Understanding Business Organization: A Case Study of Premier Inn

This report analyses the organisational structure and business environment of Premier Inn, the largest hotel chain in the UK. It includes a discussion on the benefits and drawbacks of tall organisational structure, as well as a SWOT and PESTLE analysis of the business environment. The report concludes with a discussion on the impact of Covid-19 on the hotel industry and how Premier Inn is utilising internet technology to gain opportunities.

Case Study
Understanding
Business Organization

Contents
INTRODUCTION...........................................................................................................................1
Organisational Structure of Premier Inn..........................................................................................2
Business environment analysis of Premier Inn Hotel......................................................................3
SWOT analysis.......................................................................................................................3
PESTLE analysis....................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
The business environment is defined as the sum of refers to a variety that influence business
performance and efficiency in both positive and negative ways. Identification of these factors
helps businesses identify different opportunities, develop effective plans, and improve overall
business performance in a competitive business environment. For the purpose of achieving
the competitive benefit, businesses must analyse their internal and external business
environments and develop effective strategies and plans. Companies analyzing the market
through performing research and campaigns to analyse environmental factors and evaluate their
impact on business performance in today's competitive environment. The chosen organisation for
this report is Premier Inn which is a British hospitality organisation with headquarters in the
United Kingdom. Whitbread established the Premier Inn hotel in 1987. It is the largest hotel
chain, which is serving more than 800 locations in the United Kingdom and other countries. It
entails providing great food and comfortable rooms to guests, as well as other services that draw
a large number of customers to the hotel. This report examines the organisational structure of the
Premier Inn hotel. In addition, the organisational business environment is analysed using SWOT
and PESTLE analysis.
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Organisational Structure of Premier Inn
Organisational Structure: The system that organisations undertake to outline how certain
business activities are directed with the goal of achieving determined goals and objectives of the
organisation is defined as organisational structure. An effective business structure assists
businesses in allocating all roles, rules, and responsibilities so that business operations are
carried out in a systematic manner (Arnold, and Bowie, 2019). The organisational structure also
ensures the flow of information between all levels of the organisation. It had the greatest impact
on business success by implementing all strategies correctly.
Tall Organisational Structure: Tall organisational structure refers to the business structure in
which the organisation is divided into various levels or hierarchies. In this corporate structure, a
majority of supervisors are hired at each level of the organisation and are responsible for
handling specific departments. Because Premier Inn Hotel is a large hotel including over 800
hotels in different countries, it chose a tall organisational structure as it is the most effective and
popular business structure due to its time-tested and performance. In this organisational structure,
top officials make all major business decisions affecting organisational strategic management
helps these choices to middle-level managers for implementation. It has a clear chain of
command that runs from top to bottom, and staff members are not permitted to express their
opinions or viewpoint.
Benefits of Tall organisational structure: It has a strong command structure from the top to the
bottom, which guarantees an impactful flow of communication at Premier Inn Hotel. Employees
have specific roles and responsibilities, which improves their quality and profitability (Gorla,
Chiravuri, and Chinta, 2017). It has an employees and promote structure that motivates workers
to accomplish efficiently.
Drawbacks of Tall organisational structure: Different managerial levels will be included in tall
business structures, which impact the flow of communication because it takes too long to convey
a message or choices to employees. Staff members are not allowed to make decisions with out
permission of supervisors, so many possibilities are lost. Additionally, employees feel alienated
from the top level because they rarely communicate with one another, which lower self esteem.
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Business environment analysis of Premier Inn Hotel
The corporate environment is computed as the total or gathering of different variables such as
staff, distributors, government and others that have a direct and indirect impact on business
performance and efficiency (Halbert, and Ingulli, 2020). Premier Inn Hotel conducts business by
gathering or analysing information about factors located both in and out of the business.
SWOT analysis
SWOT analysis is a useful planning tool that assists Premier Inn in identifying its strengths,
weaknesses, opportunities, and threats to be used in planning and development of strategy.
Strength: Premier Inn's strengths are its internal capabilities, which enable the company to run
its operations with efficiency and effectiveness. Premier Inn offers lower-priced rooms, which
attracts customers in the Covid-19 situation. The organisation has experienced and skilled
employees who provide a quality experience to customers, and it is remembered and visible as a
result of its advertising strategies. Another factor that allows Premier Inn Hotel to gain a
competitive advantage is its strong presence in the United Kingdom.
Weakness: Premier Inn Hotel has a limited global presence, as well as significant hygiene issues
that impact organization's overall productivity and effectiveness during the Covid-19 pandemic.
The hotel has been accused of denying to reimburse a few consumers in the event of a pandemic,
which has harmed the image of the brand.
Opportunity: Premier Inn Hotel has been using online booking process or other techniques to
expand business sales and market share during the pandemic (Hamilton, and Webster, 2018).
Customers are also attracted to the hotel by various seasonal offers, which play a key role in
increasing hotel profits.
Threat: Premier Inn is threatened by competitors in the market from hotels and restaurants such
as Holiday Inn, Easy Hotel, and others because it reduces business customers, market share, and
profitability. Clients are willing to spend more during a lockdown or downturn in the economy,
and hotels are closed due to the spread of the Corona virus.
PESTLE analysis
PESTLE analysis is a strategic method used by Premier Inn Hotel to obtain a clear picture of an
industry environment. It enables organisations to assess the impact of external environmental
factors on business performance and efficiency (Itvani, Crnjac Mili, and Krpi, 2017). When
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developing business policies and strategies, a reputable hotel takes into account all factors. Pestle
analysis factors in the context of Premier Inn are listed below:
Political Factors: Because the government has sufficient control over the hotel industry, Premier
Inn Hotel is subject to various government prohibitions that have an effect on the overall
performance. Tax plans are also beneficial to the hotel because it needs to pay less taxes, which
increases organisational funds and investment in providing quality services to customers.
Economic Factors: The hotel industry is one of the most popular investment sectors. Because
the hotel industry is economically sensitive. Additionally, lower rates and higher consumer
spending assist Premier Inn hotel in creating a competitive edge. Economic fluctuations, on the
other hand, have an impact on the organizational attractiveness and level of performance.
Social Factors: Premier Inn hotel contributes to the community by providing new jobs and other
social aspects that enable the organisation to gain a competitive advantage (Lu, Wang, and Xu,
2019). Lifestyle trends, customer beliefs, and other factors have an influence on corporate
performance even though they change frequently and are hard to predict.
Technological Factors: Various technological changes, innovation, and advancement are
occurring in today's business environment, which increases the overall profitability of the
business. Premier Inn makes use of social media and internet technologies to reach a large
number of customers and entice people to the hotel. On the other hand, implementing cutting-
edge technologies lowers overall business costs, which has a direct impact on hotel performance
and financial performance.
Legal Factors: There are numerous legal pieces of legislation, such as employment regulations,
security and safety laws, and environmental rules, as well as other policy decisions, that change
on a regular basis and create an uncertain business environment for Premier Inn. Due to these
unknowns, hotel management cannot make effective decisions (Martins, and Nienaber, 2018).
On the other side, the implementation of these laws and regulations retains the hotel's great
reputation and attracts customers, which increases its revenues and level of performance.
Environmental Factors: Environmental factors such as climate, weather, and carbon footprints
have an impact on business overall performance and efficiency. Premier Inn has implemented the
Good Together programme with the goal of making the organisation more environmentally
sustainable. The hotel has installed power lights and water-efficient showers with the goal of
resource conservation. Every one of these efforts or actions play a significant role in maintaining
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an organization's distinct image in a competitive business environment and attracting a larger
number of customers, which increases hotel profitability.
Premier Inn examines all of these external environmental factors and their impact on business
performance (Shaposhnykov, and Holovko, 2019). All of these factors have been considered in
hotel business policies and strategies, allowing the hotel to gain a competitive advantage over its
rivals.
CONCLUSION
According to the report, the business environment is a concept that includes various internal
and external aspects that are directly or indirectly related to business and have an impact on its
performance. In order to gain a competitive business advantage, it is critical for the organisation
to analyse these factors and incorporate them into organisational decision-making. A strong and
efficient business structure makes it easier for an organisation to keep information flowing. To
analyse business environment factors, businesses conduct SWOT analysis and Pestle analysis.
Business is being impacted by the Covid-19 pandemic, which exacerbates organisational
weaknesses or threats. Premier Inn hotel also gains opportunities by utilising internet technology
and offering services at reasonable prices. Hotel management also incorporated political,
economic, social, technological, legal, and environmental factors into business policies to enable
organisations to perform operations more efficiently and effectively.
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REFERENCES
Books and journal
Arnold, D.G. and Bowie, N.E., 2019. Ethical theory and business. Cambridge University Press.
Gorla, N., Chiravuri, A. and Chinta, R., 2017. Business-to-business e-commerce adoption: An
empirical investigation of business factors. Information Systems Frontiers, 19(3),
pp.645-667.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Ištvanić, M., Crnjac Milić, D. and Krpić, Z., 2017. Digital marketing in the business
environment. International journal of electrical and computer engineering
systems, 8(2.), pp.67-75.
Lu, Y., Wang, H. and Xu, X., 2019. ManuService ontology: a product data model for service-
oriented business interactions in a cloud manufacturing environment. Journal of
Intelligent Manufacturing, 30(1), pp.317-334.
Martins, N. and Nienaber, H., 2018. The influence of time on employee engagement in the SA
business environment. International Journal of Productivity and Performance
Management.
Shaposhnykov, K. and Holovko, O., 2019. Public regulation and administration in the sphere of
small business. Baltic Journal of Economic Studies, 5(4), pp.236-242.
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