Understanding Business Organization: Premier Inn Case Study

This report discusses the organizational structure of Premier Inn, the largest hotel chain in the UK, and how it was impacted by COVID-19. It also covers the external and internal environment of the company, including a PESTLE analysis and SWOT analysis.

Understanding Business
Organization

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Organizational structure:..............................................................................................................3
PESTLE analyse:.........................................................................................................................4
SWOT analysis:...........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
Business organization means the commercial enterprise which carry commercial purpose
including system of the company. Business organization is wide term which means making
surplus profit, this term describes structure including both overall structure and operational
structure. Understanding the business organization means understanding the overall structure of
the business which include external and internal structure of the business (Fjeldstad and Snow,
2018). Every business organization was greatly impacted by the COVID-19 and the structure of
business was affected. This study is based on Premier Inn, this company is one of the most
successful in hospitality industry (Premier Inn, 2021). Premier Inn is the largest hotel chain in
UK which tend to provide hospitality service to almost every part of the UK. In this report, will
discuss organizational structure of the business and understand how it gets affected because of
the COVID-19. Later this report will discuss external and internal environment of the company,
these environments may include understanding the political and other factor. Whereas in internal
environment strength and weakness of the business is being identified and opportunity and threat
which revolve around the business organization.
MAIN BODY
Organizational structure:
Every business organization have structure which allow them to divide organization in
various department who together achieve organizational goal. Structure is everything for a
business organization, strong structure allow company to be more effective and build ability to
manage in tough time in the market whereas weak structure become the reason for overall failure
of the company (Denisov, 2016). The organizational structure of the premier can be understood by
looking at the success they have in the market, this company follow centralized organizational
structure which allow them to flow powers from up to down. This business organization keep the
main power in their hand which means top management and stakeholder together make decision.
Although this business organization have dynamic nature which means they are well-prepared in
facing any challenges which weaken the structure of the company.
Premier Inn have hierarchy organizational structure which means they have direct chain
of command, this allows power to flow from top-level to bottom level. Senior management of
the Premier Inn take all the critical decision in the betterment of the company. Premier Inn know

that using hierarchical organizational structure allow them to maintain their business operation
and keep the flow of providing high quality service to the guest (Ahmady, Mehrpour and
Nikooravesh, 2016). In this structure of Premier Inn, if a staff member at the bottom need to take
decision then they need to request top manager to provide them approval which means manager
who are at the top take necessary action. Hierarchical organization structure allow Premier Inn to
strengthen their internal structure and maintain the smooth flow of the process.
PESTLE analyse:
PESTLE analysis allow company to understand external factor as this impact the business
organization (Perera, 2017). PESTLE analysis include such as:
Political factor: political factor means government and its policy, it is very clear that every
business organization get effected with the changing policy of the government. Political factor
may include tax and tariff policy, trade restriction and most importantly stability of the
government. Currently incidence of Brexit majorly impact the smooth flow of Premier Inn, this
hotel depends upon wide pool of labours from European Union (Clarke and et.al., 2017).
Government made changes in casual zero hour labour contract impacting Premier Inn and its
structure, now this hotel chain have to employee labour from other market rather than EU.
Economical factor: economical factor means the stability of the economy, every business
organization have to keep eye on the movement of the economy and impact of its factor.
Economic factor may include, interest rate, exchange rate, inflation rate and employment and
unemployment rate. Recent exchange rate of economy of UK impacted the Premier Inn, after
COVID-19 impact government took certain step to bring up fallen exchange rate, the pound
sterling is reduced up to 20% which means Premier Inn now have to adopted new exchange rate
and have to keep their net room tariff low which means this has greatly impacted the pricing
policy of the hotel.
Social factor: social factor means customer and their lifestyle, every business organization
greatly get impacted by the social factor. These social factor include, taste and preference of the
customer, liking and disliking, cultural belief and value and income and education level. Premier
Inn is being contributing in the betterment of social environment by providing more than 10000
jobs to the youth of UK and improved the lifestyle of employee. This have brought major impact
on the brand image of the company in the market.

Technological factor: technological factor means the advancement and betterment in the
technological of the industry as a whole. Hospitality industry have being using latest and fastest
technology in the process, every business of hospitality have to adopted advance technology in
the process. Premier Inn use latest and advance technology in their business operation, this hotel
provides high quality browsing line and easy assess website to the customer to improve their
experience in booking room online. Introduction of free high speed Wi-Fi facility to the
customer have brought major changes in customer experience in the hotel.
Legal factor: legal factor means rules and regulation of legislation body of the country, every
business organization get impacted because of legal factor. Legal factor include laws, legislation,
restriction and import and export taxation. Government of UK forced Premier Inn to follow
Health and Safety at Work Act 1974 which impacted the smooth flow of the company, after the
impact of COVID-19 workplace safety have become major concern. Premier Inn have developed
new policy to meet the requirement of WHS policy in the workplace.
Environmental factor: environmental factor means the nature and its impact on the business, it
is very clear that every business is somehow connected with nature, and they have responsibility
to maintain nature. Environmental factor may include climate, global warming and calamity.
Premier is planning to start 'Good Together' ecological sustainable program to reduce from
utilizing natural resources. This hotel has installed solar panel to generate energy for the hotel
room and installed water system to store extra rain water which can be used in water sufficient
shower.
SWOT analysis:
SWOT analysis allow business organization to understand strength and weakness whereas
this analysis help business to identify opportunity and threat (GURL, 2017).
Strength: every business organization have strength which allow them to more effective in the
market, these strength lies in the uniqueness of the company. Premier Inn provide affordable
price to the customer which help them to beat their competition in the market. The pricing policy
of the Premier Inn allow them to stable their business operation and win the customer in the
market. Marketing strategies of Premier Inn was enlightened after they won the hotel chain
award.
Weakness: every business organization have weakness, these weakness lies in the weak area of
the business where they lack behind. Weakness are barrier in the smooth flow of the process. The

weakness of Premier Inn lies in the structure of the business, it is very clear that some hotel of
this hotel chain did not survive the impact of COVID-19 which impacted the whole hotel chain.
Another weakness lies in responding to the pandemic, this hotel chain was not prepared for the
impact which greatly impact the strong chain.
Opportunity: opportunity lies in identification of the weakness, if the company have ability to
identify weakness then they can create their own opportunity to overcome the weakness.
Opportunity are booster of the process which means Premier Inn need to identify the weak point
to convert it into opportunity. Another opportunity for the Premier Inn lies in expansion as they
business have brand name which make it easy for them to expand to other town and area of the
country and even to other countries.
Threat: every business organization face threat from competitor as they are the biggest threat in
the business process, competitor and their activity sometimes create situation which result in
failure of the business. Premier Inn face huge competition from their competitor as they have
more strategy to win the market. Although this company is the largest hotel chain in UK but still
they face huge competition in the market.
CONCLUSION
In this report, have discussed business organization and understand its structure. Later this
report has discussed external environment of the business and its factor which impact the smooth
flow of the process, external factor may include PESTLE analysis which allow business to
understand the external factor such as political factor, economical factor, social factor,
technological factor, legal factor and environmental factor. Every business organization get
impacted because of these factor, changing external environment. Later this report has discussed
internal environment of the business organization which include SWOT analysis, every business
organization perform SWOT analysis to identify its strength and weakness which a business
have internally and externally. Whereas opportunity and threat revolve around the business
organization which a business need to catch to boost their growth in the market. Strength of the
business lies in the uniqueness they have and the service they provide to the guest. Every
hospitality business was impacted by COVID-19, and they have to keep eye on the external
factor which impact the business organization.

REFERENCES
Books and journals
Ahmady, G.A., Mehrpour, M. and Nikooravesh, A., 2016. Organizational structure. Procedia-
Social and Behavioral Sciences. 230. pp.455-462.
Clarke and et.al., 2017. Brexit. Cambridge University Press.
Denisov, I., 2016. Pattern of Organization Structure Development: the Case of Higher Education.
In Proceedings of the 13th International Conference Efficiency and Responsibility in
Education (pp. 73-79).
Fjeldstad, Ø.D. and Snow, C.C., 2018. Business models and organization design. Long range
planning. 51(1). pp.32-39.
GURL, E., 2017. SWOT analysis: A theoretical review.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Online:
Premier Inn, 2021. Premier Inn: Rest easy., [Online] Available Through
<https://www.premierinn.com/gb/en/home.html>
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