Business in Practice: Company Types, Structures, and PESTLE Analysis

This report provides a comprehensive overview of business practices, exploring various company types including sole traders, partnerships, limited liability businesses, and cooperatives. It delves into different organizational structures such as functional and divisional structures, explaining how these structures affect business productivity. Furthermore, the report examines how external factors influence business performance through PESTLE analysis, covering political, economic, social, technological, legal, and environmental factors. The analysis highlights the importance of understanding these factors for effective business operations and achieving organizational goals. The report concludes by emphasizing the significance of adapting to various business practices to ensure the success of a business.

Business in
Practice

Contents
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................2
Different types of companies and how they work..................................................................2
SECTION 2......................................................................................................................................3
Different companies from sole traders to cooperatives and Limited Liability Partnerships..3
SECTION 3......................................................................................................................................4
Identification of different organizational structures and explaining how does organisational
structure affect business productivity.....................................................................................4
How different external factors affect the performance of a business – PESTLE Analysis....5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Discovering and utilising the optimal ways of operating for the purpose of reaching on the
objectives of business organisation are included in the best practices of business. This process
state staying on top of the newest operations trends for the success of business. The purpose of
this report is to know about the business practices. It includes various types of Companies along
with the various companies from solo trades to corporate and limited liability partnership. It also
identifies the various organisational structures and how they affect business productivity. It also
involved the reasons how the external environment of business effects the performance of
business by using PESTLE analysis.
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SECTION 1
Different types of companies and how they work
It is found that there are various types of business is to choose while forming a company. But
payment incorporate creates so many types of Companies (Liu, S., Wang, L. and Huang, W.W.,
2017). Below mentioned is the explanation of various types of companies and their work:
Micro Business: It can be defined as a business in which business operations has been done
having less than 10 employees in the organization. These types of businesses require less amount
of capital. This business so do operations on a very small scale. It is found that micro businesses
play an important role in the growth of economy of United Kingdom. This business is work for
essential determination which helps in the improvement of quality of life of people in the
developing countries. Nearby ice cream parlor small café are the examples of micro business as
it include less employees and capital. Annual turnover will be less than €2 million.
Small Business: It can be explained as a privately owned Corporation sole proprietorship or
partnership having a few number of employees in the organisation and the annual revenue of
small business is less than the revenue of a corporation or a regular sized business. Such type of
business does production of goods and services on a small scale. In this business are there is a
single owner and all the works related to the management are performed by owner (Maniora, J.,
2018). Local bakery is the example of small business as it includes 10 to 50 employees. It’s
annual turnover is not more than €10 million.
Medium Size Business: After a slow and stable growth of small business, it become medium
size business. It includes the involvement of less than 250 employees and it require large amount
of capital as compared to the small business. It works as a bridge among small and large size
business. It’s annual revenue is always less than €50 million (Kariv, D., Cisneros, L. and
Ibanescu, M., 2019).
Large Size Business: It refers to those businesses which are working on huge level having more
than 250 employees in the organisation and it’s annual turnover is more than €50 million. These
businesses involve a lot number of challenges and opportunities so that they can grab the
opportunities available in the market.
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SECTION 2
Different companies from sole traders to cooperatives and Limited Liability Partnerships
Sole Trader Business: Sole trader is the most simple form of business structure which is easy to
start and operate. This business is operated and run by a single person who is the owner of
business. This business does not contain any legal identity which separates it to to its owner. The
owner has complete control over all the activities of business Assets and profit after tax. Along
with this it is not necessary to register the business. There is no any shareholder to invest the
capital.
Partnership: It can be defined as an agreement between two or more person or parties for the
purpose of managing and operating a business and sharing its profits. There are various types of
partnership. It creates a agreement between partners for running a specific business by
distributing the responsibility is for sharing the profit (Giacosa, E., Mazzoleni, A. and Usai, A.,
2018). General partnership limited partnership limited liability partnership at will is various
forms of partnership. It can be said that it is a a legal relationship. Mostly it is formed in a written
agreement and the capital invested in this business is mutual capital of partner.
Limited Liability Business: It refers to the company in which stock holders are liable to pay the
Dept or liabilities of company for a limited amount. It is another legal form of a business under
video backdoor liabilities paid by shareholders are limited to their investment. They are not
going to use their personal assets for the purpose of bearing the debt and liabilities of
organization.
Public limited liability business: It is another legal business which offers the shares of
organization to the traders as it is registered under London Stock Exchange. It is necessary for
public limited liabilities businesses to maintain a transparency with public (Freudenreich, B. and
Schaltegger, S., 2020). The owner of this business is stakeholders who have purchase the shares
of company. The organization has to follow the complete registration procedure for the purpose
of doing registration. Limited liability, additional capital, expert board of directors, Easy share
trading are the various advantages of this business.
Cooperative: It is a different kind of business as it is formed only for the benefits of their
members. Such organizations are owned and controlled by their members only. The main goal of
a Cooperative is to remove the bargaining power of individual members and getting good quality
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products. They also focus on reducing the cost during the production process. It is also beneficial
for saving the income tax of members up to a point.
SECTION 3
Identification of different organizational structures and explaining how does organisational
structure affect business productivity
Below mentioned is the different organisational structure:
Functional structure: It refers to the most common structure of organization under which the
complete firm is divided into various small groups which are based on specialized functional
area which include marketing, finance, IT, HR and many more (Blankley, A.I., Kerr, D. and
Wiggins, C.E., 2017). Under this is structure the employees are classified on the basis of their
skills and specialization. Under this structure, all the employees are classified according to their
skills and qualities. It helps in increasing the productivity of organization as all the employees
have special skills which allow them to work in an effective and efficient manner than others
who have not specific skills regarding the work. Along with this it is also analyzed it at their
confidence level of doing work is too high which require less supervision. It makes clarity in the
organization when all the employees working together they all are clear regarding their task. It
also helps the organization in reducing the cost of operations as the employees are divided
according to the functions of Business and departments which reduced the probability of doing
similar work by multiple departments.
Divisional structure: It can be defined as a structure under which II the organization is divided
into various groups and each group has their own functional departments (Wright, S.A. and
Schultz, A.E., 2018). Each and every division of organization have all the necessary resources
and functions for the purpose of supporting the product line such as Marketing department, IT
department and its own finance department. This structure of organization is beneficial for those
companies who are working at various locations as it have various divisions having separate
functional departments (Dean, B.A., Gibbons, B. and Perkiss, S., 2018). This structure involves a
high degree of specialization because of this the organization is able to increase the productivity.
Each and every division have their own responsibility is for the production of particular product
or service which ensures the efficiency along with saving time which leads to the generation of
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higher Prophet. It also leads to the development of workers. Employees who are doing work in
divisions can get more opportunity for developing skills.
How different external factors affect the performance of a business – PESTLE Analysis
PESTLE analysis is a tool used by various organisations in order to know about the external
factors of business which effect the business operations. It is necessary for organisation to
analyse external factors for the smooth running of business activities (Bergman and et. al., 2019).
It helps in analysing the political, economical, Social, Technological, Legal and environmental
factors of business. Sometimes it may create various critical situations for organisation and
sometimes it may works as beneficial for organisation as it help the management in knowing
about the various technologies and opportunities available in the market. Below mentioned are
the reasons how the pestel analysis for external factors affect the performance of a business:
Cost effectiveness: PESTLE analysis is a tool which consume only time. There is no any
requirement of hard and fast course teams as this analysis requires only pen and paper. It is in the
hand of organization to take the decisions how they want to do PESTLE analysis but the cost
remains the same.
Development of alertness: As it helps in analyzing the old factors which are influencing the
activities of organization. It do narrow and deep study of all the factors and give a lightness to
the organization about the challenges which they are going to face in the future (Zhang, X. and
Warner, M.E., 2017). It makes the availability of examining the changes and development which
are going in the market. It works as a alarm of any challenge.
Exploit opportunities: Opportunities are always provided by external factors. By the use of
PESTLE analysis of the organization can do study of external environment opportunities which
works as a strength of business organization. Along with this it also helps in doing research of
social and technological trends. It also helped to know about the various techniques used by the
competitors. It prepares a complete approach which give the opportunity and beat the
competition of market.
Marketing Planning: PESTLE analysis also helps in doing the complete and deep research of a
market under which the preferences and taste of various consumers are determined. According to
this the management has to do the planning of marketing as it will help the organization phone
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not wasting the much time and cost on the complete audience. Its state a group of people who are
potential customers for the organization (Andrade and et. al., 2019).
CONCLUSION
From the above report, it is concluded that the business have to perform various practices
while doing business operations. It is important to perform all the practices in an appropriate
manner so that the organisation can achieve the goals and objectives. Furthermore, it is also
analysed that their are various forms of businesses which are divided on the basis of numbers of
employees and the investment. In addition to this it is also found that their are two types of
structures followed by the organisation i.e. Functional and divisional structure of organisation.
PESTLE analysis helps the organisation in analysing those factors which influence the
organisation activities externally.
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REFERENCES
Books and journal
Andrade, M.S., Hartshorn, K.J., Evans, N.W. and Davis, S., 2019. Good, better, Best: English
language development practices in graduate business programs. The International
Journal of Management Education, 17(1), pp.36-46.
Bergman, Z., Teschemacher, Y., Arora, B., Sengupta, R., Leisinger, K.M. and Bergman, M.M.,
2019. Developing the business-society nexus through corporate responsibility
expectations in India. critical perspectives on international business.
Blankley, A.I., Kerr, D. and Wiggins, C.E., 2017. The state of accounting education in business
schools: An examination and analysis of active learning techniques. In Advances in
Accounting Education: Teaching and Curriculum Innovations. Emerald Publishing
Limited.
Dean, B.A., Gibbons, B. and Perkiss, S., 2018. An experiential learning activity for integrating
the United Nations Sustainable Development Goals into business education. Social
Business, 8(4), pp.387-409.
Freudenreich, B. and Schaltegger, S., 2020. Developing sufficiency-oriented offerings for
clothing users: Business approaches to support consumption reduction. Journal of
Cleaner Production, 247, p.119589.
Giacosa, E., Mazzoleni, A. and Usai, A., 2018. Business Process Management (BPM): How
complementary BPM capabilities can build an ambidextrous state in business process
activities of family firms. Business Process Management Journal.
Kariv, D., Cisneros, L. and Ibanescu, M., 2019. The role of entrepreneurial education and
support in business growth intentions: The case of Canadian entrepreneurs. Journal of
Small Business & Entrepreneurship, 31(5), pp.433-460.
Liu, S., Wang, L. and Huang, W.W., 2017. Effects of process and outcome controls on business
process outsourcing performance: Moderating roles of vendor and client capability
risks. European Journal of Operational Research, 260(3), pp.1115-1128.
Maniora, J., 2018. Mismanagement of sustainability: What business strategy makes the
difference? Empirical evidence from the USA. Journal of Business Ethics, 152(4),
pp.931-947.
Wright, S.A. and Schultz, A.E., 2018. The rising tide of artificial intelligence and business
automation: Developing an ethical framework. Business Horizons, 61(6), pp.823-832.
Zhang, X. and Warner, M.E., 2017. Business retention and expansion and business clusters–A
comprehensive approach to community development. Community Development, 48(2),
pp.170-186.
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