Analysis of Business Practices: Company Types and External Factors

This report delves into the realm of business practices, encompassing diverse company types from micro to large organizations, and exploring various business structures including sole traders, partnerships, limited liability businesses, public limited companies, and cooperatives. The report examines the influence of external factors on business performance, with a specific focus on a PESTLE analysis conducted on Tesco. The analysis considers political, economic, social, technological, environmental, and legal factors and their impact on the business. The report uses examples of companies like Issoriais, Fourex UK, Sykes Holidays Cottage, and Tesco to illustrate the concepts. The objective of the report is to provide a comprehensive overview of business operations and how different elements of the business environment impact the performance of a business.

Business Practices

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Contents
Business Practices............................................................................................................................1
INTRODUCTION...........................................................................................................................1
Section 1...........................................................................................................................................1
Different types of companies and how they work:.................................................................1
Section 2...........................................................................................................................................2
Different companies from sole traders to cooperatives and Limited Liability Partnerships.. 2
Section3............................................................................................................................................4
Different business structures and external factors affecting business....................................4
How different external factors affect the performance of a business – PESTLE Analysis....5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business practices helps organization to done business activities in cost effective way.
Company have rules and regulation for business practices to ensure that their employees
complete their work in efficient manner and allow them to work according to the applicable
laws. Companies also see business ethics in their work format so that they can have high level of
business satisfaction. This report includes different types of organization such as micro, small,
medium, and large organization. it also includes different companies from sole tread business,
partnership, limited liability business and public limited business. Further, its explain the impacts
of macro environment on performance of business. This report also includes the impact of
different external environment factors on the performance of business. In this report Issoriais
selected as a micro organization. Fourex UK ( Stylianou, K., 2020.) is selected as a small
organization in this report. A Sykes Holidays cottage is chosen as medium organization and
Tesco is selected as large organization.
Section 1
Different types of companies and how they work:
Micro business:
This organization has fewer turnovers of employees and an annual turnover of less than $2
millions. These organizations have less turnover of revenue and profitability, the main motive of
this organization is stay in the market and have stable growth. They don’t work to gain
maximum profit instead they want introduce their firm in the industry. In this report Issoriais is
selected as a micro firm, the main objective of this firm to gain the customer loyalty and increase
the revenues of the firm. Thus, micro firms have main motive to increase their business shares
and introduce firm in the market. This firm helps market to increase the level of resources and
product. Micro environment works in small business market that has small amount of employee
turnover (Al Breiki, M. and Nobanee, H., 2019)
Small business: This defined the private owned corporation that operates by the small amount of
investment in their firms. This organization works independently with the limited size of revenue
depending on the industry. This business work for the profit and gain of costumer base in the
market. There are many small firms in the market that have positive impact on the business of
larger firms. Fourex UK is chosen as the small firm in this report, company works with the
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limited amount of employees and revenue. They manage their working in all the sectors of the
market that help organization. This organization helps the market to increase the growth of the
revenues services and goods for the company.
Medium size business:
This organization works and managed by the individuals that are willing to gain the profit in the
market. These businesses are normally established and well stable position in the market. They
deal with the purpose of long term finance and gain maximum shares. In this report Sykes
Holidays cottage is chosen as medium organization. This organization work for the
maximization of the profit and productivity of the firm. Thus, this medium organization works
with the maximum level of profit and provides product and services to the organization (Ayuba,
B. and Aliyu, I.A., 2018)
Large size business
These organizations refer to the businesses that run on the large scale. This organization
has high level of investment and revenue in their firm. They have large amount of employees
that work for the growth of the organization. Large organizations offer best quality of goods and
services to the customers that work for the better experience. In this report Tesco organization is
selected as a large organization. Tesco is second largest organization of the world that operates
with the largest level of revenues in their firm. Organization works in world wild and has the
maximum profit rate in retail business.
Section 2
Different companies from sole traders to cooperatives and Limited Liability Partnerships.
Sole trader business: It is an easiest and simplest form of business setup and its relatively
inexpensive compared to the other business. As a sole tread individual is highly responsible for
the all business activities that is performed in the market. The entire decision making is done by
the owner of business and also the management of employees for the organization. This firms
have low level of risk in their business that help organization to work by their own. Any loses
occurs in this organization have impact on the income of others. These companies could handle
the loss effectively because of the lower investment. Thus, sole trade business are the small firms
that work for the profit maximization (Chakraborti, C. and Mishra, D., 2018).
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Partnership: These firms have two or more partners in their firm that work for the same goal
and objective of their organization. A partnership firm does not have separate identity but these
firms are known as partnership firms because of the numbers of partners in the firm. They share
equal profit and loss in the organization and have equal share of the firms. All the partners of the
firm have equal rights in the decision making process of the firm. Thus, partnerships firms do not
have their individual identity but the partners of the firm make the contract of partnership in the
same organization. Partnership firms are beneficial for the growth and also these firms have less
risk compare to the other organizations(Ivančić, L., Vukšić, V.B. and Spremić, M., 2019)
Limited liability business: These firms are the business structure in UK where the owners is not
liable for the all dept and liabilities. These firms have similar characteristics of those partnership
and sole partnership. This organization has the impact on the entire organizations that have
impact on the other firms. The primary reason business owner selects limited liability business to
have less liability. Limited liability Company may not be the suitable option for the owners that
want to become public trended company and want to expand its business in the market. Thus,
Limited Liability Company has both pros and cones for the owner.
Public limited liability business: A public limited company is a voluntary association with the
incorporation and there has existence and has member of members are limited. Public limited
companies are listed in the stock exchange where its market shares are trended. The company has
separate legal existence apart from the member who runs these organizations. It’s all the
activates are ruled and regulated by the government. These companies have minimum 7 number
of members but there is no limit for maximum numbers. The share of company is easy to transfer
to the other owners. The liability of member of organization is limited and can be tranfers to the
other people of the organization(Kretovics, M.A. and Eckert, E., 2019)
Cooperative: A cooperative is private organization that is owned and controlled by the people
who use its service, product and suppliers. Cooperative organizations have many types and size
of the firms. And the membership of these firms are important to collect the revenue and profits.
These firms are formed to meet specific objectives of the members of organization. That could
be profit sharing or maximising the shares of the company. people in these organization is
working for the mutual benefits in the company that can be gain by the cooperative organization.
Thus corporative organization are work for the achievement of specific goal of the members.
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Section3
Different business structures and external factors affecting business
There are various macro environmental factors that have an impact on the decision
making process of the organization that could affect the business of particular organization. This
factors are the external factors of organization that influence the productivity of organization in
both positive and negative way. The threats and opportunities are examine for the large
organization Tesco, that could help the company to increase its market shares and analyse the
future threats for the firm. Below is PESTEL analysis of Tesco, to examine the external factors
of the company.
Political factors: Political factors refers to the all the rules and regulation of government in the
operation of the activities of the organization. In the context of Tesco, company has strange
presence in the market and the stable political environment is profitable for the organization.
There are various rules and regulation of the government of UK on the retail companies, that
could have an impact on the performance of the Tesco. But the rate of loyal customer base for
the organization if high and company can deal with these challenges.
Economical factors: Economical factors involve all the financial activates of the external
environment. Economical factors does not have any impact on the performance of the firm
because of the high level of investment of the firm and strange brand image in the market. These
factors involve the trade policies of the government and taxation polices. Thus economical
factors do not have any impact on the business of the organization and it could help the
organization to have stable growth in the market.
Social factors: Social factors of the country includes culture and beliefs of the population of the
UK. In UK people have different culture and beliefs and it could impact the business of Tesco
organization. Thus, to deal with these changes of culture, Tesco is having the all the product and
services according to the needs and wants of their customers and can gain customer loyalty for
its business.
Technological factors: These factors includes all the treads and innovation in the market that
have an impact on the business of organization. This trends can impact the business of the
business of Tesco. There are several technology advancement in the market of retail that could
be a threats for the business of respective organization. Thus to deal with this threats company
can develop different kind of innovation in their business.
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Environmental factors: Environmental factors to the rules and regulation of government on the
business entities to protect the environment of the country. There are several rules in UK for the
retail industries and this could be a threat for the Tesco organization. To deal with these threats
company is using recyclable martial in their business. They can use the raw material which can
convent into raw resource that can have positive impact on the environment. Thus, to deal with
these threats company can analyse the resource and material of their firm which cannot have
negative impact on the environment.
Legal factors: there are several rules and regulation of governmental policies that have an impact
on the performance of the firms. The policies of the government can impact the business of
Tesco organization that could leads to be a threat for the firms. Tesco is following all the rules
and regulation of the government and this could help the organization to have stable growth in
the market of UK. Thus, the legal factors of the UK does not have negative impact on the
business of respective organization.
How different external factors affect the performance of a business – PESTLE Analysis
Different factors of the PESTEL analysis help organization to analyse the opportunity
and threats for the company. they have both positive and negative impact on the performance of
the business. There are various opportunity for the TESCO organization in the UK that can help
the organization to improve the effectiveness of their firm. Analysis of various factors helps
organization to analyse the future threats form the all external environment. Thus, all the external
factors have impact on the performance of the organization.
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CONCLUSION
From the above information it can be conclude that the business analysis helps organization to
have stable growth in the market. There are different organization such as micro, small, medium
and large. All the organization have different working system and investment. There also
different types of business that have different impact on the market. In the last PESTEL analysis
helps organization in the analysis of opportunity and threats from the external environment.
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REFERENCES
Books and Journals
. Stylianou, K., 2020. Can Common Business Practices Ever Be Anticompetitive? Redefining
Monopolization. American Business Law Journal, 57(1), pp.169-221
Al Breiki, M. and Nobanee, H., 2019. The role of financial management in promoting
sustainable business practices and development. Available at SSRN 3472404.
Ayuba, B. and Aliyu, I.A., 2018. Unethical Business Practices in Nigeria: Causes, Consequences
and Control. International Review of Business Research Papers, 14(2), pp.1-23.
Chakraborti, C. and Mishra, D., 2018. Responsible business practices and some Indian
SMEs. Asian Journal of Business Ethics, 7(2), pp.177-203.
Ivančić, L., Vukšić, V.B. and Spremić, M., 2019. Mastering the digital transformation process:
Business practices and lessons learned. Technology Innovation Management Review, 9(2),
pp.36-50.
Kretovics, M.A. and Eckert, E., 2019. Business practices in higher education: A guide for today's
administrators. Routledge.
Leipold, S. and Petit-Boix, A., 2018. The circular economy and the bio-based sector-Perspectives
of European and German stakeholders. Journal of cleaner production, 201, pp.1125-1137.
Leipold, S. and Petit-Boix, A., 2018. The circular economy and the bio-based sector-Perspectives
of European and German stakeholders. Journal of cleaner production, 201, pp.1125-1137..
Locke, R.M. and Samel, H., 2018. Beyond the workplace:“Upstream” business practices and
labor standards in the global electronics industry. Studies in Comparative International
Development, 53(1), pp.1-24
Pepis, S. and de Jong, P., 2019. Effects of Shariah-compliant business practices on long-term
financial performance. Pacific-Basin Finance Journal, 53, pp.254-267.
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