Different Types Of Companies And Organizational Structures

Section 1: Different types of companies and how they work

The main aim of this report is to mainly examine the different kinds of companies and the style or manner in which they try to perform the tasks successfully. Moreover, the proper analysis is needed to be done on sole proprietorships along with cooperatives and few others which will be providing the analysis on the same in detailed way. Lastly, the proper analysis of the PESTEL analyses along with organizational structures are analyzed which provides the brief understanding on different elements in the successful manner.

Micro business:

The micro business is loosely defined as the businesses within fewer than the 10 employees, which includes the owner. The micro businesses are actually operated as well as owned by the single kind of person. This micro business is operating on a small scale and the scale is measured in accordance to number of different employees, total worth as well as analysis of money has been required for starting business (Atnafu and Balda 2018). They have less than $250000 in annual sales and they require less than $50000 to start. For instance- any small start-up like the independent mechanics along with machine shop operators are considered to be the micro businesses.

Small business:

The small business is mainly defined as the privately owned kind of corporation, sole proprietorship along which has fewer employees as well as less annual kind of revenue than the different corporation of the regular size.  The values which are perceived by the small business personnel mainly tends for becoming common kind of factors in behavior of the personnel and can be becoming one of the essential factors which will be capable of mainly generating the good kind of long term performance (August 2018). The upper management will be capable of contributing towards the small business culture based development if they will be able to express values along with ideas for guiding the different efforts of the personnel. For instance- Accommodation as well as Food Services play the integral role in managing the tasks successfully.

Medium size business:

The medium size based businesses are mainly defined within the Companies Act 2006 as the businesses mainly have 250 employees working within the company. This can be family owned business or managed the business, however, by virtue of the size; they can be complex kind of entities wherein ownership is being separated from the management (Bai, Quayson and Sarkis 2021). These businesses are quite well-established as well as have the noticeable kind of track record that will be capable of facilitating financing kind of decisions by the investors or the lenders. For instance- ETSY as well as Squarespace are the two medium sized businesses wherein the operations are complex and this impacts their business.

Micro business

Large size business:

The large business is considered to be business related category with the above the average business size, has the large level of operations, and the high economies of the scale. They also hire the lot of the labor along with generate the high level of revenues. They may be even targeting national as well as international kind of markets in the successful way (Burton and Obel 2018). For instance- Wal-Mart or Amazon are examples of large size business wherein they are having the international presence and as a result, they have more than 500 workers classified as large.

Sole trader business:

It is considered to be simple business structure wherein one individual mainly runs as well as owns the overall business. The sole trader is mainly being entitled for keeping all the profits after the taxes have been majorly deducted; also liable for losses which the business incurs (Capobianco et al. 2021). This is quite easy for establishing and this is quite easy to operate in the effective manner. For instance- The local grocery store, local clothes store along with freelance graphic designer are considered to be the sole trader business in an effective manner.

Partnership:

The partnership is considered to be the form of the business wherein two or more individuals share the overall ownership, along with the responsibility for mainly managing entire company as well as income or the losses which is generated by the company (Darmansyah 2018). For instance- One of the major examples of the partnership business is mainly relationship among Red Bull as well as GoPro. GoPro mainly sells the portable cameras, while the company Red Bull sells not just the energy drinks. They are lifestyle brands which have same kind of goals.  

Limited liability business:

The limited liability company is considered to be corporate structure wherein different owners are not personally liable for debts or liabilities of the company. The LLC are considered to be the hybrid entities which mainly combine different characteristics of corporation with the sole-proprietorship or partnership (Francis and Hoefel 2018). For instance- Blockbuster was considered to be one of the successful sole proprietorship businesses which score high level of revenues in the market.

Public limited liability business:

The public limited kind of company mainly designates the organization which has mainly offered the shares of the stock to general public. The buyers of these shares have the limited kind of liability that means that they cannot be only held highly responsible for any kind of business based losses in the excess of the amount which they mainly paid for the shares (García de Soto et al. 2019). For instance- Larsen & Tourbo is one of the examples of PLL which have limited shares or limited by the guarantee as well as having the share capital.

Small business

Cooperative:

It is considered to be the autonomous association of the persons united in the voluntarily manner for meeting common economic, cultural as well as social needs as well as aspirations through the jointly owned enterprise. For instance- Cyldebank is one of the suitable examples of cooperatives which are capable of providing the different kinds of services to customers as they desire (HAMDAN et al. 2022).

Identification of different organizational structures and explaining how does organisational structure affect business productivity

As commented by Joseph and Gaba (2020), having the proper structure is one of the essential factors when it comes to the success, growth as well as profitability of the company. It is capable of providing the clear goals and make sure that the responsibilities are defined in the clear way. This will be capable of providing the proper outline within which the different strategies are being utilized in the effective way and gain competitive advantage. The two most important organizational structures include functional as well as divisional structures.

Functional Structures

As commented by Kuter, Baker and Gurskaya (2020), the functional organizational structure is considered to be the business structure which groups the different employees by the different skills, specialist along with related ones. It is mainly based on the levels of the hierarchy which include departments, under direction of the different designated kind of leaders. For instance- The Finance Department, Corporate Department along with Facilities Department is the few structures which are included in the functional organizational structures which will be beneficial for the people who are superior in different departments.

Divisional Structures

According to Leopizzi et al. (2020), the divisional organization structure is mainly considered to be the system wherein the organization segments the employees based on the different products, or the markets as opposed to the job roles. Some of the companies have the sales, marketing, along with communications department; while the divisional organization mainly trams dedicated to specific kind of region or product. For instance- In large corporations like General Electric has the divisions for the electronics, aviation as well as transportation and each with the own team of the accountants along with marketers.

As commented by Nandonde (2019), the organizational structures like the Functional as well as Divisional Organizational structures helps in improving the overall efficiency through providing the clarity to the different employees at different levels of the company. Through paying mind towards the organizational structure, the different departments can be working more like the well-oiled kind of machines, focusing more energy as well as time for completing the different productive tasks. The thoroughly outlined structure can be capable of providing the proper roadmap for the different internal promotions, allowing the different organizations for creating the solid employee advancement tracks for the different entry level kind of workers.

Medium size business

With the help of the structure, the companies will be able to succeed in the different aspects of the work and as a result, there will be inclusion of consistency which will be giving the different employees the scope to work and grow in the proper manner.

The positive kind of implications of the organizational structure helps in reducing the production based problems, and there will be increased satisfaction of the customers. These are the few elements which will be beneficial for the growth of the company in the long run (Raguseo 2018). For instance- Through structuring the company in functional manner, Amazon has been able to efficiently as well as successfully manage the ecommerce operations throughout the entire company in the accurate way. In this way, the company’s structure plays the integral role for growing strong and gain competitive advantage and as a result, it will be beneficial in managing the tasks successfully.

How different external factors affect the performance of a business – PESTLE Analysis  

The PESTEL Analysis is often being used as the broad kind of fact finding kind of activity. It is capable of helping the company for properly establishing external factors which could be capable of impacting the decisions which are made mainly inside company. Through properly understanding the different impacts, these external factors can be having on the company, it becomes quite handy for the companies to plan better and gain competitive advantage (Senevirathne 2019). The PESTEL Analysis allows the strategic as well as systematic evaluation of the prospects, risks along with opportunities of the business in the complete new kind of environment. The PESTEL analysis is capable of providing the different information on different external factors and it is mainly being used for the large as well as small scale kind of projects.

The PESTEL Analysis is capable of focusing on the possible as well as distinct along with discontinuous futures. It mainly feds in the scenario analysis which will be suitable for understanding and analyzing the different kinds of aspects which will be working in the favor of the company while expanding their business in the different areas. The PESTLE Analysis gives the proper emphasis on the different kinds of key drivers which can be the opportunity or threat for the company and gain competitive advantage in the market (Xu et al. 2020). For instance- The overall brief of the PESTEL Analysis of the Amazon Company can be showcased in the following manner:

Large size business

Conclusion

Therefore, it is inferred that the different company types provided the brief understanding on the working with examples. The sole proprietors along with few others have given the proper level of understanding on different elements which will be beneficial for growth of the company. The PESTLE analysis has been analyzed which provided the proper understanding of the external factors which will be creating opportunities and threats for the company in accurate way. Functional and the divisional organizational structures have been analyzed which provided the brief understanding on the overall effectiveness and gain competitive advantage.

Reference List

Atnafu, D. and Balda, A., 2018. The impact of inventory management practice on firms’ competitiveness and organizational performance: Empirical evidence from micro and small enterprises in Ethiopia. Cogent Business & Management, 5(1), p.1503219.

August, J.D., 2018. Tax Act First Look: The Complex New World of the Qualified Business Deduction Rule: Implications for Partnerships, S Corporations, and Sole Proprietorships. The CPA Journal, 88(1), pp.22-29.

Bai, C., Quayson, M. and Sarkis, J., 2021. COVID-19 pandemic digitization lessons for sustainable development of micro-and small-enterprises. Sustainable Production and Consumption, 27, pp.1989-2001.

Burton, R.M. and Obel, B., 2018. The science of organizational design: fit between structure and coordination. Journal of Organization Design, 7(1), pp.1-13.

Capobianco, N., Basile, V., Loia, F. and Vona, R., 2021. Toward a Sustainable Decommissioning of Offshore Platforms in the Oil and Gas Industry: A PESTLE Analysis. Sustainability, 13(11), p.6266.

Darmansyah, A., 2018. Comparative analysis of bookkeeping at sole proprietorship and partnership small and medium enterprises: Study on culinary sector in Greenville, Jakarta. Scientific Research Journal (SCIRJ), 6(6), pp.1-10.

Francis, T. and Hoefel, F., 2018. True Gen’: Generation Z and its implications for companies. McKinsey & Company, 12.

García de Soto, B., Agustí-Juan, I., Joss, S. and Hunhevicz, J., 2019. Implications of Construction 4.0 to the workforce and organizational structures. International Journal of Construction Management, pp.1-13.

Hamdan, a., Nor Muhamad, n.h., Kamarudin, m.k., Abdul, b., Ab Rahim, n.m.z. And Mohamad Norzilan, n.i., 2022. Sole Proprietorship Business Succession in Malaysia: A Perspective of Civil and Islamic Law. The Journal of Asian Finance, Economics and Business, 9(3), pp.285-293.

Joseph, J. and Gaba, V., 2020. Organizational structure, information processing, and decision-making: A retrospective and road map for research. Academy of Management Annals, 14(1), pp.267-302.

Kuter, M., Baker, C.R. and Gurskaya, M., Profit Calculation in a late 14th century sole proprietorship, the case of FrancescoDatiniprofit Calculation In a Late Medieval Sole Proprietorshi. Accounting Historians Journal.

Leopizzi, R., Iazzi, A., Venturelli, A. and Principale, S., 2020. Nonfinancial risk disclosure: The “state of the art” of Italian companies. Corporate Social Responsibility and Environmental Management, 27(1), pp.358-368.

Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African Community. Global Business and Organizational Excellence, 38(4), pp.54-61.

Raguseo, E., 2018. Big data technologies: An empirical investigation on their adoption, benefits and risks for companies. International Journal of Information Management, 38(1), pp.187-195.

Senevirathne, S.A.G., 2019. Quazi-juristic Personality of Sole Proprietorships and Partnerships in Sri Lanka and its Causes and Consequences.

Xu, B., Costa-Climent, R., Wang, Y. and Xiao, Y., 2020. Financial support for micro and small enterprises: Economic benefit or social responsibility?. Journal of Business Research, 115, pp.266-271.