Company Analysis: Business Structures in Practice Assessment BMP3002

This report provides a comprehensive analysis of various company types, ranging from micro-businesses to large corporations, and explores different organizational structures, including functional and divisional structures. It discusses the characteristics of sole proprietorships, partnerships, limited liability companies, and cooperatives. Furthermore, the report evaluates the external factors influencing business performance through a PESTLE analysis, focusing on McDonald's as a case study. The analysis covers political, economic, social, technological, legal, and environmental factors, highlighting their potential impact on business operations and profitability. Desklib offers more resources for students.

Business Management with Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
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Contents
Introduction 2
Section 1: Different types of companies and how they work
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Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships 4
Section 3: Different businesses structures and internal factors
affecting business 6
Conclusion 9
Reference List 10
B72505
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Introduction
Business organization is a entity which is formed for the purpose of carrying
out the commercial activities. Such enterprises is establish on systems of law
governing contract and exchange, property rights and incorporation. The business
organization is of different forms such as individual proprietorship, partnership or
limited liability company(Beckerich, Benoit and Delaplace, 2019). This report will include
various topics such as different types of companies, different companies from sole
traders to cooperatives and limited liability partnership, explanation of different
business organizational structures and at last evaluation of external factors that can
influence the performance of the business.
Section 1: Different types of companies and how they work
Micro business:
These companies are fewer than 10 employees and an important part of the UK
economy. It serves as a trademark of developing country as well as the economy. These
businesses create jobs and increase purchasing power , reduce production cost and offer
convenience. The government also encourages such businesses in low income areas. The
example of such company are Boss Brewing , Beauty Boulevard(Vieira and Radonjič, 2020).
Characteristics
 These businesses are run by the single individuals or small teams.
 There is only one decision maker.
Small business:
These businesses are defined as owned privately and managed with not more
than fifty employees. Such business play an important role in the economic
development. These businesses do not invest much for the machinery and plant. For
example plumber , flower shop milk booth are small businesses.
Characteristics
 Small businesses are open and flexible for the sudden changes in the environment.
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 They have a single owner which is also known as sole proprietorship(Baynova,
Petrov, and Shasha, 2019).
Medium size business:
These are medium size businesses because their employee size is between 50 to 250.
example of such businesses are land bay, Spirit heath group .
Characteristics
 These businesses are operated in local areas and remain there for a longer period
which helps the disorganization to maintain customer relationship.
 It does not require any heavy investments as these business uses labor intensive
techniques.
Large size business:
It is categorized with an above average business size and has large operations and
high economies of scale. They hire a lot of people and generate revenue. These businesses
can operate several production facilities and are dependent on high technology and
techniques. Examples of such companies are Unilever, BHP ETC(Ostos Mariño, Saenz
Arteaga and Bremser, 2019).
Characteristics
 These business are dependent more on technologies and considering the
manufacturing companies they are more capital intensive and rely on automation.
 They are able to generate substantial revenue which generally come from multiple
products segments of the business organization.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
It is a business where there is single owner also known as individual entrepreneurship
which is an unincorporated entity. It is the easiest form of business where there to lack of
government interference. These have less paper work and no need to obtain any employee
identification number from the IRS. Example of such bushiness are bookkeeping business,
freelancer writer , catering company etc.
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Characteristics
 As a sole trader the owner and the business is considered as the same. There is not a
separate legal entity which says that the owner is responsible for all the transactions
and activities in the business organization(Ratajczak-Mrozek, 2017).
 The owner has unlimited liability in sole proprietorship and if the business assets are
not sufficient the owner has to pay all the debts from the personal property.
Partnership:
It is a formal agreement between two or more people to manage and operate the
business functions by sharing the equal profits, losses and risk among themse4lves. In this it
has a advantage of more resources in the business. There are different kind of business
partnerships general , limited and limited liability partnership.
Characteristics
 It is basically managed on the agreement between two or more people to carry out
business. The partnership act 1932 , states that the relation between partners arises
from contract and not from status. The agreement can be oral or written .
 The partners have equal liabilities where the creditors have the right to recover the
debts of the organization from the individual property of the existing partners in an
organization(Sharma, 2018).
Limited liability business:
It is a structure that provides several benefits to its members. It is a specific form of private
limited company
Characteristics
 It is a separate legal entity which means it can own a property, sell or buy the property
on its own.
 It has the limited liabilities for the employees, members and managers of the business
organization.
Public limited liability business:
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It is form of company that offered shares of stock to the general public. The buyers of
these shares has limited liability. Example of such companies are Burberry, Shell etc.
Characteristics
 In this type of business there is no requirement of minimum paid up capital(Mansouri,
Singh and Khan, 2018).
 Here the liability of the each member of the company cannot exceed the amount of
investment in shares of the each member of the company.
Cooperative:
It is self governing association of persons united voluntarily to meet their common
economic, cultural , social needs through a jointly owned organization. The people who join
cooperative are the member of it and share the same values.
Characteristics
 Apart from being voluntary in nature, the membership is open for all the individuals
irrespective of gender, color, caste. Any individual who has a common interest and is
prepared to join the rules and regulation of the society has right to join the
organization.
 It is controlled by the committee elected by the members at the annual general
meeting. They are operated on the local scale. It has a procedure of one man one vote.
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
Organizational structure- It is an detailed process in which a detailed structure is
explained how the certain activities of the business organization will be conducted. It is a
flow to set the coordination of the heads and subordinates in the business organization. It
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outlines the roles and responsibilities of the employees within the business enterprise. It is
important for the company to have a structured flow of activities in order to achieve the goals
and objectives of the organization(Kokshagina and Alexander, 2020).
The various types of structure is explained below:
Functional structure- It is one of the most commonly used organization structure
which means that the organization divide the employees according to their skills,
specialization, designation and similar tasks. In this type of structure the employees report to
the single authority which is to the top management of the business organization. When the
employees are grouped together it makes the production more efficient.. also the employees
are clear on whom they need to report and answer for every activity done in the business .for
example Apple , Starbucks follow the functional structure in their businesses.
Divisional structure- It organizes the activities and functions of a business enterprise
around geographical, market, products or services groups. The organizations activities are
spited into semi- autonomous units called divisions. The employees are liable to the central
authority that provides the overall strategy for the company and coordinates its
implementation among the divisions. This is usually utilized by the large companies.
McDonald follows this structure in its organization for smooth functioning . The activities are
divided into elements that are given responsibility based on operational equipment. Each
division handles the specific area to meet the objectives of the company. It has the geographic
division and uses performance as basis for the new division in its organizational
structure(Whitchurch and Gordon, 2017).
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3.2 How different external factors affect the performance of a
business – PESTLE Analysis
PESTLE analysis is a strategic tool which is used by the business organizations to
evaluate the external factors which can influence the operations and function of the business
enterprise. Here is the analysis in context of McDonald's : Political- These factor determine the extent to which the government interference
may have the impact on the business organization. Such factors include trade
restrictions, tariffs, policies etc. for example, the government policies related to health
can impact the McDonald's in regarding its products as it deals in fast food which can
be unhealthy to the consumers(McDonald and et.al., 2020). Economical- These factors impact on the economy and its performance, which
directly impacts on the business enterprises and its profitability. Such factors include
interest rates, foreign exchange rates employment or unemployment rates etc.
McDonald is also affected from the economic external factors in such a ways that
when there was slowdown in the economy affected its business of the company.
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 Social- These factors focus on identifying the emerging trends of the consumer. It
helps the marketers to understand the choices and behavior of the curbstones for
example it is observed that in today's scenario people are busy with their schedules
are require the quick meals so this can create the opportunity for McDonald's as its
has quick meals and drive-thru helps the people to have their meals in their cars itself. Technological- These aspect consider the development and innovation that have
impacted the market or industry. Such factors are change in digital or mobile
technology, research and development. The main focus of the organizations is to
change the digital technology as well as to find new methods of distribution,
manufacturing and logistics. McDonald's is addressing the external factors to increase
in sales is happening through online order more because of the technology up
gradation(Heffernan, Ly, and et.al., 2020). Legal- These factors pertain to any legal forces which determines that what business
organizations can or cannot do. Such factors include industry regulation, labor laws,
licensing etc. McDonald s has diversification culture of the employees . It hires both
male and female and pays equally to its employees and has increase the heath
regulation in the workplace.
 Environmental- These factors concern with the ecological impacts on the business
organization. Such factors include carbon footprint, climatic change, recycling
procedures , sustainability etc. As the government has made mandatory for the
organizations to maintain the Corporate Social Responsibility activity for the
environment . McDonald's is practicing such programs like it has stopped using the
plastic straws to support government(Kim and et.al., 2020).
Conclusion
From the above report it is concluded that there are various types of companies such
as micro, small, medium, large. The motive of the organizations is to create some kind of
value and earn profits from its business activities. Also there is difference between sole
trader, partnership, limited liability business. Sole trader has a single owner where the
partnership means the agreement between two or more people. It is very important for the
business organizations to follow a structure for the smooth functioning of the business
activities. There are various types of organizational structure. McDonald flows divisional
structure in its disorganization in order to be effective and achieve the goals and objectives on
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the right time. Each departments has different set of goals that are followed in the business
enterprise. Also it is important to evaluate the external factors which can influence the
business. For such a tool can be used known as PESTLE analysis. By evaluating the political,
environmental, social, technology, legal and economic factors it is identified that every factor
has different effect on the operations of the business which need to be consider and take
necessary steps by the company in order to achieve its goals and objectives.
Reference List
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.
Vieira, A.P. and Radonjič, G., 2020. Disclosure of eco‐innovation activities in European
large companies' sustainability reporting. Corporate Social Responsibility and
Environmental Management. 27(5). pp.2240-2253.
Baynova, M.S., Petrov, A.V. and Shasha, I., 2019. Transformation In Supply Chain
Management With Modern Companies. In European Proceedings of Social and
Behavioural Sciences (pp. 437-444).
Ostos Mariño, J., Saenz Arteaga, A.R. and Bremser, K., 2019. Relationships of business
strategies and organizational characteristics with innovation types: application in
service companies.
Ratajczak-Mrozek, M., 2017. The Network Theory of Companies’ Internationalization—the
Importance of Relationships for International Expansion. Network Embeddedness,
pp.153-189.
Sharma, R.K., 2018. Factors affecting financial leveraging for BSE listed real estate
development companies in India. Journal of Financial Management of Property and
Construction.
Mansouri, A.A.A., Singh, S.K. and Khan, M., 2018. Role of organisational culture,
leadership and organisational citizenship behaviour on knowledge
management. International Journal of Knowledge Management Studies. 9(2).
pp.129-143.
Kokshagina, O. and Alexander, A., 2020. CHAPTER III. DISCOVERY, EXPLORATION
AND PREPARE FOR TAKE-OFF: PROCESSES AND ORGANISATIONAL
STRUCTURES. In The Radical Innovation Playbook (pp. 32-49). De Gruyter.
Whitchurch, C. and Gordon, G., 2017. Reconstructing relationships in higher education:
Challenging agendas. Routledge.
McDonald, L.T., and et.al., 2020. Physical and elemental analysis of Middle East sands
from recent combat zones. Inhalation Toxicology. 32(5). pp.189-199.
Heffernan, S.T., Ly, N.C., and et.al., 2020. Identifying surface morphological characteristics
to differentiate between mixtures of U3O8 synthesized from ammonium diuranate
and uranyl peroxide. Radiochimica Acta. 108(1). pp.29-36.
Kim, M., and et.al., 2020. Effect of Na and Cooling Rate on the Activation of Mg–Ni Alloys
for Hydrogen Storage. Journal of nanoscience and nanotechnology. 20(8). pp.5192-
5200.
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