Types of Businesses and Organizational Structures

This report provides an overview of different types of businesses, including micro, small, medium, and large businesses, and their characteristics. It also explains various organizational structures and how they affect business productivity. Additionally, the report discusses the PESTLE analysis and how different external factors can impact the performance of a business. The case study focuses on Marks and Spencer, a retail company based in London, England.

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Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Section 1 ..........................................................................................................................................1
Definition, characteristics and example of micro business, small business, medium size
business and large size business..................................................................................................1
Section 2...........................................................................................................................................3
Definition, characteristics and example of sole trader business, partnership, limited liability
business, public limited liability business and Cooperative........................................................3
Section 3...........................................................................................................................................4
Identify different organisational structures and explain how organisational structure affects
business productivity...................................................................................................................4
Using PESTLE analysis explain how different external factors affect the performance of a
business. .....................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business includes set of practices that are performed to develop products and services in
order to meet with the needs of customers (Slade‐Caffarel, 2020). Organisational structure can be
describe as the process according to business is conducting its practices in order to attain its
goals and objective. This report is based on Marks and Spencer company. This company is
dealing in retail sector that is providing its high quality products and services to customer. Head
office of this company is located in London, England and it is providing its products and services
to customers.
MAIN BODY
Section 1
Definition, characteristics and example of micro business, small business, medium size business
and large size business
Micro Business: It generally refers to the small business with few or less employees and
have a less turnover then certain amount is called as micro business. When referring to a small
legal business but are not financed is referred as Micro business. There micro business are
generally the family business where the requirement of employees can be one or two (Goss,
2015).
Characteristics:
 Owners are interested in micro businesses for their earn of living. Also, to generate the
large part of income, micro businesses are generally refer as the best to begin with it.
 The owner focuses on single product and achieve maximum profitability.
 Properly scaled, systematized and well structured (Hassan, Ahmad and Shiratuddin,
2015).
Examples states that: Locality grocery stores, FMCG goods are the real life examples of micro
businesses.
Small business: It refers to privately owned partnerships, corporations and sole
proprietorships that have less employees and even less annual revenue. It is similar to micro
business but the only different states that tax structure and capital investment is much easier for
small businesses then the micro businesses (Ambrose, Cordell and Ma, 2015).
Characteristics
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 Lower revenue and profit: The revenue of small scale business has generally very low but
gain profit.
 Less employees: It has been suggested that small businesses are completely run by a
single owner or few individuals together.
 Limited area: It is possible for the small businesses to locate their office at home.
Examples suggested that: Accommodation of food services, entertainment recreation, health care
and social assistance, personal trainees, real estates and cafes.
Medium size business: A medium size business is defined as a company that not
exceeds with the investment of more than 5 crore per annum and less than 2 crore.
Characteristics
 They are family owned or managed business.
 Cash flow finance are those that provide tangible goods and services.
 Bank loans are used to finance the start-up capital and for long term purchases.
Examples are Capro, Yext, Walker & Dunlop, Xaxctly corporation and many others.
Large size business: It refers to such businesses which has 5000 employers in maximum
and has a annual turnover of greater than 1.2 billion euros and a balance sheet of more than 3
billion euros. This category of business is defined as the article 15 of law on modernisation of
economy, relating to the several criteria in which business belongs for the purpose of achieve
maximum satisfaction and benefits.
Characteristics
 In large size business owners and managers are emotionally involved in such businesses
to achieve growth and generally they have their maintained stakeholders.
 Those individuals who are in higher post generally does not even know about all their
employees and staff members.
 There are larger investments, capital assets and energy efficient machinery intake by
them.
Examples include Google, Walmart, Citigroup, JPMorgan Chase, Goldman Sachs and many
others.
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Section 2
Definition, characteristics and example of sole trader business, partnership, limited liability
business, public limited liability business and Cooperative.
Sole trader business – Sole trader business is consider as the simplest form of business
structure as this will as this will include one person for performing business practices. It is simpl
for individual to set up sole trade business as well as successfully operating business practices.
In this sole trader will be taking all important decision of business which is helpful to managing
business practices significantly (Giesinger and et.al., 2020). It characteristic includes that it is
owned and managed by single person and they have freedom to work. This includes quick
decision making and owner enjoy all profits entire. In sole trader business there is no separate
entity and there is absence of government regulations.
Partnership – This refer as the formal arrangement of two or more people who are
working with in organisation. Partnership business can be describe as the organisation in which
more then two employees are working as well as sharing profits. In this both partners have right
to take decision as well as carry out business activities accordingly. It includes proper
arrangement of task as well as perform business activities accordingly. Its characteristic includes
existence of agreement and there should be proper sharing of profits with in the partners. It
consist of agency relationship and partnership business includes natural of liability.
Limited liability business - Limited libality company or business is considered as US
specific form related to the private limited company. It is generally a business structure which
will combine the pass through taxation of partnership or sole proprietorship along with the
limited liability of a company. There are several characteristics of the limited liabilities business
such as it required filling of document with Secretary of State to be authorized. Its is also
considered as character of respective business that it may have one or more than one owner that
called members as well as it can be member or manager managed business.
Public limited liability business - This includes that company that is offering its share
to public. Public limited liability business is consider as voluntary association of the members
which are incorporated. Its characteristic includes the company has legal separate existence apart
from its members (Auer and et.al., 2020). In the type of organisation, government have right to
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take decision regarding working, functioning as well as winding up of public limited liability
business.
Cooperative – This can be describe as the autonomous association of individual who are
working together in order to attain with common social, economic as well as cultural goals. In
this various capable and skilled employees are working effectively and efficiently with the
motive of accomplishing different goals and objective (Sannino and et.al., 2020). Through this,
employees and business will get various benefits. Characteristic of cooperative business includes
that it is open and voluntary association. It includes democratic structure in which each and every
member have one vote. In cooperative business, there will be equitable as well as fair
distribution of economic results.
Section 3
Identify different organisational structures and explain how organisational structure affects
business productivity.
Organisation structure can be describe as the system which is significant for providing
direction to employees for successfully and effectively performing business practices. This
includes information related to rules, responsibilities as well as role that are useful for
successfully and effectively conducting business practices. There are different types of
organisational structures which is mention below in detail-
Functional organisation – In this type of organisation structure all employees who
perform similar type of business practices are grouped together in order to successfully
performing business practices (Antosz, Rembiasz and Verhagen, 2020). For example
organisation is placing all accountants in finance department and employees with marketing
skills in market department or so on.
Divisional structured – This type of organisational structure refer as the business in
which all all employees that are working in same product or project are grouped together. This is
significant for increasing capabilities of business to meet with the demand of customers.
Matrix structured – Matrix structure is refer as the organisation structure which
includes the combination of both functional ad divisional structure. In this type of organisation
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structure, company is grouping individual on the basis of functional department on the basis of
specialization.
Flat organisation structure – This is consider as the traditional structure in which
information flow from top to down management. For example, in organisation all employees
have boss who will provide information and direction for conducting business task.
Organisational structure will lead to have major impact on business performance and
productivity. It is essential for organisation to consider effective organisation structure which is
significant for business functioning (Pluháček and et.al., 2020.). This is significant for providing
direction and guidance to all employees so that they conduct business activities in requirement
manner. This is significant for managing business task successfully as well as improving
business practices.
Using PESTLE analysis explain how different external factors affect the performance of a
business.
PESTEL analysis can be defined as a strategic framework that is used by organizations in
order to monitor as well as analyse the different macro environmental forces within the
environment. Not only this, it also helps the management in making informed decisions. The
PESTEL analysis of Marks and Spencer is described below -
Political Factors – The United Kingdom is one of the most politically stable countries in
the world with a proactive government. However, Brexit has created some uncertainties for the
company in terms of business operations and profitability. Also, there has been a rise in crimes
which have led to serious concerns. Marks and Spencer can make use of the EU market in terms
of taxes and tariffs.
Economic Factors – The United Kingdom also has a strong economic position in
comparison to other countries. The population in the country is also large which means that the
market is profitable even for small businesses. A rise in the rate of inflation can impact the
operations of Marks and Spencer. Other economic factors that can impact the respective
organization include monetary and fiscal policies.
Social Factors – Social factors are one of the important factors that can have a
significant impact on the business operations of the company. People living in the United
Kingdom have a high standard of living with high income levels. Other social factors that can
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impact the company include education levels, age, religion etc. But over the years, many
businesses offering similar products at cheaper rates have come up. This has affected the
company's overall performance.
Technological Factors - People of UK are advanced in technology. They choose the e-
commerce store in the UK ,which is quite effective. But in comparison with US their workers are
not such advanced in technologies. Strengthen the security, risk and advancement in the
technologies adoptions. This may also help in making more stronger bond with the young
generation of UK, as people are now go and shop directly in the stores.
Environmental Factors - Marks and Spencer is the luxury brand. And to maintain that
position in the market they have to connect with the environmental factors. UK people are
become more environmental conscious, and that's why marks and Spencer make their products
environmental friendly and using the same environment friendly raw materials. They source the
fresh milk from farms and also produce products that are environment friendly for the customers.
Marks and Spencer sustains its relations with their customers by implementing different
strategies.
Legal factors – Different countries have different rules and regulation which have to
followed by every company who had a setup in that country. If they don't follow that laws and
they have to face the negative impact of that. It is important for the company to adhere to these
legislations like Equality Act 2010 in order to avoid facing the consequences.
CONCLUSION
From the above report it can be concluded that there are different types of business such
as micro, small or larger and it will influence over its functioning and performance. It is crucial
for company to have correct organisational structure as it will lead to have significant impact on
business practices. PESTEL is an important model that helps business in making strategic plans
and expanding their businesses in order to increase overall profitability.
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REFERENCES
Books and Journals
Hassan, S., Ahmad Nadzim, S.Z. and Shiratuddin, N., 2015. Strategic use of social media for
small business based on the AIDA model. Procedia-Social and Behavioral Sciences,
172, pp.262-269.
Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.
Ambrose, B.W., Cordell, L. and Ma, S., 2015. The impact of student loan debt on small business
formation. Available at SSRN 2417676.
Slade‐Caffarel, Y., 2020. Organisation, Emergence and Cambridge Social Ontology. Journal for
the Theory of Social Behaviour, 50(3), pp.391-408.
Giesinger, J.M. and et.al., 2020. Thresholds for clinical importance were defined for the
European Organisation for Research and Treatment of Cancer Computer Adaptive
Testing Core—an adaptive measure of core quality of life domains in oncology clinical
practice and research. Journal of Clinical Epidemiology, 117, pp.117-125.
Auer, A.M., and et.al., 2020. Communities of practice in Alberta Health Services: advancing a
learning organisation. Health research policy and systems, 18(1), pp.1-12.
Sannino, G., and et.al., 2020. Cultural dimensions, Global Reporting Initiatives commitment, and
corporate social responsibility issues: New evidence from Organisation for Economic
Co‐operation and Development banks. Corporate Social Responsibility and
Environmental Management.
Antosz, P., Rembiasz, T. and Verhagen, H., 2020. Employee shirking and overworking:
modelling the unintended consequences of work organisation. Ergonomics, pp.1-13.
Pluháček, J., and et.al., 2020. Effect of social organisation on interspecific differences in
overmarking behaviour of foals in African equids. Animal Cognition, 23(1), pp.131-140.
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