Business Report: Exploring Various Types of Companies and Structures

This report delves into the diverse landscape of business entities, examining various types of companies operating within an economy, from micro-businesses to large corporations. It explores different company structures, including sole traders, partnerships, public limited liability businesses, and cooperatives, highlighting their characteristics, advantages, and disadvantages. The report further analyzes how external factors, such as political, economic, social, technological, environmental, and legal (PESTEL) factors, impact business operations, using Tesco as a case study to illustrate these influences. The analysis provides insights into the dynamics of the business environment and how organizations adapt to various challenges and opportunities.

TYPES OF COMPANIES

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Different types of companies and how they work......................................................................1
Different companies from sole traders to cooperatives and Limited Liability Partnerships. .....2
Different business structures and how external factors affect businesses. ................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business refers to the economic activity in which goods and services are manufactured
for the purpose of selling in order to generate profits for the organisation. In a working
environment of a country, various businesses operates their activity which adds to the economy
of a country. This creates a competition in the market in which companies are competing each
other for higher excellence and being ahead of others. In a develop economy like UK, there are a
range of facilities are provided such as advanced technology, skilled people, good quality raw
materials, better infrastructural facilities which creates an opportunity for the entities to make
them grow and develop faster(Allam, Scagnelli, and Corazza, 2020).
MAIN BODY
Different types of companies and how they work.
In an business, there are varieties of companies exist for different purposes such as micro
business, small business, medium size business and large size business who are competing with
each other for higher revenue and profits in their categories(Beckerich, Benoit and Delaplace,
2019). These categories are explained as follow:
 Micro business
Micro business are those business which operates on a very low scale like working with
9-10 employees only in their business. This category of business is considered as the most
important businesses for the UK as they accounts to about 75% of all private sector employers
and they provide around 10% private sector jobs. Unlike other business, micro business face
issues in raising funds for operations or in their start ups also which acts as a barrier to the micro
businesses to grow. But the good point is that these businesses require less amount of investment
to start their business as they are comparatively small as compared to other businesses(Gallego‐
Álvarez, 2018).
For example, Boss Brewing Company is a UK based company which is a part of Breweries
industries. It employees around 10 employees at the Swansea which generates $583,324 sales per
year. This business product is mainly beer which is popular among the people because of its
taste and quality offered by the outlet. Apart from this, the sales are quite impressive as the beer
is not much expensive which attracts a lot of customers towards it. Its target customers are
mainly lower middle class people who seeks a good place with products of reasonable price.
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 Small Business
Small business are those business which operates on a small level, requires low amount of
investment and less labour force for its operations. This type of business usually requires an
investment which ranges from 25 lakh to 5 crore. Small businesses have low amount of revenue
along with low market coverage which restricts the area of operations for finding customers of
the product. The main advantage of having a small business is that they can operate
independently without relying on other business for coordination and for the purpose of
distribution of funds. They can solely invest the revenue earned as per their requirement(Kaur
and Dogra, 2019).
For example, Cafepod Coffee Co. is a small business company which operates its business in UK
who is well known for the coffee capsules which is established in 2011. Its target customers are
those people who have a habit of consuming coffee on a daily basis and needed the product on a
daily basis. The main objective of the company is to provide refreshment and great taste with its
products for the customer satisfaction.
 Medium Size Business
Business is considered to be in category of medium if it its annual is between of between $10
million and $1 billion. Talking about the count of medium size business, there are above
2,00,000 business which comes under this category. For example, Captify is medium size
business which maintains the data of 2 billion people which is not available on Google and
perform its function on the basis of their clients(Llantada and et. al. 2018).
 Large Size Business
Large size business are those business which employees a huge of people at different locations
and have its operations on a greater scale. They have a proper information system for managing
the data of the organisation and have a efficient teams for performing the task.
For example, Tesco is a retail based company which operates on a large scale in UK with an
huge investment and employees a large number of people. Tesco provides a range of products in
various categories such as home products, clothing products etc.
Different companies from sole traders to cooperatives and Limited Liability Partnerships.
A company is an artificial person which is created by the law with having a company for
performing its functions.
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 Sole Trader
Sole trader business is usually owned by a single person but operates by more than one person
for performing the task such as grocery shops, barber shop, cafe, restaurants etc. This business
comes up with a range of benefits such as profits are retained solely by the ultimate owner. It is
really convenient to establish and manage the operations of the business and decision making is
also faster in this. For example, there are various types of sole traders such as carpenter, barber,
plumber etc. Apart from this, sole trader has to face a number of challenges in his business
regarding raising capital as he is the ultimate source of fund for business. Similarly, there is a
limited scope of skills and idea generation within an organisation due to the amount of
employees indulged in the work place. Apparently instead of having these issues they perform
well in the market(Murmura and et. al. 2018).
 Partnership
Partnership is a form of business in which two or persons have agreed on sharing of profits in
their respective shares on the basis of the business operation carried on by and this agreement has
been made for the purpose of the sole purpose of profit making. This type of business usually
requires that all the partners should be responsible towards the business and maintain trust
among them and confidence. For example, Louis Vuitton has done a partnership with BMW for
the purpose of manufacturing tailor-made set of luggage crafted in fibre of carbon for the recent
launch of BMWi8. These bags and suitcases are designed to match up with the premium outlook
of the car to provide a premium experience to the user. Louis Vuitton has been famous
thoroughly for the quality products which is being offered to its customers from so many
yearsnds allocation, staff requirement(Smith and Kubala, 2018).
 Public limited liability business
Public limited liability business is a form of business in which a separate legal entity performs
separately from its owners. These enterprises are owned and managed by the shareholders. Apart
from this, the shares of these companies are listed in the stock exchange freely. The formation
and working of the entity is governed by various rules, regulations and laws. There is also a
policy regarding member that the company should have at least 7 members but there is no such
limit on the maximum number of employees. Talking about the raising of capital, the entity raise
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its capital by selling its shares to people and those who buy it becomes the member of the
organisation.
 Cooperative business
Cooperative business is the act of voluntary association of people who formed a business for the
safeguard of their own business and for the welfare of the society. This business is non profit
organisation who runs its operations not for the sake of earning revenue. This business involves
providing service rather than making profits. All these type of business doesn't compete with
each other rather they work in mutuality by helping each other business. All the members who
are involved in this business are not dependent on each other, they work in such a way so that
they are well capable by themselves only. For example, Blue Diamond is the largest agricultural
cooperative organisation in almonds established in 1901 which serves around 3500 almond
growers in the country for helping them in the making of almonds. This business did all this
without in return of any payment from them for the products or services provided to the almond
growers(Palomares, Navarro and Lara 2018).
Different business structures and how external factors affect businesses.
Tesco is mainly based on a Hierarchical structure in which there are certain levels of
management being assignment for the purpose of the management of the company. Even in some
outlets there are 4 levels layers of management for managing the activities of the outlet. This
implies that there is a upward flow of information based on the day to day operations. This
structure helps the organisation to reduce the confusion among the employees regarding the
reporting of data as it clearly specifies that which subordinate has to report ton which superior,
same goes with the taking orders from the higher authorities. This improves the efficiency of the
business which helps the organisation to grow much faster towards the achievement of
organisational goals. Apart from this, this also helps in maintaining the coordination among the
outlets which are maintaining by the higher level authorities of each outlet for the purpose of
inventory management, fu(Weber and Heidenreich, 2018).
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PESTEL ANALYSIS
It is a technique used by the organisations to analyse the impact of external factors on the
organisation. The PESTEL analysis of the Tesco are as follow :\
 Political factors
These factors reflects the political stability of a country. In a country like UK, political parties
are very well stable in their operations. Tesco is benefited from the aids provided by the
government but on the other hand, organisation has to perform its operations under the rules laid
down by the government(Pelz, 2019).
 Economical factors
These factors includes the economic condition of a country. Tesco is taking advantage of this as
people have high disposable income which in turn helps in increasing the sales of an
organisation. On the other hand, if company wants to raise loans then they have to pay interest
rates and skilled labour in UK are costly for hiring.
 Social factors
These factors include the demographics of a country. Tesco is benefited from the upper class of
people who continuously improves their standard of living by purchasing products which in turn
helps to increase the profits of organisation. Sometimes various social issue has been raised
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against company regarding functioning of business such as cleanliness, quality of products
etc(Santos and Bastos, C 2020).
 Technological factors
These factors include the technological advancement and research and development activity
going on in the country. Advanced technology helps the organisation to work more efficiently by
keeping the cost minimum and reduce time. But they are also facing issues like technology being
used in operations go obsolete.
 Environmental factors
These factors usually emphasized on the issues like cleanliness and maintaining the quality of
products. Tesco is following the policies of government regarding cleanliness which includes not
to dump industrial waste on Government property. In case of any mistake, heavy charges will be
imposed on the organisation(Smith and Kubala, 2018).
 Legal factors
These factors includes the various rules and regulations of the government regarding functioning
of business in a country. Tesco has a separate legal to deal with this issues which helps the
organisation to create a goodwill and smooth functioning of the business. But in case of failure it
may result into adverse scenario.
CONCLUSION
From the above the information, it is concluded that in an working environment various
companies work towards success in their respective areas for contributing towards the economy
of a country. Tesco is considered to be a efficient organsation as the business structure has been
effectively followed within an organisation which increases the productivity of an organisation
and helps the company to achieve higher results. Similarly , by PESTEL analysis it is found out
that company is benefitted from the external factors which includes high savings of people,
political stability and better working environment which helps the organisation to obtain benefits
from internal as well as by the external factors by coordinating with each other so that a efficient
system has been followed throughout the functioning of business.
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REFERENCES
Books & Journal
Allam, I., Scagnelli, S. and Corazza, L., 2020. Sustainability Reporting, a New Type of
Companies’ Hypocrisy: Zara and Volkswagen Cases. In Responsible Business in a
Changing World (pp. 195-211). Springer, Cham.
Beckerich, C., Benoit, S. and Delaplace, M., 2019. Are the reasons for companies to locate
around central versus peripheral high-speed rail stations different? The cases of Reims
central station and Champagne-Ardenne station. European Planning Studies. 27(3).
pp.574-594.
Gallego‐Álvarez, I., 2018. Assessing corporate environmental issues in international companies:
A study of explanatory factors. Business Strategy and the Environment. 27(8). pp.1284-
1294.
Kaur, J. and Dogra, M., 2019. FinTech companies in India: a study of growth
analysis. Abhigyan. 37(1). pp.21-32.
Llantada, A.B., and et. al. 2018. Use of life cycle assessment by companies in the Basque region.
Results of survey research. Journal of Cleaner Production. 204.pp.20-32.
Murmura, F., and et. al. 2018. Evaluation of Italian companies' perception about ISO 14001 and
Eco Management and Audit Scheme III: motivations, benefits and barriers. Journal of
Cleaner Production. 174.pp.691-700.
Palomares, M.I., Navarro, C. and Lara, J.Á.S., 2018. Determining factors of success in internal
communication management in Spanish companies. Corporate Communications: An
International Journal.
Pelz, M., 2019. Can management accounting Be helpful for young and small companies?
Systematic review of a paradox. International Journal of Management Reviews. 21(2).
pp.256-274.
Santos, M.J. and Bastos, C.S., 2020. The adoption of sustainable development goals by large
Portuguese companies. Social Responsibility Journal.
Smith, S. and Kubala, P., 2018. Social justice in the workplace: Are on-demand companies
exploiting current regulatory ambiguities and workforce precarity?. Psychosociological
Issues in Human Resource Management. 6(1). pp.166-171.
Smith, S. and Kubala, P., 2018. Social justice in the workplace: Are on-demand companies
exploiting current regulatory ambiguities and workforce precarity?. Psychosociological
Issues in Human Resource Management. 6(1). pp.166-171.
Weber, B. and Heidenreich, S., 2018. When and with whom to cooperate? Investigating effects
of cooperation stage and type on innovation capabilities and success. Long Range
Planning. 51(2). pp.334-350.
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