Business Report: Analysis of Various Types of Companies and Structures

This report delves into the diverse world of company types, exploring their structures, characteristics, and operational dynamics. It begins by differentiating companies based on scale, including micro, small, medium, and large-scale businesses, and examines their respective attributes. The report then proceeds to compare and contrast various business structures, such as sole traders, partnerships, limited liability companies, and cooperatives, highlighting their legal frameworks, ownership models, and liability considerations. Furthermore, the report analyzes organizational structures, including functional, divisional, and matrix structures, and discusses their impact on company operations and efficiency. The report also examines the external environment using PESTLE analysis, considering political, economic, social, technological, and legal factors and their influence on business decision-making and performance, using Sainsbury's as a case study. Overall, the report offers a comprehensive understanding of the multifaceted aspects of company formation, structure, and environmental influences, providing valuable insights into the business landscape.

TYPES OF
COMPANIES
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Section 1: understanding of different types of companies and their working........................3
TASK 2............................................................................................................................................5
Section 2: understanding of different companies from sole traders to cooperatives and limited
liability partnerships...............................................................................................................5
TASK 3............................................................................................................................................7
Section 3: examine of organisational structure and impact of external environment............7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10
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INTRODUCTION
A company refers to the legal entities that are formed by the group of individuals with the
common interest that work together towards the common goals. There various ownership
structure of the company that is in to be considered at the time of start-up such as partnership
firm, proprietary or corporation firm. Companies are of various types like private and public
firms that are distinguish on the basis of their structure, ownership, regulations and financial
reporting requirements etc. in addition to this they are also be differentiate on the basis of their
scale some are of small scale, medium scale and some with the high capital are of large scale.
This report is based on the Sainsbury’s retailing company which is the second’s largest chain of
supermarket in UK(Åberg, M., Fälting, L. and Forssell, A., 2016). It based on three divisions that is
Sainsbury’s supermarket, Sainsbury’s bank and Sainsbury’s Argos. This report study includes
the understanding of different type of companies and how they work, different organisational
structure and impact of external environment on the business.
MAIN BODY
TASK 1
Section 1: understanding of different types of companies and their working
A company refers to the form of business organisation. That created by the law’s rules and
regulations. It refers to the association of individuals, which is created to undertaken the business
activities which the purpose of attaining the profit and sustainability at a market place. There are
various types of companies which are different on the basis of their scale, structure and
characteristics etc. As discussed below:
Basis Micro business Small-scale business Medium-scale
business
Large-scale
business
Meaning Micro business
generally defined as a
small business. It is
the business that
covers local markets.
And fulfil the demand
and wants and local
This is operates by
the maximum 50
number of
employees. Covers
the limited
geographical area,
and managed and
This is defined in
the companies act
2006. It is the entity
with the maximum
250 employees,
theses are mainly
family owned and
This company is
undertakings
which have huge
capital and
investment ti
operate and
manage the
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customers. (Dang,
C.N., Le-Hoai, L. and
Kim, S.Y., 2018)
operates by the
limited resources and
capital. They did not
seek for the higher
profitability.
managed entities. company, it has
the complex
management
requirements.
Character
istics
They get work done
by the maximum 15
employees. It has
limited reaches
generally serves only
local customers. And
managed by the only
owner
It has smaller market
area of the few
locations, has lower
revenue and
profitability, can be
consist of both sole
and partnership
ownership.
They are mainly
operates with the
limited resources
and capitals, they
are consist of
informal
management style
and high rate of
flexibility in the
operations of the
business. (Kobarg,
S., and. et. al 2020)
This is having
minimum 50
employees,
required wide
variety of raw
materials, huge
investment and
human resource in
the manufacturing
of final product.
Operates at a
national and
international level.
Example ISSORIA is one the
company from the
micro business,
launched in 2016 it
works in the change
management
consulting industry.
And rapidly growing
industry
FOREX is the small
scale company; this is
a broker based
company that
provides best
platform and pricing.
SMITH
BROTHERS is the
medium sized
family founded
contracting business.
It provides services
across an array of
sectors including
renewable energy.
TESCO is one of
the large scale
companies in UK.
This is the
multinational
retailing company
that deals in
groceries, it has its
stores in over 7
countries across
Asia and Europe.
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TASK 2
Section 2: understanding of different companies from sole traders to cooperatives and limited
liability partnerships.
Basis Sole traders Partnership Limited
liability
Public
limited
liability
corporative
meaning This is also known
as sole traders,
individual
entrepreneurship
and
proprietorship.
This is defines as
the business that is
run and manage
by the one person.
And there is no
legal difference
between the owner
and business
entity.
This is the type of
business where
two or more
individual enters
into formal
agreement to run
the company
mutually and
agreed on to be
co-owners,
distributes the
responsibility and
also share the
profit and loss
that a company
generates(Lichten
thaler, U., 2020).
This is the
company where
the liability of
the business
owner is
limited only to
the amount that
invested in the
company. Here
a shareholder
or a limited
liability is not
responsible for
any debt.
Investor is
entitled to
collect the
amount only
against the
asset not the
shareholders.
This is the
type of public
company.
Whose shares
are freely
trade and sold
to the general
public. These
are listed on
the stock
exchange
boards. It is
legally
abbreviated
as a plc at the
end of the
name of the
company
This is an self
governing
company of
persons that
come
together to
work towards
the common
interest,
economic and
social needs.
This
company is
owned and
controlled by
its members
that also
happen to use
the product
and services
of the
cooperative.
characteri
stics
This entity is own
by a one and
single person.
There is less
interruption of
This is formed
with the
agreement
between two or
more person. it is
it is considered
as the separate
legal entity
from the
owners and or
This company
has separate
legal entity
apart from its
members and
It is an
voluntary
association
anyone with
the common
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government.
Owner is free to
do any work and
to take decision by
own within the
company.
the mutual
business which to
be carried out,
there is sharing of
profit s per there
ratio in the capital.
And consist of the
limited liability.
shareholders.
This is having
the restricted
liability
protection
against the
debt.
shareholders.
It formation,
working and
functioning is
all strictly
govern and
directed by the
governments
rules and
laws. A
company
should have
the minimum
7 members
and maximum
has no limit.
interest can
join freely.
Members
have equal
voting rights
for the broad
members ,
and it is also
an separate
legal entity
from its
members.
There motive
is to provide
surplus
services.
example For example:
financial planners,
landscaping
company, catering
services, computer
repair services etc.
Social chain is one
the partnership
company founded
by the Steve
Bartlett and Dom
McGregor both
are working on the
online student
communities and
now running UK’s
largest marketing
agency.
Joseph Cyril
Bam ford
Excavators Ltd.
(JCB) is the
limited liability
company that is
a
manufacturing
company of
the equipments
for
construction,
agriculture,
waste handling
and demolition.
It is specialise
in producing
J Sainsbury
plc is the
public limited
company
which is the
multinational
retailer and
second largest
supermarket
chain in the
UK. It has
three divisions
Sainsbury
supermarket,
bank and
Sainsbury
Argos.
Britannia
building
society is an
cooperative
bank with
headquarter
in leek,
Staffordshire
UK. This
provides
services of
savings and
mortgages.
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over 300 types
of machine.
TASK 3
Section 3: examine of organisational structure and impact of external environment
Organisational structure is the frame work that outlines how certain activities within the
organisation direct and perform towards the accomplishment of the goals in a effective manner.
These activities include role, rule, responsibility and information. This determines that
information and activities flows in the organisation between different levels of hierarchy. Some
of the structures are discussed below:
Functional structure: This structure is based on organisation being divided in to the
groups and departments with the specific task and roles. For example: a company divided into
the four different departments such as marketing, finance, human resource and manufacturing.
Every department has manager who reports the senior executive a level up hierarchy. With the
execution of this employees are more focused on their work and it eliminates the disrepute in the
between of functioning(Mas-Tur, A. and Bolufer, J.S., 2016).
Divisional structure: This structure suits to the large company that operates in the several
horizontal objectives. Like Sainsbury’s has a different division like supermarket, bank and Argos
so this structure is on the basis of their division essentially perform as its own company,
controlling own resources and expenses. This provides greater flexibility in the working and
enhancement in the performance as everyone is clear on their roles and departments(Singh, A. and
Hess, T., 2017).
Matrix structure: This structure is the modified form of functional structure. In this
structure employee may be responsible to report to the two or bosses depending on the situation
and projects. With implementation of this in the respective company provide in as allows
employee for better communication and understanding of the each department role. And help
workers to broaden their skills and knowledge that results in the higher effective performance.
External environment
External environment also known as macro environment refers to the group of factors or
conditions in which company operates and have direct impact on the functioning and
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profitability of the organisation. There are several models to understand the external environment
of the business. One of them is discussed below:
PESTLE ANALYSIS
It is the framework or a tool which is used to analyse the factors and conditions exist in
the external environment that may influence the company in both negative and positive way.
And on which company has no control that cannot be change or modified by the executives of
the company Westervelt, M., Schank, J. and Huang, E., 2017).
Political factor: This is refers to the rules and decision made by the government. It
includes labour law, tax policies and political stability etc. That has an effect on the decision
making and performance of the company. As political stability of UK is quite good that help
business in to run their functions smoothly and not getting disturbs by changes in the laws and
policies. But recently due to BREXIT it can become necessary for company to modify their
strategies as it has the impact on the trade policies.
Economic factor: This factor is associated with the good, service and money. And this
includes demand of the consumer goods, wages, inflation, interest rates and consumer
confidence. Willingness of the consumers to buy a product in UK is adequate as their economic
is strong. They are ready to buy product even at a high price with quality that facilitate respective
company to set high prices and increase their profitability. But on the other side UK has a
dynamic borrowing and lending rates that effective the financing of the company.
Social factor: This is associated with the family, friends, colleagues and neighbours etc. That
influence individual’s attitude, opinion and standard or living which effects the sales and revenue
of the organisation. In today’s scenario people are more attracted and concern towards the brand
image in the market, Sainsbury’s sustainable business practices helps in to retain and increase in
the customer base. But on the other hand people getting more aware and concern about the
organic food(Niskanen, J. and Rohracher, H., 2020).
Technological factor: It is describe as the all external generated changes in the
technologies used by the company in their process. UK is always advanced in the technology
upgradations that provide advantage to the companies to use them and provide the quality goods
and services and cost effective manufacturing process but it becomes obsolete to early and needs
heavy investment and high cost involve in this to get the upgraded technology.
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Legal factor: This is refers to the legal laws and regulation made by the government. It
includes various laws that influence the functioning of the organisation such as security law,
contract law, consumer protection law, employee’s protection law, and health and safety law at
work place. Following these rules in a proper way helps in to enhance the performance in ethical
and right way that also provide support in to retention of the employees for the longer time.
Environmental factor: This factor is consisting of the sound, light, water, food, natural
calamities, and pollutants etc. that influence living organism. There are many factors that are also
has the impact on the organisation profitability. Government provide support to the entities in the
form of compensation and subsidy that follows eco-friendly process. Sainsbury’s reduce
operational waste, carbon emissions, add recycling their process. That helps in to maintain the
image in the eye of the customer at a work place(Sadou, A., Alom, F. and Laluddin, H., 2017).
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CONCLUSION
From the above analysis it has been concluded that company is an legal entity which formed
by the individuals in order to attain the desired goals and objectives. There are various types of
companies which are distinct to each other on the basis of their scale, structure and ownership
etc. And work accordingly to gain the profit and to sustain at market place for the longer period
of time. Furthermore there various types organisational structure adopted by the companies to
outline the flow of activities in the organisation in order to get the best. In addition to this, there
is external environment in which operates and that have a direct impact on the functioning and
performance of the company.
REFERENCES
Books and Journals
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Åberg, M., Fälting, L. and Forssell, A., 2016. Is Swedish district heating operating on an integrated
market?–Differences in pricing, price convergence, and marketing strategy between public and
private district heating companies. Energy Policy, 90, pp.222-232.
Dang, C.N., Le-Hoai, L. and Kim, S.Y., 2018. Impact of knowledge enabling factors on organizational
effectiveness in construction companies. Journal of Knowledge Management.
Kobarg, S., and. et. al 2020. Green together? The effects of companies’ innovation collaboration with
different partner types on ecological process and product innovation. Industry and Innovation,
pp.1-38.
Lichtenthaler, U., 2020. Beyond artificial intelligence: Why companies need to go the extra step. Journal
of Business Strategy.
Mas-Tur, A. and Bolufer, J.S., 2016. Different innovation policies for different types of innovative
companies? Social implications. European Journal of International Management, 10(4), pp.467-
478.
Niskanen, J. and Rohracher, H., 2020. Passive houses as affiliative objects: Investment calculations,
energy modelling, and collaboration strategies of Swedish housing companies. Energy Research
& Social Science, 70, p.101643.
Sadou, A., Alom, F. and Laluddin, H., 2017. Corporate social responsibility disclosures in Malaysia:
evidence from large companies. Social Responsibility Journal.
Singh, A. and Hess, T., 2017. How Chief Digital Officers promote the digital transformation of their
companies. MIS Quarterly Executive, 16(1).
Westervelt, M., Schank, J. and Huang, E., 2017. Partnerships with technology-enabled mobility
companies: Lessons learned. Transportation Research Record, 2649(1), pp.106-112.
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