Effectively Managing Stakeholders in a Limited Company

The assignment content focuses on the role of directors in a limited company. The director plays various roles and responsibilities, including defining strategies, objectives, goals, and policies of the company. They are also responsible for appointing senior management and developing the mission, vision, and values of the company. Additionally, the assignment discusses the business environment in a global context, highlighting factors such as economic freedom, income distribution, and workforce share.

External business
environment
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TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
Task 1: The structure and operation of UK economy..................................................................3
Task 2: Current government economic policy and its effect on business and service industries 4
Task 3: Discuss income, wealth, employment and occupational distribution in relation to the
provision of business and service operations...............................................................................5
Task 4 Demographic trends that influence employment patterns in hospitality industry............5
Task 5: The social structures of people employed in business and services industries...............6
Task 6: The structure, operations and influence of local government on a major part UK hotel
group............................................................................................................................................7
Task 7: Role and influence of European union and its impact on businesses.............................7
Task 8: Role of pressure groups...................................................................................................8
Task 9: legal framework within UK and difference between English and Scottish system........8
Task 10: UK and EU legislative process and its effects .............................................................9
Task 11: Types and characteristic of business that operates within hospitality industry ...........9
Task 12 Legal process necessary for the formation and dissolution of company ....................10
Task 13 structure and process which determines the responsibilities and control within a
registered company....................................................................................................................11
Conclusion ....................................................................................................................................12
References......................................................................................................................................14
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INTRODUCTION
Business environment is combined with two factors that are internal and external factors,
both the factors influence the decisions of businesses (Kew and Stredwick, 2005). Internal
environment includes the factors that exist within the company and put its impact on the
processes as well as the success of organization. Another component of business environment
include external environment of an organization are those components those exists outside the
company an impact the establishment ability to function. Managers generally have no control
over the external environment factors which are uncertain and indirectly affect the operations of
business. However, external environment directly affects the processes of planning, organizing,
directing and controlling of business. Present report mainly focuses on the whole UK hospitality
industry as it is consider as the fastest growing sector. The study also analyse and measure the
meaning of external business environment as it mainly affect the operations of the organization.
Along with this company also measures the modern economic policy and their impact on the
services and operations of the hospitality organization (2014 Index of Economic Freedom, 2014).
Therefore, present study also measures the impact and affect of change in the socio-
economic aspect on the performance of organization within the hospitality industry. Study also
focuses on measuring the role and influence of EU on the operations of Hilton while operating
the activities across the border. Report will also measure the different impact of external factors
that is political, social and legal environment on the activities and operations of Hilton
International.
Task 1: The structure and operation of UK economy
Hospitality industry is considered as the major employer that provides job opportunities
within the service sector. This industry encompasses an extensive variety of services that
commonly include food service, tourism and hotels services. Therefore, the key strength of
hospitality industry is that it mainly focuses on creating wealth and job opportunities throughout
the countries and get benefits from the different activities of restaurant and hotels or other
catering businesses (Economic System, 2013). In the contemporary scenario, it has been stated
that UK economy is consider as fastest growing and largest economy that features increasing
GDP rate (United Kingdom GDP Annual Growth Rate, 2016). Therefore, for operating the
services there are various form of market structure under which organization perform their
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activities (Harrison, 2013). From the different form of market structures selecting the suitable
structure directly affect and influence the behaviour and culture of organization. The different
variety of market structures available in the UK economy are imperfect competition structure,
perfect competition, oligopoly etc. Market structure of UK hospitality industry mainly focuses on
the perfect competition market as there are too many buyers and sellers present within the
marketplace and has control on the activities (David, 2000). Under UK economy, there is no
barrier for entering or existing in the market as they are free to enter in the market and exist from
the market. It has also stated that UK economy directly employs over 2.4m people in 17000
commercial establishments. Moreover, range of hospitality industry is vast as it features various
sections that mainly include hotels, restaurants, pubs, motels, clubs etc. Therefore, UK
hospitality industry mainly contributes their market share in the up-liftment of UK economy and
thus, outcome in creating various job opportunities. However, it has been stated that 32£
travellers across the globe often visit the tourist destinations in the UK. Therefore, it has been
stated that UK hospitality business mainly impart £4.25bn within economy that support the
economy in developing their destinations and places that are often visited by travellers (Britton,
2009). however, there are different sectors and industries that mainly contribute in growing the
UK economy that is agriculture sector it mainly contribute the UK economy by producing the
food needs around 60% within the economy. The agriculture industry in the UK also contribute
around £9,438 million within the economy that increases the GDP rate. Furthermore,
construction industry also primarily contribute and impart their gross value to the UK economy
that is approximately £86 billion. The construction industry progressively result in contributing
to the development or processing of infrastructure in the UK (United Kingdom National
Accounts, The Blue Book, 2013). Another industry that contribute in the GDP of UK economy
focus on production industries that generate electricity, gas and water supply that boost or add
the gross value around £33,289 million in economy.
Task 2: Current government economic policy and its effect on business and service industries
Authorities mainly frame legislations and rules that need to be enforced by the businesses
that are operating in the service industry. However, UK government from time to time modify
these policies and rules that directly forces to change their processes and procedure. The aim of
current government policy is to raise the sustainable growth and achieve rising economic
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condition by creating opportunities (Grier, 2006). In the present scenario, UK economy mainly
have higher unemployment rate. Thus, UK government enforced the different employment
policies for lowering or reducing the rate of unemployment and creating the job opportunities
within the environment. The UK government economic policy will positively outcome in
developing the hospitality industry with creating vast job opportunities. For instance, if the new
economic policies results in changing the interest rates, thus it will results in modifying the
policies and strategies (Buthe and Milner, 2008). Therefore, in the situation if hospitality
organization increases the rate of interest visitors will relatively spend low income on consuming
the luxurious and leisure services that are provided by the hospitality organization. On the
contrary, if they reduces the interest rate it will outcome in attracting more travellers and visitors
towards the hospitality organization that directly result in attracting more customers that outcome
on generating high net income. Hence due modification in existing economic policy, hotels has
been focusing on the adequate pricing strategies where in the hotel mainly regard the purchasing
power of their guest and customers. Therefore from the entire discussion, it is has been cleared
that government policies often impact the economic position of business organization (Matthews,
2005).
The affect of UK economic policy is adversely on the business and activities of Hilton
hotel. For instance; with the increase in rate of interest hotel management would modify their
rates that outcome in affecting rate of visitors and customers towards their hotel. However, with
the gain in interest rate management would also not able to take loan from the banks or other
financial institutions as due to high rate of interest. On the other hand, if government lowers or
reduces the interest rate of the banks it will positively impact the hotel organization in taking
loan from the commercial banks and financial institutions at relatively low interest rate that is
beneficial for the organization.
UK government economic policy generally focuses on fiscal and monetary policy. Fiscal
policy is defined as policies that are mainly enforced by the government on the spending of
individual and taxes. Taxes are consider as the key source that generates revenue for the UK
government. Therefore, government has focused on the fiscal policy so that it can positively
impact the overall economy. However, the economic policy generally effect the decisions of an
individual regarding spending in the businesses. There are three main stances of the fiscal policy
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that neutral, expansionary and contradictory fiscal policy. The current economic policy of UK
government that is fiscal policy generally affect the services and hospitality organization that is it
directly affect the labour productivity within the Hilton hotel. For instance; the increase in the tax
rate will directly affect the overall efficiency of individual as taxes are often deducted from their
overall compensation packages that cut down their productivity. Furthermore, fiscal policy of
UK government also benefit the Hilton hotel in taking effective decisions regarding their
business investment. For example, in the case of lower tax rates and other business taxes Hilton
hotel can investment their capital spending in the business that positively result in expanding
their services. On the other hand another current governmental economic policy is monetary
policy that is being defined as technique that is commonly used by central bank of UK to control
the inflow and outflow of money within the UK. Monetary policy of UK government will
directly effect the internal and external operations of Hilton Hotel in UK as it brings changes in
the interest rates that are set by the government.
Task 3: Discuss income, wealth, employment and occupational distribution in relation to the
provision of business and service operations
In the contemporary marketplace hospitality industry is considered as the emerging
industry as it mainly contribute in increasing the economic GDP (Fernando, 2011). Hospitality
sector mainly focuses on employing large number of employees so that they can satisfy the needs
of their customers. Income refers to amount that an employees receive in consideration with their
services those they renders within the organization. For instance, manager provide sum of money
to their staff that is waiter in order to compensate their services. However, wealth refers to an
abundance or plentiful of valuable and priceless resources that have been occupied with the
organization. Moreover, the wealth may consider as the total market value of their tangible and
intangible resources The income in relation to the provision of business and service operations is
quite high with the increasing competition in the hospitality sector. With the higher income level
in the hospitality industry employees prefer to stay committed with the organization and render
quality service to attain success in the competitive market. It has also stated that with the change
in the economic condition of UK wealth of people also keeps on changing (Carter, 2007).
therefore, it will ultimately results in changing the requirement of different hospitality
organization. It has been also stated that growth of hospitality industry is primarily depends upon
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the purchasing power of their guests and customers. Thus, there must be proper employment
distribution under the industry to keep satisfied their guests and customers by providing quality
services. Organization's in hospitality industry is mainly comprises of different services that
commonly include accommodation, food and services, housekeeping, front office, marketing etc.
that make hospitality enterprise. Therefore, all the above services need to be organized in the
proper manner so that they can contribute in occupation development (Zahra, 2003).
Great Britain
(level)
Great Britain (%) UK (level) UK (%)
Total 32825000 - 33693000 -
A: agriculture, forestry and
fishing
380000 1.2 411000 1.2
B: mining and quarrying 70000 0.2 72000 0.2
C: manufacturing 255000 7.8 2634000 7.8
D: electricity, gas, steam and air
conditioning
120000 0.4 122000 0.4
E: water supply, sewerage, waste
management
202000 0.6 206000 0.6
F: construction 2047000 6.2 2106000 6.3
G: wholesale and retail trade;
repair of vehicles
4778000 14.6 4925000 14.6
H: transportation and storage 1596000 4.9 1628000 4.8
I: accommodation and food
services activities
2218000 6.8 2269000 6.7
J: information and
communication
1328000 4 1347000 4
K: financial and insurance
activities
121000 3.4 1141000 3.4
L: real estate activities 538000 1.6 547000 1.6
The above table depicts different sector services that mainly generate the income of UK
economy. It has been measured through the table that the level of UK is higher than the total
income of Great Britain For instance, the total of Britain is around 32825000 while the total
income or gross income of UK is around 33693000. from the above table it can be measured that
7

services of wholesale and retail trade as well as repair of vehicle contribute around 4778000 in
the Great Britain. On the contrary, within the UK region wholesale and retail trade as well as
repair of vehicle contribute around 4925000 that is higher than the Great Britain.
Illustration 1: The UK income distribution, 2012-13
The above table depicts that UK income distribution level that shows that income of
individual ranges from £10 to £1000 per week. The graphs generally classifies income status of
the individual from poorest to richest. Furthermore, it has also identified that there are large
number of individual within the UK that have income level between £0 to £10 per week. In
addition to this, the mean of the household income is £535 per week and the calculated median is
£440 per week.
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9

Illustration 2: Share of workforce
(Source: statista, 2015)
The above chart depicts different professional occupation that are ranked by measuring
the share of total workforce within the UK travel and tourism as well as hospitality sector in the
year 2011. the chart shows that large number of share are occupied by the elementary occupation
that covers 49% of the workforce. While, 16% share of workforce are of the senior and manager
officials that takes business decisions so that they can sustain in tourism sectors.
Task 4 Demographic trends that influence employment patterns in hospitality industry
Demographic factors are the one which are associated with age, sex, nationality,
background, colour etc. It can be stated that such factors have great influence on the pattern of
employment in hospitality industry (Miller and Friesen, 2003). The young individuals provide
businesses with unique and creative ideas whereas experienced employees assist in
understanding and delivering services as per the market trends (Johnson and Lenartowicz, 2009).
On the basis of gender it can be stated that most of the businesses hire males employees. The
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reason behind this is that male workers are more hard working and lot of efforts are required to
work in this industry. Sometimes people also work for 16 to 18 hours a day and such working
hours are very difficult for a women. In terms of education it can be said that very business that
operates in hospitality industry seeks for workers that are well educated and qualified.
Individual's having less education performs low level jobs such as cleaning, washing, laundry,
housekeeping etc (Katz and Green, 2007). Therefore, it can be suggested that the demographic
trends have a major influence on patterns of employment.
Age profile of the hospitality sector is
Age Percentage (%) Male (across all ages) Female (across all
ages)
16-24 33.5%
45.7% 54.3%25-49 49.4%
50-SPA 13.0%
SPA 4.1%
Within the UK economy increase in elderly population is higher as compare to the other
countries. Only 48% of workforce rendering services within the hospitality organization are
under 29 while rest of the population are above 30 years that directly impact the operations of
Hilton hotel. However, the young people are often energetic and perform their activities in
effective manner that increases their productivity and often assists in enhancing the performance
of overall organization.
One of the major reason which has affected pattern of employment is the changing
demand of all the customers. it can be explained that majority of the firms seeks for a the
combination of the both young as well as experienced professions. The Above graph shows that
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around 30% of people employed within the hospitality sector are between the age group 16-19
that are highly effective in rendering services within the organization. However, the young age
group individual are also preferred for night clubs and pubs as the places generally attract the
young guests and customers.
Task 5: The social structures of people employed in business and services industries
Social structure is consider as way through which organization succeed in building social
relationship with their customers society (Felson and Clarke, 2007). Thus,it help the company in
building long lasting relationship with their customers. Organization in the services industries
mainly employs candidate on the basic of organizational requirement and qualification that
candidate possess thus, it will result in managing effective process of recruitment and selection.
With the changing demand and preferences of customers hospitality organization mainly focuses
on recruiting the candidate with higher qualification so that they can render quality services
within the firm. For instance, in the new restaurant manager must focus on employing the
freshers for the staff level job to serve the needs of customers (Hamilton and Webster, 2012).
Therefore, restaurant manager focus on providing apprenticeship training to the freshers to
enhance their knowledge and skills. However, for the seasoned theme park they must employ
part time or seasoned employees that can render service for the specific time period. Manager of
seasoned theme park will pay their employees on the daily basis as employed candidate will only
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render service in the season and after the season they are unemployed (Adhikara, 2002).
Therefore, hotels mainly employed large number of candidate so that they should provide
adequate facilities for their customers. To gain competitive edge among their rival companies
hotel organization adopt wide range of employees that render quality services to customers
according to their class and income (Doving and Nordhaug, 2010).
With the huge demographic sector in the UK, Government has focused on ABC1 system
of social grading. Under this system of social grading National readership survey (NRS) has
classified the social groups into different grade that is A, B, C1, C2, D and E.
A grade structure of people are generally regarded as upper middle class people who are
in the business that require higher managerial administrative. The B grade people are consider as
middle class status individual who mainly engage in the occupation of intermediate managerial
professions. C1 grade individual are the lower middle class status people that pursue the
occupation of supervisory and clerical job role. However, C2 grade people the consider as skilled
working class personnel who continues the business that required skilled manual activities. In
addition to this, D grade people are consider as working class individual who mainly focuses on
semi activity and work. The last grade in the social grading system focuses on lower level status
that are termed as state pensioners.
However, there are certain types of workers employed with the hospitality organization
that is part time or full time. Under part time of employment individual work or render services
for certain time period and after the time period they are unemployed. However, full time worker
are consider as individual those renders services of the full time period in the premises.
Great Britain
(level)
Great Britain (%) UK (level) UK (%)
SOC 2010 Major
group 1-3
13204000 44.3 13502800 44.1
1. manager,
directors and
seniors officials
3095300 10.3 3150200 10.2
2. Professional
occupation
5900000 19.7 6055700 19.7
3. associate
professional &
4208700 14 4296900 14
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technical
SOC 2010 Major
group 4-5
6394200 21.5 6605500 21.6
4. Administrative
& secretarial
3190000 10.6 3291500 10.7
5. skilled trades
occupations
3203000 10.7 3314000 10.8
SOC 2010 Major
group 6-7
5084600 17.1 5227600 17.1
6. Caring, leisure
and other service
occupations
2764000advantag
e and
disadvantage of
sole
proprietorship
9.2 2845800 9.2
7. Sales and
customers service
occs
23202000 7.7 2381800 7.7
SOC 2010 Major
group 8-9
5125200 17.2 5278400 17.2
8. Process plant
& machine
operatives
1876500 6.3 1945300 6.3
9. elementary
occupations
3248700 10.8 3333000 10.8
The above table depicts that there are different social structures of people those are
employed in business and services industries. These individuals are bifurcated into 4 different
groups. The first group mainly focuses on the highly qualified and skilled personnel those are
employed within the services industries. The second group focuses on the middle or skilled
workers. While, the third group mainly consists the personnel those who are engaged in the sales
and customers services operations. Therefore, the last group mainly include the personnel whose
occupation requires no skill and abilities.
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Task 6: The structure, operations and influence of local government on a major part UK hotel
group
Local government has been considered as the major threat to the organization as with the
change in government laws and regulations it directly impact the Hilton hotel group of UK (Xiao
and Fu, 2009). Thus, with the change or modification in the rules of local councils impacted the
activities of Hilton group hence, it will also results in changing the organizational structure as
well as policies. There are different agencies and councils existing in the UK economy that is
country councils, unitary authorities, district councils etc. that directly impact the operations of
establishment and often outcome in modifying the structure of Hilton hotel so that they should
sustain in the competitive scenario (Black, 2010).
However, it can be said that local governmental agencies existing within the UK directly
influence and affect the operation of Hilton hotel. The local governmental agencies indict various
policies that is abide by the organization so that support the hospitality organization to enable
different changes within their structure and culture so that they should sustain in the vast
hospitality industry. Moreover, it has also cleared that legal processes enforced by the UK
government and local governing authority adversely impact the situation and activities of the
Hilton (Kew and Stredwick, 2005).
Local government in England generally focuses on creation of 6 metropolitan countries
as well as 39 different territorial division countries. Local Government association plays vital
role that generally represent the principles of local authorities and also have rural interest. The
local authority within England generate their funds through four different sources that is first is
council tax that is raised by the local individual, another source is through central government
grant, third is through enabling business rates and last source through which government
generate the revenue is other grants. In addition to this, UK local government has imposing
different legislation and regulations related with the import and export that in-turn act as the
major problem for the hotel organization that need to rectified to render quality and leisure
services. The local government directly impact the operations of Hilton hotel by introducing
higher tax rates that affect the individual spending.
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Task 7: Role and influence of European union and its impact on businesses
The European Union (EU) has formed many rules, policies and legislation and the main
objectives behind this is to have a free flow of products and services. In order to manage and
maintain legal practises within organizations trade free regulations are encouraged by EU. The
practises of EU also force business to provide best quality of products and services to customers
and take care of the health and safety of workers (Capon, 2009). In aspect of this, some major
policies are explained below as:
 Inflation policy- As per this policy, the government of country needs to ensure the fact
that fair practises are carried out by businesses and no unnecessary rise in price is
encouraged by businesses. The inflation policy of EU positively impact the operation of
the hospitality industry as it will result in no increase in the prices that assist in attracting
the large visitors and travellers. However, the policy also impact the business in carrying
out fair and ethical services to their customers so that in future also they can visits their
places.
 International policy- EU has also encouraged international policy which encourages the
free flow of services and products. The benefit of this is that it helps in eliminating the
barriers to trade and develop health relation between countries (2014 Index of Economic
Freedom, 2014). Through focusing on the international policy of EU it positively impact
and affect the operations of hospitality organization as it enable the free flow of goods
and services across the borders that support in generating the profit and expanding the
market share by enabling international policy.
 European union also have an impact on activities such as mergers and acquisitions of
businesses. Various kinds of economic blogs are developed by EU which helps
organization to carry out mergers and acquisitions easily.
 It also increases the entire efficiency of Hilton hotel with the help of various economies
of scale. The organization has also allowed the brand to centralized its marketing and
production process.
 European union has helped Hilton hotel to lower down its entire cost of operations.
Along with this, it has also increased the business activities of Hilton by allowing
various kinds of subsidies and support to the same.
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Task 8: Role of pressure groups
It can be stated that the pressure groups play very important role in regards to hospitality
industry. A pressure group is a group of people which endeavour to persuade the decision
making of government (Economic System, 2013). Further these groups always support the
conversation of natural resources and wildlife. It has been found that, the operations and
activities of businesses operating in hospitality industry have a great impact on nature and
environment. Now many of the focus group are now forcing these businesses to adopt more
sustainable practises. In addition to this, they are also encouraged take care of the waste and
pollution extracted from their operations. Many of the places have been developed as a tourist
destination and the natural resources long with wildlife has been harmed (Harrison, 2013). The
pressure group started raising voices against the same and it is only because of this efforts that
now companies have adopted more sustainable practises. The example of pressure group
includes trade unions, professional bodies and the trade association. UK Uncut consist of various
kind of protest groups and there main aim is carry out protest against avoidance of tax in the
country. Pressure groups such as Greenpeace are the one which have direct influence on the
activities and operations of an business enterprise. They forces businesses to change their
practises and operate in more sustainable way. This increases overall cost of operations for
businesses. If an organization is found indulge in any kind of wrong activities then these groups
directly damage image of the business by protest and negative publicity. Amnesty International
forces government and other regulatory bodies to take care of human rights and protect the same.
Most of the time these groups protest in order to make the consumer aware against the wrong or
unfair practises used by business or government. Sometimes these groups creates great impact on
government and also force them to change legislations.
Task 9: legal framework within UK and difference between English and Scottish system
In UK, there are three different kind of legal systems which are England & Wales,
Northern Ireland and Scotland. Supreme court of the country is the major and the highest
authority in the court system. Under the supreme court, there is court of appeal which is sub
divided into criminal division and civil division. Further, criminal division takes care of crown
court and Magistrate Courts. On the other hand, Civil Division takes care of county court. High
17

court of justice comes under the Civil Division and has three sub division which are Queens
Bench Division, Family Division and Chancery Division (David, 2000).
Difference between English and Scottish system
The English system is one which is administered by courts in Wales and England. In addition
to this, both criminal and civil matters are taken care by the system. English system has its own
legal doctrine since 1189 (Britton, 2009). Judge and district judge are the one which deals with
all the cases related to civilians. An example of this can be a dispute between landlord and its
tenant. Tracks has been developed at three various levels to make provide the best decision.
Multi track, fast track and small claim track are those tracks. In order to solve the matters and
disputes associated with family, the family court of England and Wales is taken into
consideration. Criminal cases are usually handled by magistrate courts which has been developed
in different areas of the country. Cases related to individual which fall in the age group of 10 to
17 years are generally taken by youth court. In cases of any serious offence more than 14 years
of imprisonment is also provided to the person. Queen bench division has been developed to deal
with issues related to compensations that are usually large. People which have any kind of
criminal or civil level needs to go to court of appeal.
On the other hand, system of Scot is very different as well as unique. Further it is based
on Roman law and highlights features of medieval sources and some uncommon laws. In recent
years, law has been affected by the policies and regulations of European union. The cabinet
secretary for justice who is also a member of Scottish Government is the one which is
responsible for the criminal justice and developing the polices of court (Grier, 2006). The legal
system comprises of two different type of sections which are civil cases and criminal cases. In
majority districts of Scotland, Sheriff courts has been formed to solve various kind of cases.
Further principal in this court is the highest authority which gives decision. Partnership cases,
custody, separations etc. are some of the cases which Sheriff courts deals with. Other than this,
court of session is the one which solves cases related to personal injury. In situation where
people are not satisfied with the decision provided by session court then they can visit supreme
court. Cases such as incest, murder, rape and fraud at very wide level are been taken into
consideration by the high court of the country.
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Task 10: UK and EU legislative process and its effects
Government of UK and European Union had framed various kind of acts and policies
which are required to be taken care by hotel groups operating at both national and international
level.. The main objective behind such process is to ensure that there are no barriers for the
organizations operating in hospitality sectors in terms of flow of services (Buthe and Milner,
2008). Companies working at both international and national level needs to ensure the fact that
all fair practices are followed by them. Other than this, as per the minimum wage Act 1998,
companies needs to pay fair wages to their workers against their pay. Further, minor should not
be appointed tom perform any activity or task within a business organization. As per the
legislation, it is illegal to hire minors to carry out any kind of work. Now a days business
enterprise are also bound to ensure safety and health of all their human resources. This has
effected the practices of companies to a great extent. They have changed their entire operations
and activities (Matthews, 2005).
Task 11: Types and characteristic of business that operates within hospitality industry
Hospitality industry is one of the leading and most growing sectors of the world.
Some of the main businesses which operate in this industry are mentioned below as:
 Hotels and guest houses- These are the businesses which provide food and
accommodation services to customers. Hotels and guest houses also play a major role in
the growth of the entire industry. There are many big brands of hotels which operate in
UK and provide world class accommodation services to travelers (Fernando, 2011).
 Travel agencies- Travel agencies are those businesses which provide travel and
accommodation related services to customers. Tour agencies have tie ups with hotels
along with some airlines. They charge certain commission against the services provided
by them.
 Restaurants and Bars- These are the businesses which provides food and drinks to tourist.
Different types of food and drinks are served by these business to their customers and it
also contributes a large part of revenue in hospitality industry (Carter, 2007).
The business can be also classifieds as per their nature and such businesses are mentioned
below as:
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 Private limited- Private enterprise are the enterprises which operates with the sole
objective of increasing profitability. The decision making, strategy formation and
everything is concentrated in the hands of these entrepreneurs (Zahra, 2003). The
advantage of forming private limited company is that the range or scope of expanding the
organization is higher as compare to another type of business. Another advantage is that
the minimum number of shareholders required to start a private limited company is only
2. the status of owner do not have any kind of impact on the operations and activities of
the business. The members are also allowed to pay a fix amount which is often terms as
guarantee. This amount is usually paid towards the company debts and directly goes into
liquidation. On the the contrary, the disadvantage of private limited company is that
shares within the private limited is not transferable to other individual. Another
disadvantage is that the maximum number of shareholders allowed in private limited is
50 only. This can limit the opportunities for growth and development of a company. Public limited- Public enterprise the companies which are maintained by government of a
nation. The major objectives of these organizations includes welfare and development of
people. The advantage of enabling public limited company within the hospitality industry
is beneficial as they can raise huge amount of finance from the shareholders existing in
the external environment. Another major advantage is that such type of company
continue to carry out its operations even if any of its major shareholder dies. Along with
this, there is restriction or limit in the total number of shares provided by public limited.
As there is not restriction among the number of shareholders. Despite of this, there is
certain disadvantage of public limited is that it focuses on strict rules and regulations by
the authorities that may act as democratic culture and environment. Huge size and many
shareholders can results in creating management problems and this is the disadvantage of
public limited. Partnership firms- Partnership is a process in which two or more businesses are
integrated together to achieve mutual goals. Further all the businesses decision are taken
by all the parties engaged in partnership (Miller and Friesen, 2003). The advantage of
enabling partnership among the hospitality industry is beneficial as it result in gathering
huge capital. However, partnership is also advantageous as it enable the sharing of profit
20

and losses among different partners of the firm. On the other hand disadvantage of
partnership is that difference among the statement of partner may result in occurring
dispute. Partnership such as limited liability has its own set of advantages and
disadvantages which needs to be taken care of. One of the major advantage is that it can
have as many number of owners as it wants to have. This means that there is no
restriction on owners which can be introduced in the business. Along with this, all the
partners have very less or limited liability which each other. On the other side of this,
disadvantage is that its increase the overall creditability of business. The vanadate of
unlimited liability partnership is that it supports business in obtaining adequate amount of
finances for its growth and expansion. Its major disadvantage is that it can provide great
loss to off spring partners.
 Sole traders- Sole traders are individual's which managers their businesses individually.
The decisions, strategies are made by the individual's and they are the only one which are
responsible for the success and failure of business. The advantage of sole proprietorship
is that it result in keeping all the gained profit themselves as they are the ultimate owner
of the company. However, the disadvantage of sole proprietorship is that individual have
own responsibility in taking all the crucial decisions.
Task 12 Legal process necessary for the formation and dissolution of company
When new company is formed then it is required by its owners to incorporate the same in
order to become a registered entity as per the law (Johnson and Lenartowicz, 2009). According
to the companies Act 2006, companies are required complete and send documents such as
Article of association and Memorandum of association. A person can register by using various
ways such as online, by post using the form In01 and with the help of an agent. Memorandum of
Association contains the name and signature of those individuals who are forming the company.
On the other hand, the article of association is the one which highlights the rules and regulations
of company (Kew and Stredwick, 2005). The in01 consists of name of company, location and
registered address of the company, details of the owners and information regarding share capital.
The companies house is the one which takes care of the formation of company (Katz and Green,
2007).
Process to dissolve a company
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There are six common steps included in the process of dissolution. The steps are
mentioned below as:
 Justified reason for dissolution- The process of dissolution begins with stating a reason
for dissolution along with justification. Company is required to determine whether the
decision for dissolution is voluntary or is compulsory (Felson and Clarke, 2007). In both
the cases businesses are required to have a meeting with all its shareholders and need to
inform them about the same.
 Appointment of liquidator- In the next step is the appointment of liquidator which
determines the value of assets of company. Further he can be appointed by company or
by the court.
 Realization of asset- The next step is realization of assets in which the liquidator starts
evaluating the total assets of the company (Hamilton and Webster, 2012).
 Payment of liability in preferences sequence- when companies realized their total assets,
they begin to pay the liabilities. Further it is paid in proper sequences and based on
preference. Outsiders are the one which are paid first and after them the preference
shareholders are being paid. Equity shareholders are paid in the end.
 Closer of books- after all the payment the process of closing down the books of accounts
begins. A notice is issued after closing down the books and then the company gets
dissolved (Doving and Nordhaug, 2010).
Task 13 structure and process which determines the responsibilities and control within a
registered company
In order to make a business successful it is required by the owners to have a well
developed structure and process. All the internal and external stakeholder should be well taken
care of. Organizational structure mainly defines its level of hierarchy as well as reporting person
(Brinkman, 2014). Other than this, it also highlights that who is going report to whom.
Businesses are also required to ensure the fact that its stakeholders are involved in decision
making process. All the legislations, rules and policies needs to be followed by companies to
assure that structure as well as process is legal. Therefore, the distinct vision, mission, goals and
objectives of the hospitality organization must be communicated to all the stakeholders so that
they may render quality services within the company (Adhikara, 2002). Director of company has
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various kind of roles and responsibilities which are required to be accomplished. Further he/she
plays very important role in defining strategies objectives, goals and policies of company. In
addition to this, it is the role of director to appoint senior management of the same. On the other
hand, broad of directors has the role to develop the mission, vision and values of company. They
are also responsible to frame and implement both strategy as well as structure. These are the one
which are accountable and responsible towards all the stakeholders of a limited company.
There are various types of meeting which takes places in limited companies. Some of the
common among those includes shareholders meeting, directors meeting and special meetings.
The stakeholders meeting further consist of three main meeting which are annual general
meeting, statutory meeting and extra ordination general meeting. On the other hand, broad
meeting, committee meeting included in directors meetings. Due to legal regulation directors
have limited voting rights in limited company.
However, the structure of hospitality organization mainly focuses on the role of directors,
board of directors, role and different type of meetings that are organized by the organization for
taking effective decisions regarding the establishment. The director is consider as the key person
that must be provided with the responsibilities of taking care and maintain quality in services. On
the other hand, they will also need to ensure that the employee feel positive and are satisfied with
the activities of organization.
CONCLUSION
Conclusively, it can be said that to sustain in the competitive environment management
must focus on assessing the change operating within the external environment as it will directly
impact the activities of hospitality organization. While, the external environment mainly consists
of those components those exists outside the company an impact the establishment ability to
function. Managers generally have no control over the external environment factors which are
uncertain and indirectly affect the operations of business. However, it has also concluded that
socio-economic factor has also negatively impacted and affected the developing of organization
as well as it also measures the UK economic policy that impact the business activities of the
organization. The study further evaluate the function of EU and its impact on the UK economy
as well as on the industries that are working under it. From the above study it also assess the role
of pressure groups and their political influence in relation to national and local issues in regards
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to the hospitality industry. The report has also recommended the regulative procedure for the
organization regarding formation and liquefaction of the registered company. Lastly, the report
also advisable the legal requirements that are used for establishing and processing the business
and services operation.
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