types of business organizations PDF

Introduction
This report elaborates the details about different types of business organizations such as
public, voluntary and private enterprises. Their major objectives and operational purpose will
be discussed in a brief manner. The assignment will explore the details regarding the legal
structure that are followed by these organizations. The impact of external and internal
business environment on the operational activities as well as the decision making process of
Marks & Spencer will be discussed. The strengths and weaknesses have been discussed in
order to develop beneficial strategies for the company. The importance of coordination and
interrelationship between the different functional departments of M&S will be explained in a
detailed manner.
LO 1
P1 Explain different types and purposes of organizations; public, private and voluntary
sectors and legal structures for the chosen organizations.
Organization
An organization is a group of people with a specific purpose such as a business or a
government department [CITATION Inv05 \l 1033 ].
In the present scenario, different types of organization are facing quite tough competition in
the marketplace. The market is being saturated day by day and the competition is growing at
an exponential rate making it tough for the organizations to sustain in the market. Thus, it is
highly significant for an organization to analyze the business environment to sustain in the
market full of competition. The different types of organization are public organizations,
private organizations, and voluntary organizations. The purposes of these organizations differ
from one another that are mentioned below in details.

Public sector:
The public sector comprises of the firms, which are state-owned or government owned. The
organizations categorized under public sector owned and directed by the government of the
country. The main purpose of the organization associated with the public sector is to provide
the people of the city with good quality products and services (Bouckaert et al., 2016). The
firms operating in the public sector are focused on meeting the requirements of the people of
the country and the profits made by the organizations are taken by government or ploughed
back for investment. For example, Network Rail is organization in public sector.
Private sector:
The private sector composes of the firms that are owned and operated by an individual or
groups of individuals. The main purpose of the firms operating in the private sector is to
generate profit for the company and give it to the owner of the firm (Hayter, 2015). The
organizations in the private sector are independent of the government of the country but
have to follow and obey some legal rules and regulations to run their business in the country.
For example, Marks and Spencer is Private Sector Company.
Voluntary sector:
Voluntary sector are quite similar to the public sector. The voluntary sector composes of the
organizations looking forward to meet the requirements of the society and its people. The
main purpose of organizations operating in voluntary sector is to look after the welfare of the
society and enrich the society. The organizations do not aim to make profits and are
independent of the government and follows charity-based approach (Ncvo.org.uk, 2018). For
example, Amnesty International is an organization in voluntary sector.
Legal structure:
Sole Proprietorship:

Sole proprietorship is the least synchronized form of a firm with minimum legal start-up cost.
The firm is owned by one individual and the profits generated are tariff as private income
(Managementhelp.org, 2018). The major demerit is “unlimited personal liability” the owner
might face like claims, debts, and taxes against business. For example, Moore and Co is under
Sole Proprietorship.
Partnership:
Partnership business is simple to form and is able to deliver additional managerial and
financial resources. The partners can borrow funds, hire individuals, and operate business.
However, the profits made are again excised as personal income and the partners are liable
personally for taxes and debts. For example, Social Chain is a partnership company.
Limited Partnership:
It is a special agreement and permits the partners to neglect liability of personal asset.
Specialized income tax rules are implemented for Limited Partnership. For example, Gibson
Dunn is a partnership firm.
Limited Liability Company:
It comprises of more than one individual that gives the owners privacy of personal assets
whilst permitting the owners being taxed. Investment is done based on exchange for
ownership interest percentage. Each member is equally liable for any kind of taxes or debts
(Managementhelp.org, 2018). For example, Marks and Spencer is a LLC.
P2: Explain the size and scope of a range of different types of organizations chosen for the
purpose.
Public sector Private sector Voluntary sector
PurposeThe main aim of this type of business
organization is to provide enhanced
These firms are focused at improving their
performance in order to increase their revenue
These organizations are focused at
working for a global cause. For example,

services to the local citizens. For
example, Network Rail offers railway
transportation benefits to the citizens
of UK.
generation process. For example M&S try to analyze
the business market an introduce services that will
allow them in gaining profit.
Amnesty International works in order to
recognize the existing problems in the
community and tries to resolve the
issues.
Size Network Rail is a Medium sized based
business firm. This organization is
credited to provide employment to
around 37,000 workers in UK (Network
Rail, 2018).
M&S is considered as a large business enterprise.
They have around 84,939 dedicated employees
working to improve their business
(Marksandspencer.com, 2018).
Amnesty International is a global
organization and is supported by more
than seven million volunteers all across
the globe (Amnesty.org, 2018).
Table 1: Difference between Private, Public, and voluntary sectors
(Source: Created by the learner)
Micro Small Medium
Definition:These are small structured organization
consisting of nine or less than nine employees.
The estimated balance sheet of these firms is les
then 2,000,000 Euros, the employees are
dedicated towards maintaining the sheet
(TheCompanyWarehouse.Co.Uk, 2018).
These are also known as
small-scale business
enterprises that are owned
by partners or individual
owner. The employee
number of these firms is
then 50 and they work to
achieve their estimated
annual target (theOECD,
2018).
This company is
capable of recruiting
50-250 employees in
order to achieve their
estimated targets and
revenue (theOECD,
2018).
ObjectivesThese firms are focused to maintain the
equitable distribution of the entire national
income. They are dedicated to provide
employment to large-scale population at the
lowest possible investment.
The employees of these
firms are responsible to
maintain an equal balance
between their profit
generation and the
expenditure costs of their
operational activities.
They are expected to
maintain their annual
budget. They are
focused to increase
their productivity and
revenue generation
within the allocated