A Comprehensive Report on Business Organizations: Types and Structures

This report provides a comprehensive overview of different types of business organizations, examining their characteristics, structures, and legal aspects. It begins by classifying businesses based on size, including micro, small, medium, and large enterprises, and details the key differences among them. The report then delves into various legal structures such as sole proprietorships, partnerships, limited liability companies, and public limited companies, outlining their features and implications. Furthermore, it explores different organizational structures like line, functional, divisional, matrix, network, and project structures, discussing their usefulness in enhancing productivity. The report also analyzes the impact of external factors on business environments, utilizing the PEST framework to examine political, economic, social, legal, and environmental influences. The analysis includes examples like Tesco, illustrating how these factors directly and indirectly affect business operations and profitability, providing valuable insights for understanding the dynamics of the business world.

TYPES OF COMPANIES

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
Explanation of various types of business organisations on the basis of size ..............................1
Difference between organizations. ..............................................................................................2
TASK 2............................................................................................................................................3
Explanation of different types of organizations on the basis of their legal structure .................3
TASK 3............................................................................................................................................4
Explanation of various types of organization structure and their usefulness in productivity......4
CONCLUSION ..............................................................................................................................6
REFERENECES..............................................................................................................................8

INTRODUCTION
Business is systematic way through which individual able to provide their product &
service to relevant customer. For this they need to start up with administrating in organization.
This report is preparing to define how micro, small. Medium and large corporation is used to
start as business. And characteristic of sole trader, partnership and corporations in effective way.
It also consider that organization have various option to select best relationship structure which
help in work in effective and efficient way. This also define technique used by managers for
analysing effect of external factors.
TASK 1
Explanation of various types of business organisations on the basis of size
Business organizations is the medium through which individuals sell their product an
serve in market to fulfil demand of customers as well as earn money to run their life. Following
are the types of organization
Micro business: Thus type of enterprise includes those entities which have less then 10
employee work within the organization and their annual sales turnover is less then or equal to 2
million. Merce 's beauty is situated in Lutton, it is micro size beauty salon which provides best
kind of beauty care product and service facilities to their client.
Small businesses : It considered those organization which has annual turnover is 10 million and
employees engaged not ore then 50 (Storey, 2017). CAFEPOD Coffee Company is started by
Peter Grainger and Brent Hadfield. It is famous in local market of UK. George Achilleos is start
Achilleos
Medium size : Organization in which more then 50 but maximum 250 employees work in
organization and have 50 million turnover in specific year. It is consider as medium size
organizations. Capitfy is founded by Adam Ludwin and Domini Joseph it is IT company which
offers data and media intelligence serves to their relevant clients.
Large size: It includes those corporations which have range of annual turnover is more then 250
million and where more then 250 employees work . TESCO is one of the most famous largest
organization of UK. It offers merchandise and grocery products to their customers by running

supermarkets in IN UK AS well as other forcing countries. Its market spread from Thailand to
turkey, and also in mid Asian countries,now TESCO also enter in us market.
Difference between organizations.
Particular Micro Small Medium Large
Definition Business entities
which have
capacity to
generate only 2
million turnover
is.
Theses includes
entities which
have annual
turnover of 50
million.
Organization
which have
capacity to
generate more
then 50 million
annual sales
turnover.
Business entities
which have the
capacity to gear
more the 250
million of gross
sales by running
its business
activities.
Number of
employees
In this type of
organization less
them 10 workers
are engaged in
trading process
(Campbell, and
Kubickova,
2020).
Number of
employees work
in small
organization is
50.
Limit of working
in medium size
organization is
250.
There was no
restriction
regarding
maximum
number of
workers but they
are not less then
250 .
Management Owner mostly
sole proprietor
has been right
take decision
In this decision
also taken by
owners
Decision is taker
by CEO, director
and key manager.
Board meeting
help and decision
is taken by
distribution
method.
Legal procedure Easy Easy Moderate Hard
Plan process Probably for short
time period
Plans are made
for short period of
Business plan is
generate for
In large
organization

time shortage well as
long tie period..
plans are made
for probably long
time period.
Level of
competition
Comparatively
low
Comparatively
low
Level of
competition is
high
High
Entry and exist
barriers
It is easy to entry
and exit in micro
business.
Easy process of
entering and
existence from
market.
Typical procedure
because
organization need
to fulling legal
obligation.
It take time to
entry and exist as
large organization
due to heavy legal
rules (Gomes,
Cadete, and da
Silva, 2017). and
obligations.
TASK 2
Explanation of different types of organizations on the basis of their legal structure
Organizations is dividing according to their size, liability, and legal structure. Individuals
need to decide in which type of organization they want to start on the basis of legal
norms .Following are the types describe below
Sole proprietorship: Business which take over and mange by one person is known as sole
proprietorship . In this type of business their will be only one person who has the liability of
paying all debt as well as take al the part of revenue generate by business translations.
George Achilleos is start Achilleos Energy Assessors. The organization provides professional
advice and service and also grant energy performance certificate to their client.
Characteristics
 Business decision taken by one person.
 All the profits is took by one person.
 Sole proprietor is have unlimited liability of paying loss if inured.

 Low capital requirement.
Partnership: When 2 or more then 2 people come together to share their assets for run particular
business is known as partner business. Red Bull and Go Pro start partnership business as Red
Bull provides during and Go Pro is delivers careers and gloss thus both organization comes
together to generate more profit by providing their combo product for sports players (Fuschi,
and Tvaronavičienė, 2016).
 In this loss as well as liability is shares by each partner. Exception of minor.
 Better decision taken by using skills of every partner.
 Easy process of starting up partnership.
Limited liability: This is modern concept of business developed in recent year. In this liability
of member is limited to the value of share they contributes in business capital. Oxfam is limited
liability organization. It is non profitable company which work for alleviation of problem of
poverty.
 It can be taxed as partnership.
 They enjoy right of limited liability.
Private limited: Organization in which part of share capital is taken by individual or private
institutions is considered as privet limited. Arcadia group is best example of private limited it
produce and manufacture clothes at global market.
 It is essential to use private company after name of organization.
 Easy legal procedure.
 Restriction to allot share to public (Upadhyaya, 2017).
Public limited : It is define as separate legal entity in which more then 50 % of shares is taken
by government or public. TESCO is public limited organization in which more then 50 % of
shares is held by public.
 Separate legal entity and have right to take subscription from public.
 Strong goodwill.
 Shares can be transferable .
 They have perpetual succession and limited liability.

TASK 3
Explanation of various types of organization structure and their usefulness in productivity
It is required by every organization whether it is small , or medium organization and have
partnership or corporation as business to build strong organization structure which define all the
right and liability according to each level of hierarchy.
Following are the types of organization structured
Line structure: It is the type of structure in which a chain of command is used to go the flow of
power and responsibility. This is most common type of hierarchy used by business corporations.
It is type of autocrat structure and which each one is liable and responsible for their work.
Functional structure: In this type of structure individual are group together which share same
knowledge and belong with same field. It help in development of skills and minimize cost of
business operation by work in systematic direction.
Division structure: When personal is divided on the basis of division they belong is know as
division structure. This type of structure is suitable probably for entities which have large market
area.
Matrix structure: It is known as flexible structure because in this personal on the basis of need ,
can change their position of hierarchy to fulfil need of other department (Valvano, and
et.al.2017).
Network structure: Multinational corporation , use this structure it will help them to manage
and gives power as well as responsibility among local and their global business also. This help in
maintain strong relation among every team. In this power decentralized among each department.
Manager flexibility communicate their direction. Network structure clearly define chain of
command and also mention outline of workflow
Project structure: In this centralized decision making system is use. Manager is focus on one
particular project and on the basis of that overall power and responsibility delegated within the
structure.
Tesco is multinational company and to build successful understanding among every department
of local and global regional , their manager is used network organization structure.
Effect of external factors on business environment
External factors directly as well as indirectly influence profitability rate of business. To

understand effect of theses , PEST has been used by management department of TESCO
 Political factor:- These factors involves trade control, government stability/ instability,
government rules and regulation, tax rates. Political factors includes the decisions and
law that government take and its affects the business directly or indirectly. With
headquarter in UK, TESCO set off its firms across various countries. As one of the best
retailers in the world, the company follows various regulations related to compliance, tax
for safety of its products. Political instability affects its business operations and decisions
taken by top management. As the big company and operates more branches, it is typical
to change its policies frequently. The changes in tax policies in different countries will
affect the firms profitability.
 Economic factor:- These factors includes demand for goods, wages, prices, interest rates
consumer wants. It is the set of fundamental information that affects an organisation
directly or its investment decisions. Customers plays key role in any business, changing
in consumers demand or instability will affects the firm's operation. Changes in tax
policies will directly affects its pricing strategy, TESCO must keep in mind that changes
in price of the product will influence the sale. Because increase in price can be a reason
for the deduction of sale (de Andres, A., MacGillivray, Roberts, Guanche and Jeffrey,
2017).
 Social factor:- Social factors influenced by customers lifestyle or standards. It includes,
cultural diversity, preference, taste, religion value, standard etc. apart from this, buying
habits, education level, wealth, family size also affects an organisation. Due to fast pace
of life, customers prefer buying things according to running trends or bulk buying,.
TESCO has planned out to facilitate products according to needs of the customers. With
the attitude of consumers shifting towards organic products, TESCO has managed to
change its culture by shifting towards organic products , it promotes organic products to
fulfil uses needs.
 Legal factor:- These factors affecting a business by regulations and law determinants
that can negatively or positively affects decisions of management of company. If a
business is seeking to obtain financing through investors, it may be creates an issue such
as security law. Changes in legal factors will affects the company, it needs to follow both
national and international market laws.

 Environment Factor: This consider all the elements which is related with natural
environment. It is relevant for every business organization to use those material and
products which not hazardous and dangerous for environment. To control misuse of
natural resource, act has been established. TESCO formulated their strategies which help
in reduce the use of plastic and hazardous chemicals as well as they also contribute
towards environment . Management department of TESCO is also engaged with
awareness program of protection of environment.
CONCLUSION
From the above analysis it has been defined that before entering into market individual on
the basis of availability of resources they take decision in which type of organization they deal
with to start their business. Micro, small, medium and large organization personal engaged in.
There are different legal norm and process need to fulfilling while conducting business as
sole,trader, partnership ans established business as corporation whether it was privet, public or
limited liability. Individual on the Success of every organization depend how effective their flow
of work is go through, for this purpose to communicate with each other, structure is developed ,
which help in delegating power and responsibility. With the help of PEST manager can
understand effect of political, social, and legal factors on corporation.

REFERENECES
Books and Journals
Storey, D., 2017. Six steps to heaven: Evaluating the impact of public policies to support small
businesses in developed economies. The Blackwell handbook of entrepreneurship,
pp.176-193.
Campbell, J. M. and Kubickova, M., 2020. Agritourism microbusinesses within a developing
country economy: A resource-based view. Journal of Destination Marketing &
Management, 17 p.100460.
Gomes, P., Cadete, G. and da Silva, M. M., 2017, July. Using enterprise architecture to assist
business continuity planning in large public organizations. In 2017 IEEE 19th
Conference on Business Informatics (CBI) (Vol. 1, pp. 70-78). IEEE.
Fuschi, D. L. and Tvaronavičienė, M., 2016. A network based business partnership model for
SMEs management. Entrepreneurship and sustainability issues, 3(3) pp.282-289.
Upadhyaya, A. S., 2017. To study the relative importance and cruciality of emotional
intelligence for the success of organization, an empirical study of ABC Company
private limited. International Journal of Management Research and Reviews, 7(4)
p.450.
Valvano, G., Martini, N., Huber, A., Santelli, C., Binter, C., Chiappino, D., Landini, L. and
Kozerke, S., 2017. Accelerating 4 D flow MRI by exploiting low‐rank matrix structure
and hadamard sparsity. Magnetic resonance in medicine, 78(4) pp.1330-1341.
de Andres, A., MacGillivray, A., Roberts, O., Guanche, R. and Jeffrey, H., 2017. Beyond LCOE:
A study of ocean energy technology development and deployment
attractiveness. Sustainable Energy Technologies and Assessments, 19 pp.1-16.