Business in Practice: Analysis of Business Entities and Structures

This report examines various business entities, including micro, small, and large businesses, along with their characteristics and examples, with a focus on the UK market and the multinational company Sainsbury's. It explores different types of companies such as sole proprietorships, partnerships, public limited liability businesses, limited liability partnerships, and cooperatives, detailing their characteristics. The report further discusses various business structures, including functional, divisional, flat, and matrix structures, and assesses their impact on productivity. Finally, it applies PESTLE analysis to evaluate the impact of external factors on businesses, offering a comprehensive overview of business operations and strategic considerations.

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Business in practice

Table of Contents
INTRODUCTION.......................................................................................................................................2
Main Body...................................................................................................................................................3
Section-1.................................................................................................................................................3
Explain different kind of business entities along with characteristics and suitable examples..................3
Section2:..................................................................................................................................................5
Explain different type of companies along with characteristics and example..........................................5
Section-3.................................................................................................................................................7
Discuss various business structures and its impact on productivity.........................................................7
Assess the impact of external factors over business with PESTLE analysis............................................9
CONCLUSION.........................................................................................................................................10
REFRENCES............................................................................................................................................11

INTRODUCTION
There are several business entities that are started with different purpose and goals. These
entities are essential and play a major role in overall growth and development of a country. From
economic perspective; organizations are the major source of revenue as it generates huge
employment opportunities. Companies having different size, scope are operated within country
that significantly contribute in overall economic development (Åberg, Fälting and Forssell,
2016). For current report, Sainsbury has taken into consideration that is multinational company
based on UK. It is the second largest chain of supermarkets which owns several retail stores at
global level. The report includes different types of organizations that are initiated with different
purpose. Micro, small and large organizations are discussed in current report. In addition, several
kinds of companies such as sole proprietorship, partnership along with different kind of
organizational structure are also discussed in following report. Hence, it renders valuable insights
about different kind of companies and their impact on overall economic growth.
Main Body
Section-1
Explain different kind of business entities along with characteristics and suitable examples
Here, various organizations are working within countries that provide employment
opportunities and create a source of revenue for individuals. These companies may differ from
each other in terms of size, scope, purpose and legal structure. There are various companies
having different characteristics are being operated within UK. It is analyzed that Sainsbury is
highly affected with other companies that are given as under:
Micro or Small business:
Small entities are generally owned and controlled by single business owner who is responsible to
operate in an efficient manner. These organizations are functioned at small level with lower
amount of investment (Amara, Halilem and Traoré, 2016). Here, legal structure is centered
around business owner who take all decisions without any interruption of any external party. In
context of Sainsbury, it is a global brand that is not more affected with small companies. For

instance, Giddy Grocery is a grocery store that operates at lower level in UK. Quality products
are provided by entity at reasonable price which may affect current business of organization.
Characteristics:
Here lower investment is done by business owner in machinery, tools and other
equipments and generally operates with the help of local employees.
Number of workforce can vary between 1 to 55 who generally belong from locality and do
not posses higher qualification.
Medium size business-
Organizations that worked at large level and own sufficient number of resources in
comparison of small entities are known as Medium enterprises. It is generally functioned within
country and serve large segment of customers. These organizations are major source of revenue
for several people and provide quality goods and services to consumers. Verdant Leisure is a
medium size entity that is operated within UK market. It is analyzed that medium size entities
affected sales and profitability of Sainsbury by providing as they target huge segment of
customers within country (Franzosa and Tsui, 2020).
Characteristics:
These entities work with nearly 50 to 250 employees that are hired to operate business
effectively.
Medium entities are operated with an aim to earn sufficient profitability for owners to
improve their standard of living.
Large enterprises:
These companies are operated at wide level with higher number of resources. There are
several advance and unique machineries & tools are used by large companies to earn higher
profit margin (Galabov, 2020). In addition, these organizations give significant contribution in
overall GDP and economic growth. Several large entities like TESCO, ASDA are working in
UK. It is monitored that sales and profitability of Sainsbury is highly affected with these firms.

Thus managers are required to make effective strategies to sustain at market place for longer
time duration.
Characteristics:
Here, all the business decisions are taken by board of directors and higher authorities who
are responsible to operate business effectively.
In this, huge amount is invested in resources as business is generally operated at global level
in different countries.
It is analyzed that higher amount of profit and revenue is generated by large companies and
they also significantly contribute in overall economic development.
Section2:
Explain different type of companies along with characteristics and example
The main aim to start a business entity is to earn higher revenue and profit margin. Different
companies may differ in size, scope and purpose. There are different types of business can be
started by individuals that are given as under:
Sole proprietorship:
In this type of organization, business handles and run by an individual. Business owner
take all essential decisions regarding investment, business operations and many more. There is
no interruption of and external party (Hușman and Brezeanu, 2018). Main aim of these
enterprises is to earn potential profit margin for single business owner. For instance, small
entities such as bakery shops, firms are fall under this. Here legal structure is simple as all
decisions are taken by one person.
Characteristics:
These companies are run by an individual with the motive to generate profitability to
improve standard of living.
Business is operated at small level with lower investment as all the investment is done by
single business owner.

Partnership:
In this, two and more person come together to start organization with an aim to generate
higher profit margin (Koklic, Kukar-Kinney and Vegelj, 2017 . In this all the decisions are taken
by mutual agreement of all partners. Partnership firm is operated as per the guidelines of
partnership act 1932. All the persons are entered into partnership with an agreement that defines
profitability ration and other guidelines to operate entity. In context of Sainsbry, it is affected
with these kinds of firms that work within country. For instance, car phone is a firm which was
started by two people with an aim to earn profit.
Characteristics:
In this, whether profit or loss both are divided by partners as per predefined agreement.
Here, all partners involve in business take all decisions to operate business in an efficient
manner.
Public limited liability business:
Here, company gathers money from general public in order to operate business entity. In
this organization invite general public to invest in company. They can gather money from equity,
debts and many more. In addition, managers also need to pay some additional amount such in
terms of dividend and interest in order to borrow funds from public. In case of Sainsbury,
managers need to monitor the impact of these entities on business functions to sustain at market
place for longer run.
Characteristics:
In this, public is invited to invest fund in company through prospects that include all
necessary information regarding company.
This is consider as an appropriate way to gather huge money to undertake various bushiness
functions.

Limited liability partnership:
Here, liability of partners is limited towards the money they have invested in business
entity. Partners are only responsible for the money they have invested (Maalouf, Abi Aad and El
Masri, 2020) . They are not responsible for negligence and misconduct of another partner. Here
decisions are taken with mutual agreement of partners. Shadbolt Partners LLP is a partnership
firm based on UK that was started with an aim to earn higher profit. Here, functions of Sainsbury
are highly affected with number of LLP operating within country.
Characteristics:
Here, the entire people are responsible for their own activity as liability of partners is limited
within firm.
In this, all business partners take decisions with mutual agreement for the success and
growth of overall company.
Cooperative:
These entities are operated with an aim to serve society in an efficient manner. Main aim of
these companies is to create huge social impact. In this, people who wish to serve the nation
come together for overall societal development and upliftment. Such as Central England
Cooperative society is a firm that has been started with an aim to create huge social impact. In
case of Sainsbury, it is affected with cooperative company who are providing quality products
and services to customers within country.
Characteristics:
These companies are operated with an aim to create huge social impact.
In this, several people come and work together for overall societal development and
uplifment.

Section-3
Discuss various business structures and its impact on productivity
Organizational structure describes the arrangements of various positions within entity. It
helps to define responsibilities, duties and role of person that are working in company. It also
helps to gain desired goals and minimize disputes arises within entity (Molinos-Senante,
Maziotis and Sala-Garrido, 2017). There are different types of organizational structure that can
be adopted by a company in order to perform various assigned task in an efficient manner. In
context of Sainsbury various structure are mentioned below:
Functional structure- There are several operations such as finance, marketing, research
are performed in an organization to attain desired objectives. In this, different personnel’s are
appointed for different departments so that to perform business functions efficiently. Here
employees get an option to associate with a particular division that minimizes conflicts and
disputes ambiguity at work place. In context of Sainsbury, it can undertake functional structure
to enhance outcome of employees.
Divisional structure- Company divides different operations into a division (Salindal,
2019). These divisions can be formulated on various basics such as geographies and products
offered by organization. Necessary resources such as IT, finance, and marketing are provided to
each and every department so that they can work without any disruption. In context of Sainsbury,
it is operating in different countries so entity can use this structure in order to maintain proper
coordination at work place.
Flat structure- It is a structure that is used by small entities and start-ups in order to
operate effectively (Reino, Rõigas and Müürsepp, 2020). There is no hierarchy follows within
company as workforce can directly contact with managers regarding their issues. With this, it is
easy to convey necessary information from one person to another in company. So, companies use
this structure to enhance in overall effectiveness of entity. It is not suitable in case of Sainsbury
as entity is working at large level where flat structure cannot be applied.
Matrix structure- It is a flexible organizational structure in which work force have an option
to move from department to another. Employees get an opportunity to learn more skills and
knowledge as they get the exposure of different divisions. With this, project can be completed

effectively as supervisor can select best suitable candidate to undertake it. Sainsbury may adopt
this structure for overall development of staff members within company. It is consider as a better
way to improve in efficiency of work force.
Assess the impact of external factors over business with PESTLE analysis
In context of Sainsbury, there are several external elements which affect business
performance is mentioned as under:
Political: In this, policies, government rules and regulations are included. It comprises
several factors such as political stability, instability and many more. In reference of Sainsbury, it
is highly affected with current modifications and change made by current government of
different countries.
Economical: Under this, several elements such as inflation, interest rate, employment
opportunities are included. In case of Sainsbury, it is creating huge employment opportunities at
a global level. In addition, Brexit also influence the operations of entity as it creates several
uncertainties in country.
Social: Here, several factors such as buying habits, personality, status and attitude are
included in this element. These factors put a great influence on overall sales and profitability of
entity. Mangers of Sainsbury prepare ample of strategies in order to provide quality goods to
customers at reasonable price.
Technological: As per the current trend, to survive at market place for a longer period of
time, it is crucial to undertake unique and innovative approach. These techniques provide
competitive edge to company. Sainsbury uses several new and evolve technologies such as
automation, digital marketing in order to sustain at market place for loner run (Salindal, 2019).
Legal: It comprises several legislations, compliances, rules and regulations that are made by
higher authorities to run and operate business effectively. In case of Sainsbury, it undertakes
several laws such as business, consumer protection and other law to minimize disputes and
operate effectively.
Environmental: Nowadays, it is crucial for each and every entity to protect environment.
For this, they need to take necessary measures to minimize the negative impact of organizational

activities over environment. Mangers of Sainsbury use several techniques such as waste
management, recycle and more to protect and safeguard environment.
CONCLUSION
Business entities play a major role in overall growth and development of a country. These
organizations provide significant contribution in overall economic development by maximizing
employment opportunities and revenue of individuals. There are different kind of companies are
initiated by individuals with different aim and purpose. Further, various organizational structure
are undertaken to convey necessary message within company. Here Pestle framework is essential
to motor the impact of external environment upon business setting.

REFRENCES
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