Types of Business Organizations and Organizational Structure

This report examines different types of business organizations, including micro, small, medium, and large businesses, as well as sole trader, partnership, limited liability, public limited liability, and cooperative businesses. It also discusses the importance of organizational structure and how it affects business productivity. Furthermore, it includes a PESTLE analysis of Tesco to understand how external factors impact business performance.

Individual Report

Table of Contents
INTRODUCTION ..........................................................................................................................3
SECTION 1 .....................................................................................................................................3
Definition, characteristics and example of micro business, small business, medium size
business and large size business. ................................................................................................3
SECTION 2 .....................................................................................................................................5
Definition, characteristics and example of sole trader business, partnership, limited liability
business, public limited liability business and Cooperative. ......................................................5
SECTION 3 .....................................................................................................................................7
Organisational Structure .............................................................................................................7
How organisational structure affects business productivity........................................................8
Using PESTLE analysis explain how different external factors affect the performance of a
business. .....................................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFRENCES.................................................................................................................................10
Books and Journal.....................................................................................................................10

INTRODUCTION
This report provided a brief examination on various types of organisation and details about their
characteristics and operations. It also gives a description about the types of organisational
structures followed by the organisations and how they impact on the performance and
productivity of the same. The report also involves Pestle analysis of Tesco in order to identify
how the factors and forces of the external environment can affect the operations of the company.
SECTION 1
Definition, characteristics and example of micro business, small business, medium size business
and large size business.
Micro business
Micro business is type of business wherein the business offers products and services in order to
earn a living and does not profit much from the same. It incorporates 0-9 staff members at a time.
Characteristics
 These business does not have any scope for expansion and diversification.
 The marginal income of these business is very less in comparison to others.
Few example of Micro business are tea shops, coffee shops, cobbler etc.
Small business
Small business refers to a kind of organisation which carry out its operations at small
scale. It is a type of organisation that involves less capital and investment (Cappellino, 2020).
The small scale organisation utilises less human resources and technological resources in their
business operations.
Characteristics
 The management of small scale business is managed and controlled by the respective
owner of the organisation.
 Since these businesses operate at small level, they have high degree of flexibility and are
comfortable to dynamic environment.
 The market share of these organisations are relatively low as they have limited customer
reach.
Some of the examples of small scale business are as follows ; Salons, bakeries, stationeries etc.
Medium Scale Business

Medium scale business organisations refers to those organisation that are too large to fit in and
operate at small scale and too small to operate within large scale industry (Shaqiri and Ceku,
2019). These organisations involve have sufficient and adequate human resources and financial
resources.
Characteristics
 Medium scale organisations have a separate department of management who is
responsible for carrying out the management of functions of the organisation.
 These organisations have medium degree of flexibility in its operations as they need to
follow the preplanned or predetermined set of procedure led down by the management. The profit and revenue generation of medium scale organisation is relatively good in
comparison to the small scale industries as these organisations have a good and sufficient
market share in their respective industry.
Large Scale Business
Large scale business refers to those organisations who operate at a huge scale and require
immense and vast infrastructure. These organisation in requires huge amount of capital and
investment in order to carry out their daily operations. The human resource and manpower
requirement of these business organisation is extremely high.
Characteristics
 The management of large scale business is extremely complex in nature. These
organisation needs a systematic management teams in order to carry out their daily
operations in the organisation.
 The revenue and profit generation of large scale business is very high as these
organisation capitalises on innovative expansion strategies for their business
organisations (Betta, 2019).
 Large scale organisation have unlimited reach and are able attract and arise the interest of
target consumers in order to capture large market share and leverage from the same.
Some of the examples of large scale business are textile industry, retail industry, Information
Technology industry, Automobile industries etc.

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 characterized as an organisation wherein the owner of the business and
the business entity are considered a single entity. It is managed, operated and controlled by a
single individual. Sole proprietorship is the most suitable option of small scale business.
Characteristics
 Sole trader business involves unlimited liability i.e. the business owner has to bear all the
debt and losses generated from the business.
 A sole trader business is not required to meet any legal obligation and can operate in the
market environment without any legal formalities and procedures (Kypta, 2017).
The decision making lies in the hands of the sole owner and he is the one who is expected
to take the final call regarding important functions and operations of the business.
 The sole trader is also required to bear the risk and uncertainty associated with the
business enterprises
General stores, chocolate shops, sweet stores, beauty parlours are few of the examples of sole
trader business.
Partnership
Partnership can be defined as a type of business organisation which involves a written or oral
agreement between two or more individuals in order to operate the business operations and shre
the profits of the same.
Characteristics
 In order to run a partnership firm it is very essential for an organisation to acquire a
formal agreement for the same. A partnership firm cannot proceed its operation in the
absence of the formal document or agreement.

 The main purpose and aim behind the formation of a partnership firm is the division and
sharing of the profits generated in the business organisations.
 The decision making power lies in the hands of all the partners of the organisation and no
single partner can take decision on behalf of others.
Some of the examples of partnership firms are BMW and Louis vuitton, Spotify and uber, H&M
and Alexander Wang etc.
Limited Liability
It can be defines as a type of business organisation where the owners of the business are not
individually liable for all the debts or losses that are generate in the business. They are only
liable to the extent of their share in the business organisation (Ebo Taylor, 2018).
Characteristics
 One of the main characteristics of Limited Liability Company is that it is a separate entity
which means that it can carry out important business functions within its legal and
official registered name.
 The death and insolvency of any of the members do not effect the functioning of the
Limited Liability company and the company continues to run regardless of the same.
 Limited liability company is not as complex as other organisations and is easy and casual
to operate and manage in comparison to others.
Amazon, Nike, IBM,Sony etc. are few of the examples of limited liability company.
Public Limited liability business
Public limited liability companies involves trading with numerous investors in the open market
environment. It involves offering and trading of its business shares in the stock exchange in the
public domain to the general public.
Characteristics
 Public limited liability business has an obligation to provide its financial projection and
statistics in the public domain in order to promote transparency of its business operations.

 In this type of company, the liability of the its members,shareholders and owners is
limited to the extent of the amount and capital invested by the them in their respective
organisation.
 It is a compulsion for Public limited liability business to get its name registered as well as
incorporate the “Ltd” in its registered name.
Few of the examples of Public Limited Liability Company are Burberry group, Rolls Royce etc.
Cooperative
Cooperative organisation can be termed as an organisation whose primary aim is to promote the
interest of its members. Cooperative organisations are owned and dominated by its member who
utilises the products and services offered by the same.
Characteristics
 Cooperative organisation promotes collectivism and the opinions,Thoughts and
viewpoints of all the members are taken in to consideration while forming decisions
pertaining to the organisation.
 These organisations follow a democratic nature and every individual member of the
organisation is entitled to its vote.
 There is no boundation or compulsion on the members to be a part of cooperatives, they
can join by their will and have to right to exit from the same according to their will.
Few major examples of cooperatives are South mountain company, weaver street market, Grow-
mark Inc. etc.
SECTION 3
Organisational Structure
Organisational structure refers to the incorporation of a systematic process in the organisation in
order to define and direct the operations and activities of the organisation which in turn will
assist in fulfilling the goals and aspirations of a business organisation in the long run(Jonathan,
2018). Some of the major organisation structures are listed below :-

Functional : It is an organisational structure wherein the individual performing similar operations
are grouped together in one department in order to enhance the productivity of their operations.
Divisional : It involves the division of the organisational operations wherein each divided
segment involves the resources required to conduct the functions of the particular product line.
Matrix : It is an amalgamation of functional structure as well as divisional structure and
incorporates the characteristics of both the structured within it.
Flat : It is an organisational structure which involves the decentralisation of authority. It
promotes open communication and tries to reduce bureaucracy in the organisation.
How organisational structure affects business productivity
A good and stable organisational structure helps the business organisation to grow and expand its
operations in the near future. In order to succeed in the market, it very essential for the
organisation to promote innovation and creativity within the employees. Hence, it very essential
to have a flexible organisational structure which cal allow the employees to share their idea and
thoughts with the organisation (Moşteanu, 2020). The effectiveness of management department
is crucial in order to enhance the productivity of the business. Hence , it is essential for an
organisation to have a systematic and efficient organisational structure that can facilitate and
enhance the management process of the organisation.
Using PESTLE analysis explain how different external factors affect the performance of a
business.
Pestle analysis is a tool utilized by various organisations in order analyse, examine and scan the
factors and forces pertaining in the external business environment. Here is the pestle analysis of
Tesco :-
Political : Tesco needs to analyse the various taxation policies and procedures which may impact
the operations of the business. Reforms and restrictions to the trade systems can also affect the
performance of the organisation in the target market (Perera, 2017).
Economic: In order to enhance the performance of Tesco, the company needs to study the
economic stability of the countries its functioning in. Inflation rates, availability and limit of the

credit etc. effects the performance of the organisation during situations such as financial crisis
that occurred due to the outbreak of COVID-19.
Social : In order to encourage the performance of Tesco, the company has given consideration to
the cultures and backgrounds of the target consumers. The company has aligned the values and
beliefs of the society with the organisation in order to enhance its customer loyalty and win the
faith of its consumers.
Technological : Tesco is a company that ca[capitalising on various innovative technologies in the
market in order to enhance its productivity and efficiency which in turn can help the company
and assist the same in order to enhance the performance of the employees working in the
business organisation.
Legal : Tesco follows the legal laws and acts set by the government such as Heath and Social
Care Act, 2012 in its operations in order to continue its business operations without any
disruption. It is crucial for the company to follow the legal rules and guidelines to ensure smooth
functioning of operations.
Environmental : The organisation are obligated to provide their services in order to promote and
conserve the environment by various means. Tesco tries to reduce and eliminate wastage from its
production process and has formulated strategic plans in order to incorporate sustainable
solutions and resources.
CONCLUSION
It can be concluded that in order to establish and start a new business it very crucial to identify
the various types of organisations and to select the most suitable one according to the scale of
business an individual. The companies should try to incorporate an effective and efficient
organisational structure as it is an important determinant for enhancing the performance. It is
essential to conduct the pestle analysis in order identify the market and formulate strategies to
cope up with the same.

REFRENCES
Books and Journal
Cappellino, A., 2020. How to Choose the Right Business Organization Form.
Shaqiri, M. and Ceku, O., 2019. Types of Organization of Business Organizations and Their
Impact on Business Success.
Betta, M., 2019. Business, organization theory, and the current challenge of
neocharisma. Business and Society Review, 124(2), pp.261-281.
Kypta, U., 2017. What Is a Small Firm? Some Indications from the Business Organization of
Late Medieval German Merchants. In The Company in Law and Practice: Did Size
Matter?(Middle Ages-Nineteenth Century) (pp. 10-33). Brill Nijhoff.
Ebo Taylor, M., 2018. An Assessment of the Impact of Internal Control System in Business
Organization (Doctoral dissertation).
Jonathan, G.M., 2018. Influence of organizational structure on business-IT alignment: what we
do (not) know. In 17th International Conference Perspectives in Business Informatics
Research (BIR 2018), Stockholm, Sweden, September 24-26, 2018 (pp. 375-386).
CEUR-WS. Org.
Moşteanu, N.R., 2020. Challenges for Organizational Structure and design as a result of
digitalization and cybersecurity. The Business management Review, 11(1), pp.278-286.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.