BSc Business Management BMP3002: Types of Companies & Impact

This report provides an analysis of various types of companies, including micro, small, medium, and large businesses, as well as sole traders, partnerships, limited liability companies, and cooperatives. It examines different organizational structures, such as functional and divisional structures, and their impact on business productivity, using Tesco plc as an example. The report also discusses the influence of external factors, using a PESTLE analysis to assess the political, economic, social, technological, environmental, and legal elements affecting business performance. The study concludes by highlighting the importance of understanding these factors for effective business management and strategic planning.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
1

Contents
Table of Contents
Introduction...................................................................................................................3
Section 1.......................................................................................................................3
Several types of organizations and how they work..............................................3
Section 2.......................................................................................................................4
Various companies from limited liability partnership and sole traders to
cooperatives.........................................................................................................4
Section 3.......................................................................................................................6
Determination of several organizational structures and explaining how does it
affect business productivity. ................................................................................6
How several external elements create an impact on the performance of business
..............................................................................................................................7
CONCLUSION..............................................................................................................8
2

Introduction
In the economy every business is structured where it is having individual legal entity
which focus in innovation and ideas to gain large market share and growth (Smerek and
Vetráková, 2020). The business entity is commercial institution where it helps to engaged in
business activities in sale off good and services. In this following report it is been discussed
about relevant topic of different types of companies with involving various entities such as
sole trade artnership, limited company etc. and business structures with the PESTEL analysis
Section 1
Several types of organizations and how they work
There are several kinds of companies which is involved with medium, macro, micro,
small and large business organizations. Each business follows their own way of doing the
work. With respect to its characteristics and examples it is being determined below: -
Micro business: -
It is defined as a part of small business which operates on a very small scale. There
are less than 10 individuals and is mainly considered as a sole proprietorship business. Their
annual turnover is below 2 million (Verbeke., 2020). It needs low investment with low level
of employment. The organization is tackled by single owner only and in certain situations
they appoint even no workers.
Characteristics: -
 The business is maintained by a single individual. There is no kind of partnership
which is being accessible.
 Micro businesses don't use the way of written communication. As the aspect of verbal
communication is considered more desirable.
 The operations are done at local level only because both employees as well as owners
live in their home society only.
Example: - The UK based company, Proviz, is a micro business sector which was founded
by two brothers and offers cycling clothing and accessories.
Small business:-
It refers to a business organization which is a private corporation. They are involved
with less staff members but more than micro companies. Their turnover is around 10 million.
3

It provides different employment opportunities that achieves economic growth in terms of
both national as well as local level.
Characteristics: -
 They use several natural resources instead of wasting equipment.
 It is evolved with immediate variations which is not at all possible in large business
organizations.
 It needs limited amount of investment and manpower.
Example: - Cafe Pod Coffee company, United Kingdom is a small business which offers
amazing coffee for all venturous coffee drinkers.
Medium size business: -
It is involved with 250 workers and can be both managed one and family business.
(Mittal, 2020). These sectors are mainly managed by in house professionals who has efficient
cognition about business structure.
Characteristics: -
 It is evolved with both invention as well as innovation of goods and services.
 It offers quality certification services.
 These businesses also provides credit limit to banks.
Example: - Lintebells Ltd is a UK based medium sized business. It is a leading pet
supplements company that provides nutritional products for all the pets.
Large size business:-
It is described as an organization that includes huge amount of capital and
infrastructure. In order to grow the economy of country, large scale industries are very much
crucial. It goes on with around 5000 staff members and overall revenue is $ 1 billion.
Characteristics: -
 Both written as well as verbal communication is followed.
 It offers environment sustainability.
 These businesses earn more profit in comparison with other types of companies. The
reason behind this is that their value of total debt is high.
Example: - Barclays is a large business which is present in around 55 countries and their
overall turnover is approximately 28.3 billion.
Section 2
Various companies from limited liability partnership and sole traders to cooperatives
4

Sole trader business:-
It is defined as a business structure which is owned by a single member only. In these
business organizations, high amount of investment is not done (Zheng, and He., 2021). The
owner has full control over their company and do not share any profit with other people.
Characteristics: -
 If a proprietor wants to shut down their enterprise, they can do it any point of time and
don't need to get engaged with any sort of legal aspects.
 It depends on the owner only in which type of business they want to deal in as per
their point of interest.
Example: - Teresa smith bookkeeping services
Partnership:-
In this type of business organization, a form of legal relationship is implemented
within two or more persons (Osunnuga, 2020.). If a company earn any profit then it would be
shared with both parties. At the same point of time, if any kind of risk is there then it will also
be faced by both of them. There are different types of partnership like limited, general and
many more.
Characteristics: -
 Without taking approval from other partner, company cannot employ any individual
in order to share their business concern.
 An agreement is done in both written as well as verbal form.
Example: - Ben and Jerry is a partnership based company which deals in frozen yogurt, ice
creams and many more.
Limited liability business: -
It is defined as a part of private organization. It refers to a type of business structure
that acquires taxation of some sole trader as well as partnership. It is considered as a separate
establishment which can open everything in context with their business under their name.
Characteristics: -
 It is flexible by nature because it is dependent on business associates whether they
want to be the part of their company or not.
Example: - Associated British foods is a type of limited business being headquartered in
London.
Public limited liability business: -
5

It means a business in which ownership is divided into the form of shares that are
trade-able in context with stock exchange.
Characteristics: -
 All the shares can be transferred because there is no restriction which is involved.
Example: - Aviva plc is a British public limited insurance company.
Cooperative:-
It is defined as a separate organization which is guided by many officers. It is
involved with three types of cooperation and these are S, C and non profit corporation.
Characteristics: -
 The business has a right to acquire effective amount of capital by selling the stock.
Example: - Apple
Section 3
Determination of several organizational structures and explaining how does it affect business
productivity.
Organisation structure is comprise about towards maintaining relationship and
communication between various parts and department of the business. It determines about the
chains of command that helps to runs different level of organisation. It helps to keep better
determines for making better responsibility. In following there are different organisation
structure which describe about specific structure in perspective of Tesco plc company:
 Functional structure: According to this structure organization which is having
elements are divided and attached which is easily allocated into better responsibility
(Al-Kfairy and Mellor., 2020). In specific organisation smaller group has creates
functional areas in which employees are having grouped in some department within
the form of skills and capabilities that better perform business effectively.
 Division Structure: This structure spread about specific business specification
activities that across various divisions where specific market, product, or having
effective customer group activity. The function categorized on the basis of better
division in perspective of product line. It suitable towards large dynamic firms where
it build the team work the produce the similar product where it need individual group
that leads towards efficiency in organization.
6

Evaluation:
As per above organisation structure where it summarize on the basis of Tesco
company perspective. The company Tesco company follows Functional Structure, as
because their manager and employees are work in smaller group along with they are
contribute their skills and knowledge to handle business capabilities (Sailer and Hladík.,
2020). In this structure the manager use to instruct their employees and provide them
supervisor which help to gain competitive advantages or business outcomes through
employees contribution effectively.
How several external elements create an impact on the performance of business
According to this model it is factor of strategic planning used for external analysis in
macro environmental factor which includes political, economical, social, technological and
legal which used to environment scanning. For this Pestle Analysation the company is
consider Tesco plc which British based retail company:
Political factor: In the production about retail business where Tesco which has support
through government. The company where they having certain opportunities through political
stability and government incentives that leads to increase financial performance. The factor
involve are the taxation policies, trade regulation, political stability and foreign trade policies.
But there is an implication which can generate issues that is Brexit market, in this market it
not allows to trade in European Union.
Economic factor: This involve the market growth trade and currencies and as per this factor
which is considered economic growth, economic changes, employment rate, minimum wage
rates, interest rate, inflation of the economy which makes to product attractive (Gorasia,
Veith and Reynolds, 2020). For Tesco company as it is UK based organisation and business
is depend upon on economic growth, but due to certain uncertainty business could not gain
more competitive advantages for effective economy stability.
Social factor: This includes certain social condition where the consumer are having
suppliers and investors. The factors of cross culture activities where income, education, age,
gender, buying power customer consideration. As per the Tesco objectives as it apply for
better strategies to target market for ensuring the business benefits by providing them health
and low price and quality of product which attract customer more in demand.
Technology: On the basis of adaption which create better changes technology enhance
effectively enhance the product increase better automation for better growth opportunities
(Schleiff, Kuan and Ghaffar., 2020). In perspective of Tesco company they can attain or
7

utilized better manner to gain more competitive advantages. For perspective of Tesco
company, technology would plays an important role where it help to increase efficiency
effectively.
Environmental Factor: In perspective of Tesco company which is having availability where
better raw material of raw material for the production purpose for making quality of retail
base product and services.
Legal factor- It has an impact on regulatory systems. The regulatory authorities frame laws
in which Tesco operates its business. The Tesco has the opportunity of energy consumption
regulation with the legal constraint with the human resource management. In legal factor, all
the legal considerations, lawful activities, legal policies and procedures, legislation are
involved.
CONCLUSION
From the above report it has been concluded that there are several types of businesses
which has their own features and in accordance with that performance is done. There are
different factors that affect a business organization like social, economic and so on. Besides
this, every company has their type of organization structure like functional or matrix.
8

Reference List
Books and Journals
Smerek, L. and Vetráková, M., 2020. Difference in human resources development in various
types of companies. Polish Journal of Management Studies, 21.
Verbeke, A., 2020. Will the COVID‐19 pandemic really change the governance of global
value chains?. British Journal of Management, 31(3), p.444.
Mittal, H., 2020. HOW DOES THE INSTITUTIONAL CONTEXT OF AN EMERGING
ECONOMY SHAPE THE INNOVATION TRAJECTORY OF DIFFERENT
TYPES OF COMPANIES? A CASE STUDY OF INDIA. Economic and Managerial
Spectrum, 14(2), pp.36-52.
Zheng, L. and He, H., 2021. Share Price Prediction of Aerospace Relevant Companies with
Recurrent Neural Networks based on PCA. Expert Systems with Applications,
p.115384.
Osunnuga, O., 2020. A survey of the management, organisation, structure, content and
columns of the contemporary Yorùbá newspaper. In African Language Media (pp.
156-166). Routledge.
Al-Kfairy, M. and Mellor, R.B., 2020. The role of organisation structure in the success of
start-up science and technology parks (STPs). Knowledge Management Research &
Practice, pp.1-9.
Sailer, J. and Hladík, T., Consistent Maintenance Management Model: Results of Changes of
Maintenance Organisation Structure and Processes.
Gorasia, D.G., Veith, P.D. and Reynolds, E.C., 2020. The type IX secretion system: advances
in structure, function and organisation. Microorganisms, 8(8), p.1173.
Schleiff, M.J., Kuan, A. and Ghaffar, A., 2020. Comparative analysis of country-level
enablers, barriers and recommendations to strengthen institutional capacity for
evidence uptake in decision-making. Health Research Policy and Systems, 18(1),
pp.1-12.
Antošová, G., Vogl, M. and Schraud, M., 2020. Challenges for the Visegrad Group–The
Coronavirus Crises and its Impact on Tourism. Visegrad Journal on Bioeconomy and
Sustainable Development, 9(1), pp.28-32.
9