Types of Companies and Organizational Structures - Desklib

This report discusses different types of companies and their organizational structures, including sole traders, partnerships, and cooperatives. It also covers the impact of external factors on business performance through PESTLE analysis. The report focuses on GlaxoSmithKline Plc GSK as an example. Course code: BMP3002, Course name: Business in Practice.

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
2-3
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships 4-6
Section 3: Different businesses structures and internal factors
affecting business 6
Conclusion 9
Reference List 10
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Introduction
The purpose of this project is to examine business as an expanded version to increase
the revenues and to generate maximum profit by selling goods and services worldwide. And
implementation of successful business used to be executed by proper planning in which they
try to administer all the facilities that are been given to the customers, as it mainly maintains
all the technological advancement and functionality. In UK there are different business
practices and companies like small, micro, medium and large they all are being working on
different methods by implementing proper resources for their work and by hiring employees
for their companies. They are like partnership, sole trader, cooperative and many more
(Chassagnon, and Dubrion, 2020). This report is based on GlaxoSmithKline Plc GSK. It is
the established pharmaceutical organization which is headquartered in UK. It deals with
products relating to healthcare and vaccines and various nutritional offering. This report will
cover organisational structure with analysis of macro environmental factors for companies
(Côrte-Real and et. al., 2020).
Section 1: Different types of companies and how they work
Enterprises try to operate varied business practices through which they try to improve the
living standard of individuals and also expand the growth and development in the countries.
It mainly covers the economic growth by generating the revenues as there are some important
companies they are like as follows:
Micro business: These kinds of business practices mainly involves less than 10
employees who are being working under it and their net annual turnover will be around £2
million. They try to generate profit 40 societies as they used to face challenges due to their
size and capacity. It can be a family business and also a fresh start up by any person. As all
thses business use to deal and focus on their own earnings and livelihood and with that they
try to maintain growth for the society (Wang ,and Seifert, 2021).
Small business: All those business practices in which there are about 10 to 50
Employees are involved in working with net annual turnover is for about £10 million. All
these business are mainly privately held by partners or sole proprietorship etc. These are
independent operated companies which usually have limited revenues. All such business
usually maintains the expansion in the rural areas and also for providing work to the small
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labours. For instance bakeries, restaurants architectural firms are some of the examples of
such business practice.
Medium size business: In all such business there are about less than 250 workers
who are being employed in the companies and their annual turnover will be less than £50
million. These organisations used to help out in the growth of small business and also to gain
and earn income and profit. They usually have heavy equipments and machineries with the
capital of hiring employees at large number. For example Crawford healthcare, plan.com etc
are some medium size business practising Companies (Rhodes,2019).
Large size business: These are the enterprise who have about more than 250
employees working in the company and their net turnover will be more than £50 million. All
such business practices have large network coverage as they try to cover their business to be
expanded globally. The mainly have a complex management hierarchy through which they
try to maintain better communications in business and also try to contribute for
environmental sustainability, employment and on different issues. For instance HSBC
Holdings Is a large scale company.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business: These are mainly the organization which are operated by a
single owner who are being self-employed and usually carry on their own business. All
responsibilities and liabilities lie on the individual who is running the business as mainly the
owners are being directly liable for all the profit and losses that the company used to make.
The single individuals use to carry the business and they try to maintain the growth and
advancement in order to maintain the enhancement and production in the business practice
(Eriksson, and Emilsson, 2019).
Partnership: It is a business practice in which two or more individuals used to work
together in order to enhance the profit growth and also to maintain the educate propositions.
They mainly share an agreement where they are jointly being liable for all the responsibilities
and the corporate arrears. All the interest and important decisions lie on the mutual approval
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of partners and the decision-making process is mainly being done by the joint will of
partners. For instance, McDonald’s, Twitter and many more are Partnership Company.
Limited liability business: It is a form of hybrid business that carry the
arrangements and practices that usually product provides protection to all the firms from the
unreasonable tax management and also provides the partnership management. In all such
business practises individual used to handle the small organisations and they used to carry out
some important rules regarding to the tax and the benefits. For example, Westinghouse is a
Limited liability business (Aboelmaged, 2018).
Public limited liability business: All those business practices where the
ownership is being shared with the public tradable areas and the stock exchange. As such
business used to provide advancement by raising the capital and issuing the shares in public
for the better growth and expansion. A proper transparency has to be maintained by the
owner in order to implement the decisions for the business practises. The equitable shares are
being added up for the company and they implement out the growth of the company. For
example, Rolls-Royce is a PLC (Polak-Sopinska, and Owczarek, 2017).
Cooperative: This type of business are administered by the individuals who use their
services it is mainly being organise with the help of legal bodies and also from
unincorporated associations. It mainly focuses on providing services to their owners and also
to generate profit in order to expand the business practice. It mainly provides equity capital
and also their dividends are limited. This business use to focus on the maximum profit and
also in incorporating legal dealings in business. It mainly provides democratic management,
development of different human values for example Ocean spray is a Cooperative company.
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
Organisational structure is mainly a method that helps out to provide the analysis
regarding the functioning of companies and it also helps out to coordinate in different sectors.
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It provides the formation and the nature through which they give out the functioning and the
working of the business companies in incorporated manner. These are mainly a systematic
approach that is being used by the company in order to maintain their business practice and
properties in a smooth manner and by implementing proper working procedure some of
which are given below:
 Functional organisational structure: In this structure the company is used to
maintain smaller groups with some specialised functional areas that relates to IT,
finance, marketing, human resource and many more. Here the employees and mainly
formed in groups according to their specialty. As this mainly shares the rules and
responsibilities of different departments in order of smooth functioning of business
practises. All the departments are mainly divided in different sectors in order to assign
their work according to their working skills. This helps out to maintain the systematic
work and leading (Lin, Wang, and Sheng, 2020).
Figure 1 Functional organisational structure, 2020
 Hierarchical organisational structure: These are the pyramid shaped structure which
usually being implemented with the top-level management to lower level where all
the important decisions are being let out by the CEO and being assigned to the
employees who have been working under them. The used to provide the programs of
training sessions through which they can motivate their employees to work working.
GSK plc usually follows this structure in order to motivate their employees.
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Figure 2 Hierchieal organisational structure, 2020
Divisional organisational structure: This functions by maintaining proper divisions
according to their services and product lines through which they maintain the allocation of
their different resources regarding to the product line that is being made. It mainly helps out
to reach all the supply demands and also to strengthen their financial areas by providing best
services to their customers. The manager is used to keep close monitor on different classified
departments and their working (Hříbková, and et. al , 2018).

Figure 3 Divisional structure, 2020
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
It is an macro environmental factor which helps out to know about the sustainability
and the changes that the companies need to make as in relation to GSK plc, it is mentioned
below: Political factor: This provides out every impact that business used to face as with the
changing policies and the regulation that are being made by the governments. GSK
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used to follow all the government regulations and also focus on the new initiatives
regarding their health measures which helps them out to create a positive impact in
environmental areas. Economic factor: It includes the inflation, exchange rates, recession in all the
important sales with the economic changes. GSK has increased their turnover at the
time of pandemic Covid 19 as it has made the healthcare opportunities to be more
advanced as consumer were focusing on vaccines which were being imported by them
without any trade barriers. Social factor: These are the demographical changes that companies used to face with
the requirements of customers, location, education etc.. As the companies have to
focus on maintaining different strategies with the changing social factors. GSK
maintain different healthcare programs through which they try to maintain the
awareness regarding the medicine and also the positive impact towards the customers
for using the healthcare nutrients. Technological factor: It is mainly the digital advancement and innovation that is
being used by the companies for expanding their business. GSK used to focus on
increasing their medical services in values with the research and development team
and by providing all source available to consumers in easy manner (Ghosh, and
Rajan, 2019). Legal factor: It provides out the legislation and the rules that are being made by
government. GSK used to provide this service globally they have to follow all the
laws and norms of different countries and also focus on the health and safety
measures by taking care on various laws and maintaining the sustainability.
 Environmental factor: These are mainly the changes in the environment that can
affect the business activity sustainability advancement and global issues. GSK focus
on the healthcare services and products through which they try to enhance their
revenues and they also focus on reducing the carbon footprints and also develop
different programs of guarding to sustainable environmental protection. They also
focus on digitalisation process in order to create a positive approach towards
environment.
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Figure 4 PESTLE Analysis, 2020
Conclusion
It is summarized that the companies are aimed to generate profits and revenues by
growth and expansion. There are different types of companies with their different external
and internal environmental impact on factors. The functional and divisional organisational
structure helps out to follow the advancement in the production and growth in the companies.
Moreover, it is also concluded that PESTLE analysis contributes in making analysation of the
macro environmental factors.
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Reference List
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