Business in Practice: Analyzing Structures and External Factors

This report provides an overview of different company types, including micro, small, medium, and large businesses, detailing their characteristics and examples. It further examines various legal structures such as sole proprietorships, partnerships, limited liability companies, public limited comp...Read More

BUSINESS IN PRACTICE
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Table of Contents
INTRODUCTION............................................................................................3
SECTION 1...................................................................................................3
Different types of companies and how they work................................3
SECTION 2...................................................................................................5
Different companies from sole traders to cooperatives and Limited
Liability Partnerships............................................................................5
SECTION 3...................................................................................................7
Different business structures and external factors affecting business 7
CONCLUSION.............................................................................................10
REFERENCES.............................................................................................12
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INTRODUCTION
A business practices is considered as effective tool or element that
provide benefits to a company when it conducts into effective and
systematic manner. It contributes to run a venture and sustain
organizations within specific industry. The aim of this current study is to
define, types and characteristics with examples of varied forms of
companies. It will justify meaning, features and examples of sole trader,
partnership limited liability, public limited liability and cooperative. Lastly,
this report will explain types of organizational structures and how these
affects business productivity. It will also justify how external factors affect
performance of a venture.
SECTION 1
Different types of companies and how they work
Micro business:
It is one of those organizations that operate business with limited
resources and conduct venture practices for selling few products and
services such as grocery items, new paper distribution in specific areas,
etc.
The main feature of micro business is that it may work with not
more than 5 to 8 employees, who are efficient to perform specific task and
provide expected outcome (Brown, Bocken and Balkenende, 2020).
Another characteristic of this form of firm is that it consider as fairly
labour-intensive.
The most suitable examples of micro venture is street vendors, Oak
Cash and Carry, accounting organizations, plumber, etc.
Small business:
Small organizations are defined as a privately managed ventures,
sole proprietorship or partnership firms that may have fewer workers, to
work and achieve aim (Small Business: Characteristics, Strengths,
Reasons for Failure in Small Business, 2021). These types of companies by
working and performing at small level may contribute to enhance
customers satisfaction.
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The key characteristic of these firms is in-dependency which owner
may obtain and take pleasure of this in term of taking decision without
any interference. Furthermore, another feature of small ventures is that it
may enable individual person to control work and performance of few
employees such as 12 to 20, who effort to achieve set goals and
objectives of business. Bakery, small supermarkets, automotive repair
shop, lodging and travel outlets, etc. are included in category of small
businesses.
Medium size business:
Those companies that may have only 2 to 5 employees are known
as medium size firms, which daily effort to reach at expect outcomes and
attempt to earn profits more than investment regarding products selling.
It can be said that medium size organizations may usually have
limited resources as characteristic to increase profit and gain benefits of
few investments. Informal management style is another quality of these
firms which means that administration is mostly acted in informal manner.
Smith Brothers that operate a medium firm in the UK such as
contracting Ltd, may consider as the suitable example.
Large size business:
As compare to medium, small and micro, large size companies may
conduct their business practices within many nations or market segments.
With more than 250 employees, a large size company effort to be
productive and competitive within particular market, which in return
contribute to increase their sales, success and productivity even better
than rivals that also operates under same sector.
In term of characteristic, large scale firms may have more
candidates in more complex management hierarchical format more than
in medium scale ventures. Furthermore, they may also have great number
of ventures operations such as marketing, production, financing, IT,
customer service, etc.
TESCO, ASDA, Sainsbury. HSBC Holdings, etc. covers under the list
of large size enterprises.
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SECTION 2
Different companies from sole traders to cooperatives and Limited
Liability Partnerships
Sole trader business:
A solve trader venture is also known as individual entrepreneurship,
or simply proprietorships, which is owned and managed by one person as
business owner who have power to take decision and implement that in
effective manner.
The best thing about this kind of firms is that it may provide key
chance to owner in term of freedom regarding work and effective
decisions, which consider its important and valuable characteristic.
Oak Cash and Carry is the best example of sole trade companies, as
it may operate venture independently without facing challenges of being
partnership organization.
Partnership:
This form of legal structure that a company adopt and use may
provide opportunity to both firms' owner in term of working together with
such innovative and creative candidates, who contribute to increase sales
and productivity of brands.
The firms who chose this option may obtain a lot of benefits. For
example, by working in collaboration and coordination, a company may
gain benefit to increase productivity, which is the main characteristic of
this term.
ASDA is the most suitable example of partnership organizations as it
may perform with Waitrose & Partners.
Limited liability business:
Just like above one, LLC is another legal organizational structure
that may provide a lot of benefits to private organizations, who may effort
to be profitable and productive forever. It considers as the most common
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legal framework that has been utilized by several companies. Limited
Liability venture is governed by individual states or regions and are
considered in all (Limited Liability Company, 2021).
In category of key features, LLC term encompass characteristic of
being separate entity. In almost many nations, entrepreneurs conduct
their own organizational practices running their companies. For example,
Virgin groups as LLC gain benefits of productive workforce.
Public limited liability business:
An organization that is not a private and operate in public sector, in
order to provide and offer quality services & products to customers are
known as public limited liability enterprise. As a legal entity, public firms
may have separate identity from their key stakeholders or board
members.
Public organizations may able to take pleasure of success and
excellent growth within specific market while operating under particular
industry such as retail, hospitality or medical (Characteristics of Public
Limited Company, 2021). It may do so by offering satisfactory goods to
wide customer base.
Sainsbury's as public firm may conduct business practices to
enhance customer satisfaction level and to be competitive within retail
industry. It may work by following legal terms and policies and conducting
practices accordingly.
Cooperative:
These are forms of companies that owned by member owners and
controlled by them in effective and systematic way. All members of a
cooperative company may have a close association with brand as owners
and provider of their services and goods that provide to people according
to needs and requirements.
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Limited interest on capital, open membership, liability of members
and service motive are included in list of cooperative organizations
characteristics.
Land O Lakes and other organizations similar to chosen one may
cover under category of cooperative firms.
SECTION 3
Different business structures and external factors affecting business
There are variety of organizational structures exist within business
world that small, medium and large size companies used according to
their size and scope. These formats are;
Functional-
This structure is utilized in order to manage performance of
workforce and organize activities conducted by them. It drives the
attention of management who may use that to divides major
organizational functions into varied groups which in return make a firm
productive and profitable. By dividing functions in category of IT,
marketing, Finance, HRM and production, organizations may grow rapidly
as functional structure may assist to increase management productivity,
even better than other companies that also operate under same industry
where they may have established business.
It may arguably reach greater operational efficiency as workers with
shared competencies work together and effort to achieve common aim.
With functional organizational structure, manager may able to specific
roles and accountabilities of each candidate, which drive their attention
towards those activities that fulfil their duties and responsibilities and also
help to increase business performance.
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Divisional-
Just like above, divisional structure also include in same category. It
may provide benefits to user or implementer in term of organizing
business activities and operations into categories like goods, services,
geographical locations, etc. With divisional structure a company and their
management may build those sections that may work independently and
take decision related to area or function for which they are highly
accountable (Advantages and disadvantages of divisional structure,
2021).
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Chosen structure may affect business performance and productivity
by creating career development chances for each candidate, through
which they may grow and develop those skills that utilized to achieve
organizations aim, objectives, vision and mission. Furthermore, it may
also enable a company stronger to give quick and appropriate response to
change that may occur in market environment.
PESTLE analysis-
As strategic framework, pestle analysis concept may provide varied
benefits to companies in term of determining those factors that may put
direct impact on their productivity and current business practices whether
they affect negatively or positively. Here, the chosen model apply in case
of Sainsbury's.
Political factor-
Political stability in the UK may provide organization chance to be
flexible and enter into new market where success and growth chances
accessible in bulk and company may grab each according to needs and
business success requirements.
Economic factor-
Fluctuation related to varied economic factors may affect the
performance, productivity, activities and existing plans of companies. For
example, low unemployment rate may put positive impact on Sainsbury's
business growth as it may provide opportunity to management in term of
hiring local people who may prefer to work in a company just to earn
money that enable them to live a normal life after the crisis such as
pandemic. It may affect organizational productivity and performance
level.
Social factor-
Changes related to any social factor such as market trend, income
level, customer behaviour, etc. may put straight impact on current
management activities and functional strategies. For example, veganism
as current market trend may put positive impact on Sainsbury's as it may
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already consider what people expect from it and arrange inventory
accordingly. By offering goods according to customers current needs, firm
may become the most profitable supermarket in retail industry, which in
turn increase its productivity, customer base and profits margin.
Technology factor-
Technology advancement is one of those external factors that may
affect chosen organization performance in positive manner. For example,
it may provide opportunity to marketer about promoting brand worldwide
without conducting too much efforts as they may promote new and
existing offers by using effective marketing tools such as social media. It
may provide them chance to gain the attention of international customers
by gaining their trust and assuring that firm offer quality products and
services according to needs of target market.
Environmental factor-
Customers and governmental bodies concern related to
environment sustainability and to reduce carbon foot print, may put
positive impact on Sainsbury's growth. As firm already taken initiative to
be sustainable and conduct ethical business practices, which contribute to
increase its customer base in term of gaining attention of new buyers who
seek to retain with those companies that efforts to become sustainable
brands. Furthermore, just because of this factor, supermarket may
establish or build excellent brand image in retail industry.
Legal factor-
In recent time due to pandemic in many nations' government may
take strategic decisions in term of developing new workplace safety
guidelines. In case of Sainsbury's, it may put negative impact on current
management practice in term of putting pressure to consider each term
and condition of new guidelines and arrange everything accordingly,
which may consume a lot of time and require extra resources to do so in
effective way. It may affect negatively in short time duration, which firm
overcome by applying strategic action.
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CONCLUSION
On the basis of above discussion, it has been concluded that by
applying pestle analysis model, organization and its management has
developed understanding about varied factors that put positive impact
upon business growth. They had taken actions to overcome the negative
impact of those factors that affect negatively in the context of same.
Furthermore, it has been analysed that by following specific, but effective
hierarchical organizational structure supermarket has gained competitive
advantages and enhanced its venture productivity.
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REFERENCES
Book and Journals
Brown, P., Bocken, N. and Balkenende, R., 2020. How do companies
collaborate for circular oriented innovation?. Sustainability. 12(4).
p.1648.
Gioffré, A., Tampieri, A. and Villanacci, A., 2021. Private versus public
companies with strategic CSR. Journal of Economics. 133(2).
pp.129-166.
Online
Advantages and disadvantages of divisional structure. 2021. [Online].
Available through: <http://way2benefits.com/advantages-and-
disadvantages-of-divisional-structure/>
Characteristics of Public Limited Company. 2021. [Online]. Available
Through: <https://enterslice.com/learning/characteristics-of-public-
limited-company/>
Limited Liability Company. 2021. [Online]. Available Through:
<https://efinancemanagement.com/financial-accounting/limited-
liability-company>
Small Business: Characteristics, Strengths, Reasons for Failure in Small
Business. 2021. [Online]. Available Through:
<https://www.iedunote.com/small-business>
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