Analyzing the Macro and Micro Environments of Hilton Hotels and Oxfam

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Business and the Business Environment
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Table of Contents
Introduction......................................................................................................................................3
Part 1................................................................................................................................................4
Part 2................................................................................................................................................8
Conclusion.....................................................................................................................................14
Reference List................................................................................................................................15
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Introduction
Environment of the business are influenced by some external and internal factors such as
employees, customers, technology, suppliers, and many others. Hilton Hotels and Resorts is a
private company based in U.S.A that serves worldwide including the United Kingdom. Conrad
Hilton has founded it in year 1919. There are more than 570 hotels operating in this organisation
(hilton.com, 2019). Oxfam is a non-governmental organisation that has been founded in the year
1942 in United Kingdom. It has the headquartered in Kenya and serves many regions of the
world. The director of this company is Winnie Byanyima. In the present report, the various forms
of organisations will be discussed. There would be discussion on the functions of different
departments of the companies as per their organisational structure. The situational analysis will
be carried out to assess the effects of macro as well as microenvironment on the organisations.
The positive and negative points of the companies will be detected.
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Part 1
1. Introduction to provide an overview of different types of organisations and the growth of
the international business environment
Private sector
One or more people run private sector companies and the purpose of such business is to earn
income through trading products and services. These can be micro, SME or large businesses. For
instance, Hilton Hotels and Resorts is a private company that means it does not trade the stock
of the business to the public and owned by few number of shareholders. This is a large and
profit-making organisation. It is a global company as the organisation operates from different
countries but the decision-making and changes in products and structures comes from the central
one.
Public sector
Government runs the public sector organisations and the purpose of such companies is to provide
important services for the benefit of the people. For instance, Metropolitan Police Service is a
public sector organisation. It is a non-profit organisation, as it does not serve the people to earn
profit. This is a large business as there are more than 43,000 employees working in this company
(met.police.uk, 2019). The purpose of this organisation is to maintaining regulations, order, and
law in the country.
Voluntary sector
A group of people runs voluntary sector and the purpose of such business is to aid people
through money or services. For instance, Oxfam is one of the voluntary organisations of the
United Kingdom. The purpose of this business is to reducing the poverty rate of the country by
helping needy people and helps the victims of disasters. This is a NGO that means is not
dependent on government for fund or help. This is a large business as it serves worldwide.
2. An explanation of each of the chosen organisations, including: background details of the
organisation; the products and services they supply; the size and scope of the organisation;
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their vision, mission and business objectives; the organisational and legal structure; and
information about their stakeholders.
Private sector
Conrad Hilton has established Hilton Hotels and Resorts in the year 1919. It provides hospitality
services to the customers. There were above 169,000 employees of the company in the year 2018
(statista.com, 2019). In the same year, it has been observed that the company has around 5,700
hotels in different parts of the globe. The vision of the company is to provide best hospitality
services to the customers through warm treatment. The mission of this firm is to become the first
choice of the customers and to maintain unity among the members. The objective of this
company is to improve the quality of the service to attract the consumers. The organisational
structure of Hilton is divisional. The legal structure of the same is of private limited company.
This means that the company follows the rules of the private limited companies. The firm cannot
have more than 50 shareholders as per this legal structure and the share also cannot be traded in
public. The shareholders of this company are Wellington Management Co. LLP, The Vanguard
Group, Inc, Harris Associates LP, Vulcan Value Partners LLC, and many others
(marketscreener.com, 2019).
Public Sector
Metropolitan Police Service has been formed in the year 1829. It has the duty of enforcing law
in the United Kingdom to control the activities of the citizen for a secure and peaceful living. It
has the functions in the United Kingdom. There are 180 police stations in the country. It has
more than 31,075 police officers and 8,732 police staffs. The number of volunteers is also high.
The vision of the MET is to become the most trustable police service of the world. The mission
of the organisation is to make sure that there is safety and well-being maintenance in the
community of the country (met.police.uk, 2019). The objective of the company is to support the
victims through proper judgement. It values the maintenance of ethics as one of the major ways
to act responsibly. The legal structure that the MET follows is that of general partnerships as it
is not run by an individual person. The members of the organisation have equal rights in MET as
per this legal structure and each of them is bound to the legal responsibilities. The organisational
structure of MET is hierarchical as the members have functions as per their position and duties.
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The stakeholders of the organisation are City of London Police and British Transport Police
(met.police.uk, 2018).
Voluntary sector
Oxfam has been founded in 1942 and has focused in eradicating poverty form the world through
providing help to the people who are in need. This organisation serves worldwide (oxfam.org,
2019). In the year 2017 it had around five thousand employees and utilised the services of
around 23,000 volunteers (Elgot, 2017). The mission of the organisation is to remove poverty of
the people. The goal of the company is to helping the citizens in a direct way. It also assists in
developing the infrastructures of the poor people. The organisational structure of this company is
geographical as the functions of the firm are divided as per the geographic regions. The structure
can also be said flat as there is not much authority of the mangers and same importance is given
to the volunteers as well. The legal structure of the organisation is that of NGO that means
Oxfam follows the rules that should be adhered by a charitable trust. The shareholders of the
company are trustees and directors.
3. In detail, examine the different business functions for one of the chosen organisations,
using an organisation chart to show how the functions interrelate and analyse the
advantages and disadvantages of how they relate to and impact the structure of the
organisation.
There are various kinds of organisational structure such as functional structure, divisional
structure, and others. In functional structure, the workers work together as a group as per the
specialisation. In the divisional structure, the workers are grouped as per the divisions. Hilton has
followed the divisional structure and the functions of the workers are carried out in those
divisions (annualreports.com, 2015). The ownership division consists of 140 hotels, the
management as well as franchise division consists of 4419 hotels, and timeshare division of the
company has 45 hotels under it (Dudovskiy, 2016). This structure has helped the company to
enhance the communication as well as communication of the members of every division. This
would facilitate the decision-making of the organisation by the CEO of the company. The tasks
of the employees will be complete in time through this organisational structure. The structure has
connection with the functions of the organisation in many ways. The CEO would be able to share
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Interrelationship between the functions of organization
information to the top managers of each division. They would share the details to the labour
force of every division as well as their performance would be recorded by the members that
would be reported to the CEO regularly to determine the capabilities of the members.
Figure 1: Connection between the functions of organisation
(Source: Created by the learner)
The diverse functions include production department where the products are made for the
customers. The finance department where the financial discussions are made, HR in which
recruitment and training is done, marketing department in which promotion is carried out, and
customer service department in which the customers are contacted through the personnel for
taking feedback and solving queries. These functions are interrelated as HR department helps in
recruiting people for various positions of the company. The production department assists
marketing department by producing goods that would be sold by latter. The finance department
assists every department such as in investing in the production department to produce goods, in
HR to provide training, in marketing to promote, and in customer service by investing in
technology. The advantage of the connection to the structure of the company is that there would
be enhancement in coordination among the members and the employees would be able to
communicate with each other. However, due to the connection, if some problems occur in one
department others would be affected that would influence the whole division.
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Part 2
Introduction
In the given report, the influence of external environment would be provided to analyse their
impacts on Oxfam and Hilton Hotels and Resorts. The internal environment would also be
assessed to identify their impacts on these organisations.
1. Using PESTLE analysis identify and discuss the various macro environmental factors
that have an impact upon each of the two organisations, highlighting the positive and
negative impacts using specific examples to support your findings.
PESTLE analysis of Hilton
Factors Discussion Influences on the firm
Political Brexit would influence the
organisations of the United Kingdom
as there would be changes in the
business of UK due to withdrawal of
the company from the union of Europe
(Ferris et al., 2018).
Hilton would be affected by Brexit
as there would be reduction in the
employees. The company would
need to recruit more people from
the country to manage the
functions properly.
Economic The growth of the economic rate of the
United Kingdom has been slowed
down from the annual growth rate of
0.6% of the year 2018 to 0.5% in 2019
(tradingeconomics.com, 2019).
The changes in the annual growth
rate of economy of the country
would affect Hilton in a negative
way. There would be reduction in
the sales and profit of the business.
Social People nowadays have become aware
of importance of sustainable
development.
The organisation in order to meet
the demand of the people should
adopt sustainable development
techniques. This would be
beneficial for the business as the
image of the company would
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enhance.
Technological In the modern days, the hospitality
industry has used latest technology
such as cloud computing and use of
social media to enhance the system as
well as to promote the organisations.
Hilton should incorporate the
utilisation of latest technologies
like cloud computing and others to
enhance the functions of the
company.
Legal According to the “Minimum Wage
Act 1998”, the country’s organisations
should pay adequate revenues to the
employees (legislation.gov.uk, 2019).
The company would be affected by
the wage act in a negative way as
extra money would be spend on
human resources.
Environmental As per the “Environmental Protection
Act 1990”, the companies of the
country should manage the pollution
of the business and control the waste
through segregating them
(legislation.gov.uk, 2019).
The Act on environment would
increase the time of management
as well as there would be extra
expenditures on new technologies
to control the pollution level. Thus,
affecting in negative way.
Table 1: PESTLE analysis of Hilton
(Source: Created by the learner)
PESTLE analysis of Oxfam
Factors Description Influences on the business
Political Brexit would affect the charitable
organisation in a negative way as
there would be loss of the ways of
funding through the stream of EU.
The affect of Brexit would be
negative to Oxfam as well. The
fall in pound would reduce the
funding and worth of grants
made to the firm (Bawden,
2016).
Economic There has been increment in
employment rate of the United
Kingdom by 76.1% as the
This would enhance the
prospect of the business as there
would be more volunteers to
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unemployment rate has seen
reduction by 3.9% in 2019 (gov.uk,
2019).
volunteer for the charity.
Social The social factor such as aging
population would affect the
charitable organisation in positive
way as it has been observed that old
people are kinder than young ones
and are ready to donate.
Oxfam would be benefitted by
the aging population of the
country that is 18% above 65 and
2.45 above 85 as per the reports
of the year 2016 (ons.gov.uk,
2019).
Technological Technology has influenced the
business of the country positively
by assisting in promoting and
sharing information to the
consumers.
Through the help of technology
like media and television, Oxfam
can inform the citizens of the
country regarding their functions
in eradicating poverty. This
would be helpful in promoting
the organisation so that there
would be increment in the
number of donors.
Legal The “Equality Act 2010”prohibits
the companies of the country from
discriminating between employees
regarding the differences in culture,
background, gender, colour, race,
ethnicity, and such factors
(legislation.gov.uk, 2019).
The “Disability Discrimination Act
2005” provides rights to the
disabled persons to work in the firm
without discrimination
(legislation.gov.uk, 2019).
The Equality Act would enhance
the behaviour and attitude of
the members of the organisation
as there would be no
discrimination among them.
The Disability Act would
influence the volunteers to
provide aid to the disabled and
helpless people of the country
and perform their duties
efficiently.
Environmental Due to climate change and global Oxfam should provide food and
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warming, the poor people are
affected negatively of the country.
Drought and flood are reducing the
provision of food to the people as
well as harming the homeless ones.
shelter to the people. However,
due to changes in climate the
volunteers would get difficulty
in reaching the destination in
time (oxfam.org.uk, 2019).
Table 2: PESTLE analysis of Oxfam
(Source: Created by the learner)
2. Apply a SWOT or TOWS analysis to both organisations to identify their key strengths
and weaknesses. Explain the interrelationships these have with the external factors
previously discussed.
SWOT analysis of Hilton
Strengths
 The company has good experiencing in
managing functions.
 The strategies of the organisation are
effective to retain the customers’
loyalty.
 The leadership of the company is good
as there is communication and
cooperation among the members
(Bhasin, 2018).
 The firm has incorporated technology
that has helped it to simplify the tasks
of the workers.
Weaknesses
 One of the weaknesses of the firm is
that it is dependent on foreign market to
earn revenue.
 The debt of the organisation is high due
to so many numbers of locations
(Dudovskiy, 2016).
 The market share of the firm is low.
 There is no flexibility on the
organisation.
Opportunities
 The company should make more
expansion in foreign market to increase
profit.
 R&D incorporation would enhance the
Threats
 Political instability like Brexit would
affect the business negatively (Ferris et
al., 2018).
 Terrorism would influence the business
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quality of products and services of the
company (Porter and Heppelmann,
2015).
 It should provide budget level rooms to
the customers of average income to
influence the buyers and to increase the
number of loyal customers.
in negative way as the number of
foreign travellers would reduce.
 Climatic changes would disrupt
transportation facility that would reduce
the number of visitors.
Table 3: SWOT analysis of Hilton
(Source: Created by the learner)
SWOT analysis of Oxfam
Strengths
 The fund of the organisation is high
that enables it to help the poor people
(oxfam.org, 2019).
 The connection of the company is
efficient as it has operations in many
countries of the world.
Weaknesses
 The lack of support from community
has reduced the amount of funds
(Galaskiewicz, 2016). This would
affect the functions of the company in
helping the poor.
 There is lack of security to the
volunteers and workers of the
organisation.
Opportunities
 The organisation should take
government help to increase the fund.
 Communication with people would
assist the business in generating funds
(oxfam.org, 2019).
Threats
 UK exit from EU would reduce the
funding of the organisation (Bawden,
2016).
 Changes in climate can affect
negatively the activities of the
volunteers.
Table 4: SWOT analysis of Oxfam
(Source: Created by the learner)
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