BSc (Hons) Business Management - BMP3002: Types of Companies Report

This report, prepared for a BSc (Hons) Business Management course, provides a comprehensive analysis of different types of companies, ranging from micro to large businesses, and their operational characteristics. It delves into various business structures, including sole proprietorships, partners...Read More

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
:
Contents
Introduction 2
Section 1: Different types of companies and how they work
P
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Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships p
Section 3: Different businesses structures and internal factors
affecting business p
Conclusion p
Reference List p
Introduction
The aim of this report to examine the business environment as well as the different
organisations that carry out the business activities (Caldera and et.al, 2019). There
seems to be a pace that is being followed in almost all the industries upon the
practices they adopt in the businesses they are operating. The report brings forth
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different components that are associated with sole trader and cooperative as well as
the structures and internal factors affecting the business.
Section 1: Different types of companies and how they work
Micro business:
Micros businesses are those that usually arises a small enterprise with two or more
employees operating on a sole purpose. The business that is being operated by the
micro businesses is only limited to their development and with regards to only a
branch. There seems to be no proper growth that is obtained yet the micro business
will help to sustain the employees for over long run unless and until it is being
maintained with proper ethics (Baldassarre and et.al, 2020). These businesses are
operated on a very small scale and in a small circle.
Small business:
Small businesses are almost equal to the startups that are almost there in all the
countries. this said to be started as a petite conception with small investment which
is available and is mostly compared to a Startup capital. The financing in this
particular business is said to be self-financing which is being done by the owner
through money that is saved for over a long period of time or an equity loan. There is
an evolution of many small businesses in this era which will multiply to become most
successful business ideas and bring out more entrepreneur. There is an existence of
online business for small startups and which has clicked out to be the best out of the
lot (Caldera and et.al, 2017). Example of a small business is the Colortron Limited in
United Kingdom which has operating as a small scale business but is trying hard to
reach the perk of being the best.
Medium size business:
Medium business are considered to be those that are a little bigger than the small
scale businesses with the same formula of carrying out the personal numbers in
following for certain limits. There is a term that is given to the small and medium
businesses which is the SME. SMEs are the growth prospects that are derived to be
one of those prominent means of multilateral organizations which are excited to have
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more number of employees than that of the small scale businesses. There said to be
boundaries that are set for these enterprises in employing as well as performing the
duties. There is a scope of expanding the business as on an international basis in
order to obtain a growth trajectory. The small and medium-sized Enterprises carry
forward its operations with less than 10 to 50 Employees to contribute their part in
uplifting the company. Ceangail company is the best example for a medium
enterprise which operates with 18 employees in its organization upon offering
different services for the community and the employees.
Large size business:
Large businesses are those that has attained certain reputation and popularity and
therefore there seems to be a scope for numerous employees to take up
employment in the organizations. There seems to be recruitment drives and also
expansion on a global level since in a particular area there is a proper frame that is
attained and therefore the company will expand its boundaries in order to attain the
same reputation in all the possible countries. This type of companies will generate
income which has turned out to be the most profitable one (Karpenko and et.al,
2019). Example of this type of company is the largest retailer Tesco.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
Sole proprietorship is a type of business that is being run as well as set up by in
individual. All responsibilities are being taken by him lonely and that is why individual
and business owner of such type of business is known as sole trader. In another
words it can be said that a business that is being run by self employed person is
known as exclusive person and sole trader. There is no legal entity that can separate
to its owner (Bruwer, 2019). There are several reasons of setting up this type of
business is easiness in setting up, no boundation and involvement of others in
decision making. Unlimited liability of enjoying profit lonely is other main reason of
establishing this type of business. The only limitation of this type of business is solely
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liability of debts and difficulties in raising investment capital. Some examples of sole
traders business are: café, computer repair services and catering services.
Partnership:
It is a type of business that is being run by 2 and more than 2 people. These people
in this type of business are called partners. As per the partnership deed, partners
contribute some investment amount and other things for becoming partner. As per
the contribution ration they held ownership and liability of profit and risks. One of the
main reason and effectiveness of this type of business is contribution of risks among
partners as per their ration and contribution amount. Partners suggest better ways
and ideas for developing and growing business and it also helps them out in making
better decision. Partners help each others in making ease and flexible to pursue mire
business opportunities (Mahmudah and et.al., 2021). Limitation of this type of
business is: lack of harmony and uncertainty of duration. John Lewis partnership is
one of the effective examples of partnership type of business.
Limited liability business:
It is other type of business structure in which business owners are not liable
personally for their company’s debts. It is hybrid entities because it consists of some
features of corporations, sole traders and partnership as well. Owners of this type of
business are known as members. Most of the features of this type of business are
similar of corporation. It is allowed under state statue which means regulations also
vary from state to state. Effectiveness of this type of business is: pass through
taxation, no restriction on numbers of members and flexibility in structure.
Westinghouse and Blockbuster are some examples of this type of business as these
are organized as a limited liability company.
Public limited liability business:
This type of business is also considered as a voluntary association of members that
are incorporated. This type of businesses has rights to sell their shares of its stock to
the public and liability is limited to % of amount they have invested into business.
Overall, it can be said that all businesses where ownership of people is being divided
into shares and are tradable in stock exchange is known as public limited company.
Main effectiveness of this type of business is: better access to capital (Gostin and
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Wiley, 2020). British petroleum and McDonalds is an effective example of this type of
business that is listed under stock exchange.
Cooperative:
A type of business that is being operated as well as owned by people who use its
products and services and it can be unincorporated association. The main reason of
developing this type of business is to provide better and qualitative services to users
of services and after that company thinks about making profit. Return on investment
also remains limited. Some effectiveness of this type of business is: development of
human value, customers’ protection, poverty tackling etc. Affiliated food Inc is an
effective example of cooperative business.
Section 3: Different business structures and external
factors affecting business
3.1 Identification of different organizational structures and
explaining how does organisational structure affect business
productivity
Functional Structure: The functional structure of McDonald's will portray teamwork
which will help the manager in order to monitor all the circumstances that are
happening in the organisations. For this particular teamwork the management will
allot stages that are necessary in order to monitor its employee is such a way that
the daily activities that are being done in the organisation are carried in a proper
manner (Felch and et.al, 2019). Ensuring that the performance of the employees is
up to the mark the Mcdonalds companies will identify the choices they will have to
make in order to satisfy it its customers. The business analysis that is being done by
the Mcdonalds companies is entirely based on the crew that is allotted for the
business.
Divisional structure: The Divisional structure of McDonald's company will portray
the different aspects that are divided in the company's order to perform its
operations. Since it is a fast-food production company there seem to be different
divisions that are operating with respect to the cooking as well as the business
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strategic development aspect. There are different teams are associated with
promotion as well as the deliveries in the company.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
The MacDonald company's PESTEL analysis will reveal the various external factors
that affect the business as well as the factors that contribute to the implementation.
Political: there is always a risk of government invention upon the food production
forms because the safety will have to be ensured. Therefore, the regulation which
has food safety regulation that is imposed by the government will have to be fulfilled
in case of McDonald's. Any kind of issues that arises with regards to the food safety
or containing harmful ingredients might lead to termination of the entire project.
Economic: Altogether there are 120 countries in which McDonalds operates. The
economic issues will arise in the change of currencies since there are different
countries with worried currency. The employment rate of McDonald's is high when
compared to the other forms that for the revenue generation will have to meet the
expenses.
Social factors: The MacDonald company’s norms and policies will not usually
satisfy all the social factors. There are different countries have their own way of
cultural inhabitation that are followed by the communities. In certain countries there
will not be an encouragement for fast foods or processed foods and therefore in such
countries there might be an issue that is arrived for the operation of McDonald's.
Technological: Technology is at its perk nowadays. McDonald's also employed
technology in providing greater Customer services that will increase the customer
base of the company. The company uses technology in order to reduce the queue
that is happening during the food delivery process. This dynamic approach has
added a benefit for those that are waiting near the counter in order to get their
orders.
Legal factors: there is a barrier with respect to the legal issues for the company
McDonald's by Vikram Bakshi who is controlling the plaza restaurants. There seems
to be different ventures for McDonald's restaurant around the countries. Vikram
Bakshi was at first the employee of the form McDonald's who after termination turned
out to be one of the person who is accusing McDonald's for the management issues.
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Environmental: the company McDonald's of base of all the environmental laws that
are in regards to the company operation (Ubrežiová and et.al, 2017). The company
follows the concept of sustainability as one of its core approach in carrying forward
the services that are stipulated.
Conclusion
Entire report draws to the conclusion upon explaining the different types of forms and
organisations that exist in the business world. The report brings forth the different
organisations like the small businesses, medium businesses, large businesses and
micro businesses which will help to understand the various types that are existing in
the business environment. The report also explains the different structures that are
followed in the company McDonald's which are divisional and structural which help
you identify the different aspects that are present in the company. The PESTEL
analysis is depicted in the company which will bring forth the external factors that
impact the organisation.
Reference List
Argerich, J. and Cruz-Cázares, C., 2017. Definition, sampling and results in business
angels’ research: toward a consensus. Management Decision.
Bruwer, J.P., 2019. Critical innovation skills required of sole trader Small, Medium
and Micro Enterprise (SMME) management and its influence on perceived
business profitability.
Gostin, L.O. and Wiley, L.F., 2020. Governmental public health powers during the
COVID-19 pandemic: stay-at-home orders, business closures, and travel
restrictions. Jama. 323(21). pp.2137-2138.
Mahmudah, S. and et.al., 2021. Debt Settlement through the Client of the Existence
of Limited Partnership Business Entity as a Non-Legal Business Agency in
Indonesia. Journal of Environmental Treatment Techniques. 9(2). pp.416-420.
Caldera and et.al, 2019. Evaluating the enablers and barriers for successful
implementation of sustainable business practice in ‘lean’SMEs. Journal of
Cleaner Production. 218. pp.575-590.
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Baldassarre and et.al, 2020. Implementing sustainable design theory in business
practice: A call to action. Journal of Cleaner Production, p.123113.
Caldera and et.al, 2017. Exploring the role of lean thinking in sustainable business
practice: A systematic literature review. Journal of cleaner production. 167.
pp.1546-1565.
Karpenko and et.al, 2019. Formation of the system of fair business practice of the
company under conditions of corporate responsibility. Academy of Strategic
Management Journal. 18(2). pp.1-8.
Felch and et.al, 2019. Maturity models in the age of Industry 4.0–Do the available
models correspond to the needs of business practice?.
Ubrežiová and et.al, 2017. How Can We See the Corporate Social Responsibility
within Its Application in Business Practice?. Acta Universitatis Agriculturae et
Silviculturae Mendelianae Brunensis. 65(1). pp.339-346.
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