Comprehensive Analysis of Different Company Types and Structures

This report provides a detailed analysis of various company types, ranging from micro to large businesses, and explores their respective characteristics and legal structures. It covers sole traders, partnerships, limited liability companies, and public limited liability ventures, providing real-world examples for each. The report also examines different organizational structures, such as functional and divisional structures, and assesses their impact on venture productivity. Furthermore, it applies a PESTEL analysis to evaluate the external factors affecting a company's performance, using ASDA as a case study. The report concludes by summarizing the key findings and emphasizing the importance of understanding company types and their operating environments for business success.

TYPES OF COMPANIES
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Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
SECTION 1....................................................................................................................................2
Section 1: Different types of companies and how they work........................................2
SECTION 2....................................................................................................................................4
Characteristics and examples of different legal structure of companies....................4
SECTION 3....................................................................................................................................5
Different structure of organizations and its affects venture productivity.....................5
PESTEL analysis to determine external factors in regard to ASDA............................5
CONCLUSION...............................................................................................................................5
REFERENCES..............................................................................................................................6
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INTRODUCTION
The business world comprise of different companies, which have operated its
ventures in varied forms according to structure and sizes. Each organization has
achieved its set objectives and goals by working with specific legal structure which is
quite beneficial. The current assignment will define characteristics and examples of
different forms of organizations. It will explain several companies from sole traders to
limited liability partnerships and cooperatives. Furthermore, this study will describe
different organizational structures and its impact on productivity of a company. It will
justify use of PESTLE analysis to identify impact of external factors upon a venture
performance.
MAIN BODY
SECTION 1
Section 1: Different types of companies and how they work
Micro business
Micro businesses are those organisations that are smallest in terms of size and
scope compared to all other types of organisation. Micro businesses are those that
employ less than 10 employees and are very important part of an economy. Often such
organisations are managed by their owners and these are businesses that form highest
part of business population in an economy. These are businesses that employ low
capital and investment and objectives of these businesses is to earn maximum benefit
on their limited and low investment and assets (Houston and Reuschke, 2017). In order
to be counted in micro businesses a business must not have turnover of more than
£632,000 and balance sheet total must not be more than £316,000 and another criteria
is that average number of employees must not be more than 10. When a business or
company fulfils these criteria it will be considered as micro business or company. Scope
is these business is limited, this means that customers of these are from local area
where businesses are operating. Examples of this involves- small grocery stores, cafe
and similar businesses.
Small business
Small businesses are those organisations and businesses that are privately
owned, partnerships and sole proprietorships that employs less than 50 employees.
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These businesses also employ less investment and scale of small businesses is also
limited. These businesses also involve those industries that produce goods and
services but at small scale and employees involved are also less than 50. And in such
industries machinery, equipments and infrastructure are also employed in limited
quantity. Certain elements and characteristics of these involves often ownership is sole
ownership, management and activities in small organisations are limited to financial
management that is limited to recording of expenditure and earnings (Turner and
Endres, 2017). Limited reach of these businesses, this means that operations of the
business is limited to certain area and customers that it serves is also from a limited
restricted area. This means that these businesses can maximum serve to customers in
city where they are operating and extension can be done to more than one city but this
also remains restricted. This is because production and output is less and limited.
Medium size business
Medium size businesses are those that employ maximum 250 employees. In
order to come under category of medium size business needs to have balance sheet
total should be £18m and income of the business £36m and average employees for
medium business should be in a financial year 250 employees. Medium size businesses
are comparatively very big than small business. Scale of these types of businesses is
also bigger and their reach extends to state or sometimes even to nationwide (Sedlak
and et.al., 2016). These businesses also have significant scope in which they can
increase sales and market share of the organisation by investing more capital and
resources. These businesses often provide goods and services that have demand in
market and do not involve practices of research and development like big organisations.
Large size venture-
A big size business is a company that has at least more than 5000 workers and
has successfully operated its venture across home boundaries. This category of
companies has implemented varied approaches and applied methods in order to
increase profitability and productivity level (Pierrakis and Saridakis, 2017). The main
trait of big size company is its ability to work with wide number of workers, which is
much wider than other companies. Other characteristic of this type firm is that it has
managed business growth across national boundaries. For example, ASDA is one of
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the large size companies that have successfully managed its success and progress as
well as operational efficiency across UK.
SECTION 2
Characteristics and examples of different legal structure of companies
Sole trader business-
It is one of the business structures where only one business person or women
can runs and owns venture within specific sector, where accessibility of profitable
consumers is high (Henley, 2019). It list of its characteristics, sole trader venture can
enjoy availability of current resources in term of using to increase profits even better. It
can contribute needed capital; he or she is not only owner of a company but also
manager of overall practices. General store, barbershop, small supermarket etc, are
included in list of sole trader business.
Partnership-
This type of business can be considered as legal structure through which two
companies work together and sell products which in return provide a lot of benefits in
term of increasing sales and productivity (Barroso-Méndez and et.al., 2020). According
to this form, a formal contract between two or more companies or entrepreneurs can be
made, which enable both of them to get success. Feature of partnership venture is that
it allowed individual to share profit and loss equally. For example, Pret A manager,
marketing runners, Yoomoo etc, are successfully partnership companies.
Limited liability business-
LLC is a distinct & separate legal entity that can manage business functions and
practices in effective manner. It means that a limited liability company can obtain tax
identification number, do venture under its own label or name. It is not bound by similar
rigid policies of corporations. Trait of this business form is that it has perpetual
succession; duties and rights of partners of limited liability business and those of LLB
and its members shall be governed by a contract between LLP and its partners. Oxfam
is appropriate example of this category of firm.
Public limited liability venture-
It is an organization that is legally permitted to provide its market shares for sales
to public firm. They could not have to offer this resource to public when its management
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select not to, but option is there when and when required. Key features of public limited
liability business is that is have minimum 7 members and has unlimited number of
members in board. Burberry and Rolls Royce holdings are examples of PLL business.
SECTION 3
Different structure of organizations and its affects venture productivity
Functional structure-
It is one of the most common forms of organizational structure that companies
utilize, grouping workers by specially, talent and skill roles (Fuller, 2019). It is based on
degree of hierarch that include varied functional and operational units under direction
and appropriate guidance of designated managers as well as leaders. This structure
can show role hierarchy in a company for example vice president, sales department,
finance section, customer service, president etc.
Impact on business productivity-
Functional structure of a firm can put positive impact on productivity and other
aspects of venture in form of allow workers to work more effectively and productively
than those who could not unfamiliar with particular things which lead to excellent sales
and performance of business. Functional structure allows management to understand
roles and responsibilities systematically which make everyone enable to accomplish his
or her daily task on time.
Divisional structure-
It is another form of organizational structure that has been used by several
companies either retail or private. It groups each function of an organization into a
division format (Viardot, 2017). Furthermore, each separation contains all essential
assets and practices within it to contribute that items line. It can correspond to either
goods or geographies of firms. This structure managed by product departmentalization
that means different practices relate to things are under management of one manager.
It offer varied benefits.
Impact on productivity of venture-
Divisional structure of a firm put affect on productivity of a venture in positive
manner because when work is divided at workplace according to roles and
accountabilities, it allow people to offer quality services to customers on time. It increase
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productivity because divisional structure offer excellent operational flexibility to a
company that leads to make further changes which in return improve performance and
productivity.
PESTEL analysis to determine external factors in regard to ASDA
Political factor-
Political stability or instability, change in tax rate, trade policy and trade
restriction, are included in category of political factors. Tax rate is one of the elements
that put negative impact on performance of ASDA as big size company, which has
operated its venture across the United Kingdom. Increasing tax charge can affect in
form of unbalancing financial performance of firm, which lead to decrease sales and
bring challenge to pay extra trade charge that may be not possible.
Economic factor-
Unemployment rate, currency exchange, disposable income of consumers etc.
are examples of economic factors. In context of ASDA, unemployment is one of the
components that put positive impact on performance of chosen brand and its venture in
term of increasing productivity of company by hiring skilled and talented workers who
seeks to find out appropriate job for them. Because of this factor, organization human
resource management can get chance to hire knowledgeable people who have great
experience, but currently unemployed.
Social factor-
Life style change, needs and preferences change, health concerns and market
trends are social factors that directly influence performance of a company in two
different manners either positive or negative. In recent time, instead of eating unhealthy
products, people drive towards accepting health diet and because of that they purchase
organic food items which enable his or her health fit for longer period of time. It put
positive impact on performance of ASDA in term of increasing consumer base, because
firm already offer its grocery items that are organic
Technology factor-
Technology advancement is one of the most profitable and beneficial factors that
put positive impact on performance of chosen brand in term of reaching at global level
by creating effective marketing strategies and content that influence customers
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successfully. This factor increasing marketing efforts and efficiency of this operation as
it help company to reach at global level and generate brand awareness. With digital
marketing tools, firm can develop effective message which drive attention of new buyers
more than existing one.
Environment factor-
Consumers and government concern to reduce carbon footprint of companies
that protect environment from different types of pollution like air, water and land. It put
positive impact on ASDA performance in term of increasing sustainable business
practices which is quite beneficial for firm. Organization can improve their performance
by conducting corporate social responsibility that boost up brand image in effective
manner. Furthermore, by focusing on reducing carbon foot print firm can sustain for
longer period of time within retail industry.
Legal factor-
Changes in customer protection law, can influence performance of ASDA in
positive manner because company has already follow all principles and norms of
legislation, which bring a lot of benefits for its venture in term of increasing customer
base.
CONCLUSION
From above discussion, it has been concluded that micro, small, medium and
large size ventures has successfully managed its growth and success which in return
increase profits and revenue. With appropriate legal structures, like sole traders,
cooperative, partnership and other, companies has operated its business operations
and management functions. Furthermore, it has been summarized that organizational
structure of organization has put positive impact on business productivity as it help to
deliver quality products to consumers which has turned into increased profitability level
even better. Moreover, from above analysis it has been identified that management by
taking right action eliminate the negative aspect of external factors.
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REFERENCES
Book and Journals
Barroso-Méndez, M.J and et.al., 2020. Influence of Partner Characteristics and
Relational Capital on the Success of Business/Nonprofit Organization
Partnerships. Complexity. 2020.
Fuller, R., 2019, May. Functional organization of software groups considered harmful.
In 2019 IEEE/ACM International Conference on Software and System Processes
(ICSSP) (pp. 120-124). IEEE.
Henley, A., 2019. Transitioning from Solo Self-Employed to Microbusiness Employer:
Local Economic Environment or Owner Characteristics?.
Houston, D. and Reuschke, D., 2017. City economies and microbusiness growth. Urban
Studies. 54(14). pp.3199-3217.
Pierrakis, Y. and Saridakis, G., 2017. Do publicly backed venture capital investments
promote innovation? Differences between privately and publicly backed funds in
the UK venture capital market. Journal of Business Venturing Insights. 7. pp.55-
64.
Sedlak, O and et.al., 2016. Access to finance for micro, small and medium business
units in Serbian Agribusiness. Economics of Agriculture. 63(4). pp.1219-1235.
Turner, S. and Endres, A., 2017. Strategies for enhancing small business owners'
success rates. International Journal of Applied Management and
Technology. 16(1). p.3.
Viardot, E., 2017. Selecting the Right Organization and Structure for Sustainability.
In The Timeless Principles of Successful Business Strategy (pp. 49-56).
Springer, Berlin, Heidelberg.
Online
10 examples of why co-founding and partnerships work. 2015. [Online]. Available
Through: <https://realbusiness.co.uk/10-examples-of-why-co-founding-and-
partnerships-work/>
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