L/616/1805 How Business Operate Unit 21 HND in Hospitality Management

Task 1

1.1 Classification of business on the basis of public and private sectors

Public companies are owned by government which operates the business according to needs and interests of whole. It includes national and international industries like Franchises, Health and Social Care, Departmental stores, Law enforcements and more. These associations are work on national and international level with common purpose is to provide welfare to citizens. While regulatory bodies has no role in private sectors, business of these are operated by an individual. It includes sole traders, partnerships etc. Purpose of these companies is to earn more and more profit (Bernstein, 2015). In Public sectors, types of organisation are found on the basis of state and central ownership while private companies are divided on individual, partnership and joint stock basis.

1.2 Structures within the business of Public and Private Companies

Structures of the business of companies in UK are divided on the basis of-

Sole Proprietorship: Such companies are operated by a single person. Structure of sole proprietors are simple and owners enjoy greater flexibility of management with less legal control.

General Partnership: Industries come in this category have two or more owners who make partnership agreement which includes contribution of money required to carry out business. Therefore, each partners shares equally the profit or loss as well as pay debts. 

Limited Partnership: In this type of businesses, partners share loss or profit on the basis of investment of capital. Along with this, partners are also not involves in regular operations.

Corporations: It holds a more complex business structure in which companies have certain rights and liabilities. These organisations are worked for generating higher revenues.

Non-Profit corporations: Instead of obtaining profit, firms under this category operate business on non-profit basis (Mackey and Sisodia, 2014). They provide services to citizens for their public interest.

In UK, organisations are divided on the basis of their aim and how they operate business. Along with these, all such companies have different structures also which shows that variations are necessary in order to meet demand and needs of every individual. Although industries whether private or public have different purpose but they work for the common aim i.e. to serve mankind.

1.3 Implications on business at local, national and global economic environment

Walmart Company of UK has established its business in 1962 in retailing sector. It has 11,718 stores in 28 countries which serves the products like fresh food, groceries, leisure and clothing. It operates the business within international market. It has carried operations on local and global level both. Therefore, key areas of policy which affect business are:-

Economic Policy: This factor includes the taxation policy which affects the business in a large way. For example- If there is rise in economy of a country then profitability of companies are also rise and vice versa. In addition to this, taxation and interest rates which are determined by government impact on business. For instance- If interest rates are high then it forces industries to borrow loan and due to low income, citizens are needed to reduce their expenditure all of which causes fall in sales performance of business (Warner, 2018). Therefore, economic policies create much impact on business of Walmart Company also. 

Legal changes: Every organisation whether small or large are need to operate their business in a legal manner. Due to political factors, government of a country has to make alteration in laws which forces companies to respond to changes. Along with this, if a firm wants to operate business at global level then it need to go through various legal formation.