Different Types of Companies and Their Structures - Desklib

This report discusses different types of companies and their structures, including micro, small, medium, and large businesses, sole traders, partnerships, cooperatives, and more. It also covers organizational structures and external factors affecting business performance, such as political, economic, social, technological, legal, and environmental factors.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
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Contents
Introduction 3
Section 1: Different types of companies and how they work
3-5
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships 5-7
Section 3: Different businesses structures and internal factors
affecting business 7-9
Conclusion 10
Reference List 11
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Introduction
Business in practice is a basic concept that helps an individual person in
engaging in particular form of work. It involves various tactics and strategies that
helps businesses to reach the objectives in a prominent manner. To attain high
profitable results, an organisation mainly emphasis on applying code of conduct so
that practices of business are carried out effectively (Babajide and et. al., 2021). The
main aim of conducting this report is to examine different types of companies and in
what manner they work for attaining targets. This report is based on Dyson, a
leading British multinational company which offers electrical appliances to
customers. This also involves PESTLE analysis and organisation structure that helps
the respective business firm to attain objectives appropriately.
Section 1: Different types of companies and how they work
Micro business:
Definition- Micro business refers to a very small business that start its
operations with very limited capital and resources (Williams and et. al., 2021). These
businesses are mainly developed for developing standard of living of individual
family and friend by surviving in society as well as local market area.
Characteristics- The main feature of this type of business is that they offer
employment to small group of people such as 0-9 people. The maximum turnover of
this type of business is approximately £ 632000. The concerned business mainly
focuses upon fulfilling the day to day needs of people in local market area.
Example- The main example of micro business is boss brewing firm that is
generated to change the perception of gender within beer industry.
Small business:
Definition- It refers to the business which is considered larger than the micro
business because they offer employment to local people. There are around 0-49
employees are working who contributes in the success of firm and their longer
survival.
Characteristics- The key feature of small business is that they offer
employee opportunity to few people who are working for attaining company
objectives that is long term sustainability in local market. These businesses do not
pay taxes because they do not earn high profit margin.
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Example- One of the best example of small business is Cafe pod coffee firm
which manufactures strong coffee for people who love coffee. This helps in
providing innovative coffee to clients that helps business to grow and sustain for
long time period.
Medium size business:
Definition- This type of business is larger than small organisation and
represent as well managed firms. In medium size business there are 50-250
employees are working (Carter and Carter, 2020). These type of companies have
more capital and resources as compared to small business and they do their
business by covering overall country and nearby areas for generating more profitable
results. This business acquire investors and lenders easily which is effective in order
to generate more revenues.
Characteristics- The essential features of these type of firms is that there are
around more than 50 employees are working. In this employees are working with
sufficient capital and resources that is used to satisfied the needs and wants of
customers. Medium size business emphasis on generate more profits. Generally,
this type of organisation takes high risk to enhance the visibility in geographical
areas.
Examples- The best example of this type of organisation is Verdant leisure
that is a holiday park operator where they offer self-catering lodge along with holiday
homes to customers in Scotland and UK.
Large size business:
Definition- It define to that type of organisation who works with huge amount
of capital and investment. They mainly emphasis on satisfy the customers by offer
products and services that fulfil their requirements. It helps in generating high
amount of profits and revenues (Pascal, 2021). This business entity are worked
under the competitive industry where they provide offerings to customers to attain
competitive advantage, so that more growth and development of business is done.
Characteristics- The feature of large size business venture is that they offer
employment opportunities more than the 250 employees. Large size business helps
in developing living standard of society people by offering job opportunity. They earn
more revenues as compared to small and medium size businesses. These business
have great number of organisational operations on a daily basis.
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Example- Dyson is a leading British multinational technology company that
was founded in 1991 by James Dyson. This company deals in variety of products
such as air dryers, vacuum cleaners, hair dryers etc. In this organisation, around
12000 employees are working in all over the globe. Therefore, company have its
presence with a total revenue of 7.3 billion US$ (Dyson On: Dyson Year in Review:
2019, 2021).
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
Meaning- It refers to that type of unincorporated business in which only
individual person is responsible for bear the loss, risk and gaining profitable results
(Collinson and et. al., 2020). Sole trader bear unlimited liability but at the same time
these type of businesses are easy to operate.
Characteristics- Sole proprietorship contains several features such as:- for
setting the business it is not necessary to involve in any legal formality. In this
decisions are made by single individual due to which frequent decisions are build so
that no confusion is created.
Examples of sole traders are plumbers, hair salons, carpenters etc.
Partnership:
Definition- It defines as a formal arrangement of two or more than two
parties, not more than 20 person who involve in particular business to manage and
operate the business. Therefore in this, risk, losses and profits are divided among
partners as per the agreement done under partnership deed (Thomas and et. al.,
2021). In partnership deed, partners show their resources, capital that they invest to
attain the objectives and in this decisions are taken at mutual interest.
Characteristics- There are several key attributes of partnership limited such
as these type of business need registration of firm under the partnership deed act to
bring partnership into existence. There is no separate legal entity of partners and
company. The partnership is dissolved when the objective of partnership deed is
fulfilled.
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Examples- Deciduous Partners Ltd is one of the best example of partnership
that is situated in UK. It works as a consultancy firm that provide service to
customers by offering knowledge to individual person and business indulge in
practical management services.
Limited liability business:
Definition- It refers to a new business structure that offers variety of benefits
to their members. It is mainly governed by individual states and recognised in all
states. Hence, it allows the pass through taxation of partnership with limited liability
of cooperation.
Characteristics- This type of company enjoys the high tax benefits because
they emphasis on pass through profits as per partnership that means there tax are
not separated with business profits.
Example- The best example of Limited liability company is Blockbuster which
is best known for providing home movie and video game rental services.
Public limited liability business:
Definition- It is a type of business that are work under the UK company law
(Raziq and et. al., 2020). These businesses mainly traded in share market where
they sold shares to general public for raise money. It is also based on voluntary
association of members that reflects as a legal entity.
Characteristics- It is a type of business that have separate legal entity from
shareholders and board of directors who are the main participants in the formation of
business. They perform all their operations within company under the code of
conduct which are imposed by government of the country.
Example- There are various examples of Public limited company such as
Tesco, Polls-Royce etc. who are working under public limited liability and work for
gaining profitable business by satisfying the demands of customers.
Cooperative:
Definition- This type of company is represent as a private company that is
privately owned and controlled by the group of people without the intervention of
government in manufacturing, selling and operating of the goods and services for
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customers. They generally work for fulfil the demand of customers within competitive
business industry.
Characteristics- The main feature of cooperative business entity is that they
operate business operation without intervention of government parties. The primary
motive of the cooperatives is to provide assistance to their members. They work to
serve the members enrolled in the cooperatives.
Examples- The main example of this type of company is Infinity food shop.
That is a prominent organic and natural vegan foods to provide health benefits to
customers. It was founded in 1971
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
Organisational structure refers to a system that outlines in what manner
certain activities are directed so that goals and targets are achieved by company in
an effective manner (Chung, Joand Lee, 2021). This mainly include rules, roles and
responsibilities that express the information flows between different levels in the
company. There are several types of organisational structure that are adopted by
organisation as per working culture. Some of them are shown below:
 Divisional structure- It refers to that type of structure that group each and
every type of organisation function into a division. In this, each and every
division contain necessary resources and functions in the support of product
line or geography. In context of Dyson, company adopts this organisational
structure where employees are bifurcated in every division so that targets are
attained effectively and operations are done in a smooth manner (Dyson,
2021). Therefore, it is useful for employees to clearly understand the task so
that productive results are attained by the company because this structure
assists the company to attain organisation objectives positively.
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Illustration 1: Dyson organisational chart, 2021
§
 Functional structure- It is a structure that is used to organise the workers in
systematic manner. In this structure each and every department structures in
a vertical manner such as in production, marketing, finance etc. Therefore, it
divides the major functions into different groups.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
Pestle analysis is a framework to analyse key factors that impact business
operations and performance. In context of Dyson, factors under pestle analysis
shown below:
 Political factor- This factor is mainly linked with the government stability, tax
rate and many more. Therefore, political condition of UK is stable that
represent an opportunity for Dyson to develop their profit margin.
 Economical factor- This factor represents the spending power of customers,
interest rate etc. In UK, buying power is effective due to which Dyson enjoy
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high profitable results and improve its overall performance (Wu, Dluhošová
and Zmeškal, 2021). Due to high inflation rate, Dyson buys raw material at
high cost due to which the cost of products are high that impact company
profit margin in negative manner.
 Social factor- In UK, society people are very open minded and modern as
they are interested in using new technical products. It ultimately helps in ease
their day to day working. This create opportunity for Dyson and enhance
growth by selling products and services to customers that fulfils customers’
demands.
 Technological factor- It refers to the factor that represent a use of advanced
technology. In terms of Dyson, company produce innovative products in which
high usage of technology is presented. This attracts number of customers
towards it and positively affect company profitability and performance at
marketplace. This helps in gaining the competitive advantage within
marketplace. Dyson mainly invest in their research and development
department to upgrade technology. This develop brand image and gives them
more sales and profits eventually.
 Legal factor- This factor represents the laws and regulations for the welfare
of employees and customers so that firm generate high profitable results. In
terms of Dyson, manager adopts proper laws for satisfying employees so that
they present their work in productive manner which is useful to attract large
base of customers. In this Dyson adopt equality law in which they treat every
employee equally so that they are satisfied with the working. Due to this
performance of organisation is developed.
 Environmental factor- Dyson emphasis on adopting all rules and regulation
for safety of environment (Mataveli, Ayala and Gil, 2020). In this, they use
environmental practices that does not harm the environment. In this they
emphasis on remove the use of plastic in packaging and producing the goods,
so that number of customers are to be attracted towards it. Due to which
company overall performance is developed.
Conclusion
By the preceding report, it is to be concluded that business in practice is a
very significant term within business industry because it provides knowledge to the
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people about the market environment, types of business etc. so that firm attain
profitable results by achieving the targets appropriately. This report help in gain
knowledge regarding what capital and resource are needed to which type of
business. This report inculcates various types of businesses such as small, micro,
medium, large to understand their features, meaning effectively. Further, it evaluates
various type of companies such as sole proprietorship, legal corporative etc. with
their features that helps to examine the growth and development within marketplace.
It also elucidates the organisational structure that helps business to done their
operations very smoothly. At last, it reflects pestle analysis due to which company
understands macro environment factors that assist in gaining profitable business and
revenues by attracting large base of customers.
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Reference List
Books and Journal
Babajide, A. and et. al., 2021. Financial literacy, financial capabilities, and
sustainable business model practice among small business owners in
Nigeria. Journal of Sustainable Finance & Investment, pp.1-23.
Carter, M. and Carter, C., 2020. The Creative Business Model Canvas. Social
Enterprise Journal.
Chung, W.Y., Jo, Y. and Lee, D., 2021. Where should ICT startup companies be
established? Efficiency comparison between cluster types. Telematics and
Informatics. 56. p.101482.
Collinson, S. and et. al., 2020. International business. Pearson UK.
Mataveli, M., Ayala, J.C. and Gil, A.J., 2020. An analysis of factors that influence the
decision to export: perspective of Brazilian companies. Academia Revista
Latinoamericana de Administración.
Pascal, A.M., 2021. Business and human rights, from theory to practice and law to
morality: Taking a philosophical look at the proposed UN treaty. Philosophy
of Management, 20(2), pp.167-200.
Raziq, M.M. and et. al., 2020. Organisational Structure and Project Success: The
Mediating Role of Knowledge Sharing. Journal of Information & Knowledge
Management. 19(02). p.2050007.
Thomas, P.J.M. and et. al., 2021. A PESTLE analysis of solar home systems in
refugee camps in Rwanda. Renewable and Sustainable Energy Reviews.
143. p.110872.
Williams, J.A.S. and et. al., 2021. Business writing practice and support over time:
Evidence from a strategic management class. Journal of Education for
Business, pp.1-10.
Wu, X., Dluhošová, D. and Zmeškal, Z., 2021. Corporate Social Responsibility and
Profitability: The Moderating Role of Firm Type in Chinese Appliance Listed
Companies. Energies 2021, 14, 227.
Online
Dyson, 2021. [Online]. Available through: <https://theorg.com/org/dyson/org-chart>
Dyson On: Dyson Year in Review: 2019, 2021. [Online]. Available
thorugh:<https://www.dyson.co.uk/newsroom/overview/features/dyson-on-
year-in-review>
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