Business Report: Analysis of Company Types and Structures

This report provides a comprehensive analysis of different types of companies, categorized by size (micro, small, medium, and large) and scope (sole proprietorship, partnership, limited liability, public limited liability, and corporations). It examines the characteristics of each type, including ownership, liability, and operational aspects. The report then delves into various organizational structures, such as divisional and functional, and their impact on business productivity, emphasizing how organizational structure affects efficiency and decision-making. Furthermore, the report applies a PESTLE analysis to British Airways, examining the political, economic, social, technological, legal, and environmental factors that influence the airline's operations and profitability. The analysis covers Brexit's impact, fuel prices, customer perceptions, technological advancements, legal compliance, and environmental regulations, providing a holistic view of the external environment's influence on the company. The report concludes by summarizing the key findings and emphasizing the importance of understanding company types, structures, and external factors for effective business management and strategic decision-making.

Types of Companies

Contents
INTRODUCTION.......................................................................................................................................3
SECTION 1.................................................................................................................................................3
Different types of business organizations on the basis of size.................................................................3
SECTION 2.................................................................................................................................................4
Different kinds of business organization on the basis of scope................................................................4
SECTION 3.................................................................................................................................................7
Various types of organizational structure and how it affects the business productivity...........................7
External analysis of the firm....................................................................................................................8
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
The business is the entity established by the person or group of person that involves the
commercial, professional or industrial activity. It is the set of efforts and organized activities
which involves buying and selling of offering. The main intention or aim of every business is to
generate maximum profits. It involves an individual to get engage in any of the activity which
can help in generating maximum revenues so that the profitability of the firm can be enhanced
(Kostera and Pirson, 2017). The organization chosen for this report is British Airways, the
company which deals in the airline industry. It was founded in the year 1974. This report will
cover the kinds of business organizations on the basis of scope and size, different organizational
structure and external analysis by using a framework.
SECTION 1
Different types of business organizations on the basis of size.
There are many kinds of businesses which have the sole aim of maximizing the profits
but it is not important that it must have the number of workforce. There are various kinds of
businesses which have few employees but still have the same aim of generating the profits.
Different kinds of business organization on the basis of size are discussed below-
 Micro business- The organizations which have only few numbers of employees, between
0-9 are considered as micro business. they are so small in size that they have employed
less than 10 employees only. Their turnover is expected to be less than 2 million Pounds.
Characteristics:
 The range of workforce employed is between 0-9 only.
 Their turnover for annual basis is less than 2 million Pounds (Oscarsson, 2019).
Example: Grooming salon or repair shop.
 Small business- These are those business entities who involves the employees from the
range of 10-49 in their working. They have the expected turnover to be approximately
less than 10 million Pounds. They are larger than micro organizations.

Characteristics:
 There are less than 50 number of employees in the organization.
 The annual turnover of such firms are expected to be less than 10 million Pounds.
Example: Fourex
 Medium business- These are larger than small and micro but smaller than large
enterprises so their number of employees is in the range of 50-250 in number. They have
the turnover for a year less than 50 million Pounds.
Characteristics:
 Their number of workforce is less than 250 but more than 50 in number.
 Their turnover is less than 50 million Pounds.
Example: Marshfield Bakery
 Large business- These are the large enterprises whose annual turnover is more than 250
million Pounds. They consist of the number of workforce who are more than 250 in
number. They are engaged in making huge investment so that their profitability can be
enhanced.
Characteristics:
 They have more than 250 number of workforce.
 They have more than 250 million pounds annual turnover (Eghbal Majd, Safari and
Shaemi Barzoki, 2018).
Example: British Airways
SECTION 2
Different kinds of business organization on the basis of scope.
There are various kinds of businesses which are categorized on the basis of their scope
that are discussed below-

 Sole proprietorship- This kind of business organization is mainly engages a single owner
who established the firm at his own risk and responsibilities. It is entrusted with the task
to manage the daily operations of the enterprise and has the personal liability for all the
liabilities and debts of the firm. The responsibilities of carrying out the activities of the
firm are handled by a sole person.
Characteristics:
 There is sole owner of the firm and the ownership is not shared between anyone.
 All the profits and losses belong to owner and there is personal liability for all debts of
firm.
 The responsibilities, ownership and liabilities belongs to one person Sharma, Agrawal
and Khandelwal, 2019).
Example: An artist
 Partnership- This is that business organization which involves two or more than 2 people
who mutually decide to open a firm and share the profit or loss of the firm. The
responsibilities, ownership, losses, profit, contribution of capital and other things are
shared among all partners. They can also be held personally liable for the action of any of
the partner.
Characteristics:
 There are two or owners of the partnership firm.
 They all mutually share the profit, loss, ownership and responsibilities.
 The ratio of profit or loss is either on the basis of capital contribution or as per the
agreement.
Example: Yoomoo
 Limited liability business- This type of business enterprise involves the number of
owners who have limited liability in the r firm for their liability. They are liable to the
extent of their share in the business. Such type of business organization usually involves

the shareholders who are only liable to the extent of their share or investment in the
company.
Characteristics:
 These businesses are the separate legal entity that is different from owners.
 There is limited liability of the personnel who are associated with the firm
(Preobrazhenskaya, 2019).
Example: Accountancy firm or law firm.
 Public limited liability companies- These types of business enterprises are those which
are incorporated and involves raising the share capital by inviting public to subscribe to
the shares. The ownership of the business is divided into shares that are tradable
publically in stock exchange. These are the separate legal entity and an artificial
personality wherein the shareholders are liable only to the extent of their share in the
business and no unlimited liability arises.
Characteristics:
 There is a limited liability of the shareholders in this business organization.
 It is a separate legal entity where the owners are different from company.
 The company is engaged in raising the capital by inviting public to make purchase of its
shares (Mykytas, Terenchuk and Zhuravska, 2018).
Example: British Airways.
 Corporations- The business organization in this category are such which are created by
the common law, state law or the Royal charter. These are the separate legal bodies rhat
are established distinct from their members and each has their own set of liabilities and
privileges. They are liable to make the payment of corporation tax to the government.
Characteristics:
 It is the artificial personality that is distinct from owners.
 The members of corporation has limited liability.

 They are liable to pay the government with corporation tax and enjoy their own privileges
and are liable to pay for their liabilities.
Example: Amcor.
SECTION 3
Various types of organizational structure and how it affects the business productivity.
It is the way or a method under which the companies are engaged in carrying out its
activities as the organizational structure tells about how the business should be divided,
coordinated and organized. These are created with the sole purpose of coordinate the activities
and make the control on the performance of its workforce and members. There are various types
of organizational structure; some of them are discussed below-
 Divisional- This kind of organizational structure involves grouping the functions of the
business into the division. These divisions are structured either on the basis of product
line, market or the geography of the corporation. It contains all essential functions and
resources that provide support to the particular geography or product. It is useful as it
affords business with greater operational flexibility and the failure of one of the division
cannot threaten other division. Amazon follows this structure.
 Functional- This organizational structure is mainly used to organized the workers, these
are grouped on the basis of their specific knowledge and skills. It involves structurally
vertically every department with their roles from the president to the finance and sales
unit, to the customer service, to the workforce which is assigned to one offering. These
specialized units are required to report to the single authority that is the top management.
The major advantage of this is that it makes the working and production more efficient
and of the high quality. McDonald, British airways follows this structure (Lu, Lai and
Ma, 2017).
The organizational structure mainly affects the productivity level of the company as the
top level management has the major decision making power and the employees under its are
required to follow it. For instance, in the functional structure, the functional units are divided
on the basis of their specialty, skill and knowledge which helps in enhancing the efficiency of

the firm as each of the department is specialized in its working. This shows how the
organizational affects the productivity level and how organizational structure has the major
role in shaping the firm.
External analysis of the firm.
There are various macro factors which affects the productivity and functioning of the
firm. It is important for businesses to analyze their external environment so that there is no
impact on its operations. PESTLE analysis is a framework which is used to analyze the external
factors so that the business can make its decision accordingly. In relation to British airways, it is
discussed below-
 Political- It is concerned with the political environment of the state wherein the business
operates. The Brexit have affected the functioning of the British airways as the exit of
UK from EU have resulted in losing the influence on the development of the European
Aviation Safety Agency legal framework. This affected its business.
 Economic- It involves factors such as inflation rates, employment rates, etc. The exit of
UK from EU has resulted in reducing the major investment for the British airways that
have affected its business. but the low fuel prices have resulted in increasing the
profitability of the airline for short period of time.
 Social- It involves socio-cultural factors that affect consumers and market. In relation to
British airways, the perception of people that the British airways is the low cost airline
has forced the airline to decease its prices as it may result in losing the customers.
 Technological- It involves the adaptation of the technology into the business that shapes
the working of business. British airways invest in the technology so that they can serve
the customer with enhanced experience. For instance, the digital booking system,
payments, digital check in and out, etc. have served the customers with best experience
(de Andres and et. al., 2017).
 Legal- It involves compliance with the rules and regulations of the firm. The British
airways makes sure that it complies with the laws. Recently, the employees went on the
strike with resulted in delayed operations and flights so that airline was forced to make
settlement payment to the employees so that the operations are resumed.

 Environmental- It is concerned with the operations of business which affect the
environment. In relation to British airways, the government have mandated the purchase
of the carbon pollution permit for the airlines who wants to operate in EU. So this has
affected the business of airline as it has to check its working and comply with standards
of environmental norms.

CONCLUSION
It is concluded from above report that there are different types of business entities which
are established by the private individual or group of people. on the basis of size, there includes
micro, medium, large and small enterprises which differ on the basis of number of employees
and annual turnover. On the basis of scope, there are various businesses such as partnership, sole
proprietorship, company, corporation, etc. The companies follow the organizational structure
which act as direction or guidance so that there is management of the activities of business.
lastly, it is summarized that the business operates in the environment which consist of internal
and external factors that have huge influence on the business. The Pestle analysis is done in order
to analyze the external factors which are beyond the control of business.

REFERENCES
Books and Journals
de Andres, A., and et. al., 2017. Beyond LCOE: A study of ocean energy technology
development and deployment attractiveness. Sustainable Energy Technologies and
Assessments. 19. pp.1-16.
Eghbal Majd, M., Safari, A. and Shaemi Barzoki, A., 2018. The Effect of Strategic
Entrepreneurship on Organizational Performance: Role of Dynamic Capabilities of the
Organization and Turbulent Business Environment. Journal of Entrepreneurship
Development. 11(1). pp.1-19.
Kostera, M. and Pirson, M. eds., 2017. Dignity and the Organization. Palgrave Macmillan UK.
Lu, E.P., Lai, G.C. and Ma, Q., 2017. Organizational structure, risk-based capital requirements,
and the sales of downgraded bonds. Journal of Banking & Finance. 74. pp.51-68.
Mykytas, M., Terenchuk, S. and Zhuravska, N., 2018. Models, methods and tools of optimizing
costs for development of Clusterized organizational structures in construction
industry. International Journal of Engineering and Technology (UAE). 7(3). pp.250-254.
Oscarsson, O., 2019. Boundary work to conduct business as usual: interaction at the boundary
between the affected organization and emergency responders. Risk, Hazards & Crisis in
Public Policy. 10(2). pp.212-232.
Preobrazhenskaya, V.V., 2019, November. Self-organization of Business Processes in the
Environment of Web-Economic Relations. In The International Scientific and Practical
Forum “Industry. Science. Competence. Integration” (pp. 168-176). Springer, Cham.
Sharma, A., Agrawal, R. and Khandelwal, U., 2019. Developing ethical leadership for business
organizations. Leadership & Organization Development Journal.