Business Structures, External Factors and PESTLE Analysis in Practice

This report delves into the intricacies of business operations, analyzing various business structures such as micro, small, medium, and large enterprises, as well as sole traders, partnerships, and corporations. It explores the characteristics of each type and their operational differences. The report then examines organizational structures, including hierarchical, flat, divisional, and functional models, highlighting their applications and advantages. A significant portion of the report is dedicated to PESTLE analysis, a framework used to evaluate the macro-environmental factors (Political, Economic, Social, Technological, Legal, and Environmental) that affect business performance. The analysis provides examples of how these factors impact businesses, such as Morrisons, and discusses the implications of each factor on business strategies and outcomes. The report concludes by summarizing the key findings and emphasizing the importance of understanding business structures and external factors for successful business management.

Business in Practice

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
SECTION 1......................................................................................................................................3
Definition, characteristics and example of micro business, small business, medium size
business and large size business..................................................................................................3
SECTION 2......................................................................................................................................5
Definition, characteristics and example for the sole trader business, partnership, limited
liability business, public limited liability business and Cooperative. ........................................5
Using PESTLE analysis explain how different external factors affect the performance of a
business.......................................................................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business comprises of all the required elements through which they can increase the
growth of the company and also generate the higher level of revenue by emphasising on the
productivity of the business(Klun and Trkman, 2018). It is important for every organisation
have the direct focus on the external environment so that they can take the corrective decision in
order to handle them. There are various types of organisation which will discussed in this report.
This report will cover the PESTLE analysis and the factors that is impact the external
environment.
MAIN BODY
SECTION 1
Definition, characteristics and example of micro business, small business, medium size business
and large size business.
There are various business activities which is being frame in order to followed by an
individual so that they can generate the sufficient revenue in order to establish strong brand
image in the market. A business can be small, medium and large. The main consideration of
there is to generate the high profits by increasing their production. Various types of business is
explained as follows:
Micro size business
In these types of business, there are minimum 0-9 employee are working in their
respective department and they are operating their business in low investment and the funding of
such organisation is tends to low(Kato and Charoenrat, 2018). The annual revenue of such
business is amounted to £2 million.
Characteristics
 These organisation run their business operation with the few number of employees as the
small level of their business.
 These types of business conduct their operations in small areas with small market
segment.
 These are the business which generates lower level of revenue with their target market
and having limited product line.
Example- Small brewing company.

Small size business
These are the type of business which is working with minimum 10-49 employees and
being operated by the small entrepreneurs and generates the revenue amounted £10 million.
Characteristics
 These are the firms which is solely operated by the single owner and individual is only
responsible for all the profits and looses.
 The sole proprietor handle the whole operation with the few investment and all the
responsibilities will be framed in the systematic manner.
 There are low funding in such firms as they operating their business on small market
segment.
Example- Broadsword Events House
Medium size business
These are the business which operate their business operations in the large market share.
All the capital market share is being covered in it and there will be large investment in such
companies so that they can perform the (Drucker, 2017). They perform their business operations
with minimum 50-250 employees and generate the annual turnover of £50 million.
Characteristics
 This is a type of company which is operating their business by the many owner and they
have adopted their business strategy in an accordance manner.
 These type of business work with the sufficient investment and run their operation in an
appropriate manner.
Example- Verdant Leisure
Large size business
These are the multinational companies which operation their business in different level
across the globe. The number of employees which are being working are more than 250 and the
annual turnover the such organization amounted to £50 million. Such business operate their
business on large market segment.
Characteristics
 There are large number of employees which are utilizing their skills and knowledge in
order to get the work done in an appropriate manner.
 They are operating their business in the large market segment in different regions.

 There are numb-ours owner who are working together in order to get the objectivity of
the business and framed the several polices and strength accordingly so that they can
work in an right direction.
Example- Morrisons is the multinational company which covers there market expansion globally.
Basis Micro Small Medium Large
The number of
employees
working under
0-9 Between 10 to 49 Between 50- 250 More than 250
Annual turnover 2 million euros 10 million euros 50 million euros Above 50 million
euros
SECTION 2
Definition, characteristics and example for the sole trader business, partnership, limited liability
business, public limited liability business and Cooperative.
Organisational structure is defined as the direction in which all the operation is moving in
accordance to complete their particular task in an appropriate manner by which they can
establish a good brand image in t he market. It is analysed that all the structure and the method
which are used in the working is being framed in it. Every organisation use the different
organisational structure in order to make the effective use of each resources. Various type of
organisational structure is explained as follows: Hierarchical organisational structure-t is a type of structure in which all the employees
is known with their authority and accountability that whom they have to report and who
will solve their related queries(Di Gregorio, 2017). It is a pyramid shape structure that
posses from top level management to lower level management. Each employees is
familiar with the roles and responsibilities in order to complete the specific task.
Sainsbury is using this structure as it give the strict code of conduct in order to perform
the various operations in an appropriate manner so that they can attain the objective in an
effective manner. Flat organisational structure- This is the organisational structure in which fits in the
organisation which is having fewer level between upper management and staff-level

employees. Many start-up is performing their business in an efficient manner by using
this organisational structure. It give the effective team work within the organisation so
that they can make the best use of their resources in order to attain the organisational
goal. Amazon is using the this structure as it gives more responsibilities to their potential
employees who can perform their business operation in an systematic manner. Divisional organisational structure- It is the structure in which they are concerning
about the divisions having complete control over the various aspect of the business and
ensure their effective working with the accordance of attaining the objectivity of the
business. Each divisional have their own marketing team, sales team, IT team etc. This
structure will best suit in large organisation where all the department is having large pool
of work. McDonals's is using this structure as it is a large organisation that is having
various operations in different departments.
 Functional organisational structure- It is the structure which is similar to hierarchical
structure in which all the responsibilities starts with the top level management and they
give the authorities to their manger in order to complete the specific task in an
appropriate manner with the consideration of attaining the organisational (Ben Youssef
and et. al., 2018). In this, employees are being organised on the basis of their skills and
capabilities so that they can perform their given tasks in a approached manner and all the
department is managed independently. Starbucks is using this structure so that they can
get the effective results in each department with the proper supervision of their respective
manager.
It is analysed from the above discussion that each organisational structure have the
specific importance in which they are making the right use of each resources and every
organisation is using the suitable organisational structure accordingly.
Using PESTLE analysis explain how different external factors affect the performance of a
business.
PESTLE analysis the frame work of evaluating the macro factors in the business
environment so that they can identify the necessary measure in order to cope up with the several
challenges. It is analysed theta there are various areas or the department which is affected by the
external environment so it is necessary to have the complete information about the various
factors of macro environment that is explained as follows:

 Political- these are the factors which includes the government stability, corruption,
foreign trade policy, tax policy etc. Morrisons is facing the major impact of Brexit that
leads to certain change in the rules and polices of the UK and the changing legislation for
the food retailers has imposed the huge impact on the smooth running of the business. On
other hand there is a positive impact on the company as the there is stable government in
the UK so that company can run their business in a sustainable approach. Economic- These are the factors which includes the inflation rate, import and export
duties, interest rates, disposable income of the consumer etc. (Ashton, Russell and Futch,
2017). Due to the impact of Brexit, there is a major fluctuations in currency and created
the inflation across the country so that Morrisons is facing reducing n their production.
There is hike in the oil price so that they are facing the huge impact on the consumer
budge by which the company is facing the loss I their revenue. As the increasing price of
the oil leads to reduce the productivity of the business by which the economic condition
of the UK get slow done. Social- these are the factors which includes the cultural trends, values, norms, age
distribution, career attitudes, safety emphasis etc. There is a increasing age population
offers various business opportunities for the Morrisons and the growing eduction and the
health of the consumer help the company to operate their business in an efficiency
manner so that they can make the best use of their resources and generate higher revenue
and profitability. Technological- These are the factors which includes the change in the technology or the
automation imposed within the organisation in order to launch the innovative or advance
products. Investment in the technology will help the company to make the effective use
of their resources and make responsive to their potential customers(Ammar and Chereau,
2018). They can serve their customer in a better way formulating the digital data of
emerging trends in the market by which UK can move towards digitalization. On other
hand, innovative technique leads to increase the production cost by which the prices of
the product get high and consumer will decrease the demand for the products and
servcies. Legal- These are the factors which includes the discrimination laws, employment laws,
health and safety law etc. Morrisons is running their business by apply a food safety and

legal standard like FSA targets so that all the operations can be run in lawful manner.
They are having the policies and legal guidelines to support the various legislation so that
they can build a good brand image in the UK market. On other hand, the legislation
varies form country to country and it is not possible to follow each law and of that
company is facing legal action against them.
 Environmental- These are the factors which includes the ecological and environmental
aspect such as climate change and the impact of industries like farming, agriculture etc.
Morrisons is running their business with the consideration of saving the environment by
doing CSR activity and Zero waste was directed landfill in the manufacturing sites. They
are also offering the plastic free fruit and vegetable options. This helps in saving the
enviroment and establish a ecological balance in UK.
CONCLUSION
It is concluded from the above report that there are various types of business which is
operating their function on small, medium and large scale ans the core objective is to generate
higher level of revenue and profitability in order to establish good brand image in the market.
The organisational structure which is followed by the company is hierarchical in which all the
employees is known with the duties and responsibilities in order to complete the specific task. It
flows from top level management to lower level management. Moreover, there is a huge impact
of external environment on the business as there is a positive impact of social and technological
factor and there is a negative impact of political and legal factor on the business due to trade and
tariff restrictions.

REFERENCES
Books and Journals
Ammar, O. and Chereau, P., 2018. Business model innovation from the strategic posture
perspective. European Business Review.
Ashton, W., Russell, S. and Futch, E., 2017. The adoption of green business practices among
small US Midwestern manufacturing enterprises. Journal of environmental planning
and management, 60(12), pp.2133-2149.
Ben Youssef and et. al., 2018. The importance of corporate social responsibility (CSR) for
branding and business success in small and medium-sized enterprises (SME) in a
business-to-distributor (B2D) context. Journal of Strategic Marketing, 26(8), pp.723-
739.
Di Gregorio, D., 2017. Place-based business models for resilient local economies. Journal of
Enterprising Communities: People and Places in the Global Economy.
Drucker, P.F., 2017. What Makes an Effective Executive (Harvard Business Review Classics).
Harvard Business Review Press.
Kato, M. and Charoenrat, T., 2018. Business continuity management of small and medium sized
enterprises: Evidence from Thailand. International journal of disaster risk
reduction, 27, pp.577-587.
Klun, M. and Trkman, P., 2018. Business process management–at the crossroads. Business
Process Management Journal.
Möller, K. and Halinen, A., 2018. IMP thinking and IMM: Co-creating value for business
marketing. Industrial Marketing Management, 69, pp.18-31.
Neubaum, D.O., 2018. Family business research: Roads travelled and the search for unworn
paths.
Schneider, S. and Clauß, T., 2020. Business models for sustainability: Choices and
consequences. Organization & Environment, 33(3), pp.384-407.