Module Number: BMP3002

Module Name: Business in Practice

Year/Trimester: 2021-22/Semester 1
Module Leader: Andrey Jichev/Jafar Orja

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Table of Contents
Introduction......................................................................................................................................3
Understanding of the Different Types of Companies......................................................................4
Micro Business.............................................................................................................................4
Small Business.............................................................................................................................4
Medium Size Business.................................................................................................................4
Large Business.............................................................................................................................4
Description of Sole traders to Cooperatives and Limited Liability Partnerships............................5
Sole proprietorship.......................................................................................................................5
Partnership Business....................................................................................................................5
Limited Liability Business...........................................................................................................6
Public Limited Liability Business................................................................................................6
Cooperative..................................................................................................................................6
Organizational Structure and its Effects on Productivity................................................................7
Pestle analysis..............................................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
Business includes the economic activities involved in producing and exchanging goods or
services. A business enterprise is formed to earn profit by delivering value to customers. Without
the purpose of making a profit, a business can’t grow and sustain itself. A business organization
is involved in not only gaining profit but also creating employment for others (JEFF MADURA.,
2018). Business differs from other business organizations based on the size, ownership,
controlling, management, expansion of the operation, and entity. This report contains various
types of business and their features. A business needs to be handled its activities proficiently to
achieve operational excellence. Organizational structures ensure the allocation o of business
activities to the concerned parties (Puranam and Maciejovsky, 2017). Various organizational
structures exist, appropriate to a specific type of business and its size range.

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Understanding of the Different Types of Companies.
Business refers to economic activities by which products or services are produced, delivered, and
earned profit. According to ownership, structure, legal entity, capital, and labor, businesses have
different categories. Some of these are _
Micro Business
An enterprise conducting business with a micro capital, having less than ten laborers, and
having a turnover of less than £2 million is called a micro business. This business is primarily
formed to satisfy the employment of the entrepreneur (Gilchrist, 2017). The capital of this
business can be from the owner or microcredit. Issoria, Manton's Card, Proviz are some of the
best micro Businesses in the UK. Any changes in an entrepreneur's intention may threaten this
type of business.

Small Business
Small Business falls under the condition of having employees less than 50, and turnover must be
less than £10 million. Small Businesses have a mentionable contribution to the GDP of the UK
as it is creating job opportunities inspiring innovations (Gilchrist, 2017). Professional, technical,
and scientific service sectors are enlisted under Small Business. Coffee shops and eateries fall
under Small businesses in the UK.

Medium Size Business

A business with employees less than 250 and a turnover under £10 million is known as a
medium-size Business (Gilchrist, 2017). It confers a significant portion of the economy by
creating job opportunities opening new markets Majority of the businesses in the UK fall under
SMEs. 51 % contribution of Total turnover derives from the SMEs. Captify, a research-based
company, is an example of medium size business in the UK (Heath, 2014).

Large Business
Large Business falls under the condition of having more than 250 and turnover higher than £50
million. It enables 40% employment in the UK. Businesses like HSBC Tesco are creating
tremendous job opportunities that develop a healthy economy (Gerber, 2017). Some businesses
can expand their businesses across the border, which generates job opportunities for other
countries and enables cash inflow from other countries. This type of business can create a new

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market and the ability of market penetration in a cross-culture economy. 0.1 of all businesses in
the UK is fall under large business (Heath, 2014).

Description of Sole traders to Cooperatives and Limited Liability

Partnerships
As defined previously, business refers to an organization or entity involved in economic
activities to earn profit. A manager or entrepreneur directs a set of business functions to achieve
a particular goal. Different types of business derive because of formation, control, ownership,
amount of funds. Various types of business are _

Sole proprietorship
A business entity formed, financed, controlled by its owner is called a sole proprietorship
business. In this business, the capital is raised by the owner (van Rooij, 2014). As it is funded by
its owner, liability is unlimited. The profit and loss carried by the owner. Some features like easy
formation, no legal formalities, faster decision-making are considered advantages of this
business. Disadvantages of this Business are lack of adequate funds, unlimited liability, no
separate tax, and no legal distinction. The existence of this business depends on the willingness
of the owner. Most businesses in the UK are primarily sole proprietorships. Home Healthcare,
Housecleaning Services, and some tourism business in the UK are sole proprietorships (Shaw,
2019).

Partnership Business
A business organization is formed by two persons or more than two persons and carried by all or
one person on behalf of others to generate profit. The relation of partners is based on the
agreement. Conduction of Business, how profit will be distributed, amount of capital provided by
partners are mentioned in the contract (van Rooij, 2014). As the number of the owner of this
business is more than one, there exists no capital adequacy. Some advantages of this business are
no complex formation method, availability of capital, integrated decision making. But there are
many disadvantages of this business like no legal distinction, unrestricted liability, and decision-
making conflicts. Registration of this Business is not mandatory as there is no legal entity.
Dissolution of agreement is the way to close this business. It can happen willingly or based on

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specific incidents. Law firms, real estate investment firms, accounting groups, physician groups
are commonly partnership businesses in the UK (Shaw, 2019).

Limited Liability Business

Limited liability business is formed to reduce the financial risk of investors. Partnership and
limited liability businesses run similarly. But in LLB, partners are not liable to pay more than a
partner invest. It means the liability of one partner can't be carried by the others. There may be
the exception that all partners should be liable in this case if the business is unlawful or doing
any fraudulent activity (Kuntz, 2018). The significant convenience of this business is protecting
the partner's interest which means any misconduct of a fellow partner can't harm the other
interest. This business is more flexible than a limited company. Some disadvantages also exist
here, like registration complex formation.

Public Limited Liability Business

This Business is formed under the company act and registered under the stock exchange. The
capital is raised by selling the share to the public. Shareholders are the owner of this business.
Shareholders elect the board of directors who are responsible for managing the business. The
liability of an owner is limited by the price of the share (Morera Balcells, 2013). This business
enables a shareholder to avoid any liquidity risk. This business can raise a massive amount of
capital. It results in the expansion of business and portfolio. A large amount of capital, legal
entity, permanent existence, limited liability is the major convenience of this business. There are
a few disadvantages like the double tax system, complex formation, etc. AstraZeneca Plc,
Cineworld Group Plc, Rolls-Royce Holdings Plc are some names of the public limited business
in the UK (Morera Balcells, 2013).

Cooperative
A Cooperative is an entity where people from the same or particular community get united to
reach their goal or interest jointly. Unlike other businesses, there is no goal for maximizing
profit. Here the objective is to attain specific plans for developing the community together. The
practice of democracy is maintained (van Rooij, 2014). The board of directors is elected by the
members of the cooperative. Each person has the right to cast one vote only irrespective of the
number of shares they hold. There are diverse types of cooperatives. Each has a specific goal or

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purpose. This can be for purchasing raw materials collectively, supplying particular goods,
housing, etc. The number of Cooperatives in the UK is less than 1% (Shaw, 2019).

Organizational Structure and its Effects on Productivity

A business organization needs to perform several functions coordinated to attain its goal and
objective. Business operational activities vary from one to another because of the size and
functional area. Allocation of daily business operations and authority to the responsible parties is
known as organizational structure (Puranam and Maciejovsky, 2017). It distributes the activities
of an organization that are executed by responsible parties. It helps to clarify the roles of
employees. Two standard formats are Tall and Flat.
In the Tall structure, the management activities are segmented into many parts and distributed to
concerned parties. In this structure, the CEO holds the most executive power. The CEO allocates
the responsibility and authority to the middle managers and employees. The middle managers
can control their subordinates. Subordinates report to the middle managers about the operations.
Middle managers report to the CEO about the progress and performance. Decision-making
within this structure is time-consuming because of the taller hierarchy (Puranam and
Maciejovsky, 2017). Though it is a rigid hierarchy, it defines the exact duties and
responsibilities.
Another structure is flat. It divides the management activities into fewer parts. It enables a
manager to have a wide span of controlling power. Because of a wide span of controlling
authority, sometimes a communication gap arises. As a result, some decisions can be
incompatible with the situation. Managers can't communicate with all subordinates, but
managers can adopt faster decisions (Jassowski, 2013). Middle managers are not required to this
structure because the executives interact directly with the subordinates.
According to their features, a Tall structure is suitable for a large organization, and a flat is best
for a small organization. Organization structure explains the chain of command and assigned
necessity tasks. Whenever employees face problems, they report to the managers, and managers
bring the solutions. The organizational structure reduces the communication gap. Reducing the
communication gap is one effective method to make the employee skilled. Providing the exact
information at the proper time may decrease the waste (Jassowski, 2013). Effective
communication between employees and managers tends to have less error in operations. As a

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result, the efficient output will be produced and delivered to the customers.

Pestle analysis
Pestle analysis is a method to clarify the business environmental factors that affect business
operations. For a business organization, there are numerous factors by which the functions of a
business are influenced. External factors refer to the environmental facts derived from outside
the company and affect the business. AstraZeneca, a biopharmaceutical business in the UK, is
providing innovative medicines to millions of people to encounter healthcare challenges (Jones,
2017). The following paragraphs consist of the PESTLE factors of AstraZeneca_

Political: Political factors include stability of government, administrative system, BREXIT. The
stability of government enables long-term profitability of health care sectors. Since AstraZeneca
is a multinational business, it needs to explore government stability before creating a market.
AstraZeneca should analyze the interference of government to the healthcare services the
flexibility of administrative systems (Jones, 2017).

Economic: GDP of a country, tax rate, unemployment, inflation, foreign investment are the
factors regarding the economy. Economic factors shape and build the prosperity of business.
AstraZeneca should consider the growth rate in healthcare services, the flexibility of taxation,
inflation rate, the exchange rate of the currency of the particular country, unemployment rate,
and labor wages for the healthcare industry.

Social: Social factors include the characters of demographics like a culture of community attitude
belief. AstraZeneca must analyze these factors to understand how the consumer will interact how
a marketing plan should be developed. The skills of a particular area's people, as well as
education, must be considered because manpower will be elected from those communities.

Technological: Today's organizations are confronting a continual transformation in technology.

Investing in new technology enables a corporation to acquire competitive advantages for a given
time (Jones, 2017). AstraZeneca should consider which technology its competitors are using,

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how productivity will be impacted for implementing new technology, what structural changes
will be placed healthcare industry.

Legal: Businesses operating in the United Kingdom must adhere to all applicable laws and
regulations. Before expanding the market, AstraZeneca has to explore the legal framework of a
particular region. It should figure out the law regarding healthcare, intellectual property
protection law, Employment act, Equality act.

Environmental: Environment resources are inhaled by businesses. Those markets' environmental

regulations should be thoroughly examined by the company. The effects of business operations
on the environment might be harmful. Different markets have different environmental standards
(Jones, 2017). So AstraZeneca needs to evaluate the environmental circumstances like waste
management of the healthcare industry, environment pollution law, climate change, etc.

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Conclusion
Entrepreneurs initiate business with a view to attaining specific goals or objectives. Initiating a
business is not a successful task. Maintaining the activities of a business effectively and
efficiently is flourishing. Activities and categories of businesses should be considered before
setting up a business. Activities of Business differ from one to another because of formation,
ownership, legal entities (JEFF MADURA., 2018). Every business has distinct features that
make the business unique from others. This report demonstrates a quick overview of various
types of businesses. Structural importance has a significant influence on the business. A
congenial business structure enables a business to be more productive.

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References

Gerber, W., 2017. Characteristic features of small business and large firms: An empirical
comparative study. Journal of Administrative and Business Studies, 3(4).

Gilchrist, A., 2017. The Layman's Guide GDPR Compliance for Small Medium Business. 6th ed.
Independently published.

Heath, J., 2014. Opportunities for UK businesses. 4th ed. London: UK Trade and Investment.

Jassowski, M., 2013. Organizational Dynamics: Understanding the Impact of Organizational

Structure in Team Productivity. IEEE Design & Test, pp.1-1.

JEFF MADURA., 2018. INTRODUCTION TO BUSINESS. 2nd ed. [Place of publication not
identified]: ED-TECH.

Jones, T., 2017. Factors Affecting AstraZeneca. IIC - International Review of Intellectual
Property and Competition Law, 48(7), pp.864-865.

Kuntz, T., 2018. Asset Partitioning, Limited Liability and Veil Piercing: Review Essay on
Bainbridge/Henderson, Limited Liability. European Business Organization Law Review, 19(2),
pp.439-463.

Morera Balcells, X., 2013. Spain Steps Forward to Achieve UK Conditions Incorporating a
Limited Liability Company. SSRN Electronic Journal,.

Puranam, P. and Maciejovsky, B., 2017. Organizational Structure and Organizational Learning.
SSRN Electronic Journal,.

Shaw, J., 2019. Business Population Estimates for the UK and Regions ‐ Introducing improved
statistics on the UK enterprise population. Economic & Labour Market Review, 5(4), pp.47-67.

Van Rooij, A., 2014. Sisyphus in business: Success, failure and the different types of Business.
Business History, 57(2), pp.203-223.

Wetherly, P. and Otter, D., 2018. The business environment. 6th ed. London.

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