Different Types of Companies and Organizational Structures

This report by Desklib discusses different types of companies and their organizational structures, including micro, small, medium, and large businesses, sole traders, partnerships, limited liability businesses, public limited liability businesses, and cooperatives. It also explores how organizational structure affects business productivity and how external factors impact business performance through a PESTLE analysis of Tesco. The report includes a reference list of sources for further reading.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
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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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The aim of this report to examine that there are different types of companies and
there are many differences in how they actually operate in the business environment.
There are different organisation structure which determines the ways by which a
company runs their activities. In this report the company structure such as sole
traders, cooperatives and limited liability partnerships will be understood. Also the
ways by which the different businesses structures and internal factors affect
businesses across different sectors will also be observed by the end of this
report(Hirschhorn, 2021). To conclude this report, different external factors affecting
the performance of a business would be made clear through PESTLE Analysis.
Section 1: Different types of companies and how they work
Micro business:
A micro business is considered to be a business where the size of the company is
very small. Though the number may change with the demographics, it can be said as
a business that employs nine or fewer people in an organisation atmosphere and
their aim is to earn profits and taking their business to the next level. The micro
businesses are also known as micro enterprise. Micro businesses, though at a small
level can still be be effective and add value to the country's economy by creating
jobs and adding business convenience. They usually doesn't require high finances
since their business is at a lower level than the others.
Small business:
A small business is considered as a privately owned business, partnerships or sole
proprietorship that has more than 9 but lesser than an average size business. These
businesses usually produce goods and services at a small scale. These industries
also at a small level contribute towards the economic conditions of the country. They
though small in sizes, are many in no. and have been employing millions of people
through multiple sectors in the country(Lopez,Bastein,and Tukker,2019) . Most of the
management work in a small business is run by the owner himself and they are open
and flexible to changes in the organisation unlike the big organisations which needs
extensive strategies to change anything in their business structure.
Medium size business:
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The medium sized businesses are the business of average sizes that are enough in
number to be above the small size businesses. These are sometimes included with
the small sized businesses and are collaboratively known as SME''s(Small and
Medium sized enterprise). Also these may have been a small business at some point
and with few strategies and finances could become a large sized business. The have
collaboratively easy route to getting finances especially if the company has the ability
and potential to become a large size business.
Large size business:
The large size business is a business type that is an organisation with more
employees than a medium size business. They usually has large operations and
high economies of scale. They are most likely to present in multiple countries across
different continents(Phillips and Tanner, 2019). They at some point of their business
life cycle must have been a medium sized business. These businesses are very
proactive and always looks upon strategies to spaces to penetrate into. These
spaces could be any industry or any other expansion route for the business. Few
good example of the large size businesses are the UK based giants like Tesco,
Marks and spencer and american MNC Amazon.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
Sole trader business is a type of business that is owned by a single owner or a sole
person. That person is the only owner and all the work including the manufacturing,
sales, marketing and distribution is all done by that same person. Also the profits are
just for the single person to take advantage of. But it has to be made known that the
losses are also to be fully taken and resolved by the same person.
Partnership:
A partnership is an arrangement of individuals or groups who in collaboration do
activities that benefit them as a whole. From a business point of view, the
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partnerships could be considered as the formal agreement of two or more
organisations to manage and operate a business where all partners share profits and
losses equally. These partnerships is done in order to get maximum outputs form the
collaboration that they were not able to get while working alone(Rukanova and et.
al., 2020).
Limited liability business:
Limited liability businesses are those businesses that where the owner is given the
advantage of being protected from the personal responsibility from the company's
debts or liabilities. They can also be considered as a hybrid entity of partnerships or
sole proprietorship where there are more benefits for the owner than the other types.
The limited liability company has its features that are quite similar to a corporation,
the availability of the flow through taxation to the members of an LLC is a feature of a
partnership.
Public limited liability business:
A public limited liabilitiy business is a business that has some shareholding capacity
for the general public. The general public who are buying those shares have limited
liability which means that the can never be held responsible for any business losses
which the company's finances are taking through.
Cooperative:
A cooperative business is a type of business that are controlled and run by the
members to meet their shared needs together. These members can be the
customers of the company, the employees, residents or the people connected with
the business. But these owners of the company has to keep up with the specific
rules and values of the cooperative structure. The owners of the business are usually
the people that are closest to the business. Few examples of these could be
cooperative stores, taxi firms etc(Schmidt and et. al., 2020).
Section 3: Different business structures and external
factors affecting business
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3.1 Identification of different organizational structures and
explaining how does organisational structure affect business
productivity
In the business the organisation structure is very important if the company needs to
define the relationships and the roles of the company properly. These types of
structures can be based on variety of factors which could also include the size and
the purpose of the business.
Functional Structures
This structure is when a business or an organisation is run in respect to the expertise
and the speciality of the business. This is a traditional business approach where
there are different departments according to their functions and they are responsible
for their own goals and evaluation of their growth. A very good example of this type
of structure could be the different departments present in a normal company. These
departments could be Marketing, sales, Human resource, Communications etc. This
type of structure is very important for improving the productivity of the organisation
as a whole(Tabassum, and Singh, 2020). When there are different departments
divided on the basis of their functionality it is easy for them to do their work. The
individuals or the teams easily avail their objectives and they are able to do their
work in a particular manner as desired by the management.
Divisional structure
This structure is when the company is run by grouping the employees by branches
or divisions. Though this depends upon the service or the product that the company
is operating for. These divisional structures often have resources that are different
for each divisions. These different resources could be separate HR, production,
sales etc. To control the different groups there are different managers to make sure
that all the work is happening properly. For example- A restaurant owner can have a
separate group of people handling the catering business for weddings and have
different group that handle the normal restaurant business. The business productivity
of a company also depends upon the structure they are in. And the divisional
structure of a business could be fruitful in improving the performance of a business
activity and in turn could make up enough profits for the business.
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3.2 How different external factors affect the performance of a
business – PESTLE Analysis
Tesco is a multinational company that operates through many stores and
supermarkets across more than 14 countries in Europe and Asia. Though a very
successful company in what they do, they have been continuously looking for
opportunities for expansion and evaluation by looking towards the external factors by
doing the Pestle analysis.
Political factors
Since it is UK based it has a big advantage of getting support from the government
of the UK based countries. Also, there many governments of developing countries
who are inviting them in facilitating more job requirements.
Economic factors
Tesco has been successful in keeping their economic environment very stable until
the Covid pandemic arrived. Since they have been in a dilemma of changing their
prices of the products and taking a toll on their profits to keep up with the
requirements of the customers.
Social factors
The social factors are also a concern for the company since after the Covid
pandemic as the customer demands and needs have been fluctuating a lot. Hence it
is a challenge to keep up with this social factor(Trondal, 2022).
Technological factors
Tesco has been experimenting and using different technological advances to make
the performance better for the employees and make improved products for their
customers. Hence, the Technological factors are a boom for the company for making
their processes faster.
Legal factors
Since, Tesco is a company present in multiple countries, it is a challenge for Tesco
to deal with all the legality and the tax issues that are different in various countries.
They have special teams focussing on just the legal factors of the company.
Environmental factors
Tesco are aware of the fact that many of their products use plastic as one of their
components. They have been using specific measures to tackle the environmental
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issues including the Global warming problems caused by their multiple
factories(Wang and Wu, 2021).
Conclusion
In this report, it was understood that there are different types of company structure
including Micro businesses, small businesses, medium businesses and large
businesses and not just by their size but by their working is also different. Different
companies from sole traders to cooperatives and Limited Liability Partnerships were
also made to be known in detail in this report. Identification of different organizational
structures and explaining how does organisational structure affect business
productivity in an organisation was also concluded in this report. After that a Pestle
analysis was done for the company Tesco that explained how the external factors
are impacting the business performance and productivity. Also how the different
expansion strategy for the companies are affected by the external factors are also
understood by the Pestle analysis.
Reference List
Hirschhorn, L., 2021. Extending the Tavistock model: bringing desire, danger, dread,
and excitement into a theory of organisational process. Organisational and
Social Dynamics, 21(1), pp.114-133.
Lopez, F.J.D., Bastein, T. and Tukker, A., 2019. Business model innovation for
resource-efficiency, circularity and cleaner production: What 143 cases tell
us. Ecological Economics, 155, pp.20-35.
Phillips, R. and Tanner, B., 2019. Breaking down silos between business continuity
and cyber security. Journal of business continuity & emergency
planning, 12(3), pp.224-232.
Rukanova, B.,and et. al., 2020. A framework for voluntary business-government
information sharing. Government Information Quarterly, 37(4), p.101501.
Schmidt, D., and et. al., 2020. The place of research in the rural health workplace
structure: a content analysis of a rural health organisation’s strategic and
operational documents. Rural and Remote Health, 20(2).
Tabassum, N. and Singh, S., 2020. Corporate Governance and Organisational
Performance: The Impact of Board Structure. Springer Nature.
Trondal, J., 2022. An organisational approach to meta-governance: structuring
reforms through organisational (re-) engineering. Policy & Politics, 50(2),
pp.139-159.
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Wang, Y. and Wu, C.H., 2021. How Work Experiences Drive Personality Change:
The Impact of Work, Organisational, Societal and International Environment.
In Work and Personality Change (pp. 33-62). Bristol University Press.
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