Types of Companies and Organizational Structures: A Study on Unilever

This report discusses the different types of companies and their characteristics, structures like partnership, public company, etc. It also analyzes how an organizational structure affects business and explains PESTLE of the company. The study is based on Unilever.

TYPES OF
COMPANIES

Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................3
Section 1:.........................................................................................................................................3
Different types of companies and their characteristics:..............................................................3
Micro Business-......................................................................................................................3
Small Business-......................................................................................................................4
Medium Business- .................................................................................................................4
Large businesses- ...................................................................................................................4
Section 2: .......................................................................................................................................5
Different types of structure of companies and businesses:.........................................................5
Sole Trader-............................................................................................................................5
Partnership-.............................................................................................................................5
Limited Liability Company- ..................................................................................................6
Public Limited Company- .....................................................................................................6
Cooperative Business- ...........................................................................................................6
Section 3:.........................................................................................................................................6
Different organizational structures and how these structures affect the productivity of
business:......................................................................................................................................6
Hierarchical structure- ...........................................................................................................7
Functional structure- ..............................................................................................................7
PESTLE analysis of business- Unilever:....................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
A business is carried out in order to earn profit by engaging itself in commercial and
industrial activities. It is an professional enterprising entity that tries to provide a basic
organizational work culture. The scale on which the business operations are carried out refers to
its size in the business. The size helps in determining the production level of the company and
what are its volume of sales. A business operates on a small scale as well as on the large scale
thus it ranges from a sole trader type to a Multinational corporation. Companies can work in the
private sector or in the public sector depending on its preference. This report will cover in detail
the different types of companies and how they work(Birahim, 2020). It will cover the different
structures like partnership, public company, etc. It shall also analyse how an organizational
structure affects business and will explain PESTLE of the company.
MAIN BODY
Section 1:
Different types of companies and their characteristics:
Companies can be differentiated based on their value, size, liability, goodwill which makes them
different from other companies smaller or larger in size. Taxation policies on the companies are
implemented based on their size of working. These categories are created based on the number of
employees, the turnover of the business, its balance sheets, etc. The different types of companies
are as follows-
Micro Business-
A micro business is generally the type of business that exits in UK with less than ten
employees because it ranges from 0-9. More than 90% of business in UK is in this category
(Cresswell and et. al., 2020) . The management of this business has fixed no. of individuals who

set up and carry out the business. Generally a single person owns the micro business. Thus the
turnover of micro business enterprises is not high, it is ≤ € 2 m. this type of business includes
work like independent contractors, small coffee shops, plumbers, machine shop operators, etc.
The Mantons cards and Boss Brewing company are famous examples of Micro Business in UK.
The characteristics of this type are easy management where due to the small level of business
with less number of employees, it is easier to manage and operate and also eases decision
making. Another feature of it is less no. of risks because it is of micro level and thus based on its
operations large risks do not arise in the business. Confident and passion in carrying out the
business is also a characteristic of this type because they can manage their customers and
employees easily.
Small Business-
Small business enterprise is generally a type of business that has more than 10 and less
than 50 no. of employees. They earn less number of profits compared to a medium size and more
profits than a micro level business. The companies with an annual turnover of ≤ € 10 m come
under this type. The examples of a small business are guest houses, market trader, photographers,
teaching sector, etc. The Broadsword Event House and Marshfield Bakery are famous small
businesses of UK. The main characteristics of this type are effective decision making because it
involves owners as well as managers who can make decision based on their knowledge and
experiences that can benefit the business. Another characteristics is Limited Investment because
it requires investment which is limited due to its size which is smaller than the large business
enterprises(García de Soto and et. al., 2019).
Medium Business-
Medium business enterprise is basically the type of business that includes more than 50
and less than 250 number of employees within its company. They have the flexibility to earn
profits based on the scale they work. Generally, the companies that have an annual turnover of ≤
€ 50 m are included in the medium business. The examples and the types of business included
under it are manufacturing and transportation companies, health care and medicinal business, etc.
The famous Medium Businesses in UK are Crawford Healthcare, Plan.com and Track Global
group. The main characteristics of this type are run by a group of people because it has more

number of employees which requires proper management to operate smoothly. It also has
evaluation of customers as its main feature which makes running of the business easier due to
the fact that customer engagement and interaction with them is given a priority within this.
Large businesses-
Large business is a type of business that operates on a large scale and includes more than
250 employees that can go up to maximum limits. They earn huge no. of profits because their
revenue earning are more than micro, small and medium size businesses. Their annual turnover
is more than the medium business enterprises (Hertati and et. al., 2020). The common sectors
and examples under it are multinational corporations, big brands. Telecommunication
companies, etc. The most famous large business companies of UK are Unilever, HSBC,
AstraZeneca. The main characteristics of this type are chains of business because a single brand
has many different branches that operate in different regions amongst different customers. High
Profits is also one of its main characteristics as they help in high earnings and in generation of
huge number of profits for the business.
Section 2:
Different types of structure of companies and businesses:
Sole Trader-
It is a business that operates on a small scale and managed as well as owned by a single
person. It is generally a self employment type of business. It is beneficial because it involves low
establishment costs and it is easier to operate and run. It is popular form among the young
entrepreneurs in UK. All the revenues and profits that are earned in the business go in the hands
of the owner who is a single person. Its main characteristics are independent decision making
because there is no involvement of any other person while making judgements and decisions for
the business. It also offers ownership control which rests in single hands. One of its
characteristics is also financial risks which might arise due to the burden of finance and losses
on a sole person. Private management of affairs helps in maintaining confidentiality about the
business operations (Keeble, 2018) .

Partnership-
This type of business structure involves two or more than two individuals who carry out
the business as partners. They have a partnership agreement between them which states the
sharing of roles and responsibilities among them while managing the business or company. The
profits and losses are also shared in equal proportion between them. They jointly share the costs
of establishment, the financial risks, etc. its main characteristics are Joint liability with respect
to the management of risks and maintaining the accountability of all the action that are taken by
them. It has easy investments because the investors consider this type as more reliable than the
sole trader. It also involves innovative decision making due to the different knowledge and
experience of the partners in managing the business.
Limited Liability Company-
It is a large type of business which is also called as private limited company. It is
managed with respect to the provisions of Companies Act 2006. the owners in this type of
business enjoy limited liabilities with respect to their personal affairs. The owners enjoy limited
personal liabilities with respect to the amount of money that is used in the business. It is easier to
make profits and earn revenues. Its main characteristics are separate legal entity which helps in
creating a professional image for the business. There is also efficiency in tax planning of the
limited liability business sue to filling of taxes on time.
Public Limited Company-
It is placed under the public enterprises under the company law of UK. The shareholders
are the real owners of the company. Thus, it can be defined as a company which is legally owned
and is allowed to offer its shares in the public for sale. It is not a popular form of business in UK.
The owners in this business are offered separate entity and protection from different liabilities
and debts due to its public nature of business. Its main characteristics are easy transferability
because shares can be easily transferred in the public and to others in the market. The
shareholders enjoy limited liabilities because it is a semi- government type of business which
protects the interests of the owners(Klimuk and Lazdins, 2019) .

Cooperative Business-
Cooperatives are generally the business that are owned and managed by the members.
These members can be anyone ranging from customers, employees to residents of the region
who have the right to participate in the business operations and have a share in the profits it
makes. Thus, it can be called as an independent association controlled by its members.
Section 3:
Different organizational structures and how these structures affect the productivity of business:
In context of Unilever,
Hierarchical structure-
This is the most common type of organizational structure in the pyramid form. It includes
a chain of command that flows from top to down in the organization like from CEO to the low
level of employees. In this structure each employee has a supervisor above them who guides
them. It offers merits in defining level of authority and power and enhances promotion by giving
each employee a speciality. But it is disadvantageous because it limits innovation(Roberts, 2018)
.
Functional structure-
This structure involves making of groups and departments in the organization and
dividing them with respect to the roles, responsibilities and specialities. It is beneficial in
narrowing of the skills and expertise of the employees so that the organization can reach its goals
by providing best quality goods and services to customers.
With respect to Unilever, it should inculcate the functional structure within the
organization as it can help the business in establishing of clearly defined roles and what
expectations are demanded from the employees this can further lead to improved productivity. It
can facilitate the level of performance by enhancing it with specialities of employees. When the
organisation functions while also developing the skills of the employees it can increase its
productivity and earn revenue.

PESTLE analysis of business- Unilever:
PESTLE analysis helps to highlight the scenarios which have an impact on the
performance and business of the brand(Ullah, 2021) .
 Political Factors- Unilever has a huge and different portfolios of its chain of products
like Beauty & Personal care, Food & Refreshment, Home Care, etc. This thus requires
that the brand of Unilever to abide by the rules and regulations that are set by the
government. Proper analysis of all the laws that can affect the operation of the business
must be carried out because Unilever requires corporate friendly norms to reach out to
more customers.
 Economic Factors- Unilever mainly deals in the FMCG which makes it essential for it to
have a knowledge of the state of economy. Economy which is growing can help the brand
to earn more profits like Unilever has high chances of growth in developing countries. It
should also keep in mind the rate of employment in the countries to reduce its costs of
operation.
 Social Factors- Due to its base in different nations, Unilever needs to launch and market
the products based on what can be appealing and attractive to its social demographics. It
thus makes ads in different languages. This factor helps Unilever with better positioning
and target segmentation.
 Technological Factors- in order to sustain among the market competitions, Unilever
needs to keep in track with the changing technologies. Analysis of technological factors
helps in increasing efficiency and decreasing costs. Automated operations can help in
time saving of Unilever(Wardati and Mahendrawathi, 2019).
 Legal Factors- Due to the big portfolio of Unilever it comprises more than 400 brands
which requires taking care of the laws and protecting its products and their patents. Legal
department is a must for Unilever to take proper actions.
 Environmental Factors- Unilever has been successful in framing its image as a
company which is environment friendly. It is now working with the UN Sustainability
goals which will enhance its image in the market which will lead to improved business.

CONCLUSION
It can be concluded from this report that Businesses vary in their size with respect to the
no. of employees and their annual turnovers. They also have different structures like Sole trader,
Partnership, Limited liability business, Public Company and Cooperative. The conduct of the
business is affected with the type of structure that it operates in. There are also different
organizational structures wherein Hierarchical and Functional structure has been analysed which
seem to be very suitable for different businesses. Unilever is a top performing brand that is
operational in UK. Pestle helps in understanding the different external factors that have an
impact on the performance of business of Unilever.

REFERENCES
Birahim, S.A., 2020. Internal and external factors of Nestle and comparison with Unilever.
Cresswell, K., and et. al., 2020. Accelerating Innovation in Health Care: Insights From a
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García de Soto, B., and et. al., 2019. Implications of Construction 4.0 to the workforce and
organizational structures. International Journal of Construction Management, pp.1-13.
Hertati, L., and et. al., 2020. The effects of economic crisis on business finance. International
journal of economics and financial issues, 10(3), p.236.
Keeble, D., 2018. High-technology industry and local environments in the United Kingdom.
In High Technology Industry and Innovative Environments (pp. 65-98). Routledge.
Klimuk, V.V. and Lazdins, A., 2019, September. INTERACTION OF EDUCATION, SCIENCE
AND BUSINESS IN TERMS OF DIGITAL ECONOMY DEVELOPMENT.
In Economic Science for Rural Development Conference Proceedings (No. 52).
Roberts, J., 2018. Multinational business service firms: The development of multinational
organisational structures in the UK business services sector. Routledge.
Ullah, N., 2021. A Comparative Analysis between Unilever and Johnson & Johnsons.
Wardati, N.K. and Mahendrawathi, E.R., 2019. The impact of social media usage on the sales
process in small and medium enterprises (SMEs): A systematic literature
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