BSc Business Management: BMP3002 Report on Company Structures

This report examines various types of companies, ranging from micro-businesses to large corporations, detailing their characteristics and structures. It explores sole trader businesses, partnerships, limited liability companies, and cooperatives, providing examples for each. The report also delves into different organizational structures, such as functional and divisional structures, and their impact on business productivity. Furthermore, it utilizes PESTLE analysis to evaluate external factors, including political, economic, social, technological, legal, and environmental factors, and their influence on the performance of a global consumer products firm, Unilever. The report aims to provide a comprehensive understanding of company types, structures, and the external environment affecting business operations.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
0

Contents
Introduction...............................................................................................................................1
Section 1: Different types of companies and how they work............................................2
Section 2: Different companies from sole traders to cooperatives and Limited Liability
Partnerships.............................................................................................................................4
Section 3: Different business structures and external factors affecting business.........6
Conclusion................................................................................................................................9
Reference List..........................................................................................................................9
1

Introduction
The aim of this report to examine the several forms of organizations based on
their size as well as their legal structure. It has Also highlighted are the various
organizational structures, as well as the evaluation of the external element in the
effectiveness of the business of Unilever, a global consumer products firm based in
the United Kingdom. There are different types of corporate enterprises, and the
organization is one of the most popular. It is founded in keeping with the legislative
procedures. A corporation is primarily a corporate association that relates to a
human connection and is formed to engage in commercial operations, with formal
and regulatory status, continuous progress and a distinguishing mark. The
corporation has an independent constitutional vision in the business, that indicates
that a business and its operator are distinct, which implies that a business may form
contracts on it's own may be accused in its own identity. Furthermore, every nation
has had its own standing position of the organization and corporate structure, with
certain resemblance.
Section 1: Different types of companies and how they work
Micro business:
Micro company is very small in size and that is a type of commercial
corporation that operates on a small level and scale Moreover, that size is mostly
determined by the organization volume of representatives the firm's value, and the
finance required to start their business in the first place (Hasenpusch and Baumann,
2017). It has been determined that a small enterprise can only recruit up to 10
people. However, size and scope are significant differences between a micro firm
and a private enterprise This has been determined that a micro firm typically works
as a single most important proprietorship entity and earns less than & 260,000 per
year. Small street food shop, freelancer, home based business and many more are
included in this type of businesses.
Characteristics
 Companies occupy a small market range since firms operate in limited sites.
 The corporation has a limited scope and lesser sales and earnings
2

 Because micro businesses are often run by a single person, they have a solo
proprietor company structure.
 Micro enterprises have a shorter gestation timeframe which would be the
duration and after that the return on capital commences (Dutta and Banerjee,
2018).
Example: Issoria, The Willoughby Book Club
Small business:
This type of organization is a small company that is small in size and is
generally formed by a solo founder with a little and limited amount of funding labor
and a small number of employees. These firms produce small commodities (Zhao,
Davis and Copeland, 2018). These companies have a turnover of £10 million and less
than 50 workers. Small enterprises include catering enterprises cleaning services
and many more.
Characteristics
 The key characteristic of a small business is that it is generally owned by a
single person, thus the organization is directed and controlled by the creator.
 Other characteristic of small business businesses is that, due in part to their
small size, businesses will be flexible and adapting to change
 The objective of a small business is to stay in business while making as little
money as possible.
Example: Fourex, Marshfield Bakery
Medium size business:
A medium-sized firm is a type of firm that is medium in structure. Medium-
sized firms make significant contributions to economic growth. These companies
earn £50 million and engage less than 250 people (Feder and Niţu-Antonie, 2017).
Manufacturing companies, transportation services, wholesalers, and so on are
examples of medium-sized organizations.
Characteristics
 The primary characteristics of a medium-sized organization are that it had few
capitals.
3

 These businesses is usually established with the target of accomplishing
buyers while attempting to make the lowest possible lot of earnings
 A medium-sized business's administrative is commonly unstructured and also
the owner effectively oversees all business activities.
Example: Giacom, Pharmacy2U
Large size business:
The large company employs more than 250 employees. This form of
organizational units are established with the goal of maximizing income and
remaining in the business for an extended period of time, and these organizations
place a strong stress on meeting the needs of their customers in providing a better
buyer journey (Tracey, Dalpiaz and Phillips, 2018).
Characteristics
 Large corporate firms employ a greater number of people and have a much
more complex organizational structure than medium-sized organizations.
 Furthermore, the aspect of this type of business entity is that firms are
constantly attempting to meet their customers' needs and expectations while
also boosting their income.
Example: Unilever
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships
Sole trader business:
Sole trader's business organizations are those firms which are run and
directed by a single person. A company entrepreneur is someone who works for
himself and runs his own company. In addition, the individual is exclusively
responsible both for enterprise’s revenue and failure.
Characteristics
4

 The fundamental basic qualities of a sole trader are that it is controlled and
run with just one individual that faces all threats and gets all monetary
advantages.
 Additional feature of a sole trader firm is there was no restriction to
responsibility since there is just one legal owner (Nicotra and et. al., 2018).
Example: Couriers, taxi drivers
Partnership:
In a partnership business, two or more people opt to cooperate together and
run the firm as partnerships with sharing all responsibilities. The income is spread
evenly among both industry partners, and the concerns are spread as well.
Characteristics
 In a partnership, decision-making and direction of firm procedures are
distributed evenly amongst these parties.
 Furthermore, the wealth is allocated fairly among all of these entities and the
many uncertainties, resulting in a rise in the overall performance of the firm.
Example: NotOnTheHighStreet.com
Limited liability business:
Entities under limited liability are primarily accountable for their corporation's
liabilities limited to the value of their stakes in the business (Rao and Mulloth, 2017). It
means that if the company declares bankruptcy and eventually enters into a formal
liquidation operation such as from a Creditors' Voluntary Liquidation (CVL), the
management and stakeholders may loss their previous capital in the company
Characteristics
 These are a limited company separate from their participants, with the
additional advantages of limiting their individuals' responsibility.
 Companies are subject to taxation as if these formed a collaboration, with the
further value of the organizational flexibility of a working relationship.
Example: Virgin Atlantic
5

Public limited liability business:
A public limited corporation is a voluntarily association of individuals that is
formed and so has its own lawful identity with restricted liability for its members
(Wieczorek and et. al., 2018). The stocks of public limited firms are openly exchanged
on the stock exchange.
Characteristics
 The shareholders of public limited corporation can openly and speedily
transfer their shares to the general public.
 Another element of this form of business structure is that the liability of the
owners and the business's executives is constrained.
Example: British Petroleum Company Limited, British American Tobacco
Cooperative:
These are non-profit organizations made up of volunteers which seek to
improve individual’s lives It is defined as an organization that is run and managed by
the individual who consumes the company's goods and services and gains from
what it provides properly.
Characteristics
 The major significant features of this sort of company are that this is
maintained and managed by a specified operating body and that actions are
taken by this council.
 The cooperative's participants' liability is limited.
Example: London Capital Credit Union
Section 3: Different business structures and external factors
affecting business
3.1 Identification of different organizational structures and their
affect on business productivity
Functional structure
6

In the functional structure identical activities are merged, such that, operations
connected to a definite job are grouped together as a separate unit (Jafari-Sadeghi,
2020). Every one of those independent units has its own list of functions and
objectives to meet. A functional leader known as the division manager controls every
unit in a functional organizational hierarchy. The manager will be an expertise in their
field or would be held accountable for the performance of the unit. Moreover, the
functional leaders report directly to the institution's main officer
Divisional structure
Divisional structure is a type of organizational structure that organizes various
activities centered on product sections and geographically segments. Moreover,
each institution's function has its distinct range of critical commodities and activities
including the manufacturing, branding, ordering, human resources and many more.
This organizational structure's divisions are managed by the main director who will
be in responsibility of regular business. They are liable to the firm's higher
management for the unit's achievement.
Organizational structure has an impact on corporate productivity
The firm's organizational structure ensures that all essential duties are
assigned to the important authorities thus boosting the business's overall
performance and income. It also enables a constant process of engagement across
parts. It also helps business organizations improve operational productivity by
appropriately separating manpower and duties.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
PESTLE analysis is used by businesses to evaluate the several external
variables existing in the environment and how they have a huge influence on the
corporation's performance. In context to Unilever, PESTLE analysis is mentioned
below:
Political factors: Unilever offers a diverse product range, with the firm
focusing on the areas such as Beauty & Personal Care, Food & Refreshment and
many more. The majority of its sales come from Fast Moving Consumer Goods
7

(Hariram and et. al., 2021). As a result, Unilever must follow the Food and Drug
Administration's requirements.
Economic factors: Developing countries such as India and China have a
tremendous potential for growth. However, there are certain risks involved. On the
other side, wealthy nations offer a direct route. Workforce is another significant
economic aspect in determining a company's chances in a country. When there are a
huge number of jobless workers, Unilever may be able to cut expenses. However, it
may also imply that there would be fewer consumers in the industry to purchase their
stuff.
Social factors: With a presence in over 100 countries, Unilever must
introduce goods and advertise these in a way that attracts to socioeconomic groups.
Unilever is aware of this, as indicated by the fact that the majority of its commercials
are available in many dialects. Its beauty and care sector has a wide range of
products. It is one of the most basic wishes of people of all ages to appear attractive,
and with today's technology, corporations can offer superior items. As a result,
stronger branding and target segment are essential,
Technological factors: To be competitive in the industry, Unilever should
stay up with technical developments. Continuous enhancements in operational
functions are essential to boost performance and reduce prices. A suitable amount
of assets should be invested in the R&D sector so that new goods may be
developed, allowing Unilever to significantly expand its market share. Unilever can
save time by providing a set facility with controlled procedures
Legal factors: Unilever offers a wide product variety of over 400 brands,
involving consistency with multiple laws and regulations (Andrews and et. al., 2019).
Furthermore, Unilever must also preserve its copyrights. Fake businesses frequently
misuse the patents of many other organizations as promotional factors and to
confuse consumers.
Environmental factors: Unilever has already been capable to efficiently
present themselves as an environmentally responsible firm while still keeping its
promise. Unilever is concentrating on UN Sustainable Development Goals to boost
company image and profits. The company is dedicated to achieving its objective of
producing all plastic packaging reusable. Unilever should also find ways to reduce
8

the amount of plastic used in packaging materials. This would have the ability to
dramatically reduce the carbon footprints of both the company and its customers..
Conclusion
From the above discussion, it can be concluded that, many businesses have
distinct business entities and structures, and the corporation has been one of them.
It is founded according to the legislation of the country and has a distinct
organization identity from the ownership. In this report, it includes the different kinds
of companies with their work. Along with this, sole traders to cooperatives and limited
liability partnerships are also mentioned and at last, in include the different
organizational structure with its impact on the organization and the PESTLE analysis
for evaluating the external factors.
Reference List
Book and journals
9

Andrews and et. al., 2019. The development of an inline Raman spectroscopic analysis
method as a quality control tool for hot melt extruded ramipril fixed-dose
combination products. International journal of pharmaceutics, 566, pp.476-487.
Dutta, A. and Banerjee, S., 2018. Does microfinance impede sustainable entrepreneurial
initiatives among women borrowers? Evidence from rural Bangladesh. Journal of
rural studies, 60, pp.70-81.
Feder, E. S. and Niţu-Antonie, R. D., 2017. Connecting gender identity, entrepreneurial
training, role models and intentions. International Journal of Gender and
Entrepreneurship.
Hariram and et. al., 2021. Comparative analysis of combustion, performance and emission
phenomenon of a CI engine fuelled with algal and cotton seed
biodiesel. International Journal of Ambient Energy, 42(6), pp.636-647.
Hasenpusch, T. C. and Baumann, S., 2017. Strategic media venturing: Corporate venture
capital approaches of TIME incumbents. International Journal on Media
Management, 19(1), pp.77-100.
Jafari-Sadeghi, V., 2020. The motivational factors of business venturing: opportunity versus
necessity? A gendered perspective on European countries. Journal of Business
Research, 113, pp.279-289.
Nicotra and et. al., 2018. The causal relation between entrepreneurial ecosystem and
productive entrepreneurship: A measurement framework. The Journal of Technology
Transfer, 43(3), pp.640-673.
Rao, B. and Mulloth, B., 2017. The role of universities in encouraging growth of technology-
based new ventures. International Journal of Innovation and Technology
Management, 14(04), p.1750014.
Tracey, P., Dalpiaz, E. and Phillips, N., 2018. Fish out of water: Translation, legitimation,
and new venture creation. Academy of Management Journal, 61(5), pp.1627-1666.
Wieczorek and et. al., 2018. Stable‐isotope analysis reveals the importance of soft‐bodied
prey in the diet of lesser spotted dogfish Scyliorhinus canicula. Journal of fish
biology, 93(4), pp.685-693.
Zhao, L., Davis, L. and Copeland, L., 2018. Entrepreneurial intention: An exploratory study
of fashion students. Journal of Enterprising Culture, 26(01), pp.27-50.
10