BSc (Hons) Business Management: Companies Report Analysis

This report provides a detailed analysis of various types of companies, from micro-businesses to large corporations, examining their structures and operational characteristics. It explores different business structures, including sole proprietorships, partnerships, and limited liability companies, and discusses how these structures impact business operations and risk. The report also investigates the influence of external factors, such as political, economic, social, technological, legal, and environmental (PESTLE) factors, on business performance, using Marks and Spencer as a case study. Furthermore, it examines how organizational structures affect business productivity, with a focus on functional and divisional structures. The report provides a comprehensive overview of the key elements of business operations and the external forces that shape them.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
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Contents
Introduction.................................................................................1
Section 1: Different types of companies and how they work.....1
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships.........................2
Section 3: Different business structures and external factors
affecting business.......................................................................3
Conclusion..................................................................................3
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Introduction
A business is a legal entity that produces various types of products and services to
fulfill peoples needs. There are various types of business that differ on basis of their
size and operational areas. So according to their size they form organizational
structure. Besides that, there are various factors that impact on performance of
business. These factors needs to be identified and on basis of that measures is to be
taken. In this report it will be described about different types of companies and how
they work (Hwang, and et.al., 2017). Also, companies from soul traders to
cooperatives and limited liability partnership. Moreover, it will be explained about
business structure and acts external factors affecting business. Here, Marks and
Spencer company is taken that operate in retail industry.
Section 1: Different types of companies and how they work
Micro business:
It is a kind of business that do not have more than 9 employees working within
organization and whose turnover is never more than £ 2 million (Hassan and et.al.,
2017). These kinds of business are mostly run by family members or close
members. Such kind of businesses have high potential of growth and development.
One of the most common examples of micro business is Vermont. This company
only has 5 people whose annual turnover is not more than £25,000. Such kind of
businesses faces various kinds of challenges in order to sustain within the market in
which operate, fulfil their short- term goals and objectives. Micro businesses led in
increasing 33 percent of employment rate of UK as there are approximately 5.5
million of micro businesses in UK.
Small Business
It is a kind of organization that do not have more than 50 employees and
whose turnover is not more than £10 million (Harten, 2019). Overall revenue and
turnover of a small business completely depends upon the area serviced by such
business. These kinds of businesses can operate from one place as well as can
have offices at many locations as well. Most of the small businesses are privately
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owned but some of them can be in partnership, sole proprietorships as well. One of
the examples of small business is Vectair Holdings. It only has 40 employees
working for them. These businesses also help in providing employment and
contributes in increasing overall economy of a country.
Medium sized business
These are type of organizations that do not have more than 250 employees
whose turnover is not more than £50 million (Hassan and et.al., 2017). These
organizations are developed when small businesses become success and grow
exponentially by entering into new market or by developing or producing innovative
or creative products, services or processes. Such organization have capability of
expanding further. One of the example of Medium sized business is Crawford
Healthcare that has approximately 130 employees working for them and their overall
turnover is £25 million
Large sized business
These are kind of organizations that have more than 250 employees working for
them and such kind of organization have turnover more than £50 million (Hassan
and et.al., 2017). Such kind of organizations can operate in both domestic and
international market i.e. have their presence in more than one country. such kind of
companies can private, public, partnership, sole proprietorships etc. overall structure
of these companies is quite complex and most of them have their structure as per
their presence internationally. Such kind of organizations need to continuously focus
upon innovation, research and development in order to gain competitive advantage
and sustain within the market in which they operate. Some of the most common
example of Large organizations are Tesco, HSBC etc. Tesco has approximately
423,092 employees working for then and turnover £ 53 billion.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
There are various types of business that operate. They all provide variety of
products and services. Moreover, goals and objectives of business also vary from
one another. It depends on its size and nature. So, they all are defined as below
Sole proprietorship- it is the most common and simple form of business in which a
single owner owns and runs a business for earning profit. All the decisions are taken
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by the owner and he is responsible for all the risk and liabilities in the business. For
example restaurant, cafes, etc. (Bankvall, Dubois, and Lind, 2017)
Characteristics
 It is owned by a single owner
 Profits are not shared
 Decisions are taken in dependently
 Owner is liable for all the risk
Partnership- In this the business is owned by two or more than two partners. There
are two types of partnership in it that is general unlimited. In general both owner
invest money into business and is liable for both owner invest money into business
and is Limited liability. Moreover there is no need of having an agreement in it as
well in limited partnership there is need to sign in agreement. Furthermore the
liability owned by partners depend on the investment made into the business
Characteristics
 There is need to have agreement signed among partners
 The partners are liable for limited liability
 The profits are shared according to the ratio of investment
 Risk is shared between partners
 There is failure of partnership in business
Limited liability business- it is similar to limited partnership where owners are
having limited liability but in this the benefit of partnership and corporation are
combined into it. For example Maruti Suzuki, Bharat petroleum, etc (Lam, and
Wong, 2018)
Characteristics
 The partners are liable for limited liability
 The profits are shared according to the ratio of investment
 Risk is shared between partners
Public limited liability business It is a company that is formed by and is having a
legal existence. Also, it offers shares to public. These types of business are listed on
stock exchange where it is traded publicly. For example Burberry, Rolls Royce, etc
Characteristics
Companies having separate legal existence from its members
The structure and its working is regulated and controlled by government
There must have 7 minimum members and loan limit off maximum members
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The shares can be transferred without consent of shareholders
Liability of companies limited two face value of shares
Shareholders are having no right to participate in management of company
Cooperative- it is privately owned business by people who uses its products and
services. Basically, cooperative very in terms of size and type that is based on its
objectives, The structure of business meet members changing needs. For example
Amul. (Labes,, Hanner, and Zarnekow, 2017)
Characteristics
It is privately owned business
The main purpose is to earn profit
Those who finance the cooperative can use its products and services
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
Every organization follows different structure that is based on their nature and
size. Also it is necessary to follow an effective organization structure so that roles
and responsibilities are clearly defined and it also helps in clear flow of
communication. The organizational structure defines the activities which are directed
to attain our goals and objectives. The activities includes rules, flow of information,
between various levels of company. Furthermore it is analyzed that there is
relationship between organization structure and business productivity. Moreover it is
identified that there are basically two types of organizational structure which is
followed they are defined as below
Functional- It is a common type of structure in which business group employees on
basis of their skills and roles. In this there are various levels of hierarchy that include
different departments that is under head of particular leader (Oliva, , and et.al.,
2019).
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Divisional- In this structure each function is grouped into a division. Then, the
division is responsible for performing various functions. Also resources are allocated
to each division. For example marketing, IT, finance, HRM, sales, etc.
Marks and Spencer follows flat organizational structure in which there are few
levels of middle management. Besides that it is evaluated that organization structure
affects business productivity. This is because if there is flexible organizational
structure then there will be smooth flow of communication and information within all
levels, departments and employees. Thus, they will be able to work in flexible way
and attain goals and objectives. In addition to it, if there is transparency between
organization structure then it will lead to effective decision making.
Managerial influence- If there is weak organizational structure then there will be bad
decision making which will affect the department productivity as well. Therefore
having a good management will lead to efficient decision making which will help in
enhancing productivity and efficiency of department (Eggert,, Böhm, and Cramer,
2017)
Structural flaw- If organizational structure is not formed properly then information will
not travel in fast way. This means if middle management is not having channels of
communication then important information may not reach employees in right time. So
flaws in organization structure will cause breakdown in communication thus it will
impact on productivity.
Growth- If a company grow with weak internal structure and communication then it
will lead to inefficiency. Therefore, having a strong culture helps in maintaining
corporate productivity and also allows in making improvements in structure along
with expansion of organization.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
It is a framework that is used to analyze the external factors that impact on business
performance it is as follows
Political- This factor is related to laws and regulations, trade laws, political stability
etc. So, any change in these laws it will impact on operations of Marks and Spencer.
So as firm operate in various countries they have to follow rules and regulations of
these countries. In UK due to Brexit there will be change in trade laws so it will
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heavily impact on performance of company in negative way (Bankvall, Dubois, and
Lind, 2017).
Economic- In this there are factors related to GD, inflation rate, currency rate etc.
thus, it highly impact on company growth. Due to COVID-19 there has been
lockdown imposed in various countries so it has led to decline in GDP growth of
nations. So it has also affected on Marks and Spencer growth in negative way as
there is decline in sales and profits
Social- It is related to changing needs and preference, taste, cultural ethics, values
etc of people. Due to COVID-19 now people are becoming health conscious so there
is change in their needs as they are focusing on organic products hence, it has
affected the performance of Marks and Spencer the company is now providing
organic products to fulfill that demand of people. It has resulted in positive growth
(Lam, and Wong, 2018).
Technological- As name depicts it is related to advancement in technology this highly
impact on performance of business. In present times online business model is highly
been used by retail firms they are providing online products to people. Similarly
Marks and Spencer is also using advanced technology to provide products and
services to customers thus it has benefited them in positive way by attracting a lot of
people and generating high sales and revenues.
Legal- In this there are various laws such as employment health and safety minimum
wage act which has to be adhered by companies in which they operate. The
government has made changes in health and safety laws now firms have to ensure
employees health and safety with new norms and guideline. Similarly Marks and
Spencer performance is affected as focuses on staff health and safety of employees.
Environmental- These are those factors such as CSR practices and environment
laws that organization needs to follow. In recent times government is focusing on
sustainability so it has affected performance of business in negative way. Marks and
Spencer has to follow various CSR practices so it has affected on their business
operations in negative way (Labes,, Hanner, and Zarnekow, 2017).
Conclusion
From above report it is concluded that there are various types of companies
such as micro, small, medium and large. Their size and nature varies from one
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another and also they work in different way. Besides that there are various
companies such as soul trader, limited liability, partnership, etc these all purpose and
objectives vary from one another. Moreover functional and divisional are types of
organizational structure. Also it affect business productivity as having flexible an
effective structure leads to high productivity. Also there are various external factors
that affect the performance of business such as political, social, technological, etc.
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Reference List
Books and journals
Bankvall, L., Dubois, A. and Lind, F., 2017. Conceptualizing business models in
industrial networks. Industrial Marketing Management, 60, pp.196-203.
Eggert, A., Böhm, E. and Cramer, C., 2017. Business service outsourcing in
manufacturing firms: An event study. Journal of Service Management.
Harten, S.V., 2019. The Global Reporting Initiative as a tool for analyzing corporate
tax avoidance? Evidence from 581 Small-Medium, Large and Multinational
Organizations.
Hassan, H., and et.al., 2017. Factors Influencing Cloud Computing Adoption in Small
Medium Enterprises. Journal of Information and Communication
Technology. 16(1). pp.21-41.
Hwang, J., and et.al., 2017. Energy prosumer business model using blockchain
system to ensure transparency and safety. Energy Procedia, 141, pp.194-
198.
Labes, S., Hanner, N. and Zarnekow, R., 2017. Successful business model types of
cloud providers. Business & Information Systems Engineering, 59(4),
pp.223-233.
Lam, J.S.L. and Wong, H.N., 2018. Analysing business models of liner shipping
companies. International Journal of Shipping and Transport Logistics, 10(2),
pp.237-256.
Oliva, F.L., and et.al., 2019. Innovation in the main Brazilian business sectors:
characteristics, types and comparison of innovation. Journal of Knowledge
Management.
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