Business in Practice

Business in Practice

Introduction

Practice business develops qualification for learners, to begin with, how the operation of the business is done. It refers to the firm's ability to maintaining a successful relationship with customers and meeting their expectation. The current report will seek address to the different types of business based on their size, and how they work in an organization. Further, this report will explain the different types of companies with sole trader, partnership, public limited and cooperative organization. The report will emphasize the different structures of organization and the effect of the external environment in business.

Section 1

Definition, characteristics and example of micro business, small business, medium size business and large size business.

A micro business is generally an operating business in the environment. This businesses formation is done by a single owner or sole proprietorship (Gherhes et al., 2020). It is a very small scale business with a number of areas not exceeding more than ten, which is an important part of the economy. There is a difficulty in getting funding and credit for expanding business and funding for start-ups. Their annual turnover does not exceed 2 million dollars and the amount of employment overall is 19.2%. As per the statistics, it was revealed that about 5.4 million micro-businesses were operating in the UK. For example; boss brewing company is the micro-business was founded by women to change the perceptions.

Small business is a privately owned organization resulting in higher profits and generating more revenues than the regular size business. Small businesses have the support of government and variation in tax policy which is depended on the country (Julien, 2018). Small business needs licensing to open and serving with the government authorities like inspection and certification. It is an independent organization with several employees 50 in the small sector. According to the statistics, there are around 5.9 million small businesses in 2020. For example; Cafe Pod Coffee Co. Is a small business with a big boy in this sector and pushing with the boundaries of making it number one in the UK.

Figure 1; Small Business statistics in the UK

(Source: axsar.com 2020)

Medium Size Business is a company with 50 to 200 employees; this states that they can be complex entities where separation occurs of ownership with management. They are well- established, facilitating their financial decisions and separating their often operating their own mature entities (Aittasalo et al., 2017). In the UK there are more jobs created in 2019 of medium size business employing 7.6 million people. The way of job creation is leading with the business seeking higher growth potential. For example; Verdant Leisure is the medium-sized business operating in Scotland, and it is a privately held company employing not less than 50 employees.

Large Size Business is the organization where there are more employees and following more complex management hierarchy than the small and medium size business. There are many investments made in a large business, and with more capital, the number of manpower is more. As per the statistics, there is around 8000 large size business in the UK. The opportunity of large size business is given to those people whose limit level is high, and there are not less than 250 employees in this organization sector (Di Giovanni et al., 2017). In the UK generally, the large business is holding the account of 0.5% and offering a maximum number of employment of around 48%. For example; ADM group is the business of global marketing services dealing with higher profits and revenues.

Figure 2; Business population estimation in the UK

(Source: gov. uk 2019)

Section 2

Definition, characteristics and example of sole trader business, partnership, limited liability business, public limited liability business and Cooperative.

A sole proprietorship is the type of business operated by a single individual or owner who is responsible for the organisation's functioning. They intend to earn profit with limited resources and providing goods, services to their customers so that they can fulfil the needs of customers (Cavric et al., 2020). Based on the organisation's objective, risks are involved, and according to the capital invested by the owner in the industry. There is the higher liability of the owner in this case; an example can be Kent's Hairdressing for Men, this range from sole traders in the UK who should have a license for formation and closure to run this type of business. Next, the responsibility of the owner is to repay the loan to the bank if a loan is taken for the start-up.

Figure 3; Sole proprietorship

(Source: businessjargons.com 2021)

The partnership is the form of business which is operated by two or more persons to ensure growth in the business. This does not only involve individual for the operation, but the whole other member and there is an equal division of the number of profits and risks according to the investment of capital. The contract is made for the same based on the terms and conditions of a partner. Their cooperation is agreed with the mutual interest of individuals (Dwyer, 2018). For instance; Red bull and go pro is the partnership firm where according to the agreement equity is received to go pro by red bull.

Public Limited liability business is a type of business choosing to offer a share to the public in order to raise funds for the use of commercial aspect. This sector is based on the liability of the members and on their limitation of liability (Kahal, 2017). It includes the division of shares and based on the criteria of the owner making the investments. There are companies who do not provide their share in such a way instead owns other private sector company or plc. For example; ASDA plc is the public sector company who bought their shares for improving the performance of the organization. ASDA is often dealing with retailing company causing the owner to continuously change their shares. The CEO of the company is considered as the board members and which is often traded as LSE, i.e. London Stock Exchange.

The cooperative organization is also known as Joint Stock Company, and it is the association of person. The formation is done according to the same mind of the individual, and it is operated, which is based on the financial benefits and generally having mutual assistance working for them. It is generally owned and controlled by the individual whose needs are based on social, cultural and economical, which is to be met by the person. For example; John Lewis and Partner is the high brand departmental store in the UK, and it deals with selling the part of merchandise of an employee-owned mutual organization. Their partners are capable enough to understand the balance equal that shares the responsibilities and rewards of partnership.

Figure 4; Rise in value of the cooperative sector

(Source: thirdsector.co.uk 2012)

Section 3

Identify different organisational structures and explain how organisational structure affects business productivity.

An organizational structure is a function that outlines the certain activity directed in order to achieve certain goals of the organization. There is a flow of information determining between levels of the department (Stverkova and Pohludka, 2018). Organizational action is affected in the structure by providing a foundation of standards. It develops team behaviour and enhances the consumer’s role in an organization. There are structures followed in the organization is marketing, human resources, operations and financing that is described below:

Marketing: The focus of the ASDA is to increase the share and to take place in the number of profits. They apply strategy which is low budget and uses various techniques of sales promotion. The company uses a sponsorship policy for the way of promotion. ASDA communicates and uses media outlets by selling products to customers, strategies that are common in the organization is special offers, reducing the price of the products and getting an offer like buy one get one free. The brand needs to be marketed so that it can make more and more sales by ensuring and providing safety records to satisfy the needs of the customers.

Human Resources: The HR role in an organization is to recruit the right and talented employees in an organization. The employees should be skilled in a particular job and experienced in that field, the planning process in ASDA assists the company to recruit, keep and optimize. They cover a variety of activities and deals in policy role making, welfare role making and supporting role and provide their employee's guidance for the training and development process. It constitutes the teamwork and thus, ensuring to increase the personnel and efforts of the organization (Danvila-del-Valle et al., 2019).

Finance: The allocation and disbursement of finance are done in the organization so that business operation can handle finance of the organization. Resources are offered by ASDA on loan repayment, dealing with personal finance and insurance activities to deal with the practitioner. They provide affordable and cheap products at a reasonable price and thus, ensuring profits out of them and satisfying the needs of the customers.

Operations: Operations are used to direct the ensuring life of the company. It provides direction mechanism and effective operation accomplishes the group, department and in an efficient and effective manner. This fulfils the basic need of the customer and should adopt policies and procedures of the organization and rules and regulations.

Figure 5; Organizational structure

(Source: lumenlearning.com 2021)

Using PESTLE analysis explain how different external factors affect the performance of a business.

There are external factors that affect the performance of business consisted of a macro factor indirectly operating the business. This makes the inconsistent decision making for the uncontrollable factor in an organization, and it is used for strategic planning. PESTLE analysis uses different operation for the business, which is discussed below:

Political factor: Organization monitors the impact of the political environment directly including national and regulations consisting of international, their laws, rights of the consumers. The political environment of the ASDA is stable, and behaviour is changed with the involvement of Brexit. With the involvement of Brexit, there is a proof supply chain for the future (Perera, 2017). The organization currently is dealing between UK and EU for both parties in an organization.

Economic factor: Economic factor needs to be considered in ASDA, i.e. credit cost, pay level, supply and demand of labour, pressurizing in a competitive way etc. Pricing strategy is changed in the organization due to the economic factor, and shopping activities are reduced due to Covid 19 impact.

Social factor: There is a vital role played by ASDA, i.e. ageing population, a lifestyle that is healthy, consumer's taste and preference, it introduces new products and services. They adopt segmentation strategies and help the company to develop; ASDA sells a huge number of cater to the ethnic group. They make a rigorous balance between fulfilling the behaviour and attitude of the customers; changes are also made in a demographic and growing population.

Technological factor: Due to the ever-growing change in technology, it becomes necessary for ASDA to adopt these changes and to adopt broadband, delivery services and mobile apps. With instance, the supermarket chain has made constant working on technology to make their use in the best manner. It also uses continuous innovation in technology to upgrade the balance between organizations.

Legal factor: Rules and regulations are abided by ASDA operating with relevant authorities and thus, resulting in punitive actions. Strategies for ASDA were adopted like penalty should be paid by the people for the delivery of a north breach for food safety.

Environmental factor: Organization is dealing with environmental friendly company and putting significant pressure on the company to operate in a friendly manner. They include CSR and sustainable development process for the performance operation with the aim to improve productivity and efficiency (Jin et al., 2019).

Conclusion

The above report demonstrates that there is a major role in the business environment in the organization. This report also explained the sizes and their statistics in the UK, how profits are ensured through this. Further, this report discussed the impact of sole trader, partnership, public limited and cooperative sector with examples. Organizational structure influenced the decision making of the firm shown by finance, marketing, HR and operations is outlined in this report. At last, it states using pestle analysis that there are the impacts of ASDA.

References

Aittasalo, M., Livson, M., Lusa, S., Romo, A., Vähä-Ypyä, H., Tokola, K., Sievänen, H., Mänttäri, A. and Vasankari, T., 2017. Moving to business–changes in physical activity and sedentary behavior after multilevel intervention in small and medium-size workplaces. BMC Public Health, 17(1), pp.1-14.

Cavric, D., Buljat, M. and Lesic, D., 2020. THE TAX ASPECT IN EARNINGS OF SOLE PROPRIETORS. Economic and Social Development: Book of Proceedings, pp.49-58.

Danvila-del-Valle, I., Estévez-Mendoza, C. and Lara, F.J., 2019. Human resources training: A bibliometric analysis. Journal of Business Research, 101, pp.627-636.

Di Giovanni, J., Levchenko, A.A. and Mejean, I., 2017. Large firms and international business cycle comovement. American Economic Review, 107(5), pp.598-602.

Dwyer, A., 2018. Toward the formation of genuine partnership spaces. International Journal for Students as Partners, 2(1), pp.11-15.

Gherhes, C., Vorley, T. and Brooks, C., 2020. The “additional costs” of being peripheral: developing a contextual understanding of micro-business growth constraints. Journal of Small Business and Enterprise Development.

Jin, W., Zhang, H.Q., Liu, S.S. and Zhang, H.B., 2019. Technological innovation, environmental regulation, and green total factor efficiency of industrial water resources. Journal of Cleaner Production, 211, pp.61-69.

Julien, P.A. ed., 2018. The state of the art in small business and entrepreneurship. Routledge.

Kahal, A., 2017. Limited Liability Partnership: An Emerging Business form for Entrepreneurs. International Journal of Engineering and Management Research (IJEMR), 7(3), pp.654-657.

Perera, R., 2017. The PESTLE analysis. Nerdynaut.

Stverkova, H. and Pohludka, M., 2018. Business organisational structures of global companies: Use of the territorial model to ensure long-term growth. Social Sciences, 7(6), p.98.

Online references

axsar.com 2020: [Online][Accessed through] https://www.axsar.com/blog/uk-small-business-statistics/ [Accessed on 11^th February 2021]

gov.uk 2019: [Online][Accessed through] https://www.gov.uk/government/statistics/business-population-estimates-2019/business-population-estimates-for-the-uk-and-regions-2019-statistical-release-html [Accessed on 11^th February 2021]

businessjargons.com 2021: [Online][Accessed through] https://businessjargons.com/sole-proprietorship.html [Accessed on 11^th February 2021]

thirdsector.co.uk/2012: [Online][Accessed through] https://www.thirdsector.co.uk/value-cooperative-sector-rose-almost-20-per-cent-2008-2011/finance/article/1138606 [Accessed on 11^th February 2021]

courses.lumenlearning.com 2021: [Online][Accessed through] https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/common-organizational-structures/ [Accessed on 11^th February 2021]