BSc BMP3002: Analyzing Company Types, Structures & External Factors

This report provides a comprehensive analysis of various company types, including micro, small, medium, and large businesses, detailing their characteristics and operational scales. It explores different business structures, such as sole proprietorships, partnerships, limited liability companies, public limited companies, and cooperatives, highlighting their legal frameworks and operational dynamics. The report also examines the impact of internal and external factors on business performance, utilizing the PESTLE analysis to assess political, economic, social, technological, legal, and environmental influences. Furthermore, it discusses functional and divisional organizational structures and their effects on business productivity. This detailed overview aims to provide a thorough understanding of business practices and their implications in diverse organizational settings; students can find this and similar solved assignments on Desklib.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
Contents
1

Introduction 2
Section 1: Different types of companies and how they work
P
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships p
Section 3: Different businesses structures and internal factors
affecting business p
Conclusion p
Reference List p
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Introduction
Business practices refer to the information that relates to the business plan, services,
manufacturing processes, financial information, supply sources, and various other ways in
which a business practices in the market to become successful. This report will illustrate
different kind of companies and their working process. The report will cover definition,
examples and characteristics of the micro business, medium size business, small business and
large size business in the economy. It will also discuss different type of partnerships, different
kind of business structure and how these business structures and environment gets affected by
the external factors, using the Pestle analysis.
Section 1: Different types of companies and how they work
Micro business:
Micro business comes under the type of small business. This business does
not employee more than 10 employees. It includes solopreneurs, side hustlers,
freelancers and other owners that operate form one location. The micro
businesses enjoy the benefit of close customer relations and also have the advantage of
extremely low capital, as these businesses requires very less capital for their start up. Such
businesses come into notice very rarely and hold very low potential in front of the customers
as it becomes very hard for the customers to trust the micro businesses. But once the
customers start to trust them there is no going back as they tend to satisfy the customers more
than any other business.
Small business:
Small business refers to the businesses that work on a small scale and includes a very
low capital and fewer number of labours and machines. These businesses involve more than
100 employees and labours but the number does not exceed from 1500 employees. Small
business tend to obtain a revenue by $1 million to $40 million (Davis, Haltiwanger and
Schuh, 2019). They also play a very important role in the economy as they contribute the
most to a country's economy. Bakeries, local chocolate business, toothpick business, paper
business, candles business etc. are some example of small businesses that operate in the
market. A small business never invests more than 1 crore in its capital. They have a limited
reach and is more inclined towards the use of labour than the technologies, as it becomes very
expensive for them to afford the latest technologies. They are flexible in nature and easily
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adopt changes in the environment. The management of such organizations are done by their
owner itself.
Medium size business:
Medium size businesses might be the family owned or managed business of any kind,
These businesses may also come under tangled entities where the management is separated
from the ownership of the business. These kinds of businesses are generally well-established
and have a nice record that can be tracked and which can also facilitates the financing
decisions of the investors or the lenders (RACZYŃSKA, 2019). The structure of finance of
such businesses are usually managed by the in-house professionals, who are engaged in
reviewing the suitability of current structure plus, the additional funding and alternative
availability for matching the requirements of business for both the timing and the purpose.
Medium size business often engage in different kinds of finance that are supplied by distinct
providers. These businesses may also deal with more than two banks and have the access to
different finances by their ability of providing security.
Large size business:
A large size business is referred to a business that comes in a category of above
average size, involves high scale of economies and also is indulged in large operations. These
kinds of organizations generate huge revenue and also hire large number of labours. Large
size businesses also target international or national markets. They rely more on technology
than on the labours, as they have huge capital and huge funding available and can easily
afford to adopt the latest technologies in their businesses. Such businesses also have
continuous flow of the resources and great scope of expansion as they are supported by huge
capital and various funding options that are available in the market for them. They also have
a responsibility to register themselves as a public limited or private limited company and
have a clear vision and mission according to which they target their market segments, be it
nationally or internationally. These kinds of bushiness have great flow of instructions that
help in achieving the goals of the businesses as they have a clear division of functions which
are supported by the specialized human resources.
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Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
A sole trader business is referred to a business or an enterprise that is owned and run
by one person, single handedly. It is a sole trader-ship or a sole proprietorship which has no
legal differentiation between the business and the owner (Jones and Talbott, 2021). But it is a
not mandatory to work alone and the owner can employee other people as well to work
collectively towards the purpose of the business (Bernoste, Khedhaouria and Thurik, 2019).
In such businesses, the owner have the full control of all the operations and on the decisions
of the business, it is not treated as a separate entity and as both the business and owner are
treated as one entity, so after any uncertainty, the business of the owner is ceased, be it the
death of the owner, bankruptcy, imprisonment or the retirement.
Partnership:
A partnership is said to be an agreement between more than two parties for managing
and operating a business together and sharing the profits of the business together. There are
different kinds of partnership agreements, but the liabilities and profits of the businesses are
shared equally (Clarke and Crane, 2018). The partnership business also have various
advantages such as; easy formation (as the agreement can be in both the form oral or written),
there is a benefit of great resources (as it has good capital which is contributed by the
partners, unlike the sole proprietor ship), the advantage of the risk being shared (as only one
persona is not involved and risk become less when it is shared by other people also) and
lastly there is great combination of skills that can take the business to new heights.
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Limited liability business:
The limited liability business can be defined as the kind of corporate business
structure where the owners and members are not personally or individually liable for all the
acts committed and done by the specific company. This is the hybrid categorical entities
which amalgamate the key characteristics of such companies and that of the sole
proprietorship including partnership structures. This simply illustrates that the responsibility
of its relevant owners is confined up to that amount that has been invested in the
organizational business which is not accountable for associated losses and incurred debts of
the company. Such limited liability business company possess separate legal structures in its
market and is flexible and easier in the process of taxation and its operational departments
and management of its functions (Harris, 2020).
Public limited liability business:
As per the specified and recognized Companies Act of year 2013, public limited
liability business structure is one very single most preferred business choices that people
widely opt for as its business environmental structure which it offers is accommodating in the
nature as its prospect of expanding into further market growth shares is higher. The public
limited business organization consists of the wide scope and capacity of legal freedom since
the persons who adhere to such company framework has to adjust with individually-owned
property (Barbic, 2022).
Cooperative:
The cooperative type of business is owned, managed including operated for its
benefits for the partners of such businesses. These are known as democratic organization. The
cooperatives possess very strong committent for solidifying the community in which its
business resides and serve its products. There are five types of various cooperative society
which are retail workers, manufacturers, service providers and housing cooperatives. Benefits
of such cooperative society include that all its members in its relevant society possess equal
vote rights and associated varied structures. A cooperative business is compiled in such way
that its members share its business and equally shoulder responsibility for operating and
managing cooperative society (McKillop and et.al., 2020). There are no limits on the amount
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of individuals that can gather a cooperative.
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
There exist mainly dual type of company structure namely functional and the
divisional which impact business growth in various ways.
Functional structure
The functional business structure segments all its operations of its company into several
teams and varied areas of expertise like department of sales, department of finance,
department of production, etc. These are divided in such manner that all its workers working
in the particular spheres are skilled in particular functions and related tasks given to these for
serving specific departments. It affects business firm in positive manner since different teams
lead business to a higher productivity level (Orlov and Kurako, 2020, September). This is the
outcome of its efficiency which is created in the company by completion of task properly.
Each functional section is led by functional head who is liable for maximizing the skill of it
for achieving the business goals on time. Interactions in such businesses flow straight towards
senior management and its has very fewer links across department. Relevant significance of
its structures are given below-
 The hierarchy in such a structure seems clear and organized which assists in making
communication easier/better in the firm.
 Its roles and duties of each segment is transparent that helps in smooth liability for
assorted works.
 Personnel specializes in various sectors that help company to raise work-performance
which in turn increases company's profit margin.
Divisional Structure
The divisional structure in business organizations implies that its framework is
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divided in varied team-sections on basis of goods, jurisdiction or its zone. Each unit is
regulated by divisional supervisor whose task is boosting performance in the particular
section by managing it. For instance businesses organized on a basis of segmented structure
could have operational teams in UK, US or Australia. The divisional pattern is applied by
such organizations which sells broad range of consumer goods in markets (Osterrieder,
2021). This is also adhered in the companies which sells to both the B2C and B2B services.
This categorical structure always emphasizes on augmenting profits through serving various
customers locally and globally. The upside of divisional pattern are given as-
 It creates higher accountability which implies members in the business are liable for
the tasks completed by them.
 This structure facilitates organizational competitive advantage in many markets,
business size gets larger with such divisions.
 It also aids company in strengthening the company culture by permitting all its unique
features of its different workers at efficient levels in the firm.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
Political: The political aspects are all such factors which are associated with governmental
arenas of a country. These factors include fiscal policies, taxation policy, trade obstacles and
tariffs, etc. These have both positive and degrading influences on business performance of the
firm.
Economical: The economical aspects such as the increase in inflation of the economy
impacts organizational in negative manner. These are such aspects which show the
performance factor of country's economy which directly and indirectly affects business.
Social: The sociological dimensions are all such aspects that are linked with many social
trends of the region like traditional/cultural trends, demography ratios, population expansion
etc.
Technological: Techno-savvy features are such areas which are connected with innovative
technologies and influence operational functions of the business such as automation, R&D
department, technological knowledge and awareness also come in it.
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Legal: Legislative aspects like all such laws which affect the constant running of its
businesses in the nation. The customer laws, labour policies, safety laws and regulations falls
under it.
Environmental: The nature-related and environmental aspects relate to the areas that are
depicted with the nearby surroundings. Business organizational analysis regarding
environmental aspects comprise climate, fluctuating weather, geography, global alterations in
environment, etc.
Conclusion
From the above report it can be concluded that the concept of businesses that exist all
around the world is very widely ranged and can be categorized in a lot of terms and contexts.
The report above has fairly summarized, defined and described the various kinds of business
organizations based on the factor of size such as small, medium and large sized. It has also
analysed and discussed different companies starting from sole traders, public and private
limited firms to cooperative societies. The report has further differentiated between several
existing business structures and the internal and external factors that surround it.
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Reference List
Barbic, J., 2022. Liability of Supervisory Board Members for Damages to the Public Limited
Company. Zbornik PFZ. 72. p.11.
Bernoste, I., Khedhaouria, A. and Thurik, R., 2019. Positive affect, the entrepreneurial
process, and the entrepreneurial success of sole proprietors. M@ n@ gement. 22(2).
pp.273-296.
Clarke, A. and Crane, A., 2018. Cross-sector partnerships for systemic change: Systematized
literature review and agenda for further research. Journal of Business Ethics. 150(2).
pp.303-313.
Davis, S.J., Haltiwanger, J. and Schuh, S., 2019. Small business and job creation: Dissecting
the myth and reassessing the facts. In Labor markets, employment policy, and job
creation (pp. 169-214). Routledge.
Harris, R., 2020. A new understanding of the history of limited liability: an invitation for
theoretical reframing. Journal of Institutional Economics. 16(5). pp.643-664.
Jones, S.H. and Talbott, S., 2021. Sole Traders? The Role of the Extended Family in
Eighteenth-Century Atlantic Business Networks. Enterprise & Society. pp.1-30.
McKillop, D., and et.al., 2020. Cooperative financial institutions: A review of the
literature. International Review of Financial Analysis. 71. p.101520.
Orlov, V. and Kurako, E., 2020, September. Organization and Management of a Multiple
Functional Structure for Large-Scale Informational Processing Systems. In 2020
13th International Conference" Management of large-scale system
development"(MLSD) (pp. 1-4). IEEE.
Osterrieder, P., 2021. Organizational Structure. In Managing Industrial Services (pp. 53-66).
Springer, Cham.
RACZYŃSKA, M., 2019. DEFINITION OF MICRO, SMALL AND MEDIUM. REVIEW
OF ECONOMIC AND BUSINESS STUDIES.
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