BSc Business Management BMP3002: Types of Companies Report

This report provides a comprehensive overview of different types of companies, ranging from micro-businesses to large enterprises. It explores various business structures, including sole proprietorships, partnerships, limited liability businesses, and cooperatives, detailing their characteristics and operational aspects. The report further analyzes organizational structures and how they influence business productivity, touching upon functional and divisional structures. Additionally, it delves into the impact of external factors on business performance using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors with examples. The report aims to offer insights into the dynamics of different business models and the external factors that shape their success.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Contents
Introduction 2
Section 1: Different types of companies and how they work
P
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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
Introduction
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Companies are legal bodies which are formed with the unification of various
individuals who gathered together to work for a common goal and accomplishment of
determined objectives. They are categories into various categories like industrial and
commercial and then further sub categories in private, public, limited or share capital
companies etc. Their taxation tariffs differ in accordance with their assemblage. The aim of
this following report is to examine the different types of companies their attributes and
functioning and also analysis the differentiation of companies on the basis of sole trader,
partnership, cooperative and LL C's. Further the report will also determine the organizational
structure of the companies and how the external factors influence the overall operational
activities of the establishments.
Section 1: Different types of companies and how they work
Micro business:
Micro- enterprises are basically small businesses. The initial amount of capital
invested to start the industry is comparatively very low. They total count of appointed
workforce in these establishment is less or not more than 10. In some scenario these
industries are operated by the owners alone without any employees. The customers or buyers
of their product are very low as their business is not very well expanded they are limited to
their domestic locations or ares (Brownlee, Dmytriyev and Elias, 2017). That's the reason of
their low income as they can able to generate low income. Some of the examples of Micro
businesses are : Hand loom and hand crafted products, jute products like making baskets,
broom etc.
Small business:
These establishments are generally self owned and private corporations. Small
industries are also established by partnerships. They also do have less workers as their
operational activities are not that complex so they required less labors and their overall
profitability earned by the business is not that high with less profit margin. The characteristic
for these establishments differ according the country they are operating in for example in the
United Kingdom the government have guidelines for manufacturing and production
industries to appoint not more than 400 employees and retailers have a limited staff count of
less then 100. Their investment expense is comparatively high than the micro-industry
(Müller, Buliga and Voigt, 2020). These enterprises may have one or more outspread stores
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or outlets in their operational region. Example: Cafe's and food joints, Pet care institutions
etc.
Medium size business:
The mid scale organizations are prescribed to hire more than 100 or less than 200-250
workforce in their establishment. These enterprises or corporation can be paternal or family
owned. But the administration or management of the core activities of the business is totally
separate from the the people who owned the business and its actual management. These
institutions need to be enrolled under that registration of Companies act (Frank, Dalenogare,
and Ayala, 2019). Their operations a re a bit complex as they consist of systematically
structured administration and also get financial support from the investors, and creditors and
they have equal right to get involved in the decision making and every future strategy
formation of the company. Medium size companies basically function in the market which
have high growth and profitability potential and carry out their functions in the market to
bring forth many development opportunities for them and can expand their horizon in the
large commodities upfront. Example of such establishments are: Textile industries, Agment
which is a chemical production industry, Vectair holdings hygienic product suppliers, Tile &
Stone depot ceramic tile distributors etc.
Large size business:
These are the big companies which have their business expanded in international and
national market. The annual turnover of these establishment is highest in comparison of all
the SME industries. They have high profit margins and productivity, their distribution
channel is very well structured. Organization structure of these businesses is complex as they
have long systematic structured hierarchy and the line of authority is also enlarged in both
horizontal and diagonal direction. Large industries carried out several functions and activities
on regular basis (Cavalieri and et. al., 2018.). These organizations should employ around
450-500 employees and not less that 250. Their market reach is strong as they have acquired
huge customers base from nearly every segment of the market. Such enterprises maintain
professional engagements with various big industries and the stakeholders operating in the
marketplace. Examples of large establishments are: AstraZeneca, HSBC etc.
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
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Sole trader business:
Sole trade businesses is the type of business which is owned and governed
by an individual trader, in such a way that the trade has unlimited liabilities for the
performance of the business. For example if the company faces loss then the owner
has to repay the debts from the profit collections because of which the owner is itself
responsible for getting all the profit (Worthington, 2018). The main characteristics of
this business type is that its simplicity, low nominal costs and because of which sole
traders can often be seen as startups which provide services like healthcare,
booking business computer repair or any other type. In this the number of employees
and type of recruitment process is also selected by an individual because of which
high control over activities can be seen because of unlimited liabilities.
Partnership:
Partnership is the type of business model which is having more that one
owners because of which the organizational liabilities and profit are equally divided
among all the owners with a sharing agreement which is achieved with the help of
attorney. Since profit and loss are shared equally among all the members because of
which liabilities and decision-making capabilities are also divided among the
members thus decision-making time is increased as compared to sole trader (Keane
and Costin, 2019). Transaction of capital amount also has to be done with the proper
consideration and agreement of all the members by which high level of self
understanding can be achieved. Some of the biggest partnership organizations are
Twitter, HP and WB.
Limited liability business:
This is one of the most widely used liability system in which the liabilities of
the owners are limited to the certain point till which it has done investments in the
organization. This limits the amount of loss which company has to bare if it fails to
achieve its targets and has to face loss (Kavanagh and Brigham, 2019). This limited
liabilities reduce the decision-making time of the organization and since
organizational profitability can be achieved with higher investments and thus this
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type of businesses are often large because high amount of investment can be seen
in this.
Public limited liability business:
As the name describe in this type of business model public investment can be
seen at high level because of which transparency of the business increases and also
the risk of the owner reduces. Thus it provide high level of advantage to company
because it is achieving investment at large level by which growth and expansion can
be achieved more effectively. Some of the most popular examples of this is Rolls-
Royce PLC, British Petroleum and many more.
Cooperative:
In this type of business structure its services and activities are governed by its
users. This type of business format is organized as legal bodies by which the main
objective of this is to provide high level of services to its users and buyers by which
high level of profit margin can be achieved (Strážovská and Treľová, 2016). Some main
advantages of this is Ocean Spray and Weaver Street market.
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
Organizational structure is the way in which organizational activities are done
this is important because through this interdepartmental communication can be
established by which work load can be effectively shared among all the departments
and thus company will be able to achieve high level of working capabilities. This
happens because organization is the group of individual who have gathered together
for achieving a common goal and since organization has to provide products and
services on the basis of customer requirements because of which each department
has to synchronize its working with each other in such a way that the developed
product is able to fulfill all the requirements of customers (Lipton, 2017). Thus it is
very important that organizational structure has to developed in such a way that
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employees are empowered to discuss their issues with the higher authorities of the
organization in such a way that problem solving time is reduced.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
Following is the PESTLE analysis of Tesco.
Political-
Political instabilities of a country make a direct impact on organizational
working capabilities because company has to follow the rules and regulations
developed by the governments and if it fails to work according to that then it has face
penalties. This can also be seen in the case of Tesco in which UK's decision of
leaving EU has made a negative impact on company's performance because it has
to pay taxes in the areas which were freely available before the events of Brexit
which has increased organizational expenditures.
Economical-
The economic condition of the country also make a negative impact on
company's performance because it is direct linked to the buying capabilities of the
buyers and thus if the buyers are not able to purchase the products then company
will have to face loss. Now since Tesco provide products on the basis of customer
requirements by which it has to make sure that it establish pricing in such a way that
high sales can be achieved other wide company has to face loss.
Social-
Company has to make sure that it is able to provide products on the basis of
customer requirements and thus it has to make sure that the products are being
placed in such a way that high sales can be achieved. Thus Tesco has to make sure
that it is able to provide products on the basis of customer requirements.
Technological-
Customers are increasing their engagement in technological development and
due to which organizations also have to increase their engagement in social media
marketing by which it is able to achieve high organizational sales (Mtani and
Nyangarika, 2020). Therefore Tesco has to implement these technological
advancements in its work areas in such a way that work productivity and accuracy
can be increased.
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Legal-
Legal factors the governmental rules and regulations which company has to
follow otherwise it has to face penalties which increase organizational expenditures
and also will decrease company's reputation in front of its customers which will make
a negative impact on its sales. Due to which Tesco has to make sure that it is able to
develop organizational culture in such a way that it is able to fulfill every
governmental criteria.
Environmental-
Company has to take several steps through which it will be able to provide
high level of benefits to the environment by which it will be able to achieve high level
of positive image development because it is developing a sense for customers that
company is taking steps for social welfare but it will increase expenditures which will
reduce goal achieving capabilities.
Conclusion
The above report have conducted a detailed study which help in the better
understanding of the different types or companies and also the examine their characteristics
and attributes in accordance with their size and scale. Establishment in regards with their
operations and functionality was also analyzed on the base of sole proprietor, limited liability
partnership and co-operative industries. Further the report evaluated various organizational
structures and their impact on the productivity and growth on the different business context.
Lastly the influence of external factors business activities and operation was also
examined as in what sense they alter the activities of the organization.
Reference List
Brownlee, E.R., Dmytriyev, S. and Elias, A., 2017. Integrative Stakeholder Engagement:
Stakeholder-Oriented Partnership Between the Coca-Cola Company and World
Wildlife Fund. In Stakeholder engagement: Clinical research cases (pp. 339-367).
Springer, Cham.
Cavalieri, S. and et. al., 2018. Service transformation in industrial companies.
Frank, A.G., Dalenogare, L.S. and Ayala, N.F., 2019. Industry 4.0 technologies:
Kavanagh, D. and Brigham, M., 2019. The Quakers and the Joint Stock Company: Uneasy
Bedfellows. In Quakers, Business and Corporate Responsibility (pp. 111-128).
Springer, Cham.
Keane, C. and Costin, Y., 2019. Collaboration in an entrepreneurial cluster: a study of an
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urban coop. Journal of Enterprising Communities: People and Places in the Global
Economy.
Lipton, P., 2017. The Introduction of Limited Liability into the English and Australian
Colonial Companies Acts: Inevitable Progression or Chaotic History. Melb. UL
Rev.. 41. p.1278.
Mtani, M. and Nyangarika, A., 2020. Constraints of Empowering Women’s Entrepreneur’s
and its Impact in Community Welfare in Tanzania.
Müller, J.M., Buliga, O. and Voigt, K.I., 2020. The role of absorptive capacity and innovation
strategy in the design of industry 4.0 business Models-A comparison between SMEs
and large enterprises. European Management Journal.
Strážovská, Ľ. and Treľová, S., 2016. SMALL AND MEDIUM-SIZED BUSINESS–LEGAL
FORM OF BUSINESS IN SLOVAKIA. ECONOMICS, MANAGEMENT, LAW:
INNOVATION STRATEGY. p.82.
Worthington, I., 2018. 10 Legal structures. The Business Environment. p.229.
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