Business in Practice: Unilever's Structure and External Factors

This report provides a comprehensive analysis of business practices, focusing on different business types such as micro, small, medium, and large enterprises, illustrated with examples like Boss Brewing Company, CafePod Coffee Co., Smith Brothers, and Unilever. It delves into the legal entities of businesses, including sole proprietorships, partnerships, limited liability companies, public limited companies, and cooperative businesses, citing examples like Kurt Geiger, NotOnTheHighStreet.com, Ladbrokes Coral Group plc, HSBC Holdings, and The CO-OP. The report also examines various organizational structures—hierarchical, functional, divisional, and flat—and their impact on business productivity, specifically in the context of Unilever. Furthermore, it conducts a PESTLE analysis to assess the influence of political, economic, social, technological, legal, and environmental factors on Unilever's performance, highlighting both opportunities and threats the company faces in its operating environment.

Business in Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
Discuss different types of businesses and how they work..........................................................1
TASK 2............................................................................................................................................2
Discuss the the legal entities of businesses with example..........................................................2
TASK 3............................................................................................................................................4
Discuss the different organisational structures and its affect on business productivity..............4
Conduct PESTLE analysis to analyse different external factors and its affect on business
performance.................................................................................................................................5
CONCLUSION................................................................................................................................6
References:.......................................................................................................................................7

INTRODUCTION
Businesses are the commercial enterprise that are established with the purpose of earning profits
in exchange of their offering to the outer world (Abdurakhmanova, 2020). There different types
of business organisation on the basis their sizes such as small, micro, medium and large
enterprise. The businesses are also categorized on the basis of their number of owners and
liability. Every business organisation have different organisational structure on related to the
number of employees and the item they offer in market. However the business environment and
its operations are highly affected by its external environment factors. Therefore, for business to
grow and attain long term success the businesses must structure themselves better and analyse
the factors regularly to grab opportunities in market. For the present report organisation selected
is “ Unilever”. The company is the large British multinational consumer goods organisation
based in London, England. The report will discuss the different types of companies and its legal
entities. Further the report will also cover the different types of organisational structure and
Pestle analyse to analyse external factors that impact business.
MAIN BODY
TASK 1
Discuss different types of businesses and how they work
Micro business
Definition: The micro enterprise or business are the smallest size business firms that employs 5
or less employees and only has one owner. These are family business or low scale business. Most
of the home based stores are the part of micro business.
Characteristics: The micro business contain very minimal risk in terms of survival or financial
risk. The micro business has low employees therefore they are easily managed and also there is
sole ownership (Barbato, Fumasoli and Turri, 2021).
Example: Boss Brewing Company is one of the micro business in UK whose founder is Sarah
John. The lady created a business of brew to change the perception around world for women in
brewing.
Small business
Definition: The small businesses are the enterprise that employs 10 or less employs that are
privately owned and also has less annual revenue generation.
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Characteristics: The small businesses are high in numbers and are major contributor of UK
economy and also they have less employees to manage. The small business are more labour
oriented therefore generate employment.
Example: The CafePod Coffee Co. is the coffee shop in UK at small scale enterprise. The
company serves exciting and tasty coffee for coffee drinkers. The company has challenging spirit
and never stop innovations in the recipe (Cherunilam, 2021).
Medium size business
Definition: The medium size business are outlined by the Companies Act 2006 as the
commercial enterprise with approximately 250 employees. They may have one or two owners in
partnership.
Characteristics: The medium scale business are highly passionate for their work and try to full
fill customer demand in order to gain popularity to become large organisation. The medium size
business owners are more risk taker and strive for the consistent improvement. They also largely
contribute in economy of UK.
Example: Smith Brothers (Contracting) Ltd. Is the medium size firm established in 1999 by two
brothers Richard and John Smith. The company is family business. The company has
contracting business in different sector including renewable energy.
Large size business
Definition: The large size organisation are the business firms that contains multiple or single
owners with acquisitions and mergers and has employees more than 250. The businesses are at
large scale and offers the different types of product with wide portfolio.
Characteristics: The large scale organisation earn great profits and also has huge annual revenue
generation. The firms are innovative firms and technology oriented. They also operate across
national borders to generate international economies (Crouzet and Mehrotra, 2020).
Example: The Unilever is the best example for large scale organisation in London with approx
18000 employees with huge product portfolio. The company is also multinational organisation.
TASK 2
Discuss the the legal entities of businesses with example
Sole trader business
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Definition: This business type means the business legal ownership is of one owner which means
the business is run and owned under single proprietorship. The business is legally registered
under sole trade.
Characteristics: There is the legal right of owner on all the profits of the company. The business
is easy to set up as there is no dependency on other. All the decisions are also made by sole
trader (Gaspary, Moura and Wegner, 2020).
Example: Kurt Geiger is the UK successful sole trade company started in 1963. The company
manufactures covetable footwear and accessories.
Partnership
Definition: A type of business run and owned by several people together and all are binded with
legal contract of partnership and has respective profit share as per the contract.
Characteristics: In partnership the responsibility of business is equally shared between the
partners. The partners also act as investor and generate funds.
Example: NotOnTheHighStreet.com is the partnership entrepreneurial firm of two award
winning entrepreneurs, Holly Tucker and Sophie Cornish. The firm is the successful e-
commerce business with 200 employees.
Limited liability business
Definition: The type of legal entity company with private company business structure and has
combine aspects of corporations and partnership firms.
Characteristics: The business has the benefit in the form of flexibility and also the funds flow
through partnerships. They also maintain the image of corporations. The functions are run by
board of directors (Hamdani and Daim, 2020).
Example: Ladbrokes Coral Group plc a limited liability company based in London. The
company has operation of betting and gambling and recently has acquisition with famous sports
betting and gambling group of UK.
Public limited company
Definition: The public limited company are the voluntary type of organisation that are
incorporated. In this the legal existence is separate and liabilities of members are limited.
Characteristics: The public limited companies is listed over the stock exchange and also it's
shares can be traded publicly. The company is strictly governed with rules, regulations and laws
of government.
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Example: HSBC Holdings the famous British bank is the public limited company and is also
one of the largest banking and financial services of the world. The company has millions of
customers through its global businesses.
Cooperative business
Definition: The cooperative organisations are self-governing association of group of people that
united voluntarily meet each other through common social, economic or cultural wants. They are
consumer cooperative business firms and are jointly owned and managed by people (Simões,
2020).
Characteristics: it is completely voluntary membership of people with common interest and
people are free to leave anytime they want. The funds and finance of the co-operative business
are collected by the members only. They are democratic organisation.
Example: The CO-OP (Co-operative) is the British Cooperative association with central
membership organisation with 700+members and 31 employees. The headquarter of this firm is
in Manchester, UK.
TASK 3
Discuss the different organisational structures and its affect on business productivity
Different types of organisational structure are:
Hierarchical
The pyramid shaped organisational structure in which the organisation chain of structure
is from top level manager or CEO to lower level employees and subordinates. In this the
structure defines the power of individual from to level to lower level as there is unequal power
distribution. In Unilever the hierarchical will be useful for the performance because their will
level of authority and responsibility. This also helps the employees to remain motivated and
work hard and improve performance in order to gain promotions (Som and et.al, 2020).
Functional
In the functional organisational structure is on the basis of the functions occur within
organisation. The functions of the company include marketing, sales, finance, IT department etc.
in this employees are hired on the basis of the specific skills. For example Unilever also has the
functional organisational structure where the company has different functional departments such
as marketing , sales, operations, production, logistics, HR, Finance etc. This is useful to the
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performance of the Unilever because it allows the staff to focus on their roles and encourages the
innovation and specialization for better performance.
Divisional
In this organisational structure the company has been divided into divisions and each division
has their own resources and employees that are controlled by the head of division. The divisions
are like small company with its own marketing team, IT team, Sales team etc (Zhang and Cui,
2021). This structure is majorly followed by large organisations in which there are different
products and also operates in different markets. For example Unilever has baby care, food and
other different product so it can have product divisional structure. This will help the business to
focus and monitor the performance of each product individually. This will also help the Unilever
to have customized approach.
Flat
In the flat organisational structure the companies have very few divisions and levels which is
also known as the horizontal organisation structure. In this the supervisors and employees are
treated at equal level and also the employees are provided with responsibility. Unilever can also
adopt this structure to improve their involvement in the organisation and also to give them more
responsibility. This structure is highly beneficial for open communication that also foster
innovation in organisation.
Conduct PESTLE analysis to analyse different external factors and its affect on business
performance
The Pestle analysis is the tool to analyse the external environment factors that impact the
business operation and performance. The Pestle analysis of Unilever conducted below:
Political factors: The political genre affects the performance of Unilever. The UK has political
stability with most countries across world which is opportunity for the Unilever as company is
multinational organisation. The Brexit has majorly affected the business performance as they
separation of UK and EU was threat to the operations of consumer good market (Zhao and et. al.,
2020).
Economic factors: Unilever's business sales and operation are highly depended on the economic
condition of the nation. The increasing wages of people in developing countries like UK is good
for the business as increasing disposable income leads to more sales and more demand of
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products. Due to Covid-19 the economic condition of some countries are low which is threat to
Unilever as in such regions there is downfall of demand and productivity.
Social factors: The consumers trends, and behaviour are important for the Unilever's business to
adapt and make change accordingly to enhance performance (Abdurakhmanova, 2020). The
rising concern of consumers for health has lead to innovation of new healthy products has
increased company's performance among consumer. Also company has opportunity to grow their
profits and sales higher by targeting women consumers with improved incomes.
Technology factors: Unilever is dependent over the technology to support the customer service
and also for its consumer goods business. Rising digitalization and automation is opportunity for
Unilever to improve and increase the operational efficiency by adopting new equipments. The
rapid growth in Research and development is threat to Unilever s this increase the competitive
advantage of competitor's in this industry.
Legal factors: In consumer goods industry it very important to satisfy the legal rules regulatory
to remove restrictions on trade and barriers. The Unilever highly comply with the food safety
rules to make its food products completely healthy and safe for consumers to eat. This also
increase the corporate image of the Unilever.
Environment factors: The ecological conditions influence the business operations of the
Unilever. For the sustainable performance and growth the company is using the renewable
energy resources and using sustainable methods to produce consumer goods (Barbato, Fumasoli
and Turri, 2021). Through CSR and environment sustainability initiatives company also has the
opportunity to gain competitive advantage.
CONCLUSION
It is concluded from the above report that businesses are categorized on the basis employees
number, number of owners and each has their own benefits and significance in the global
economy. The legal entities of business from sole trader to partnership to cooperative all has
different characteristics and legal arrangements in terms of profits and ownership. Hence. The
business structure plays a huge role in deciding the functions, roles and responsibilities of people
in organisation and its culture. Hence for business to grow and survive it is important to analyse
the business structure and its external environment factors to grasp the opportunity and mitigate
threats.
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References:
Books and Journals
Abdurakhmanova, G., 2020. Effective regulation of employment in small business. Архив
научных исследований, (11).
Barbato, G., Fumasoli, T. and Turri, M., 2021. The role of the organisational dimension in
university positioning: a case-study approach. Studies in Higher Education. 46(7).
pp.1356-1370.
Cherunilam, F., 2021. Business environment. Himalaya Publishing House Pvt. Ltd.
Crouzet, N. and Mehrotra, N.R., 2020. Small and large firms over the business cycle. American
Economic Review. 110(11). pp.3549-3601.
Gaspary, E., Moura, G.L.D. and Wegner, D., 2020. How does the organisational structure
influence a work environment for innovation?. International Journal of
Entrepreneurship and Innovation Management. 24(2-3). pp.132-153.
Hamdani, Y. and Daim, T., 2020. Organizational Transformation: Consumer Goods. In DIGITAL
TRANSFORMATION: Evaluating Emerging Technologies (pp. 523-575).
Simões, E.N., 2020. A decision support system application module-for PESTLE analysis-
competitive intelligence algorithm (Doctoral dissertation).
Som, R.M and et. al., 2020. Understanding leadership roles and competencies for public-private
partnership. Journal of Asia Business Studies.
Zhang, K. and Cui, Q., 2021. Public–Private Partnership and Social Equity: An Empirical Study
of the Disadvantaged Business Enterprise Program. Transportation Research Record,
p.03611981211031210.
Zhao, L and et. al., 2020. An optimal service selection approach for service-oriented business
collaboration using crowd-based cooperative computing. Applied Soft Computing. 92.
p.106270.
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