Understanding Business Organization - A Case Study of Premier Inn Hotel

This project report provides insights into the organisational structure of Premier Inn Hotel and evaluates the business environment through PESTLE and SWOT analysis. It also highlights the impact of external and internal forces on business operations. The report is based on a case study of Premier Inn Hotel, one of the largest hospitality organisations in the UK.

Understanding Business
Organization

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Organisational structure of Premier Inn Hotel.............................................................................1
Evaluation of business environment............................................................................................2
PESTLE analysis.........................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Business environment can be understood as aggregation of varied forces or institutions that
impact organisational activities in a significant manner (Alnuaimi and Et. Al., 2021). This
project report aims to demonstrate an understanding in relation to organisational structure. It also
highlights major forces that are considered as helpful in shaping contemporary business
environment. This project report is based on a case study which is based on Premier Inn hotel
that has established in 1987 and as its headquarters at England, United Kingdom. It was
established by Whitbread Plc. It is considered as one of the largest hospitality organisation at UK
consisting of 800 hotels on a global scale. They provide excellent room services and calm
ambience to their guests. Apart from being a giant hotelier, they also fulfil their corporate social
responsibility in a sincere manner by collaborating with their charity partners such as Great
Ormond Charity Hospital and many more. This project report also depicts numerous intrinsic as
well as extrinsic factors that impact workings of an organisation in a sizeable manner.
MAIN BODY
Organisational structure of Premier Inn Hotel
Organisational structure can be understood as a blue print which details how specified
activities are bifurcated or delegated among employees in order to accomplish goals and
objectives (Argyris, 2017). It essentially outlines role as well as responsibilities of varied
employees in an establishment. An efficient organisational structure is beneficial for
organisations as it aid them in improving operational efficiency as well as eliminate duplication
of efforts. Top management of Premier Inn follows a tall organisational structure whereby they
have delegated differential responsibilities to their employees. Managers of Premier Inn have
adopted this type of structure in order to run their differential branches as well as divisions on a
smooth basis.
This hierarchal organisational structure is considered as beneficial for Premier Inn as it
help managers to clearly delegate responsibilities to their employees in an effective manner. It is
also advantageous for Premier Inn as it assist them in train employees regarding organisational
workings and internal promotions.
This type of structure has certain limitations which needs to be recognised by organisations
in a strategic manner. It is considered as disadvantageous for Premier Inn as it restricts freedom
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of employees to show their creativity. It also hamper communicational channels and decision-
making process as it involves many layers of departments or units. It also slower down the
decision-making process as approval of superiors are necessary in this type of tall organisational
structure (Audretsch, 2018). Slow communication create problems in taking abrupt decisions in
the case of emergency which can deteriorate image and marker position of Premier Inn Hotel.
Evaluation of business environment
Business environment can be described as sum total of varied conditions, events and
influences which has surrounded organisation and affect its workings in a significant manner
(Beynon-Davies, 2019). It is imperative for organisational managers to think strategically for
developing insights related to structure as well as competitive dynamics present in industry. It is
significant for establishments to analyse their micro as well as macro factors in order to grab
numerous opportunities in an effective manner. Managers use varied tools for assessing their
surrounded environmental forces which have adverse impact on business operations.
SWOT analysis
SWOT analysis refers to a strategic framework which is used by corporations for
leveraging their strengths as well as weaknesses which further aid them in exploring
opportunities and minimizing threats (Gilal and Et. Al., 2017). It is evaluated by organisations
for assessing their growth avenues and planning for the future developments. SWOT analysis is
considered as beneficial for Premier Inn Hotel as it aid them in formulating strategies for their
new avenues or making improvements in existing one. SWOT analysis in relevance with Premier
Inn is mentioned below:
Strengths
 Biggest hotel chain- Premier Inn is one
of the leading business chain in UK
through which they can manage their
losses.
 Economy rates- Premier Inn offers
their rooms on economy price to their
guests which led them to visit this place
very often.
Weaknesses
 Loss of revenue- Premier Inn Hotel
have incur huge losses in terms of
revenue due to covid 19 which lead
them to stop their growth plans.
 Lack of human resources- In order to
manage their operation cost, managers
of Premier Inn have cut down varied
jobs which lead them to have a lack of
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human resources.
Opportunities
 Digitalisation era- Premier Inn can
explore opportunities through adoption
of digital ways for reaching to massive
number of customers through their
marketing campaigns.
 Market position- Operations and
branches of Premier Inn can be an
opportunity for them to open up new
revenue streams.
Threats
 Covid guidelines- New variant of
corona virus can poses as a threat for
Premier Inn as this can lower down the
number of their guests.
 Cut-throat competition- After global
lockdown, spending patterns of people
have changed in a significant manner
which give rise to a threat of intense
competition.
PESTLE analysis
PESTLE analysis can be explained as a strategic technique which helps to ascertain varied
external forces that have their influence in business operations (Halford, 2018). This is used by
establishments for strategic planning as well as risk management planning. It is considered as
advantageous for Premier Inn Hotel as it aid them in assessing varied macro factors which
impact their business activities. Varied forces of PESTLE analysis in accordance with Premier
Inn Hotel are mentioned below:
Political factors essentially involves trade disputes, fiscal initiatives and political instability
of a specified country (Mnich and Wisniewski, 2018). In UK, government has a significant
control over hospitality industry as they frame laws in relation to travel prohibitions. Political
instability can transform these laws which is considered as unfavourable for Premier Inn Hotel.
However, reduced corporate tax can be a favourable aspect for Premier Inn as they can save their
operational cost in a sizeable manner.
Economic forces involves rise in GDP trends, unemployment and inflation rates of a certain
nation (Safonova and Petukh, 2017). In UK, most of the businesses have incurred huge losses
due to close down of tier establishments because of corona pandemic. This pandemic has also
affects the spending patterns of people which have an unfavourable impact on revenues of
Premier Inn Hotel. However, they have adopted economic pricing strategy which is a favourable
for them at the time of global pandemic.
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Social forces encompasses of differential attitudes, perception and values of people of a
specified country (Shapiro, 2017). In UK, people are attracted to those organisations fastly who
have adopted sustainable practices and fulfils their corporate social responsibility. In relevance
with Premier Inn, this factor is considered as favourable as they have collaborated with
numerous charities and implemented sustainable practices in their operations. Although, it costs
high to Premier Inn which is an unfavourable factor but they have to manage it.
Technological forces are concerned with automation, technology upgradation and research
& development practices related to a certain nation (Vantrappenand and Wirtz, 2018). UK is
considered as one of the leading nation which supports technological innovations in a significant
manner. Managers of Premier Inn use digitalised techniques for reaching a large number of
people which is favourable for them. At the same time, use of advanced technology like video
conferences can hamper their business operations and considered as unfavourable.
Legal factors consist of industry regulations, employment & consumer protection
legislations and rights related to intellectual property of a certain country. UK government
implement strict laws in relation to employment and customer protection from any mistreatment
or malnutrition activities. This factor is considered as favourable as managers of Premier Inn
follow all the legislations regarding maintaining safety of their employees as well as guests.
Non-compliance of legal laws can be unfavourable for Premier Inn as this can put them in
expensive litigation processes.
Environmental factors are concerned with carbon footprints, impact of climate change and
extreme weather events in relation to a specific country. In UK, government formulate varied
laws in regards to conserving environment in an effective manner. Managers of Premier Inn use
sustainable practices such as energy-saving lights as well as water-efficient showers which is
considered as a favourable aspect for them. However, blames related to managing hygiene at
their premises can be an unfavourable element for them.
CONCLUSION
From the above mentioned information, it has been assessed that business environment is a
sum total of varied external as well as internal forces which can influence business operations in
a sizeable manner. Organisational structure is a sort of outlining document which directs the
efforts of employees trough specified responsibilities. It is imperative for organisational
managers to choose their structure very carefully. PESTLE analysis is a tool which evaluates
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forces related to intrinsic as well as extrinsic macro environment which can impact business
operations in a significant manner. SWOT analysis refers to strategic tool which depicts
knowledge in relation with their strengths as well as weaknesses for grabbing opportunities and
mitigating varied risks. Business environmental tools help organisational managers in
formulating varied strategic plans for their growth avenues.
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REFERENCES
Books & Journals:
Alnuaimi, M. and Et. Al., 2021. Towards intelligent organisations: an empirical investigation of
learning orientation's role in technical innovation. International Journal of Innovation and
Learning. 29(2). pp.207-221.
Argyris, C., 2017. Integrating the Individual and the Organization. Routledge.
Audretsch, D. B., 2018. Industrial organization and the organization of industries: Linking
industry structure to economic performance. Review of industrial organization. 52(4).
pp.603-620.
Beynon-Davies, P., 2019. Business information systems. Red Globe Press.
Gilal, F. G. and Et. Al., 2017. Supply chain management practices and product development: a
moderated mediation model of supply chain responsiveness, organization structure, and
research and development. Journal of Advanced Manufacturing Systems. 16(01). pp.35-56.
Halford, S., 2018. Gender, power and organisations: An introduction. Macmillan International
Higher Education.
Mnich, J. and Wisniewski, Z., 2018, July. Strategy and structure in public organization.
In International Conference on Applied Human Factors and Ergonomics (pp. 351-358).
Springer, Cham.
Safonova, M. F. and Petukh, A. V., 2017. Technology for implementation of the tax-control
compliance system in the organization structure. British journal for social and economic
research. 2(1). pp.43-53.
Shapiro, S., 2017. Structure and process: Examining the interaction between bureaucratic
organization and analytical requirements. Review of Policy Research. 34(5). pp.682-699.
Vantrappen, H. and Wirtz, F., 2018. A smarter process for managing and explaining organization
design change. Strategy & Leadership.
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