BMP3002: Analysis of Company Types, Sizes, and Structures Report

This report, prepared for a Business in Practice module, provides a comprehensive analysis of different types and sizes of companies, including micro, small, medium, and large businesses. It defines and characterizes various business structures such as sole proprietorships, partnerships, and limited liability companies, offering real-world examples for each. The report further explores organizational structures, including hierarchical and flat models, and their impact on employee performance. It also applies PESTEL analysis to examine external factors affecting businesses, using the example of Aston Martin. The report aims to provide a thorough understanding of business operations, structures, and the external environment for strategic decision-making.

Types of Companies

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
SECTION 1......................................................................................................................................1
Description, features and examples of micro businesses, small businesses, medium businesses
and large scale businesses......................................................................................................1
SECTION 2......................................................................................................................................2
Description, features and examples of sole proprietorship. Partnership, limited liability
business, public limited liability business and cooperative....................................................2
SECTION 3......................................................................................................................................4
Description of organisational structure and influence of organisational structure on employee
performance............................................................................................................................4
Explanation of outward elements affecting enterprises with the help of PESTEL analysis. .4
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................8

INTRODUCTION
Business firms need to understand the different legal structures adopted by enterprises
and the sizes if various establishments in their industry in order to understand in order to
understand the nature and intensity of competition present in their industry. Apart from this
recognition of effective organisational structure for the business firms is equally important. The
present report aims to determine various kinds and sizes of enterprises and provide features of
each identified business firms along with examples. This report also provides description of
organisational structure and influence of organisational structure on overall performance of the
workforce. The influence of outward elements on a business firm is also explained with the help
of PESTEL analysis.
MAIN BODY
SECTION 1
Description, features and examples of micro businesses, small businesses, medium businesses
and large scale businesses
Micro business firm
This type of business firm is created by entrepreneurs in order to gain enough income so that
they are able to pay their daily personal expenses. This type of business firm needs to have 10 or
fewer employees, annual turnover equal to or lower than £632,000 and a balance sheet total
equal to or lower than £316,000 as per the British legislation. The main features of this type of
organisation are that it has few employees and very low profitability (Kelliher, Mellett and
Harrington, 2020). Just Williams Toy shop in London United Kingdom is an example of this
type of enterprise.
Small business firm
This type of business firm is larger in comparison to micro business but is still considered a
small enterprise. The legal requirement for small business organisation are equal or lower
turnover than £6.5 million, balance sheet total equal to or lower than £3.26 million, maximum
workforce of 50 employees as per the British legislation. The main features of this enterprise are
that this type of firm has informal management structure and is controlled by the owner.
Lovethesales.com is an example of small sized business firm (Selviaridis, 2020).
Medium business firm
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The legal requirements of this type of business firm are that it needs to have workforce
consisting of fewer than 250 employees and turnover under than £12.9 million. Nector which is
Polish deli is an example of this type of firm (My Shop: Entrepreneur's fears for her Polish deli
empire, 2016).
Large scale business firm
This type of business firm is spread across international markets and has high
profitability. An example of this type of file is TESCO.
SECTION 2
Description, features and examples of sole proprietorship. Partnership, limited liability business,
public limited liability business and cooperative
Sole proprietorship
This kind of business firm is under the control and ownership of a single individual. The
profits collected by this type of business firm are considered as the personal income of the owner
and loss of the business enterprise is suffered by the owner. The decision making is in the hands
of the owner and the owner is individually responsible for the financial obligations of the
company. The company is usually registered under the name of the owner as the owner and the
entity are considered the same person (Tans, 2017).
The features of sole proprietorship include low costs, easy registration, tax deduction and
easy dissolution.
An example of sole proprietorship is Kristin Baybar’s toy shop in London which sells toys
in the Green Oak area of London for the past forty years. It is self-owned shop opened in the
name of the owner Kristin Baybar.
Partnership
This type of entity is formed by two or more individuals and is classified into general partnership
and limited partnership. A partnership enables business partners to participate in decision
making. Partnership is registered for self-assessment with HMRC. Responsibilities and
obligations of the enterprise are shared between the partners of the company (Adamou,
Kyriakidou and Connolly, 2021).
The primary features of partnership include easy paperwork required, high growth
potential along with shared risk between partners of the company.
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An example of globally successful partnership company is Google. The company was
formed as a partnership between co-founders Larry Paige and Sergey Brin.
Limited liability Company
This kind of business firm enables owners, shareholders and partners of a business firm
with liability safeguards which results in earnings and losses of the business firm reflect on the
personal tax return of the owner. Limited Liability business firms have one or more than one
member and it is not necessary to divide profits and losses among team members (Lawrance and
Brooks, 2018).
The primary features of the limited liability corporation is simplistic documentation,
flexibility in selecting taxation of members, fewer regulations and protection of members from
liability.
GlaxoSmithKline is an example of limited liability company.
Public limited liability business
This type of business formed after two or more members are voluntarily incorporated
which Provides the business firm distinct legal existence. The liability of members of the
business firm under public limited liability business is limited. These type of business firms are
listed on the stock exchange and are traded publically.
The chief features of limited liability business firm are perpetual succession, index of
members and registration with PLC in order to gain status of PLC.
The British retail firm TESCO PLC is an example of this type of business.
Cooperative
This type of company is created by members which has specific aim and are willing to
cooperate and organise an establishment in order to attain the aim. As per the UK legislation a
cooperative society is an enterprise which is under the ownership and controlled by benefit of its
members which can include service users, consumers, employees or suppliers.
The main features of a cooperative business firm are democratic management, voluntary
organisation service motive, government control, distribution of surplus, capital and return
thereon (Ajates, R., 2020).
Example of this type of business firm is shared trade society limited which is a fair trade
financial co-operative based in United Kingdom.
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SECTION 3
Description of organisational structure and influence of organisational structure on employee
performance
Organisational structure refers to the guidelines which direct the way of completion of
business operations and attainment of goals Levels of hierarchy, flow of information, regulations
and duties of employees are constructed with the help of organisational structure.
Hierarchical organisational structure
This organisational structure includes several levels of authority which are arranged in a
hierarchical order. The information flows in a downward manner as orders are passed from the
top to the bottom of the hierarchy. The primary advantage of this structure is that it facilitates
quick decision making while the primary disadvantage is that it limits employee engagement.
Flat organisational structure
This organisational structure is characterised by low management level between employee
and top management of the company. The primary advantage of flat organisational structure is
that it promotes employee involvement in decision making process of the company. On the other
hand the main limitation associated with flat organisational structure is that it reduces
progression opportunities for employees which reduces their motivation (Chang and Lin, 2019).
Impact of organisational structure on employee productivity ‘
Organisational structure impacts employee productivity as it dictates the way in which
employees engage with their colleagues and enables horizontal flow of information and seniors.
Organisational structure which promotes collaboration between workers contributes to increased
engagement and knowledge sharing. On the other hand organisational culture which restricts
horizontal flow of information restricts employees from sharing knowledge skills and
experience, results in lack of knowledge sharing and development of rigid organisational
structure. Employees are not able share ideas and opinions are gain provide feedback on
development programs which affects the speed at which they acquire new skills. This affects
overall performance of the company (Farrell, 2020).
Explanation of outward elements affecting enterprises with the help of PESTEL analysis
There are various elements which affect business firms, PESTEL analysis is a useful
framework to identify and analyse such external factors which affect business firms. The
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business firms which is selected to explain elements affecting business firms by application of
PESTEL analysis is the British car manufacturer Aston Martin. This business firms is a globally
successful luxury car brand with brand image of creating premium quality and high speed luxury
car products. The PESTEL analysis of Aston Martin is provided below: Political Elements: The initial element of the PESTEL analysis identifies the influence
of political components affecting the business firms along with opportunities and threats
provided as a result of changes in the political surrounding of the business firm. The
political components considered in this part of the framework include political stability,
level of corruption, infrastructure, involvement off government in corporate activities
and international relations. The disorder surrounding the implementation of Britain
leaving the European Union is the chief political element which affects daily business
operations of the company. In order to deal with the result of this implementation the
company has executed in contingency plan to protect from any loss due to this political
shift (Aston Martin triggers contingency plans for no deal Brexit, 2019), Economical Elements: It is essential for business firms to analyse this element of the
framework as it impacts every aspect of the business firms along with affecting current
and future strategies of the company. Inflation rate, foreign exchange rate, Gross
domestic product, consumer price index, interest rate and producer price index are some
of the economic elements taken into consideration for this part of the framework. The
number of high net worth individuals which are capable of have been increasing in
recent years (London has more dollar millionaires than New York, 2021). This is
beneficial for Aston Martin as it increases the consumer base of the company.
 Social Elements: This section of the PESTEL framework focuses on analysing cultural
changes and impact of changed social behaviour on the business firm. This element
affects business firms as it is directly related with the consumer and changes consumer
decision making behaviour. Age distribution, cultural trends, attitude towards
employment and trends are some of the social elements which affect business firms. The
growth in the used car market is a social factor which affects profitability of Aston
Martin. The shift of consumers towards using rental luxury cars instead of actual
ownership of cars impact the sale of the firm.
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 Technological Elements: This element of the PESTEL analysis focuses on the shift in
technology, introduction of effective technology, development in certain technological
field and consumer adoption of technology. The impact of these elements is analysed in
this portion of the PESTEL framework includes R&D activity, automation, technological
incentives and the rate of technological change. Technological advancement in field of
sustainable vehicles such as electric vehicles and green fuels gives Aston Martin
opportunity to produce sustainable cars.
 Environmental Elements: Thee value of this element in the PESTEL framework has
increased due to increase in climate change awareness in consumers all over the globe.
This affects the consumer purchasing behaviour as most consumers seek sustainable
products or services. Contribution of the company on climate change and impact of
corporate actions from a sustainable viewpoint is provided in this part of the framework.
In content of Aston martin the company has recently launched electric vehicle in order to
cater to sustainable consumer base.
 Legal Elements: The effect of legislative policies on a business firm is recognised in
this part of the PESTEL framework. This includes include discrimination law, consumer
law, antitrust law, employment law, and health and safety law. In context of the British
car manufacturer Aston Martin the chief legal element affecting the company is
compliance with vehicle safety norms in different foreign markets.
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CONCLUSION
From the above report it is concluded that micro, small, medium and large enterprises
have different features. In addition to this sole proprietorship, partnership, limited liability
business, public limited liability and cooperative business firms have different legal structures
and distinguishing features. Hierarchical organisational structure and functional organisational
structure are two different types of organisational structure with various benefits and limitations.
It is important for establishment to select organisational structure after clearly understanding
features, benefits and limitations of each organisational structure External elements which affect
business firms can be determined with the help of PESTEL framework.
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REFRENCES
Books and journals
Adamou, M., Kyriakidou, N. and Connolly, J., 2021. Evolution of public-private partnership: the
UK perspective through a case study approach. International Journal of Organizational
Analysis.
Ajates, R., 2020. An integrated conceptual framework for the study of agricultural cooperatives:
from repolitisation to cooperative sustainability. Journal of Rural Studies, 78, pp.467-
479.
Chang, C .L. H. and Lin, T .C., 2019. The relationship between organisational culture and
knowledge management culture. International Journal of Information Systems and
Change Management, 11(2), pp.128-156.
Farrell, T., 2020. Military adaptation and organisational convergence in war: Insurgents and
international forces in Afghanistan. Journal of Strategic Studies, pp.1-25.
Kelliher, F., Mellett, S. and Harrington, D., 2020. Enablers of green innovation in the micro-firm
—perspectives from Ireland and Canada. Journal of Small Business &
Entrepreneurship, pp.1-20.
Lawrance, S. and Brooks, F., 2018. Unwired Planet v Huawei: the first UK FRAND
determination. Journal of European Competition Law & Practice, 9(3), pp.170-175.
Selviaridis, K., 2020. Effects of public procurement of R&D on the innovation process: evidence
from the UK small business research initiative. Journal of Public Procurement.
Tans, S.J., 2017. Service Provision and Migration: EU and WTO Service Trade Liberalization
and Their Impact on Dutch and UK Immigration Rules. Brill.
Online
Aston Martin triggers contingency plans for no deal Brexit, 2019. [Online] Available through <
https://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/aston-martin-
triggers-contingency-plans-for-no-deal-brexit/67438518.
London has more dollar millionaires than New York, 2021 . [Online] Available through
https://www.theguardian.com/business/2021/feb/24/london-dollar-millionaires-new-
york-covid-crisis-assets-wealth
My Shop: Entrepreneur's fears for her Polish deli empire, 2016. [Online] Available through
https://www.bbc.com/news/business-36677460
My Shop: Kristin Baybars' toy shop in London, 2017. [Online] Available through
https://www.bbc.com/news/av/business-38642319
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