how they work, as well as the impact of external factors on businesses. It focuses on Cadbury as a case study.
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Table of Contents Table of Contents.............................................................................................................................3 INTRODUCTION...........................................................................................................................4 Section 1: You are to show an understanding of the different types of companies and how they work.............................................................................................................................................4 Section 2: You are required to explain different companies from sole traders to cooperatives and Limited Liability Partnerships..............................................................................................5 Section 3: To consider different business structures and how external factors affect businesses. .....................................................................................................................................................5 CONCLUSION................................................................................................................................8 REFERENCE..................................................................................................................................9 2
INTRODUCTION Business report is the evaluation of activities and functions which are running in the industry that needs to consider while operation which can help to increase the organisational productivity and profitability (Amir, Arshid and Arani, 2019). For running any business there is need to analyse the activities and productivity as these are important to know that which factors might be affect the business and their performance. This report is based on Cadbury organisation that is large size multinational company operating their business all over the country by offering variety ofproductsandserviceswhichinfluencesnumberofcustomersandattainthehigher productivity. The management of such organisation understand taste of their customers produce the kind of products which develop the higher performance in changing environment. This report is segmented in three section as different types of business, types of companies and factors in relation to external environment that affected the business. Section 1: You are to show an understanding of the different types of companies and how they work. Micro business:This type of businesses is very small in size as they are operating very small places. The main purpose of such business is to fill customers demand and live their daily life. In this business numbers of people are less than 5 that can help to manage a business. For example, repairing shop, mobile booth (Ghobakhloo, Azar and Tang, 2019). Small business:This specify explicit as small business such as sole trader, partnership and corporation which can help to manage a business regularly. The main purpose of small business is to manage the activities and fill the customer demand and increases the performance. the number of person in such business are less than 10 who thoughts to increase their activities. For example, small restaurant, Café Qila and others. Medium size business:Such type explicit greater than small where more than 50 but less than 250 employees are working for the purpose of providing variety of products and services. For instance, Pharmacy 2U, Crawford Healthcare, NPW gifts (Ye, Xiao and Zhou, 2019). Large size business:This type of business is establishing for getting the higher profits by managing and organising all activities accurately. The number of employees are more than 500 that helps to attracts the large number of customers. For example, Cadbury, Starbucks and Rolls Royce. 3
Section 2: You are required to explain different companies from sole traders to cooperatives and Limited Liability Partnerships Sole trader business: When a business is operating by single person by taking all risk and potential which can help to operate a business If any losses arises then such person is liable to manage the business and develop all activities (Anwar and Ali Shah, 2020). Partnership:When a business is operating by two and more than two people in the interest of getting higher profits and developing a business activities. The partners are legally responsible who use the partnership deed in distributing profits and loss effectively. Limited liability business:This means a business where people are engaging in business activities up to a limited liability which can help to operate and regulate a business continuously. This can be in the form of public organisation, trust and charities where members are legally (Dong and Yang, 2020). Public limited liability business:This means public limited liability company that signifies business offers shares to the public. This business is operating by public and government authorities which can help to develop a business efficiently. For arranging the funds and capital there is need to sale shares publically that can help to operate a business regularly and manage the business effectively. Cooperative:A business in the form of cooperation, farm, and business that mainly owned by different people for the purpose of organizing all activities and development of business properly. This is uses to analyse the needs and provide the better quality of products and services (Mawuli and Yala, 2019). Section 3: To consider different business structures and how external factors affect businesses. Organisation structure is defined as design and practices of business which uses to manage all activities and perform the organizational functional in effective form that helps to manage the business and attain the higher profitability (Vita, 2019). Cadbury is large size organization which is operating business by adopting best structure that are as explained: Matrix Structure:This type of organisation structure is designed to establish good relationship in organisation that can help to manage the all activities and functions accurately. In this, same skills of people are pooled for getting work assignment where they needs to report more than one manager that might be create the burden on workers. For example, in case of 4
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adopting this culture by Cadbury, management is assigning all activities and delivering the giood performance in effective manner (Oliva and et.al., 2019). Line Organizational structure –This is simple company structure which uses by organization to manage and organize the business activities. in this flow of information and authorities keeps top to bottom that can help employees to work accordingly and increase the organisational productivity. in case of adopting this culture by Cadbury chain of command and each department head has control over their departments that supports to complete assignment and manage the functions (Tura, Keränen and Patala, 2019). From the above Cadbury is focusing and following the Line organisational structure in which management provide the information to employees in a line form that helps to complete the work and develop the business effectively in changing environment. The management also operate and organise the business activities accurately so that a it can be grow by brining stability and effective communication. PESTLE Analysis:The research of PESTLE is an appropriate platform for the analysis and monitoring of macro-environment conditions and their variables that may have an effect on industry. Both businesses use the system to examine the effect of financial influences on policies and industry in the current period. This includes a few factors addressed with Cadbury Company in terms of relevance: Political factor:The connection of factor is with government regulations and activities thatneedstoconsiderwhileoperation.Politicalconsiderationsincludeforeignexchange programmes, taxation, trade controls, public policies and the stability or uncertainty of the democratic structure in the overseas market. Inside the United Kingdom, it is seen that the country has a prosperous and welcoming political structure that offers tremendous opportunity for firms with specific confectionery developments (Wu and Makin, 2019). Positive impacts:In recent decades, tremendous political integrations have occurred across countries that include business expansion elements. In addition, the UK government offers incentives and subsidies to confectionery companies such as Cadbury and can boost their position and boost the reputation of the industry with their acceptance, which could have a positive effect on improving financial results and business plans. Negative impacts:Nevertheless the existence of few circumstances will create obstacles or problems for the organisation. For example, Brexit occurrence causes problems for the 5
implementation of trade-related activities and working with other countries that have a negative effect on growth strategy and the output of specified company. Economical factor:Consumable consumer income, wealth creation, the market cycle and so on is economic influences. The UK has an era of globalization and highly developed economy that affects entity techniques' entire output. Positive impacts:In context to Cadbury, management provides better taste and quality of confectionary items which attracts large number of customers and attain the higher productivity. Negativeimpacts:Continuouslychangingininterestratecanaffectthebusiness negatively as productivity and sales of organisation as it create the higher cost in taking loan for expansion of business (Maran and et.al., 2020). Social factor: The common views of the population, age distribution, behaviours and desires are related to social factors. In the United Kingdom, it is seen that social circumstances are in pursuit of a business that makes it possible to render distinctive combinations of heritage, crafts and others in the manufacture of variety of chocolates. Positive impacts: Increasing lifestyle of changing of taste regarding confectionery items Cadbury increases their sales all over the country as it is multinational company selling the varirty of products and services which helps to maintain highyer productivity. Negative impacts:Due to changing demand many competitors are existing in market which has reduced the organisational performance as customers are switching their taste from Cadbury to another item which affected business negatively. Technological factor:Technical variables are creativity, technological up-gradation and automation. In the UK, the technology that confectionary companies have to adopt according to requirements is always evolving (Lombardi and Rodriguez, 2019). Positive impacts:By using new technique, and innovation in confectionary items which increases sales and profitability. Moreover, by using new technology organisation is providing its product through online system which delivers higher productivity and sales effectively. Negative impacts:In adopting new technology and online distribution channel cost of Cadbury has increases which create the problem for business to arrange the funds and make spending in expansion of business. Legal factor:Legal variables set by the government in the UK are consumer rights regulations, product safety regulations, equity and diversity law and advertisement guidelines. 6
Positive impacts:Cadbury makes all its operational attempts by efficiently observing government policies, legislation and laws. This helps to reduce government interference and retain a leadership role without any complications or challenges that have a good impact on all the organization's activities and strategies (Bilčík, Božiková and Malínek, 2019). Negative impacts:when government is making amendments to existing laws, it creates difficulties to conduct works according to new provisions that have a negative effect on the management of changes, the implementation of new approaches and the brand profit of the firm. Environmental factor:Environmental variables are diverse natural elements that affect business operations. In order to establish projects to enhance regulatory laws, UK charities, government bodies and local authorities have launched initiatives. Positive impacts:The firm does not use elements that are forbidden by the legislation and cause environmental contamination. It recycles its waste and eliminates carbon footprints, which has a positive effect on its efforts to preserve clean and hygienic environments (Morais and Franco, 2019). Negative impacts:oppositely, not participating environmental safety activities can be challenging situation for Cadbury to continue their business and activities. CONCLUSION From the report it can be concluded that different types of businesses are running that different business are small, micro, medium and larger are operating. The external factors are related to government and strict regulation that needs to follow in running. To follow effective structure can be opportunity and develop the business effectively. 7
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