Business in Practice Report: Business Types, Structure & Analysis

This report provides a comprehensive overview of business concepts, encompassing various business types like sole traders, partnerships, limited liability businesses, and the distinctions between small, medium, and large-scale enterprises. It delves into organizational structures, using McDonald's as a case study to illustrate divisional structures and their impact on global operations. Furthermore, the report includes a detailed PESTEL analysis, examining the political, economic, social, technological, environmental, and legal factors affecting businesses, with specific attention to the USA context and the challenges faced by McDonald's. The report covers the characteristics of each business type and the factors that influence the performance of a business in the market. The report is a comprehensive resource for students studying business development and related fields, offering insights into real-world business practices and analytical frameworks.

Business in Practice

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
SECTION 1.....................................................................................................................................3
SECTION 2.....................................................................................................................................4
SECTION 3.....................................................................................................................................6
Organizational structure...............................................................................................................6
PESTEL Analysis........................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10
Books and journals....................................................................................................................10

INTRODUCTION
A business is a company or an organization where people work to make money, profit for the
organization or for ourselves (Mougayar, 2016). Business is something where people work
together, sale the products and services to customer or clients. In the business owner hire or
recruit the people for the better performance. The word business is coming from 'BUSY' word
means doing something for making the money and profit.
MAIN BODY
SECTION 1
Small business: A business which perform on small scale with small investment, number of
labours are less and Few things to operate the business. Small scale industries are something that
produce products and services on a small level (Buppert, 2020). These types of industries not
invest more and these types of business are settled in urban area as a separate shop or unit.
Example, Small scale business is like retail shops, bakeries, paper, pen, local chocolate etc.
Characteristics
 They have only one owner so, small business is known as sole proprietorship
 Business technology level is very small they are more dependent on labours or we can
say man power.
 They are more flexible because they are independent.
Micro Business: A micro business is a domestic business they are generally sale their
product in local markets. In micro business there are fewer than ten employees or labours and the
annual turnover of these business is around €2 million or less than that. Example Micro business
are like food business, canteen, trading, retail shops etc.
Characteristics
 They are more profit motive.
 They have limited areas and less chances of risk.
 They have less number of labours so they do not have to invest much on labours.
 They are sole proprietor.

Medium size business: A medium size business is introducing as a company that not full fill or
cover the criteria of 2 out 3 in the current year or preceding year. Medium size business income
is £36m (Pearson, 2017). In this business the average employees for the financial year is 250.
Example Captify, verdant leisure.
Characteristics
 Medium size business adapt the quick changes according to market conditions.
 They are very good financial manager.
 More empowerment.
Large size business: Large scale business needs more property, infrastructure, and huge
manpower. In this business they need more capital and investment. These types of business
operate basically basic goods, machines and chemical. Mostly they have chain network across
the Globe. Example, TESCO, Vodafone.
Characteristics
 They provide more employment opportunities.
 Further they provide or create more opportunity for small scale business.
 They are more powerful and capable to introduce with new technologies for research and
development.
SECTION 2
Sole Trader Business: Sole trader business is operated by the owner if the business and
they are liable for all operational activities and decision of the business. They have all rights and
authority to take decisions and control the business. They do not need to take help of other
decision maker. They do not have any legal identity. They have complete control on their assets
and profits after paying the tax. Example such as, Plumbers, decorators etc.
Characteristics
 Ownership of one-man means owned by single person.
 They enjoy entire profit.
 They have separate entity.
Partnership: Partnership is formal and legal agreement by two parties or more than two
to manage and share its profit. In partnership business all partner has rights to share profit and

liabilities. For partnership business there are need of at least two parties. Some common
Example of Partnership are Levi’s and Bloomberg.
Characteristics
 sharing of profits in parties
 They have unlimited liabilities.
 They have more resources and skills because everybody has different mind-set and
thoughts.
Limited liability of business: Limited liabilities are a legal framework of any organization in
which a firm loss will not exceed the amount that is invested during partnership procedure
(Zellweger, 2017). Means partners and the owners is a not public assets of the firm and if there is
chance or some indication of fails of the business then private assets are not at risk. For Example,
Anheuser-Busch, Blockbuster and Westinghouse.
Characteristics
 The owner of the LLC is safe against the liabilities of the firm.
 LLC needs less requirement of the maintain the books like bookkeeping, financial.
 LLC company can also form by with one member.
Public limited liability businesses: A public limited company is authorised under the
Companies Act 2013. The company sale their shares for collect capital and the people who buy
the shares are known as members. Public limited company are listed on the list that is stock
exchange where shares are sold. Minimum number of member is seven in the company and that
is much but there is no maximum limit for the members.
Characteristics
 The company has legal existence that is separate from another member whose compose
it.
 its activities are formulated under the government rules, laws and regulations.
 They have large capital and financial privacy also.
Cooperative: Cooperative is owned, manage and work by and for their members to know their
common, social, economic needs. In cooperative people work together with equality there are
same equality for all the members (Lüdeke-Feund and Dembek, 2017). The cooperative is
control and manage by 'one member, one vote' rule. They have to share their equal rights

regarding amount of capital that is used for the firm. There are some Example such as
BAYWIND Energy Co-operative, Brighton Energy Co-operative.
Characteristics
 They have open membership.
 They are not biased on the basis of colour, religion, caste and sex.
 They give proper training and education to members for better training and development.
SECTION 3
Organizational structure
Organizational structure is a method or path to identify the work factors. Organizational
structure is used to divide, control, organized and coordinate the business activities. Its control
the performance of members and work mode. Its define the hierarchy of the organization. This
structure the made for the business that how organization will operate and reach is goals and to
identify the roles of each members of the company.
McDonald’s Organizational Structure
McDonald’s organizational is reformed in 2015 to improve the performance and the globe
operations because McDonald’s is a multinational company. A firm structure is defining their
performance, goals and coordination to achieve their goals (Palo, Åkesson and Löfberg, 2019).
McDonald’s is a largest food restaurant chain in the globe so they have to keep working on the
marketing issues and challenges. Through this structure company launch some new products to
maintain its performance and to satisfying the customer needs and taste specially when they have
more competitors like burger king, starbucks,wendy's. McDonald’s has a divisional
organizational structure. In this structure each division has their different work and department
where they have to, manage their responsibility according to works and task.
Characteristics that affecting food service business action:
Wide ranging Hierarchy:
McDonald’s is an international company and cover all its work globally. This structure is
used to control and manage all the managerial directions. McDonald’s CEO gives the operations
to all business areas through this structure hierarchy. Command and orders are passed from the
CEO to managers, and to the restaurant managers and among franchisees.
Performance based division:

Performance based division are the specific characteristics of the McDonald’s. July 1,
2015, McDonald’s had the geographic divisions in the organization: (a) U.S., (b) Europe, (c)
Asia/Pacific, (d) Middle East and Africa, and (e) Other Countries & Corporate (OCC) including
Canada, Latin America and Corporate. After the reorganization, the company work as basis for
the new divisions in its organizational structure: (a) U.S., (b) International Lead Markets, (c)
High Growth Markets, and (d) Foundational Markets and Corporate.
Function based Groups
McDonald’s is use function based groups on the organisation structure. The company has
many groups and each group is under the leadership of an executive and senior manager etch.
Groups may have added and changes according to company growth and market change
(Schallmo, Williams and Boardman, 2017).
PESTEL Analysis
PESTEL Analysis is the strategies of identifying the situation of political, economic,
social, technological, environmental and legal factors of the country or world or any
organization. Through pestle we can easily identify the opportunity and threats of the business or
nation so, we can overcome the threats and problems and take more opportunity. Through pestle
we can focus on six major factor that is POLITICAL, ECONOMICAL, SOCIAL,
TECHNOLOGICCAL, ENVIRONMENTAL and LEGAL (Caldera, Desha, and Dawes, 2019).
PESTEL analysis of USA indicates the some political, environmental, social,
technological, economical and legal factors. USA is stands for UNITED STATES OF
AMERICA it is the largest economy in world. It is a very developed country its reputation is
very amazing for infrastructure and technological support. It is very powerful country.
Political factors: The political factors of McDonald's in USA is very important for
threats and opportunity of the organizations. Some time it will help to company and sometimes it
will become threat for businesses because of some trade agreements make it easier or tough for
the organization and sometimes tax rates are increased on fast food or some ingredients are
banned so it will make more challenging for the organization. Now in this pandemic COVID19
McDonald’s are facing lots of challenges because of COVID19 there were lock down in country
so in that time they were facing problems because of rules and regulation that no one can operate
the company in lockdown specially food zone so it’s become more challenging for them.

Economic factors: Economic factors which are affect the organization as this is
international, local brand. That means the whole company is affected by the COVID19
economically. Because of lockdown in USA so there is fall of income, increase more
unemployment. Because of lockdown there is fall in economy also. The economic condition is
weaker than before so this affect the organization economy also so the falling sales is also main
attributes of changing taste, rates and economical fall (Caldera, Desha and Dawes, 2017).
Socio factors: In this factor organization is taking care of the needs, taste etc. customer
needs, taste and competition is very major factor that impact on McDonald’s. In this situation
human beings are more aware about their health issue their calories intake, because of COVID19
they are avoiding the junk foods so McDonald’s needs to focus on customer demands and
choices. They have to meet the new choices, changing in menu card, rates and demands of
customer related health issues for gaining more sales with more precaution because of
COVID19.
Technological factors: Changing in taste, rates, services customer wants more
precaution and awareness. Through changing technologies McDonald's accept the changes and
improve their businesses and start different types of services as precautions also that is self-
service, online ordering, take away reordering. This technology meets the higher satisfaction of
customer and improve the connection with customer.
Environmental factors: There are some environmental issues that create threats for the
company just like good quality products, focused on the protective resources. Some of the main
issues that is faced by the food production company is deforestation, food miles. In this
pandemic there are too necessary to taking care of environmental factors because food is main
product that is psychological needs of human being (Baumann-Pauly and Nolan, 2016).
Legal factors: Legal factors can have major impact on successful business. Organization
needs to meet with every new laws, rules and regulations for their employees, business and
customer too. But some of the policies make tougher for the organization to make more profit
just like employment law, minimum wages, holiday, sick pay. These policies increase the cost of
the business but may overcome recruitment costs because employee feels that they are receiving
good behaviour, better pay, and good satisfaction so they don't want to leave the company.

CONCLUSION
` It can be evaluated from above mentioned report, there are number of company Through
pestle analysis we can easily focused on the everything that affects organization in good way or
in a bad way. McDonald’s needs to focus on more demands of the customer and focus on new
technologies and taking care of environmental factors and legal factors to improve the business
or overcome the recruitment cost.

REFERENCES
Books and journals
Baumann-Pauly, D. and Nolan, J., 2016. Business and human rights: From principles to
practice. Routledge.
Buppert, C., 2020. Nurse practitioner's business practice and legal guide. Jones & Bartlett
Publishers.
Caldera, H. T. S., Desha, C. and Dawes, L., 2017. Exploring the role of lean thinking in
sustainable business practice: A systematic literature review. Journal of Cleaner
Production, 167, pp.1546-1565.
Caldera, H. T. S., Desha, C. and Dawes, L., 2019. Evaluating the enablers and barriers for
successful implementation of sustainable business practice in ‘lean’SMEs. Journal of
Cleaner Production. 218. pp.575-590.
Lüdeke-Freund, F. and Dembek, K., 2017. Sustainable business model research and practice:
Emerging field or passing fancy?. Journal of Cleaner Production. 168. pp.1668-1678.
Mougayar, W., 2016. The business blockchain: promise, practice, and application of the next
Internet technology. John Wiley & Sons.
Palo, T., Åkesson, M. and Löfberg, N., 2019. Servitization as business model contestation: A
practice approach. Journal of Business Research. 104. pp.486-496.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Schallmo, D., Williams, C. A. and Boardman, L., 2017. Digital transformation of business
models—best practice, enablers, and roadmap. International Journal of Innovation
Management. 21(08). p.1740014.
Zellweger, T., 2017. Managing the family business: Theory and practice. Edward Elgar
Publishing.