Understanding Business Organisation: Organisational Structure and Business Environment Analysis of Premier Inn Hotel

This report covers organisational structure of Premier Inn hotel, external and internal business environment analysis, SWOT and PESTLE analysis of Premier Inn Hotel.

Understanding
Business Organisation

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Organisational Structure of Premier Inn Hotel ......................................................................1
Business Environment Analysis of Premier Inn Hotel...........................................................3
SWOT Analysis......................................................................................................................3
Strength.........................................................................................................................3
Weaknesses...................................................................................................................4
Opportunities.................................................................................................................4
Threats...........................................................................................................................4
PESTLE Analysis...................................................................................................................5
Political Factors.............................................................................................................5
Economic Factors..........................................................................................................5
Social Factors................................................................................................................5
Technological Factors...................................................................................................6
Legal Factors.................................................................................................................6
Environmental Factors..................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Business organisation is a system that is established to explain how businesses should be
structured and what products or services must be manufactures that could fulfil customer
demands. The main motive of business organisations is either to earn profit or to make society
better. Companies that focus on earning maximum profit are known as Profit organisations
whereas firms whose aim is to improve society thorough education, arts or some other sources
are called as Non-profit enterprises (Treuren, 2019). The following report covers organisational
structure of Premier Inn hotel which is British hotel chain and was founded by Whitebread
as Travel Inn in year 1987. The headquarter of this hotel is in Dunstable, England, UK.
This report examines external and internal business environment of Premier Inn hotel
which has impacted the hotel at times of COVID-19 global pandemic. Furthermore, the
following report also focus on favourable and unfavourable external environmental
factors that are impacting hotel.
MAIN BODY
Organisational Structure of Premier Inn Hotel
Organisational Structure explains how certain tasks such as project allotment,
supervision and many more in companies should be directed in proper way in order to
accomplish desired target. There are various types of organisational structure like
Hierarchical, Functional, tall, flat and divisional. In context to Premier Inn hotel, it executes
hierarchical organisational structure within its management system which is the most
implemented organisational structure by many firms and has a shape like pyramid. The
chain of command which usually starts from superior managers or leaders and at bottom
it has general employees. Under this organisational structure the orders and rules are
given by upper management department which have to followed by all employees under
them (Hart, 2019).
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(Source: Hierarchical organisational structure, 2020).
This organisational structure has some advantages and disadvantages which are explained below
in detail:
Advantages of hierarchical organisational structure:
 This organisational structure creates a clear chain of command in Premier Inn
hotel where every employee knows whom they should report to and departments
are divided according to employees' skills.
 A clear communication bridge is developed between employees and managers
which helps in clearing conflicts or misunderstandings (Amankwah-Amoah and
Adomako, 2019). It provides a clear picture of authority in the selected hotel which helps in
explaining who has more power in organisation which could be very beneficial in
times of crisis as decisions could be taken fast by superior managers.
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Disadvantages of hierarchical organisational structure:
 Managers or leaders in Premier Inn hotel could become more concerned about
their power and might get defensive if others interfere in their decisions.
 As employees get divided in departments based on their skills could create inter-
department rivalry in order to prove themselves better than others which
eventually could reduce their productivity (Sona, 2019).
 This structure does not provide flexibility in Premier Inn hotel as it is not
adaptable to any modification in market and there is lack of internal innovation
within this structure because it centralizes power to only one person who mostly
do not encourage their workers to share their opinions.
Business Environment Analysis of Premier Inn Hotel
Business Environment covers all the external and internal surrounding factors of a
business that could impact its functioning. External environmental factors include
political, technological, legal, economic, social, culture and competitors which impacts
strategies of companies from outside. Whereas internal environmental factors are
companies own strengths, weaknesses, opportunities and threats which explains their
position in marketplace (Lertxundi, Barrutia and Landeta, 2019).
SWOT Analysis
This a marketing tool which is used to analyse internal environmental factors of
companies in order to evaluate their strengths, weaknesses, threats and opportunities.
Following is the SWOT analysis of Premier Inn Hotel:
Strength
Premier Inn Hotel is one of the leading hotel chain in UK which shows its strong
presence in hotel industry. The hotel has wide network of supply and distribution that
helps in understanding demands of customers. At the time of COVID-19, Premier Inn
Hotel developed partnership with Diversey which is a leading supplier of hygiene goods
for hospitality industries (Koonin, 2020). This partnership helps the company in attracting
more travellers as after this pandemic, people are more concerned about their health and
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hygiene. The selected hotel provides many facilities such as auto-dispense sanitisers that
are available within public areas, doors handles and all areas are sanitised with Diversey
authorized disinfectants to the European standards of EN14476 which is effective against
Coronavirus (Premier Inn CleanProtect - our new enhanced hygiene promise, 2021).
Weaknesses
As compared to its competitors such as Raddison Hotel and many more hotels Premier
Inn Hotel has limited presence in global market which is one of its greatest weakness.
Hospitality industry is among the most impacted sector by this pandemic lock-down
which has created big loss for many hotels. In case of Premier Inn Hotel, it has lost
almost £725m during first half of its financial year and booking by travellers were also get
slowed at the time of regional lock-down that were enforced in October 2020 (Premier Inn
owner hit by £725m loss as local lockdowns dent bookings, 2020).
Opportunities
After COVID-19, utilization of digital marketing and online bookings have become a
trend in hospitality industry. The selected hotel could implement these strategies in order to
increase customer base. The use of social media sites for marketing might help the Premier Inn
Hotel in gaining competitive advantage as now a day’s travellers and youth are more active on
these platforms as well as like to explore those hotels whose ratings are excellent (Arasanmi and
Krishna, 2019).
Threats
Similar situations of lock-down could arise in upcoming future which could be threat for
Premier Inn hotel and might cause great losses again. The entry of new organisations or already
existed competitors such as Holiday Inn, Easyhotel and Ibis could create a strong competition for
Premier Inn which could decrease its customer base.
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PESTLE Analysis
This marketing tools is used to evaluate external environmental factors that could
influence strategies of businesses. The PESTLE analysis for Premier Inn Hotel has been
discussed in detail below:
Political Factors
These factors include policies and laws implemented by government which could impact
functioning of companies. In case of hospitality industry, it is very important to follow rules and
regulations executed by government. As economy of country largely depends upon tourism
industry hence, government has to make favourable laws that could attract more customers.
During COVID-19, the government of UK has announced various schemes such as 'Eat out Help
out' in order to support hotels and also reduced VAT rates (Turner, 2019).
Economic Factors
Hospitality industry is the fifth largest sector in UK which has created almost 2.4 million
jobs in country and contributed around £34 billion in overall tax revenues. The budget hotel
sector is in UK is considered to be as fastest growing sector and it has been calculated that by
2027 overall hotel market will become double in size (Strategic Analysis (SWOT, PESTEL,
Porter) of Premier Inn (Whitbread Plc), 2021). Due to COVID-19, the economic output in this
sector reduced to 90% in April 2020 and in case of Premier Inn hotel it has went through loss of
about £1bn. To overcome these crises caused by coronavirus, the hotel collected over £1bn from
investors in June 2020 and has to cut down almost 1,500 jobs (Premier Inn owner Whitbread
swings to £1bn loss amid Covid lockdowns, 2021).
Social Factors
Priorities of people change with time and according to their living standards which
eventually brings social modification in world. These changes also impact hospitality industry
which influences customer’s behaviour such as easy accessibility, variable room rates, security
and many more. In case of Premier Inn hotel, it focuses on modifying its strategies according to
the preferences of customers such as in COVID-19 it is offering sanitized rooms, beddings,
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sanitisers in public areas and many more facilities against coronavirus so that guest could feel
safe in hotel.
Technological Factors
These factors are related to new and advanced technologies that could influence business
operations of companies. Technologies are very important for hospitality industry in terms of
marketing and promotion of their services as it could be used as way of communication with
customers (Van Zyl, 2020). In case of Premier Inn Hotel, it has maintained interactive website
for its customers which helps it in advertising its services. Technological equipment could also
become threat for hotels as database of guests might get hacked or leaked which can destroy
image of hotel as this will question security system of the hotel.
Legal Factors
For the growth of hospitality industry, it is very important to have safe legal environment
which could benefit this sector. Hotels have to follow many laws such as Innkeeper laws that
ensures safety of customers in hotels, Truth-in-menu laws which explains that the food and
beverages served by hotel must be as according to given menu. The hotel has to follow these
rules properly or else it might face legal troubles.
Environmental Factors
Hospitality industry has been pressurized by both environmental activists and
government to reduce their carbon footprints. As this sector utilize massive non-biodegradable
items such as plastic bags to dispose its hotel waste which might cause serious issues
environmental issues. In case of Premier Inn hotel, it has reduced its carbon footprints and utilize
100% renewable energy and solar panels to generate electricity in hotel (Jallow, Renukappa and
Suresh, 2020).
CONCLUSION
From the above discussion, it has been evaluated that organisations establish their
business according to their desired either to earn profit or for some some cause. It has also been
observed that executing right organisational structure within companies help them in managing
management effectively. It has been evaluated from the above SWOT analysis of Premier Inn
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Hotel that COVID-19 not only created a great loss for it but has also developed many
opportunities which could benefit hotel. It has also been evaluated that it is very important for
hotels to analyse external environmental factors that could influence their functioning. By
examining PESTLE analysis of Premier Inn hotel it could be said that these elements provides a
broad knowledge about market and could help the hotel in modifying their strategies according
to customers' demands which might enhance its presence in hospitality industry.
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REFERENCES
Books and Journals
Treuren, G. J., 2019. Employee embeddedness as a moderator of the relationship between work
and family conflict and leaving intention. The international journal of human resource
management. 30(17). pp.2504-2524.
Hart, R. D., 2019. Diversity in Sustainability Collaboration: Influence of Home-Organisation
Diversity on Team Mental Model Development in Interorganisational Workgroups for
Sustainability Challenges (Master's thesis).
Amankwah-Amoah, J. and Adomako, S., 2019. Big data analytics and business failures in data-
Rich environments: An organizing framework. Computers in Industry. 105. pp.204-212.
Sona, R., 2019. Impact of emotional intelligence and perceived organisation support on
intrapreneurship. ZENITH International Journal of Multidisciplinary Research. 9(5).
pp.412-421.
Lertxundi, A., Barrutia, J. and Landeta, J., 2019. Relationship between innovation, HRM and
work organisation. An exploratory study in innovative companies. International Journal
of Human Resources Development and Management. 19(2). pp.183-207.
Koonin, L. M., 2020. Novel coronavirus disease (COVID-19) outbreak: Now is the time to
refresh pandemic plans. Journal of business continuity & emergency planning. 13(4).
pp.298-312.
Arasanmi, C. N. and Krishna, A., 2019. Employer branding: perceived organisational support
and employee retention–the mediating role of organisational commitment. Industrial
and Commercial Training.
Turner, P., 2019. Employee engagement in contemporary organizations: Maintaining high
productivity and sustained competitiveness. Springer Nature.
Van Zyl, A., 2020. The development and validation of a high performance model within an IT
organisation (Doctoral dissertation).
Jallow, H., Renukappa, S. and Suresh, S., 2020. The impact of COVID-19 outbreak on United
Kingdom infrastructure sector. Smart and Sustainable Built Environment.
[Online]
Premier Inn owner hit by £725m loss as local lockdowns dent bookings. 2020. Online Available
through: <https://www.theguardian.com/business/2020/oct/27/premier-inn-owner-
whitbread-loss-local-lockdowns-bookings-profits-covid-hotel-closures>./
Strategic Analysis (SWOT, PESTEL, Porter) of Premier Inn (Whitbread Plc). 2021. Online
Available through: <https://phdessay.com/strategic-analysis-swot-pestel-porter-of-
premier-inn-whitbread-plc/>./
Premier Inn owner Whitbread swings to £1bn loss amid Covid lockdowns. 2021. Online
Available through: <https://www.theguardian.com/business/2021/apr/27/premier-inn-
whitbread-loss-covid-lockdowns-beefeater-brewers-fayre>./
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Premier Inn CleanProtect - our new enhanced hygiene promise. 2021. Online Available through:
< https://www.premierinn.com/gb/en/why/cleanliness.html>./
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