Types of Companies and Their Impact on Business Performance

This report discusses the different types of companies and their characteristics, including micro businesses, small businesses, medium-size businesses, and large-scale businesses. It also explores various types of business corporations, such as sole trader businesses, partnerships, limited liability businesses, public limited businesses, and cooperatives. Additionally, the report examines different types of organizational cultures and their impact on business productivity. Finally, it analyzes how different factors of PESTLE analysis, including political, economic, social, technological, legal, and environmental factors, affect business performance. The report concludes by emphasizing the importance of understanding these factors in order to achieve sustainable growth and success in the business environment.

Types of companies

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK1.............................................................................................................................................1
Explain the different types of companies and how they work....................................................1
TASK2.............................................................................................................................................3
Define various types of business corporations with features and illustration.............................3
TASK3.............................................................................................................................................4
Define different types of organisational cultures & how it affects productivity of business......4
Explain how different factors of pestle analysis impacts the business performance..................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business is defined as company or firm that indulge in commercial, professional and
industrial activities and process that plays prominent role in accomplishment of business
objectives and goals with aim as to serve the society and solve social problems (Akhtar and
Sushil, 2018). Company is defined as the separate legal entity that represents association of a
person and individual with unique & specific with sharing of a common purpose.
Marks & Spencer is a multinational British retailer who offers clothing and home
products and food products with their own label. The company is registered in 1884 at England
by Michael Marks & Thomas Spencer.
This report is based on the topic “Types of companies”. Here different types of
companies with characteristics and examples based on comparison are discussed. Further internal
factors and external factors of companies are considered within report so as to analyse their
impact on respective organisation.
MAIN BODY
TASK1
Explain the different types of companies and how they work.
Micro Business
Definition: This type of business is opened independently with 1 minimum or maximum
number of employees is 9 and annual revenues of micro business is under $25,000. it is the type
of business that has legal and formal business structures (Bruijl, 2018).
Characteristics: The main characteristics and features of micro business reflects as
attainment of higher profits, limited control and monitoring is needed for operation and
functioning of business in effective manner.
Example: The best example of micro business of United Kingdom is “Mantons Cards”, it
is local retailer with aims to offer world's best selection of gifts and greeting cards. Mantons
cards worked hard with local suppliers & great artists so as to offer local-themed merchandise.
Small Business
Definition: This is refers as the business which opened independently and the limited
number of employees are 10 and annual revenues under $50,000. small fussiness is varies upon
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type of business like employees size of manufacturing business is must be less then 500
individuals. This requires limited control over its operations.
Characteristics: In terms of small-scale business features of it are based as- limited reach
of area in terms of monitor an control, single owner and operator of business, attainment of profit
by own. These are the important characteristics of respective business.
Example: The relevant examples of small-scale business includes “Oscar
technology”based on providing exceptional recruitment services for information technology and
digital sectors from over 20 years with 70 employees.
Medium-size Business
Definition: It is also an important type of business based on medium-scale with number
of employees up to 250 with million of turnover and required huge control and monitoring to
manage 250 employees and resources as well (Čepel and et. al., 2018).
Characteristics: This involves large amount of money needed for operation and function
of business, higher earning and revenues of business, limited liability and accountability towards
business.
Example: Best example of this type of business is “John Good Shipping” UK based
logistic company that invested in latest shipping technology that allows customers to interact
direct with system.
Large-scale Business
Definition: It is the business where large number of employees considered in millions
and billions. Large-scale businesses requires huge capital investment over operation and
management of organisation in effective ways so as to sustain business (Hamilton and Webster,
2018).
Characteristics:The essential characteristics of large-scale business includes more than
one owner of business, similar value of assets as turnover of company, usually dealing with basic
goods and essentials of general public.
Example: One of the right example of large-scale business is “Marks & Spencer”, is UK
based firm with have large number of 80,000 employees.
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TASK2
Define various types of business corporations with features and illustration.
Sole trader Business
Definition: It is defined as the type of business not fits for small sector and wants to open
sole proprietorship is called as sole trader business that has extensive start ups that creates huge
opportunities to enjoy large number of profit.
Characteristics: sole trader business is characterised by one hand ownership, freedom of
make effective business decisions with unlimited liability & accountability of owners. It doesn't
have separate identity (Hansen and et. al., 2018).
Illustration: The best example of sole trader business of UK is “A E Scott & Co” that
deals in personalised services to people who wishes to operate their own business and helping
those who have already in successful business.
Partnerships
Definition: It is another important type of business that exists with a agreement and
contract between two or more partners operate and mange a organisation together with sharing of
profits, loss, capital of business.
Characteristics: The major characteristics of partnership business is there is a sharing of
profits and losses of business, interest of partners is not transferable, provision of legal
agreement and contract between individuals and partners.
Illustration: In terms of partnership business suitable example includes “Sargent
Partnership Lip” that offers accounting services with aims to reduce the burden and optimise tax
position so as to make it simple for business organisations to focus on core activities & functions
of business.
Limited Liability Business
Definition: It is the type of business that registered at company house with having own
rights and obligations towards operation and management of business. As the name shops
ownership of partners are divided into equal parts that refers as shares of business (Khan, Çera
and Netek, 2019).
Characteristics: This type of business is characterised by formal and legal existence of
business with proper registration, flexible taxation of business, liability of owners is limited,
simple and easy operation.
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Illustration: Limited liability business is here illustrated by Professional Liability
Brokers Ltd that offer informal, fast and reassuring advice regarding insurance with having
ability to adopt whole market of insurance.
Public Limited Business
Definition: It is defined as the association of members that has separate entity in legal
and formal way with having limited liability towards losses of firm. It is also known as the stock
exchange where shares are exchanged.
Characteristics: Public limited business is characterised by separate legal existence,
shareholders are free from the liability and accountability of creditors of business.
Illustration: Suitable examples of this type of business organisation is consists of Marks
& Spencer company
Cooperation
Definition: Cooperation is considered as the business organisation which is operated and
manage by people who uses its products and services, it varies according to the size of members
and types of firms.
Characteristics: Cooperation is characterised by its members, equal distribution of
profits, democratic structures of business organisation.
Illustration: One of the best example of this type of organisation is Dent-tech Ltd car
accessories and repairing services based in UK.
TASK3
Define different types of organisational cultures & how it affects productivity of business.
Organisation structure is defined as the system that provide direction towards
achievement of business objectives in effective and efficient manner so as to develop the
productivity of business (Kokodey, Gnezdova and Lomachenko, 2018). In terms of Marks &
Spencer have its own structure based on requirements of business.
Line structure: This is most used structure of organisation where authority flaws from
top level ton bottom. According to this organisational structure line managers holds the authority
to take decisions in order to build effective communication system within organisation. This
structure implies effective management and control that makes chain of command within
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business. In terms of Marks & Spencer this type of business structure helps in evaluating
effective discipline within organisation.
Hierarchical structure: It is another important structure of company where groups are
made based on functions and operations like human resource, technical and engineering
department, finance. Groups are made to reduce unnecessary burden of management and allows
manager of each department to hold all authority about their departments by own. With respect
to Marks and Spencer it helps in managing flow of activities and commands in effective ways.
Matrix structure: This is also a group based organisational structure in which groups are
build on the basis of employees similarities in terms of their skills, interests and expertise that
has crucial impact on attainment of tasks. In this type of organisation structure responsibility or
accountability of employees varies towards more than one manager (Syazali and et. al., 2019).
Respective organisation can use this structure for creating a healthy and friendly work
environment.
team-based structure: In this type of organisational structure teams and groups are
formulated for solving business problems ion effective an efficient way. Teams are made to
accomplish group tasks and duties with coordination and cooperation. In terms of respective
organisation it helps in obtaining standards and targets within specified time period.
Network structure: It is also significant type of organisational structure that helps in
analyse instinct & extrinsic relationship between top level of organisation and management. This
helps in managing and controlling & ensuring bottom flow of information or decision-making so
as to build effectiveness with ion firm.
Although these are the important types of organisational structures that has prominent
impact on business in terms of making effectiveness and discipline so as to maintain
effectiveness within organisational productivity.
Explain how different factors of pestle analysis impacts the business performance.
PESTLE Analysis
there are six important factors or elements that has prominent impact and influence over
behaviours and performance of employees as well as entire organisation (Miftari, 2018). Theses
factors are considered as follows:
 Political factor: Political stability of government of UK, reducing taxation rates
has positive impact on business organisation of country. In terms of respective
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organisation political factor has prominent impact on business performance and
creates huge opportunities for success of business.
 Economical factor: Due to recession and unemployment rate of United Kingdom
affects the economy of entire country that leads to negative impacts over large-
scale businesses. Thus, it is important for respective business to concentrate on
lower prices in order to constant flow of business and rising position in market.
 Social factor: Buying habits of population of UK is shifted from premium to
essential products an goods at affordable prices due to pandemic of Covid-19.
Thus, in terms of overcome negative impacts of this aspect of pestle analysis it is
prominent for respective organisation to focus on availability of its goods and
products at lower and affordable prices so everyone can purchase and fulfil their
needs. This leads to sustainable growth of business.
 Technological factor: United Kingdom is technology advanced country and it is
necessary for firms to use advanced technology within its process and activities so
as to meet the technological requirements of sector. Marks & Spencer uses digital
technology in their manufacturing and distribution activities. Thus, this factor has
immense impact on respective firm and its performance (Somers, 2019).
 Legal factor: This factor of pestle analysis is related to variety of factors such as-
governmental policies and legislation, strict rules and regulations of political
parties impacts the performance of business organisation in both positive an
negative ways. negative impact creates threats for business while positive impact
creates opportunities for business. In terms of respective business should focus on
fundamental laws for customer protection and labour safety laws for controlling
threats and garbing opportunities for future growth of business.
 Environmental factor: Marks & Spencer has positive impact of this factor of
pestle analysis that leads to effective operation and enhancing business
performance. Government of UK is very strict in terms of environmental laws
thus, in order to sustain long term and secure future growth of business within
target market. Although uses of renewable resources for production and
manufacturing practices of business leads to opportunities for future growth of
business.
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CONCLUSION
Thus, from above discussion it is observed that there are different types of
companies and businesses that varies according to size, structure, number of employees, capital
investments, definition and characters of them. Thus, in this report several kinds of companies
are discussed, further different organisational structures are defined so as to know their impact
and effects on behaviours and performance of employees within organisation. Moreover external
and extrinsic factors are considered in order to identify their influence on organisational
productivity. These all are the important aspect of business that has prominent impact and
influence over business performance and productivity.
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REFERENCES
Books and Journals
Akhtar, M. and Sushil, S., 2018. Strategic performance management system in uncertain business
environment. Business Process Management Journal.
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Čepel, M. and et. al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hansen, M.W. and et. al., 2018. Coping with the African business environment: Enterprise
strategy in response to institutional uncertainty in Tanzania. Journal of African
Business. 19(1). pp.1-26.
Khan, K.A., Çera, G. and Netek, V., 2019. Perception of the selected business environment
aspects by service firms. Journal of Tourism and Services. 10(19). pp.111-127.
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018. October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Miftari, V., 2018. Transformational leadership communication in developing countries’ business
environment. Journal of History Culture and Art Research, 7(2), pp.259-264.
Somers, F., 2019. European Business Environment: Doing Business in Europe. Routledge.
Syazali, M. and et. al., 2019. Partial correlation analysis using multiple linear regression: Impact
on business environment of digital marketing interest in the era of industrial revolution
4.0. Management Science Letters. 9(11). pp.1875-1886.
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