Understanding Business Organisation

This report analyzes the organisational structure of Premier Inn, a UK-based hospitality organisation. It also includes a business environment analysis of Premier Inn, using SWOT and PESTEL analysis. The report provides insights into the internal and external factors that impact Premier Inn's business.

Understanding
Business Organisation

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Organisation structure of Premier Inn....................................................................................3
Business Environment analysis of Premier inn .....................................................................4
SWOT analysis.......................................................................................................................4
PESTEL analysis....................................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business is working in an uncertain environment where changes occur on a regular basis. This
environment includes various external factors which impacts upon the functioning of business
enterprises (Baloyo, 2020). It is essential for managers of company to identify these factors as it
create impact on productivity and profitability of an organisation. Study of business environment
is important for business as it helps them to identify various opportunity in market and grab them
in order to expand their market share. Business environment helps business to identify needs of
changes in organisation and reduce negative impact of these changes on their business. This
report includes analysation of Premier Inn which is a UK based hospitality organisation. Premier
Inn is an organisation which has established in UK in the year 1987 by Whitbread. It is one of
large organisation which has around 72000 rooms and 800 hotels. This project report includes
discussion of organisation structure of Premier Inn Hotel. It also includes identification of
internal and external factors which create impact on business.
TASK
Organisation structure of Premier Inn
The organisational structure is a system which is used by the business organisation in
order to direct activities for the achievement of business goals (Smirnova, 2019). It includes
hierarchy followed by the management as well as the employees to conduct different activities
related to their business. Premier Inn is one of large organisation which has around 700 hotels in
their hotel chain. To manage activities of these hotels, Premier Inn need follow well established
organisational structure in their organisation.
Types of organisational structure
Organisation structure is an important aspect of business as it ensure all activities in
business are carried without any problems. Organisation structure are of different types like tall
structure and flat structure. Adoption of these structure provide various advantage and
disadvantage to Premier Inn. Discussion of tall structure and flat structure in context of business
of Premier Inn are as follows:
Tall structure: Tall organisation structure is one which has numbers of management
layers between employees and upper management of company. This organisation is usually
includes less umbers of employees which are reporting to each manager of company as managers

are providing them supervision (Tbaishat, and et.al.,2018). In Premier Inn, manager is
responsible for their group task and needs to reports to their senior level management and they
needs to report to CEO of company.
Flat structure: Flat organisation structure has less numbers of management in compare
to tall organisation structure and also has short chain of command. It helps in empowering
employees and also provide them sense of responsibility and autonomy. This type of
organisational structure is not suitable for large organisation and is only works in small
organisation which has small work force. In this, employees are motivated to work with another
people in order to resolve issues.
Premier inn is following tall structure because it suits to their business requirement. This
organisation has nearly 700 hotels and it is not possible for CEO of company to conducts all
operations of hotels. For this, there are several managers working in this organisation for
managing their business. This structure provides benefits for business of Premier Inn as it
ensures there is no misunderstandings in their organisation between different managerial level
(Hasan, and et.al., 2019). But at same time, it also create disadvantages for organisation as it
contains many managerial levels which increase time of information sharing in their enterprise.
Business Environment analysis of Premier inn
Business environment refers to total of all factors which are present outside business and
create impact on functioning of business. These factors include customers, competitors,
government, suppliers, social, political, legal condition. In order to conduct business
environment analysis, managers of Premiere Inn can use SWOT and PESTEL analysis which are
mentioned below:
SWOT analysis
SWOT analysis refers to a framework which is used for purpose of evaluation of
competitive position of company and developing strategic planning. This analysis helps
company to assess internal as well as external factors which can create impact on business. This
analysis helps to assess performance, risk, potential and competitors of business. SWOT analysis
of Premier helps managers to identify threat and weakness of company in order to gain
advantage of strength and opportunity. SWOT analysis of Premier Inn their organisation are as
follows:

Strength Weakness
 Premier Inn is an organisation which
has occupancy rate of more than 80%.
Operating profit of company is also
increasing with 7% in the year 2017
(Bhanushali, 2018). It is one of
profitable organisation in UK as it is
investing in refurbishments, real estate
and décor.
 Premier Inn has strong market
presence in market as it has around
60,990 and is one of largest hotel group
in UK.
 This organisation has strong brand
image in market. This organisation is
providing kid friendly environment,
free Wi-Fi in their hotel.
 Premier Inn is facing big issues with
hygiene as company has history in
which their house keeping staff are
using same guest towels for cleaning
their bathroom and toilets
(Katagiri,2020).
 Premier Inn has limited global presence
in compare to their market players. This
organisation is operating at large level
but in limited number of countries.
Opportunity Threat
 Premier Inn is getting opportunity to
enter new market as company is getting
success in Germany (Loasby, 2021).
 This organisation is investing on room
design and décor in budget hotel
segment which enhance experience of
their customer. There is increase in
income of middle class group which are
spending on hospitality services.
 There are various competitors of
Premier Inn in market with whom they
needs to complete in market. These
competitors include Easy hotel,
Holiday inn, Ibis and many more.
 Company is also facing legal threat in
market which create impact on
business. This legal threat occur from
health and safety executives of Unite
Trade.

PESTEL analysis
PESTEL analysis refers to framework which is used for purpose of evaluating external
environment of an organisation. It breaking down risk and opportunity into factors like political,
legal, technological, environmental, economic, social. This analysis is an effective framework
which is used in corporate strategy planning of a company. It helps them in identifying benefits
and limitation of business strategy which are as follows:
Political factors: Political factors like Brexit create threat for business like Premier inn. Due to
Brexit, government of UK has made changes in their rules and regulation which create problems
for business. Government in situation of Covid-19 has imposed various regulation on people and
business which create problems for business of Premier Inn. But at same time, government is
also providing support to business of Premier Inn which create favourable situation for them in
which they can earn more money.
Economic factors: Economic Factors are those which create impact on cost of company of
Premier Inn (Maréchaux, 2020). UK has highly educated and well skilled employees which
provide competitive advantage to Premier Inn. But due to covid-19 situation, economy of UK
has facing crisis which create negative impact on business.
Social factors: Social factors are factors which are related to belief, values. It creates both
favourable and unfavourable situation of business of Premier Inn. There is increase in spending
power of consumer which create favourable situation for business of premier inn which allow
them to spend on services of company. There are various competitors in market of UK which are
providing same services. These competitors are attracting customer of Premier Inn which reduce
profitability and marketing share of company.
Technological factors: Technological factors are related to advancement of technology and
technology up gradation. It provide competitive advantage to Premier Inn as this organisation is
adopting advance technology which helps them to enhance experience of their customers. This
company has their own websites and accepting booking of customers from both online and
offline mode . They are also offering payment options like debit card, credit card and other
options like Google pay, Paytm and many more (Nel, 2020). But advancement of these
technology create threat of security for business.
Environmental factors: Environmental factors are those factors which are related to pollution
weather and climates change. Business of Premier Inn depend of condition of weather as in good

weather, people come to stay in their hotels which provide them opportunity to earn profit. This
organisation is also following all regulation related to environment. They are also fulfilling their
corporate social responsibility which create favourable condition for their business.
Legal factors: Legal factors are those which includes laws and regulation. Premier Inn is a
multinational organisation which is providing their service in different countries. This
organisation is following all rules and regulation which results in positive image of company in
minds of their customers. This organisation is facing legal threat from health and safetyy lwas as
they not following that law properly and are using guest towels for cleaning of bathroom and
toilet of hotels.
CONCLUSION
From above mentioned project report, it can be concluded that business environment includes
different external factors which influence functioning and operation of business. It is important
for managers to identify these factors as it helps them to reduce impact of these factors on
business. In order to identify these factors, business use different analysis like SWOT analysis
and PESTEL analysis. SWOT analysis is an internal external analysis which helps business to
identify various factors like strength, weakness, opportunity and threat. This analysis helps
company to assess their internal as well as external factors which can create impact on business.
It helps them to assess performance, risk, potential and competitors of business. PESTEL is an
external analysis which helps them to identify various factors like political, social, legal,
technological, economic, environmental factors. This analysis is an effective framework which is
used in corporate strategy planning of company. These analysis helps company to understand
impact of external factors which create opportunity for them to expand their business or
identifying new ideas.

REFERENCES
Books and Journals
Baloyo, M.J., 2020. Understanding household entrepreneurship through intersectionality: A Total
Social Organisation of Labour perspective (Doctoral dissertation, University of
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Bhanushali, M., 2018. TLP Understanding Theory, Structure and Design of Organisation 2017-
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Katagiri, H., 2020. Conceptual organisation of customer engagement: Understanding the concept
of engagement and considering the structure of customer engagement factors. The
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Loasby, B.J., 2021. The Organisation of Knowledge and Knowledge as Organisation.
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Maréchaux, B., 2020. Business organisation in the Mediterranean Sea: Genoese galley
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