Business Organization Analysis: Marks and Spencer Case Study Report

This report provides an in-depth analysis of various business organization types, including micro, small, medium, and large businesses, as well as different types based on scope such as sole traders, partnerships, limited liability companies, public limited companies, and corporations. The report then delves into organizational structures, comparing hierarchical and flat structures and their impact on business productivity, using Marks and Spencer as an example. Finally, it conducts a macro-environmental analysis of Marks and Spencer using the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors affecting the company's operations and success. The report aims to provide a comprehensive understanding of business structures and environmental influences.

Business in Practices

Contents
INTRODUCTION.......................................................................................................................................3
SECTION 1.................................................................................................................................................3
Various kinds of business organizations on the basis of size...................................................................3
SECTION 2.................................................................................................................................................5
Various types of business organization on the basis of scope..................................................................5
SECTION 3.................................................................................................................................................7
Macro environmental analysis of the company........................................................................................8
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
A business is considered as a legal enterprise which is run by the individual or group of
people. It is engaged mainly in professional, commercial or industrial activity. It is also regarded
as the set of efforts and the organized activities that involves the trading of goods and services.
Every business involves a common motive which is to generate maximum profit. They all work
with the sole aim of maximizing the profitability and serving the society which such offering that
can raise their living standards. It helps in uplifting the economy by providing employment to the
people (Di Pietro, and et. al., 2021). The organization chosen in this report is Marks and Spencer,
a leading retailer that deals in food, clothing and Home decor products. It was founded in 1884.
This report shall cover various types of business organization, based on their scope and size,
Organizational structures and the macro environmental analysis using a framework.
SECTION 1
Various kinds of business organizations on the basis of size.
There are different types of business organization that are established with the sole
motive of earning maximum profit but it is not essential for them to have large number of
employees. There are various organizations which have limited or no employees but their motive
is only to generate maximum profitability. The different types of business organization on the
basis of their size are discussed there under-
 Micro business- This type of organization has no or very few workforce. The range of
employees is between zero to 9. The annual turnover expected for these types of
businesses are less than 2 million pounds.
Characteristics:
 These businesses are very small in terms of number of employees as it involves only 0-9
number of workforce.
 The turnover of these business on annual basis is mainly less than 2,000,000 pounds
(Temirov, 2020)
Example: A repairing shop

 Small business- It includes those business enterprises which have the workforce ranging
between 10 to 49. They are bigger in size than micro businesses and they are expected
turnover on annual basis is also less than 10 Million pounds.
Characteristics:
 There are less than 50 employees in the business and are larger in size than micro
business.
 Their turnover as less than approximately 10,000,000 pounds
Example:
 Medium enterprises- These businesses are bigger than micro and small business entities
but smaller than the large organizations as their number of employees is less than 250 but
more than 50 employees. The annual turnover is mainly less than 50 million pounds.
Characteristics:
 These businesses are smaller than large but bigger than small and micro businesses as
they have 50 to 250 ranged workforce.
 The annual turnover for these enterprises is approximately less than 50 million pounds
(Shaqiri and Ceku, 2019).
Example:
 Large businesses- It includes those entities whose annual turnover is more than 50
million pounds and they comprises of more than 250 numbers of employees.
Characteristics:
 These are the large enterprises whose number of workforces are more than 250 in
number.
 The annual turnover of this enterprise is more than 50,000,000 pounds.
Example: Marks and Spencer

SECTION 2
Various types of business organization on the basis of scope.
The business organizations are also categorized based on their scope. These are narrated
thereunder-
 Sole trader- This type of entity mainly involves a soul owner who is interested with the
task of managing the day to day procedures and operations of the firm. The owner has its
own set of risks and responsibilities have and has the sole decision making power in the
organization. There is a personal liability of the sole proprietor for any of the liability or
debt of the firm.
Characteristics
 The ownership in this business organization is not shared between anyone rather there is
a single owner.
 all the responsibilities, profit and loss belongs to owner and he is personally liable for all
the liability.
 The ownership, liabilities and responsibilities is of a single person (Betta, 2019).
Example: An electrician shop
 Partnership- There is 2 or more persons who mutually decide to open a firm where they
share the responsibilities, decision making power, profit, contribution of capital and
losses. In this, one partner can be held liable for the action of other partner and there is
personal liability of all.
Characteristics:
 The 2 or more persons make up a partnership form.
 Every aspect of the business is shared among all which includes profit, ownership loss
and responsibilities.
 The ratio of the losses and profit is either fixed on the basis of their capital contribution
or as per the clause in the partnership agreement.
Example

 Limited liability business - This type of business entity mainly engages number of
owners that have liability to the limited extent. The owners are liable only to the extent of
their share in the organization. The owners are called the shareholders who make an
investment in the organization by purchasing the shares of the company and are liable
only to that extent.
Characteristics:
 It is a separate legal entity distinct from its owner.
 The owners have limited liability to the extent of their contribution or share in business.
Example:
 Public limited liability companies- This kind of business entity is one which is an
artificial personality, having its own common seal. There is a share capital being raised in
these type of business where public is invited to subscribe to the business’s shares so that
the capital is raised. It is a separate entity different from its owner and the shareholders
are only liable to the extent of their share in the organization and there is no unlimited
liability.
Characteristics:
 The share capital is raised by inviting application from public.
 There is a limited liability of all the shareholders.
 It is a separate legal entity and an artificial personality which means that the company can
sue and be sued by anyone (Konovalova and et. al., 2020).
Example Tesco
 Corporation- The business which is categorised in this are such that is created by the
state or common law or by the royal charter. It is also regarded as a separate legal entity
which is established different from the owners and every member of the corporation has
its own set of liabilities and enjoys its own privileges. The corporations are liable to pay
corporation tax to government.
Characteristics:
 There is a limited liability of the members of the corporation.
 It is an artificial personality and a separate legal entity.

 The corporations are liable to make the payment of the corporation tax and every member
enjoys its own privileges and are liable for its own liabilities.
Example
SECTION 3
Different types of organizational structure and how it affects the business productivity
Organizational structure is a method or a way in which the businesses get engaged in
carrying out its work or activities. It mainly provides the framework which divides, organize and
coordinate the working of the people associated with organization. The main purpose of this is to
make coordination in the activities and control the workforce performance. The different types of
organizational structures are illustrated thereunder
 Hierarchical structure- This type of organizational structures has a chain of command
which begins from the top management and executives and finishes at the lower level of
employees. There is a clear defined authority in this structure where employees know that
whom they are required to report. There are many leaders in this as it is a pyramid shaped
structure and has many levels of control so that the performance of every employee is
monitored. There is a clear path of communication where the roles of employees are
communicated with clarity so that there is no chaos or confusion, while working, thereby
enhancing the efficiency of all employees.
 Flat organizational structure- This is a structure which have no or very few level of
middle management among the executive and the workers. There is a direct
communication from the top management to the frontline workers. There is a distribution
of position and units where the employees know that they are directly being supervised
by each of the manager. There is more responsibility in this organizational structure
because there is direct communication between the top management and the employees
(Kleinknecht and et. al., 2020).
Marks and Spencer follows the flat organizational structure so that there is direct
communication between the top and the lower management. This structure affects the
productivity level of the organization as there is top level management who have the major
decision making power and they communicate the roles and responsibilities direct to the

employees. Due to this direct communication, the efficiency of the employees is enhanced as
they know what is expected by the top level management which helps in enhancing the
productivity off the workforce (Bonacchi, Marra and Zarowin, 2019).
Macro environmental analysis of the company.
There are many external factors which directly affects the functioning and productivity of
the organization so it is very essential for them to analyze the external environment so that they
can make an efficient decision for the growth and success of the firm. PESTLE analysis is a tool
that is used to analyze the macro environmental factors which directly affects the business
(Islam, Al Mamun and Amanullah, 2017). In relation to Marks and Spencer, it is narrated
thereunder
 Political- It includes those factors that are related to political environment of the state.
Marks and Spencer has a global presence as it operates in different countries all around
the world. The post Brexit impact on the business can be that there may be many
restrictions in the free trade that will affect the profitability of Marks and Spencer as is it
operates in the EU regions mainly.
 Economic- It includes factors such as employment rate, inflation rate etc. Any rise in the
inflation rate can affect the working of Marks and Spencer. UK is a biggest economy of
the world so its monetary and fiscal policies must be managed properly so that there is
low rate of inflation being maintained. This will help the organization to maintain the
high quality of products so that it can serve the customer with best offering.
 Social- It includes the socio-cultural factors that can affect the business. Marks and
Spencer deals in clothing which is a very dynamic segment due to changing trends and
demands of customers. The consumer purchases the offering and gets influenced by the
social, personal or cultural changes in the market.
 Technological- It involves adaptation of technological advancement in the organization.
Marks and Spencer uses technology in its business so that it can serve the customers with
enhanced service. The organization has recently announced for the technology
transformation program so that it can deliver the diversified customer experience.
 Legal- It is concerned with compliance of laws and regulations of the state. Marks and
Spencer make sure that it complies with every law in every country. It initiates regular

training sessions for the employees in the area of health so that it can keep it update every
year about current legislations.
 Environmental- It includes those factors that can affect the environment. Marks and
Spencer make sure that it obliges with its social responsibility of protecting the
environment. It launched the green policy in its organization so that it can take an
initiative to provide positive impact on the community and planet (Li and Manthiram,
2019).

CONCLUSION
It is summarized from the above report that there are various types of business enterprises
that are categorized on the basis of their size and scope. The business entities based on size
includes micro, small, large, and medium enterprises and on the basis of scope the businesses
include sole proprietorship, partnership, corporation, company, etc. The businesses follow the
organizational structure so that they can monitor the performance of employees and manage their
day to day activities. It is important for organization to analyze its external environment so that
they can plan such strategies which can help in preventing any damage to it by the external
factors.

REFERENCES
Books and Journals
Betta, M., 2019. Business, organization theory, and the current challenge of
neocharisma. Business and Society Review. 124(2). pp.261-281.
Bonacchi, M., Marra, A. and Zarowin, P., 2019. Organizational structure and earnings quality of
private and public firms. Review of Accounting Studies. 24(3). pp.1066-1113.
Di Pietro, R., and et. al., 2021. Business Entities. In New Dimensions of Information
Warfare (pp. 197-226). Springer, Cham.
Islam, F.R., Al Mamun, K. and Amanullah, M.T.O. eds., 2017. Smart Energy Grid Design for
Island Countries: Challenges and Opportunities. Springer.
Kleinknecht, R., and et. al., 2020. An attention-based view of short-termism: The effects of
organizational structure. European Management Journal. 38(2). pp.244-254.
Konovalova, E.E., and et. al., 2020. Development of Forms of the Hotel Business Organization
in Modern Conditions. Journal of Environmental Management & Tourism. 11(4 (44)),
pp.857-862.
Li, J. and Manthiram, A., 2019. A Comprehensive Analysis of the Interphasial and Structural
Evolution over Long‐Term Cycling of Ultrahigh‐Nickel Cathodes in Lithium‐Ion
Batteries. Advanced Energy Materials. 9(45). p.1902731.
Shaqiri, M. and Ceku, O., 2019. Types of Organization of Business Organizations and Their
Impact on Business Success.
Temirov, S.O., 2020. OPPORTUNITIES TO INCREASE THE EXPORT POTENTIAL OF
SMALL BUSINESS ENTITIES. Theoretical & Applied Science. (8). pp.165-169.