BSc BMP3002: Company Types, Structures, and External Business Factors

This report provides a comprehensive analysis of different company types, ranging from micro-businesses to large corporations, detailing their operational characteristics and financial structures. It further explores various business structures, including sole proprietorships, partnerships, limited liability companies, public limited companies, and cooperatives, highlighting their legal and operational differences. The report also examines the impact of organizational structures, such as functional and divisional structures, on business productivity. Finally, it assesses the influence of external factors on business performance through a PESTLE analysis, covering political, economic, social, technological, environmental, and legal aspects. This document is available on Desklib, a platform offering a wide range of study resources for students.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
Contents
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Introduction 2
Section 1: Different types of companies and how they work
P
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships p
Section 3: Different businesses structures and internal factors
affecting business p
Conclusion p
Reference List p
Introduction
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Business management refers to the organizing and managing the business activities.
There are different types of business organizations and all of them have a different
concept for performing the business activities. The business management is mainly
concerned with the achieving of the organizational objectives. It involves those
methods that leads towards the achievement of the main motive. This report will
illustrate the different types of business organizations and their working style. The
report also describes the different organizational structures affecting the productivity
of the business. And the external factors affecting the business.
Section 1: Different types of companies and how they work
There are certain type of companies, those are:
Micro business:
These are those businesses that employs less than ten people. They cover
approximately 10% of the private jobs. These are similar to small businesses but,
they face difficulty while allocating funds for the start-up. The micro businesses are
mainly operated in the retail sector, healthcare, construction and in social assistance.
The working scenario of the these firms is just like other firms. They select the
business structure such as, corporation and partnership. Afterwards, they decide
their financial stability and all the necessary management activities. Lastly, they get
the businesses licenses in order to start their operations. (Rojas-Torres and Kshetri,
2019). Under this, the tax rate depends upon the type of business a firm operating.
In order to provide loan facility for such associations the small business
administration has been setup. They offer the loan up to amount 50,000.
Small business:
These are those firms that employ from 100 to 1500 employees. These are the
private enterprises owned in the form of partnership, sole proprietorship and
corporation. They operate on the small scale. They face the issues related to the
quality management of the products as they have less resources in comparison of
the large organizations. The capital stability of these firms are less. Therefore, they
generate less revenue. These enterprises work on the concept of creating the values
and achieving the objectives. They create values, mission, vision, policies in order to
achieve the objectives. The main motive of these associations is to provide the large
employment to the needy people. These businesses are involves in the sectors retail
service, construction, special trade contractors and agriculture. They get the loans
from the bank in order to start their business functions.
Medium size business:
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These business can be the family owned business. They have separate legal entity
from their owners. These associations are the well-established associations and
have good financial base. The financial structure of the business is maintained by
the in house professional. In order to arrange finance, the medium-size business
approaches various banks. Many businesses with efficient record of credit easily
gets the loan. (Geissdoerfer, and et.al., 2020). The business approaches cash-flow
finance, grants, over drafts and trade credits in order to set the capital base for the
firm. The businesses earn the revenue between amount up to 10 million and 1
billion. It operates in the manufacturing, engineering and wholesale sectors.
Large size business:
These businesses involve that enterprises who have 5000 employees and an annual
turnover more than the 1.5 billion euros along with the balance sheet consisting 2
billion euros or more than that. It operates on an extreme large scale and generates
the high level of income. The tax rate of these associations are high compared to
other associations. In order to start the large business high amount of capital is
needed. The fundraisers for the firms are shareholders, debentures, public and the
banks. It requires large number of resources. These companies have a separate
legal entity from their owners. Shareholders are considered as the actual owners of
the companies, and they have full right of taking part in the decision -making policy
of the companies.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
Sole proprietorship is that form of business that is managed by the single person. An
individual is liable for all the risks. The complete right towards the profit is enjoyed by
the owner. The business does not have the separate existence than the owner. Firm
runs in the name of the owner. The liability of the business is unlimited. The paper
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work is generally less in comparison of the other form of the businesses. Arranging
the finance is the hard task for the firm as the single person is not capable of
arranging the large ratio of finance. At the time of loss, all the risk has to be bear by
the owner only.
Partnership:
Partnership is that form of business that involves two or more than two people in
order to establish the business. The agreement has been signed between the
partners for sharing the loss, profit and liabilities of the business. The opinion of all
the partners is equally important in the business. This form of business helps in
sharing of risk at the time of high risk. (Bari, 2019). All the partners are liable for
bearing the risk and compensate the loss. In terms of legal entity the firm do not
have separate existence than the partners. This form of business leads to cost
saving, moral support and tax benefits.
Limited liability business:
This is the business structure for the private companies which includes combination
of partnership and corporations. These businesses have a high rate of flexibility in
terms of choosing tax treatments. Under this, the income of the firm is defines as the
income of the owners therefore, the firm does not have to pay double taxes. The tax
is paid at the individual level. The company has the limited liability. This results in
protecting the owner and members from being personal liable for the debts. These
firms are managed by the state government. Any change in the government policies
leads to change the working scenario of the firms.
Public limited liability business:
A public limited liability company is that company under which the liability is limited
and shares offered to the public. The fund can be acquired by inviting public in order
to buy shares. The public who buys share has been considered as the owner for the
firm. The shares of the company are easily transferable. Such companies have a
feature named perpetual succession. (Massinon, 2018). It means, these companies
does not have an end. In order to register the company, the business must have
minimum three directors or maximum fifty directors. These companies easily gets the
loan as they are considered as the part of public sector.
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Cooperative:
It involves those businesses that are organized by the different individuals in order to
achieve the economic goal. These are the non-profit organizations that works with
the aim of social welfare in the society. These organizations are run by the NGO and
government. The ultimate goal of these organizations are increasing the level of
social and economic development. There are different cooperatives has been formed
such as, consumer, workers and producer cooperatives. (Gupta And Gupta, 2019).
They follow the concept of eradicating the poverty, empowering women and
providing employment. They overall focuses on the development of the society and
protects the public interest.
Section 3: Different business structures and external
factors affecting business
3.1 Identification of different organizational structures and
explaining how does organisational structure affect business
productivity
An organizational structure refers to that system that helps in outlining the
performance of the organization's activities in order to achieve the goal. These
structure clears the working scenario of the organization. It helps in establishing the
flow of the communication in the company. (Muafi and et.al., 2019). This works as a
guidance towards the employees. The structure results in the high flexibility in terms
of performing the task. As a result, the productivity of the employees is increased
and the objectives are achieved in efficient manner within the time. Here are the
examples of the organizational structure:
Functional structure- This form of organizational structure is utilized to organize the
employees of the different departments. This structure is formed according to the
qualification, creativity and talent of the employees. It divides the whole organization
into different departments and the employees who are suitable enough for a
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particular department has been shifted into that, this has been done in order to
increase the skills of the employees. (Dedahanov, Rhee and Yoon, 2017). This
structure makes a clarity in the working scenario of the organization within this the
productivity of employees get increased. The task is given to the employees
according to their skills and ability. Performing a single task again and again results
in making the employee more productive. And collectively all these different
departments contributes towards the main goal.
Divisional structure- This structure formed with the aim of grouping each function
of the organization in different divisions and all of these divisions contains all the
mandatory resources which are needed to perform the operations. For example;
marketing department, finance department and R&D department. Each of the
division has its own resources and a manager who focuses on that particular division
in order to increase the efficiency rate. This form of organizational structure follows
the team working criteria, all the members interact with each other and share the
common interest of work. (Modenov and Vlasov, 2018). The efficiency of
communication is high as employees communicate with each other in relation of
same project. Different divisions in the company results in making each department
individually productive. As a result, all these different department together
contributes for the organization and the main objective has been achieved.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
Evaluation of business or organization performance mainly influences by the forces
of external factors are as follows,
Political:
This factors mainly influences by changes in government policies, tax policies
and many more. On the basis of changes in policies business owner, manger has to
prepare changes, and they are responsible to manager new policies according to
new variation in tax, foreign trade, trade control and many more policies (Iskandar
and Aprilianty, 2021) Application of variation is required because of effectiveness
expansion in business performance.
Economic:
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This factors directly impacts on company long term success because
country's inflation rate highly affects business good and services performance.
Reduction in individual buying capacity, higher unemployment, lower income rate
and many more which directly impacts on business product buying services. So
analysis of these factors its important task that business manager recognize that
which services influence their business product performance and how to manage
product and services activity in market that individual can buy their services with
easier manner.
Social:
Cultural, religion, variation in customer requirement, perception, lifestyle
changes and many more aspects influences business performance, Knowledge
about these factors company has to consider timely which diversification require in
business product ans services not only fashion product, but multiples different
business goods require knowledge and consideration of social changes. If
organization not consider and applies new changes according to market trend they
not survive in market for long term.
Technological:
Acceptance of innovation in business activity is essential approach which
develop more efficiency in business performance and product and services. Those
organizations not consider developing and expand innovation in their business they
not survive in competitive market like according to recent trend many businesses
provides online survives, so people more connect and engage with this type of
organization (Marheni, 2021).
Environmental:
It influences security of raw material of business, people requirement are
changes when climate ans weathers suddenly diversify. Knowledge about this
activity company or business has to develop some risk analysis aspects, and they
ave responsibility to how effectively manage their product ans services throughout
unwanted or unconditional situation.
Legal:
Different country has their different legal aspect but application of legal
approaches essential because they are the to expand their business effectively in
market. If any individual business not following legal laws, regulations and rules it will
directly closed by government. Almost every country develop implement laws
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because their safety, employee income improvement, lands, production activities
and many more. Consideration of all these aspects are essential because it expands
business reputation ad goodwill as well.
Conclusion
It has been summarized form the above reflective study that business affects by
multiple aspects like internal external factors, and they impact on overall business
performance, so on the basis of this study it has been clear that individual business
owner, manager and staff member has to consider which forces influenced their
effective business performance. And this study also shown that different size and
activities of organization impressively mange their stakeholders. This assignment
clear provided idea about any organization those require knowledge about their
product and services influenced by which factors.
Reference List
Bari, M.A., 2019. Strategic Partnership: Facilitating Value for Start-ups (Master's
thesis).
Dedahanov, A.T., Rhee, C. and Yoon, J., 2017. Organizational structure and
innovation performance. Career Development International.
Geissdoerfer, M., and et.al., 2020. Circular business models: A review. Journal of
Cleaner Production, p.123741.
Gupta, R. and Gupta, A., 2019. Cooperative Business System of Dairy Sector in
India: Role of State, Caste and Gender.
Iskandar, M. N. and Aprilianty, F., 2021. Building an Effective Branding Strategy: A
Study Case of Raiment. Malaysian Journal of Social Sciences and Humanities
(MJSSH). 6(9). pp.569-578.
Marheni, M., 2021. Business Management Strategies and Msmes Financial
Performance with the Digitalization of Information Technology in the Times of
the Covid-19 Skills. Jurnal REKOMEN (Riset Ekonomi Manajemen). 5(1).
pp.81-90.
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Massinon, N., 2018. Relatives valuation of diamond building products public
company limited.
Modenov, A.K. and Vlasov, M.P., 2018. Organizational structure and economic
security of an enterprise. Revista Espacios. 39(39).
Muafi, M., and et.al., 2019. Business strategy, organizational structure, work
processes: are the alignment?. Quality-Access to Success. 20(S1). pp.399-
404.
Rojas-Torres, D. and Kshetri, N., 2019. Big data solutions for micro-, small-, and
medium-sized enterprises in developing countries. IT Professional. 21(5).
pp.67-70.
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