Different Types of Business Organisations and Their Impact on Business Performance

INDIVIDUAL
REPORT

Table of Contents
INTRODUCTION ..........................................................................................................................3
SECTION 1......................................................................................................................................3
Different types of business organisations on the basis of size....................................................3
SECTION 2......................................................................................................................................4
Different types of business organisation on the basis of form....................................................4
SECTION 3......................................................................................................................................6
Different organisational structure and its affect on business......................................................6
PESTLE analysis to explain external factors that affect the business performance...................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
A business organisation is an entity which is formed to carry out the commercial activity
in return of generating revenues and profits. These businesses are governed by the laws of
contract, employment, copyright, property, company, etc. There are different types of business
organisation prevailing in the market which can be differentiated on the basis of size or form.
Apart from earning profits, the organisation also contributes to the economy of the country in
which it is established or expanded (Zhang, 2020). The organisation chosen for this report is
Sainsbury's, a supermarket chain situated in United Kingdom by John James Sainsbury in 1869.
It is the second largest supermarket chain in UK. The company is divided into 3 divisions,
supermarkets, banks and retailer (argos). This report will cover different types of business
organisation on the basis of size and forms. Further it will deal with different business structures
and how external factors that affect the business.
SECTION 1
Different types of business organisations on the basis of size.
There are four types of business organisation prevailing in UK on the basis of their size.
They are classified as micro, small, medium and large business enterprise.
BASIS MICRO SMALL MEDIUM LARGE
Definition These business
organisation are
the one who
employs less than
10 people in their
organisation.
These entities are
the one who
employ less than
50 employees in
the company.
These companies
engage less than
250 employees in
their organisation.
There are the
companies who
employee more
than 250
employees in
their organisation.
Turnover The turnover of
micro sized
companies are
under £2 millions.
The turnover of
small sized
enterprise is
under £10
millions.
Their turnover is
under £50
millions.
Their turnover is
more than £50
million.
Example Consultancy Courier business Logistic company Multinational

industry like
Issoria
like FedEx. like John Good
shipping
grocery retailer
like Tesco PLC.
SECTION 2
Different types of business organisation on the basis of form.
There are different types of business organisations prevalent in UK on the basis of their
form. These may include sole proprietorship, partnership and limited liability partnership,
companies like limited liability business, public limited liability business and Cooperative. The
following factors are to be considered before choosing business organisation-
 structure that the owner is willing to adapt
 level of control tax implications, etc. (Peršič, Markič and Peršič, 2018).
Sole proprietorship
This type of business organisation is for small sized businesses as there is only one owner
who manages and controls the business. The owner is only responsible for the daily activities of
he business. The characteristics of sole proprietorship are-
 There is only one owner who manage and control the business.
 The owner is personally liable for the liability and debt of the business.
 The registration of this business is simple and cost efficient.
 There is very limited capital involved to start the sole proprietorship. All earnings and profits from the business belongs to owner and he is only liable to pay
income tax. Common examples for sole proprietorship can be plumbers, hairdresser,
electricians, etc.
Partnership firms
This business organisation involves two or more persons who are partners in a single
entity and share the ownership of the firm. An agreement is required for starting the partnership
firm so that things are made clear between the partners regarding share of profit, decision making
power, dispute resolution mechanism, etc. (Bees and Williams, 2017) The characteristics are -
 There are 2 or more persons involved in partnership who share ownership and
responsibilities.