Business in Practice: Report on Various Types of Companies - BMP3002

This report, submitted for the BSc (Hons) Business Management course, provides a comprehensive overview of various company types and business structures. It begins with an introduction that outlines the report's objectives, followed by an exploration of different company classifications based on size, including micro, small, medium, and large businesses, providing examples like Tesco and Marshfield Bakery. The report then delves into different company structures such as sole traders, partnerships, limited liability businesses, public limited liability businesses, and cooperatives. The report further examines organizational structures, focusing on functional and divisional structures, and analyzes external factors affecting business performance using the PESTLE analysis, considering political, economic, social, technological, environmental, and legal factors relevant to a company like Tesco. The report concludes by summarizing the key findings and insights regarding the diverse business landscape.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
Contents
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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 3
Section 3: Different businesses structures and internal factors
affecting business 5
Conclusion 7
Reference List 8
Introduction
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The goal of this assessment is to give a rapid overview of the many types of
businesses that are available in terms of competitiveness. The study investigates
how firms are categorized based on their nature and responsibility, using a range of
instances. The study also highlights the relevance of organizational structure,
focusing on the two most common types. There are many different types of
businesses that are established, each having its own structure, purpose, structure,
and responsibility. The following report was completed by Tesco, a global brand with
headquarters in London, United Kingdom.
Section 1: Different types of companies and how they work
Micro business:
There are no more than ten employees in this type of business. This is a small
business with an annual revenue of less than £2 million and a balance sheet with
less than £316,000 pounds. The owner must invest a small amount of money to
carry out practically all of the obligations and activities of this sort of firm. According
to statistics, these micro-businesses contribute to the wider economy (Gao and Li,
2020). It also benefits the economy by focusing on developed and emerging
economies that are ignored. This type of microbusiness is usually started with the
same amount of capital as the previous one, and it is managed, run, and controlled
by the same person as the prior one. It benefits the economy by sustaining economic
cohesion throughout the United Kingdom's regions. Freelancing, architecture
businesses, electricians, and so on are examples.
Small business:
This is a company with a small amount of capital invested by the owner, yet it
has more than one comparison to a small company. This sort of business, according
to the Companies Act of 2006, does not employ more than 50 people and therefore
does not employ less than ten. The annual revenue of the company is less than £10
million, and the total balance sheet must not exceed £4 million. Small firms are
usually sustainable in terms of income and scope as they can satisfy customers
easily. The corporation hopes to enhance the economy both locally and
internationally, and it may be capable of contributing more monetarily in the future.
Perhaps this type of business makes a major contribution to the economy. As a
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result, they contribute to the achievement viability of the economy. Because they are
not constrained by organizational resistance, small enterprises can respond faster to
changing business environment and the economy. These types of business includes
sole proprietorship, partnership or corporation. Marshfield Bakery is a small business
established in UK.
Medium size business:
This is a business where the amount of money invested is neither overly large
nor extremely low. According to the Companies Act 2006 of the United Kingdom,
medium-sized businesses must have fewer than 250 and more than 50 workers, an
annual turnover of not less than £24.9 million, and a balance sheet total must not
exceed £12.9 million (Wilkinson and et. al., 2020). This sort of company's business
plan begins with the slow development of valuable small businesses, with the
corporation collecting a large percentage of net sales and expanding profits. The
medium-sized enterprise is acknowledged as the country's economic strength
because it fosters growth by providing a varied variety of job prospects and delivers
customer satisfaction by establishing new markets. Verdant Leisure is an instance of
this form.
Large size business:
To function, organizations of this size often require a big quantity of capital as
well as a huge number of employees. These businesses frequently operate on a
nationwide and global scale. There are almost 250 people employed in such
companies. Large corporations also assist and benefit smaller businesses. This type
of company has a hierarchical that allows it to adjust to changing business situations,
as well as an efficient organizational structure and a good customer communications
networks (Akpan, Udoh and Adebisi, 2020). Tesco, Sainsbury, M&S are some
examples.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
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A sole proprietorship is a form of business that is founded by a single person.
The owner of this type of company is solely responsible for the company's actions
and operations. The owner of this business structure has unlimited liability and is
totally responsible for all debts and possible losses incurred during business
activities. The costs of beginning a business for sole proprietorships are cheaper
than for other types of businesses. One of its benefits is that the sole trader enjoys
the confidentiality. Plumbers, architectural firm and others are examples of sole
proprietorships.
Partnership:
The partnership forms with two or more members in which the partners
contribute towards the capital amount and further carry out business operations in
pursuit of common goals. The owners of the partners in order prevent conflicts is
required to form partnership deed, which can be either in oral or in writing.
Furthermore, the liability is unlimited to which the partners are jointly and severally
liable for company’s debts. Such people profit from flexible working even in the lack
of government interference. Furthermore, as agreed, the level of risk is split equitably
among these partners (Maddison, Rehdanz and Welsch, 2020). Another unique
feature is the possibility to transfer interests to a third party with the permission of all
partners. Twitter, Red Bull are some examples.
Limited liability business:
This is a form of business ownership that combines the elements of both a
partnership and a corporation. This sort of organization is commonly referred to as a
"limited liability partnership" (LLP). The tasks and operations of this type of business
structure must be carried out by two or more people. The partners are not compelled
to risk their own assets to pay off the company's debts, and their obligation is
apportioned according the amount of money they have contributed. Furthermore,
enjoys the notion of perpetual succession. Oxfam is one of the examples of LLP
businesses (Geiger and Pécoud, 2020).
Public limited liability business:
This type of company has a separate and legally recognized existence. The
public raises the funds required to carry out the activities and obligations of this type
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of organization through the sale of company shares. This type of business has a
better possibility of long-term progress and success in the sector. The owner must
be impartial in both the decision-making process and the performance of the
company, and as a result, cannot be hidden. Funds are often acquired from a
number of sources in this sort of organization, with financial organizations, such as
banks, being the most typical source of funding. Rolls- Royce Holdings, HSBC
Holdings and so on.
Cooperative:
This is a sort of commercial organization that is created merely on the basis of
charity. The expansion of this type of corporate organization is fueled by a desire to
improve society and indeed the quality of life of its members (Plesner and Husted,
2020). This organization's main objective is to assist the community, and it's not
created with the intention of making a profit. Adopt a democratic leadership style that
is based on a sound organizational structure. Select Machine, Fourex are some
cooperatives in United Kingdom.
Section 3: Different business structures and external
factors affecting business
3.1 Identification of different organizational structures and
explaining how does organizational structure affect business
productivity
Organization structure means the activities which help the company to attain
the common goals in an effective manner (Titley and Dolan, 2020). There are
several structures which help the company to allocate, coordinate and supervise
within the company.
Types of organizational structures
 Functional organizational structure: it is similar as hierarchical organizational
structure as the highest level of responsibility e is being held by the topmost
level of employees within the Enterprise. These are the structures which have
different departments with respect to their requirements in order to fulfill the
common goal of the organization. The company used to divide their
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employees with respect to their skills and knowledge possessed by them
which is also used in order to encourage and develop their skills in the
workforce.
 Divisional organizational structure: It is the separation of a corporation into
divisions based on the primary items that will be manufactured. Consider
Samsung, Reliance, and other companies. It helps solve new difficulties that
have evolved as a result of differentiated products (Ojansivu, Hermes and
Laari-Salmela, 2020). For companies that want to improve and continue to
evolve, this is the best organizational structure. Under this organizational
structure, the company is separated into various divisions based on
resources, products, operations, or geographic locations. Under this
arrangement, each section keeps its own responsibilities and skills.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
Tesco is the British multinational company, located in London, United
Kingdom which deals in the retail sector industry (Wang and Zhou, 2020). The
company is operating its business around the globe and for which it is important for
the chosen organization to determine the external factors which affect their
operations. With the help of the PESTEL model the Chosen organization is
determining the external factors which are discussed below:
 Political factors: due to Brexit there are many changes with context to the
trade practices which are into the International boundaries. This has resulted
in instability in the political sector and a negative impact on the economic
condition because of the unemployment rate. This has a major impact on the
economic condition of several countries where Tesco is operating its
functions.
 Economic factors: these factors include the labor cost and other costs which
affect the functions of the company while providing the products and services
to the targeted audience. This majorly affects the profit margin of the firm.
When the increase in cost and price for the company it will result in decrease
in margin of profit which directly impacts on the revenue of the firm.
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 Social factors: when there are several changes in the shopping style of the
customers it will have an impact on the company as it requires the change
with respect to the products and services which are offered by the company
so that they can satisfy the current trends in two and effective manner. In the
current scenario the customers are also wanting to get the same day of fast
delivery e of their goods and services because it is important for the chosen
organization to develop such strategies in order to satisfy the desires of their
targeted audience.
 Technological factors: Tesco is also facing several issues related to the
poor experience of their customers. This is because of the technological factor
and it is necessary for the chosen organization to adopt the updated
Technology so that they can provide better services to their targeted
audience. This is also beneficial for the chosen organization to develop a
good brand image into the Marketplace which is used in order to attract the
targeted audience.
 Environmental factors: Tesco is using it to encourage the audience to make
an order from their website which is helpful in order to save the fuel and time
of their customers. The company is also willing to collect the unwanted plastic
bags so that they can recycle it and develop some of the product which is
beneficial for the environment and customers also.
 Legal factors: as it is already mentioned that the company is operating at the
global level so it is important for the organization to follow each and every
rules and regulations which are given in the local and international laws of the
country. It is important for the organization to deal with the changes and law
as it may affect the performance of the company in achieving their targets
(Gatto, 2020).
Conclusion
From the above report it can be concluded that business plays an important
role while developing the economic conditions of a nation. It can be classified on the
basis of their size and scope. It is important for every organization to develop
effective organizational structure so that they can increase their performance and
enjoy higher profitability from the competitive market. It is important for every
organization to determine the external factors which are not in the hands of company
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e as their impact can be on the revenue of the firm. The analyses of external factors
can be used in developing the strategies which can be helpful in order to overcome
such factors.
Reference List
Akpan, I.J., Udoh, E.A.P. and Adebisi, B., 2020. Small business awareness and
adoption of state-of-the-art technologies in emerging and developing markets,
and lessons from the COVID-19 pandemic. Journal of Small Business &
Entrepreneurship, pp.1-18.
Gao, P. and Li, J., 2020. Understanding sustainable business model: A framework
and a case study of the bike-sharing industry. Journal of Cleaner
Production. 267. p.122229.
Gatto, A., 2020. A pluralistic approach to economic and business sustainability: A
critical meta‐synthesis of foundations, metrics, and evidence of human and
local development. Corporate Social Responsibility and Environmental
Management. 27(4). pp.1525-1539.
Geiger, M. and Pécoud, A. eds., 2020. The International Organization for Migration:
The New ‘UN Migration Agency’in Critical Perspective. Springer Nature.
Maddison, D., Rehdanz, K. and Welsch, H. eds., 2020. Handbook on wellbeing,
happiness and the environment. Edward Elgar Publishing.
Ojansivu, I., Hermes, J. and Laari-Salmela, S., 2020. Business relationships in the
industrial network literature: Three approaches and their underlying
assumptions. Industrial Marketing Management. 87. pp.181-195.
Plesner, U. and Husted, E., 2020. Digital organizing: Revisiting themes in
organization studies. Red Globe Press.
Titley, B. and Dolan, C., 2020. Complete Business Studies for Cambridge IGCSE®
and O Level. Oxford University Press-Children.
Wang, Z. and Zhou, Y., 2020. Business model innovation, legitimacy and
performance: social enterprises in China. Management Decision.
Wilkinson and et. al., 2020. Handbook of research on employee voice. Edward Elgar
Publishing.
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