Analysis of External Business Environment: UK Hospitality Sector

This report provides a detailed analysis of the external business environment within the UK hospitality industry, using InterContinental Hotels Group (IHG) as a primary case study. The report begins by discussing the structure and operation of the UK economy, including its historical context and current standing in the global market, emphasizing the significance of the service sector. It then delves into income, wealth, employment, and occupational distribution, highlighting the influence of economic policies and demographic trends on employment patterns within the hospitality sector. The report further examines the role and influence of the local government, EU regulations, and pressure groups, as well as the legal framework affecting business operations. Additionally, it explores different types of businesses in the hospitality sector, the legal processes for company formation and dissolution, and the organizational structures within registered companies. The report concludes with a comprehensive overview of the external factors impacting the UK hospitality industry, offering valuable insights into the challenges and opportunities faced by businesses like IHG.

External business environment

TABLE OF CONTENTS
TABLE OF FIGURESINTRODUCTION ................................................................................3
1.1 Discuss the structure and operation of UK economy.......................................................3
1.3 discuss income, wealth, employment and occupational distribution in relation to the
provision of business and services operations........................................................................3
Importance of Hospitality industry to UK..............................................................................5
1.2 Analyze current government economic policy and its effect of business and service
industry...................................................................................................................................6
1.3 Income, wealth, employment and occupational distribution in relation to the provision
of business and services operations........................................................................................7
1.4 Demographic trends that influence employment patterns in Hospitality Industry...........9
1.5 Social structures of people employed in IHG................................................................10
Length of the services of the people -....................................................................11
2.1 The structure, operation and influence of local government on IHG hotels..................12
2.2 Role and influence of the EU, and its impact on Service Industry................................13
2.3 Role of pressure groups and their political influence in relation to national and local
issues....................................................................................................................................13
2.4 Legal framework within the UK, identifying the main differences between the English
and Scottish systems.............................................................................................................14
2.5 UK and EU Legislative process as it affects business of IHG Hotels............................15
3.1 Different types and characteristics of business that operate within the Hospitality
Sector....................................................................................................................................17
3.2 Legal processes necessary for formation and dissolution of a registered company.......18
3.3 Structure and processes which determine the responsibilities and control within a
registered company...............................................................................................................20
CONCLUSION .......................................................................................................................21
REFERENCES ........................................................................................................................22

TABLE OF FIGURESINTRODUCTION
Business organizations have to operate in a particular environment such as internal
and external environment. External environment refers to the environment that directly
influences the company and the factors are uncontrollable. The report aims to discuss the
external environment of UK hospitality industry. IHG is a famous hotel chain that has been
selected for the study. The influence of local government and legal framework of UK on IHG
hotels has been extracted.
1.1 Discuss the structure and operation of UK economy
For the period of the British Empire UKs economy was one of the largest and the
most influential in the world as it was the first country to introduce industrial revolution in
terms of advance technology. Country’s economic system was badly affected due to first and
Second World War, but having a globalization scenario UK has earned its image back in
respect of economic performance. According to a current survey, UK is the 6th largest
economy in the world and stands 8th in terms of GDP (Li and Zhou, 2005). Although, it is a
part of European Union but it has maintained its single market image while believing in free
movement of human, financial and materialistic resources. The economy follows the rule of
exchange of goods, services and capital in all areas. It has maintained 20th place in terms of
labor force which includes 31.9 million productive workers. Service industry has contributed
a large part in UK GDP growth. 1.4% labor force is associated with agriculture work, 18.2%
are in industries and rest 80.4% are employed in service sector (Big Hospitality, 2014). Being
a price taker market and huge number of companies, the economy has a perfect competition
market. The country earns mostly from export, as it is rich in natural resources.
1.3 discuss income, wealth, employment and occupational distribution in relation to the
provision of business and services operations
Most of business in UK is grouped into two sectors such as public and private.
Private sector is set by the individuals, corporate entrepreneur and the persons who are
seeking for conducting profit making activities. On the other hand public sector consists of
the organization owned by local and central bodies. These organizations provide the service
with the help of public corporations. There are five convenient sectors in UK economy which
are explained below:
Primary sector: This sector included the activities that are directly linked with
natural resources such as farming, mining and oil extraction.
3

Secondary sector: The activities related to production of goods in the economy come
under this sector. Manufacturing is the top most activity and it also includes some of public
sector such as gas, water and electricity industry.
The tertiary sector – Tertiary sector includes the entire service come under private
sector. For example: distribution of goods and services, insurance, banking and finance.
Inspite of, industries of public sector services such as health and defence also considered as
tertiary sector services.
The goods sector –This sector includes all the services of primary and secondary
sector organizations.
The production industries: All the unit of secondary sector excluding coal and coke
construction industries and oil, mineral and natural gases comes under this sector.
Figure 1 Structure of UK Economy
(Source: Tourism Alliance, 2014)
4

Figure 2 Turnover of UK economy
(Source: Tourism Alliance, 2014)
Importance of Hospitality industry to UK
(Source: Oxford Economics, 2010)
Hospitality industry of UK is considered as one of the most growing industry in terms
of generating revenues and employment. However, according to the British Hospitality
5
Illustration 1: UK Hospitality sector economic contribution

Association (BHA), UK's hospitality and tourism industries will create more than 30000 new
jobs opportunities of the young people by 2015. In this, 14832 are for permanent roles, 11103
for apprenticeships and 5157 paid universities placements. Therefore, in regards to
employment current condition of UK Hospitality sector is relatively fruitful for both freshers
and experience personnel.
(Source: Oxford Economics, 2010)
1.2 Analyze current government economic policy and its effect of business and service
industry
IHG Intercontinental is the biggest UK based hotel group having the largest chain.
The organization is operating in 100+ countries having 4400+ hotels with almost six lakh five
thousands rooms and the annual turnover of the company is 130 million. Operating in
hospitality industry, the hotel corporation is affected by various policies designed by UK
government. Change in interest rates, tax rates and currency exchange rates affect the
business operation of IHG. Due to modifications in interest rates, corporate entities have to
change their strategies. In case of high interest rates people will spend less on leisure services
on the other hand having low interest rate more tourists will be attracted towards hospitality
services and company will earn huge revenues (Davies, 2000). A single change in fiscal
policy leads to change in tax rates with will impact both in negative as well as positive
manner for services industry groups such as IHG. If it earns high profits it has to pay higher
6
Illustration 2: Direct Hospitality employment contribution

taxes such as tariff rates of hotel. Currency of UK is Great Britain pound and it conducts
international business, so the exchange rate fluctuation significantly impacts the service
industry. In case of depreciation in currency value the revenues will come down and vice
versa, overall the profitability of business gets affected by government policies. The
government has strengthened the regulations on licensing in hospitality companies which are
in favor of IHG group as the threat from new entrants has reduced (Big Hospitality, 2014).
1.3 Income, wealth, employment and occupational distribution in relation to the provision of
business and services operations
United Kingdom is a wealthy country, as in 2012-13, median income was approx £21,000.
Standing at the 20th position in terms of labour force and more than 31.9 million workers, still
the UK economic system is facing the issue of unemployment (UK Labour market, 2014).
The rate of unemployment in the country is more than 8 %. The percentage of employees
working in agriculture, industry and service sector is 1.4, 18.2 and 80.4 respectively. In
relation to the
Income can be denoted as the flow of currency generated from factors such as wages
and salaries while on the other hand wealth refers to personal savings with banks, investment
in real estate, private pensions etc (Tourism Alliance. 2014). Living standard of UK
population and real income of people have increased but unequal society still exists in the
country (Clifton and Díaz‐Fuentes, 2010).
In UK economy where wealth inequality rose between 2000 and 2007 and then again
between 2007 and 2014. in the mixed economy like UK size of the labour force at 32.7m
workers from out of an estimated population of 63.7m (UK Labour market, 2014.).
7

The means and median of income from all occupational sectors are as follows:
Median of income (in £s per week) £407 per week
Mean of income (in £s per week) £507 per week
Official poverty line (in £s per week) £244 per week
Source : UK Income distributions
(Chart of the Week: UK Income Distribution, 2013)
As per a survey of 2013 more than 6 % people have higher disposal income of £1000
per week and they were living in households. The major cause of poverty has emerged to be
the big recession in 2008 when many people have lost their jobs (O’Connor, 2011). Most of
the people who were below poverty line were earning income of 54 pounds per week. The
ratio of inequality is increasing from last 15 years as rich people are becoming richer whereas
poor people are going down towards higher level of poverty. After the rescission period
income for rich sector has increased from 7% to 10% but income of poor sector has decreased
from 19% to 18% (Economic contribution of UK hospitality industry, 2010).
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The hospitality industry of UK accounts for 17 per cent of total UK net employment
growth between 2010 and 2014. Hospitality has substantial contribution in UK’s private
sector jobs recovery. With €1.16 additional demand generated in the wider economy for
every €1 spent in the sector. From the secondary investigation, found that 80.4 percentage of
employees belongs from service industry out of which 40 percent belongs to hospitality
sector. This also indicates that the demand and supply of industry plays key role in UK
economic system. It has also been identified that more than 10 % people have higher disposal
income in the industry that means economical status of sector is also having various
advancement. Number of experts are expecting that the income level of hospitality sector is
also going to increase by 10 % in next 10 years (Economic contribution of UK hospitality
industry, 2010).
1.4 Demographic trends that influence employment patterns in Hospitality Industry
From last 40 years, it has been seen that in UK the ratio of female employees have
been increased than male employees. In 2003 the percentage of male and female employees
was 85 % and 15% from which the number of male worker have been reduced to 76% on
the other hand the ratio of female labour have been increased by 9% in 2010. Out of 13.4
billion workforce 42% employees were doing part time job in which the percentage of
women and men were 15 and 25 respectively (O’Connor, 2011). As a full time worker,
women have worked for 40 hours in a week contrary to men who have worked for 44 hours
per week. The following statistics show the demographics of employees in hospitality sector
for 2013.
AGE PERCENTAGE
(%)
MALE FEMALE
16-24 33.5
45.7 54.325-49 49.4
50-State Pension Age 13.0
SPA 4.1
Out of total employees 15.7% were male and rest were females and all are involved in
various kinds of hospitality services. All were between the age of 16 and above. The people
in the age of 16-24 have a percentage of 33.5, 49.4% employees were in the age of 25-49.
The age of 50 is the state pension age in UK in which 13% employees were involved in
services. Rest of the people which are 4.1% of total employees are above the age of 50 years
and are employed at managerial level (Hsieh, 2012).
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1.5 Social structures of people employed in IHG
IHG is a well known and the biggest hotel chain in UK, the working environment of
organization attracts huge talent pool. According to recent survey, the statistics in 2013
annual report of IHG shows that more than 8197 people are directly employed by the
company around the globe. In the organization the percentage of female and male employees
is 41% and 59% respectively (Clifton and Díaz‐Fuentes, 2010).
The following table indicates the managerial diversity in the company
Category Male (%) Female (%)
Manager 49 36
Non Manager 51 64
Length of the services of the people -
1. 51% under 3 years
2. 35% 3-9 years
3. 14% 10+ years
Distribution of age -
1. 16% under 25
2. 66% 26 to 24
3. 18% over 45
10

In the company female employees get salary between £18,000 and £64,257 and males
earn between £18,000 and £42,500. It has been seen that the jobs in hospitality sector are
stable in the UK but the salary of employees has not increased. At the time of recession,
company has reduced its employment rate by 7.1. The following pictures depict the current
job status in IHG.
2.1 The structure, operation and influence of local government on IHG hotels
IHG operates in the UK economy which is a free market economy and it has to
experience various restrictions from local governments. Political stability is the foremost
reason which influences the number of visitors and tourists. Political situation in Northern
Ireland is not stable, so most of the tourists are reluctant to visit such places (Stratigaki,
2004). Due to less number of visitors and skilled workforce, the hotel units operating in such
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places are not able to earn good revenues. Local government has developed number of laws
such as employment law, competition law, consumer protection act etc. that impact business
of hotels. In a competitive scenario, having competition laws, organization cannot develop
aggressive pricing strategies. The organization has to follow all the regulations designed by
government bodies. In addition to this, some rules and regulations benefit the hotel group for
example local bodies have initiated to host London Olympics, which have given an
opportunity for company to earn huge revenues while serving more number of tourists (Ekins
and Lees, 2008). Government also gives various benefits in terms of giving rebates which
increases firm’s profitability. IHG has to conduct role analysis of local government and
should make their strategies according to them.
2.2 Role and influence of the EU, and its impact on Service Industry
The corporate entities of UK are highly impacted with the regulation of European
Union which is a political economic union and includes 28 states as its members. This union
was established to benefit the companies’ operations in EU countries but some of its policies
have turned into challenges as many companies have lost their flexibility in operation. There
is a policy named EMU policy that has impacted a lot to service sector in UK such as IHG
group (European Union Committee, 2005). According to this policy, company has to deal in
Euro rather than trading in home currency, as a result of this, companies have to monitor
every change in Euro rates. The rules of anti discrimination and providing equal opportunities
to every employee have benefited the people of service industry and helps in creating a
quality work culture. EU is accountable to design and monitor competitive polices that has
benefits the organizations in developing harmony and peaceful environment. Regulation
developed by EU includes the policies of fair remuneration, workplace health and safety and
so on. Service industry should follow the rules designed by the European Union otherwise it
will not operate in external business environment.
2.3 Role of pressure groups and their political influence in relation to national and local
issues
The other name of pressure groups is interest group or protest group, these are the
unions which influence the government to change and modify the rules and policies. Such
groups have the ability to change the mindset of decision maker with their actions. These
groups also fight against the companies who do not follow the regulations developed by
government. They can pressurize the authorities to take actions that can influence the
reputation of companies (Grant, 2005). Pressure groups and their activities have an influential
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role in hospitality industry as they can fight against the companies who do not follow the
policies such as environmental law, discrimination law, fare wages law, etc. the action taken
by such groups can harm the image of companies. The aim of interest group is to focus on the
activities of organizations and to make sure that they are practiced in the favour of society
and environment. If they find any company practicing unethical operations, they can file a
case against it in consumer court and can influence the government to punish such
organization. There are various committees designed by interest groups to keep an eye on
every movement and take quick actions against unlawful behaviours in the society. The
reasons for these pressure groups are criticised by companies
– They appear too powerful
– They are powerful enough to represent minority interests at the expense of the
majority
– They focus on their own agenda at the expense of wider issues
– They take direct action that breaks the law(Fey and Birkinshaw, 2005)
Influence of pressure group
• The success of a business entity is determined by the extent to which the group are
capable of capturing the popular imagination as keep the industrial issue alive
• They contact with media, politicians, etc. are crucial to get the issue into the public
domain. They can aware public with the illegal are unlawful activities of companies
that can harm their image.
• In the success of pressure group its reputation plays an important role group (Fey and
Birkinshaw, 2005).
Result of protest
• Can create legal and ethical changes in business practice
• It increasing the practice of environmental audits by businesses
• The decrease in the use of CFCs
• Reputation of companies can be increased and decreased
• It ensure for ethical and honest corporate environment
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2.4 Legal framework within the UK, identifying the main differences between the English
and Scottish systems
United Kingdom has four major countries and most of the multinational organizations
are conducting their business in these countries. These are England, Wales, Scotland and the
Northern Ireland. Excluding Scotland, three major legal frameworks have been designed to
regulate the marketplace such as Common law, European Union and the European
Convention on the Human Rights (Li and Zhou, 2005). The description of all the three is
explained in underneath points:
Common Law- As per the common law legal courts have been designed where
different judges take the decision based on situations. Every judge sitting in the court has
special knowledge on legal procedures. In case of repeated and similar issues decision makers
have to take same actions against complaints (Fey and Birkinshaw, 2005).
European Law- All the rules and regulations developed by European unions have
included the characteristics of English law. These laws are made to serve the rights of
community and environment with the illegal practices of organizations.
European Convention of Human Rights- Government of UK is involved in
communities who have designed the ECHR laws and have enabled such rules at local and
national level. It is similar as the consumer court protects the rights of common people who
are hurt or injured in any manner by the practices of business entities (Johnson, Lenartowicz
and Apud, 2006).
Legal system followed by Scotland is considered as mixed and hybrid legal system
which includes all the elements of common and civil laws. It has some features of English
laws and other unique and specific laws. The difference between English and Scottish
systems is:
SCOTTISH LAW ENGLISH LAW
Only hotels can serve alcohol 24 hours a
day
It is legal to serve alcohol in bars and hotels
24 hours a day.
People cannot smoke in any public place
including bars and restaurants
People can smoke in many public places,
such as stations, bars and restaurants.
Person in the age of 16 can marry without
any consent and take part in political
decisions
After the age of 16 anybody can marry or
take part in legal decisions
There are 15 people in the jury when trying
serious crimes in the High Court.
There are 12 people on the jury when trying
serious crimes in the Crown Court.
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Any person aged 12 and above can make a
will.
People must be 18 to make a will (Škerlavaj,
Štemberger and Dimovski, 2007).
2.5 UK and EU Legislative process as it affects business of IHG Hotels
IHG is following many laws and regulations which are incorporated in the business
environment of UK. Major rules which the organization is following are licensing rules, food
hygiene and fire regulations. If company fails to follow all the legal rules, it has to bear the
punishment given by government bodies (Knowles, 2012). IHG hotel is located in UK which
as become a part of Economic and Monetary Union (EMU). The purpose of EMU is to allow
business entities to adopt single currency. It will impact the operation of bunnies entity. In
addition to that business entity is affected by the anti discrimination policies introduced by
UK government. It will affect the pricing policies of business entity.
Following points show the UK and EU legislative process and their effect on IHG
Hotels:
 Organization has to conduct business under a specific name and minimum capital
requirement should be met to open a hotel chain. In case of any fraud, licence can be
cancelled.
 It is mandatory to make licence for business in hospitality sector
 The information related to customers and guests has to be kept confidential
 Company should have safety measures in each and every unit in order to avoid any
injury to anybody (Koutrakos, 2006).
 Business needs to conduct ethical practices with various stakeholders, otherwise it has
to face strict actions from government.
 Any kind of illegal action against UK and EU law, taken by company will result in
cancellation of licence or financial punishment
 If company does not follow the rules and regulation its reputation in public can come
down in the eye of its customers which will harm its goodwill and profitability and
wealth of business will become down.
 As per rules of EU laws, it has to maintain price level or not reduce the prices to the
lowest, so the business of others will get hampered (Atkinson, 2009).
15

 Minimum wage policy clearly depicts that, there will be rise in hourly minimum wage
for worker for the age of 25 and over to 7.20 from April 2016. The policy is expected
to push up the total wage bill by 1.5bn next year, improving to 4.5bn till 2020. While
the research clearly illustrates that increase as modest and hospitality sector of UK
will have better increase up to 3.4%.
(Source: Chan, P. S., 2015)
 Along with this, the legal age of buying alcohol and cigarettes in UK is above 18.
However, it is important for each hotel operating in UK to follow the guidelines and
does not allow any individual below 18 to buy the alcohol and cigarettes (Wintour,
2007).
 The main purpose of Sunbeds (Regulation) Act 2010, is to prevent the use of sunbeds
on commercial business premises by children and young people under 18 years.
Hence, it can be said that EU and UK legal system affect the business operations of
IHG Hotels and the organization should follow the rules and regulation to maintain a good
image in market.
16
Illustration 3: Percentage imporvement in minimum wage rate in Hospitality sector of
UK

3.1 Different types and characteristics of business that operate within the Hospitality Sector
Hospitality sector includes all the business that provides leisure services to the
customer. This is the fasted growing sector in the world. The income of this sector mostly
depends on the number of visitors.
List of businesses included in Hospitality sector of UK
Hotels: Hotel business is the famous in hospitality industry as it is the major source of
earning in this sector. In UK there are more than 50-60,000 hotels and the average room rate
for the chain hotels is around 70.87 Euros. The occupancy rate in hostel business is more than
73.5% which represents the future opportunities for growth. There are more than 24, 0000
people working in this field. It is that field of the hospitality industry which generates the
highest revenues. It include buts sector private as well as public (Cherbakov and Galambos,
2005).
Restaurants: After hotel, restaurant is the most popular business in hospitality
industry which generates second largest revenue for the industry. There are almost 56,000
restaurants in UK and this sector employs almost 500,000 full time and the part time
employees. In this sector part time and full time worker can be found in. These generally
come in the private, partnership sector. Most of restaurant in UK are operating in private
sector.
Pubs: Pubs are generally made to attract the youth and teenagers. This is considered
as enjoyable place for conducting parties and other events.In UK, there are almost 88,098
premises with full license including 59,000 pubs. These generally operate in the night and it
is completely related with the entertainment factor. To operate a pub business huge capital is
required to be invested. Mostly, private parties are operating in this sector and the partnership
in private parties is famous in this hospitality sector. This business requires huge legal
formalities to be done as they serve alcohol. (Richardson, 2006).
Contract Catering: In this business, companies provide food offering for number of
events and occasions. There are almost 20,000 contract catering outlets in UK and the
turnover in this business is almost 5 billion pounds and they serve almost 3 billion meals.
This sector employee more than 220,000 workers in the catering sector, which is almost 11%
of the total hospitality sector. The company operates business in partnership or private
regulation.
17

3.2 Legal processes necessary for formation and dissolution of a registered company
At the time of formation of company in UK market, organizations have to follow a
legal process which is as follows:
 Company have to pay registration fee and has to provide legal documents – as per
Section 9 of 2006 companies act
 Organization’s registration office has be in England and Wales
 It has to design article of association in which information related to manages and
their responsibilities should explained.
 Have to fill an IN01 form in which the information related to invested share capital is
to be given (Jordan, 2005)
 Memorandum of Association needs to be prepared to pass the information of
shareholders consent on subscription of shares
Dissolution process has to go through a legal way and a specific process is as follows:
 File with the state: The first step of dissolution in any company is of filing
state fir no due. Company has to place creditors on notice that business cannot incur
any further debt which helps to relieve them from the future tax burdens (Cherbakov
and Galambos, 2005).
 Notify the IRS and State and Local Tax Agencies: Firm has to pay all the taxes that
are needed to be filled. Proper notifications are made to both the parties in case of
acquisitions.
 Cancel Business Licenses: In addition with the local, state and the federal tax
agencies it is needed to file the other paperwork for termination of licenses. This is
very important for companies to cancel the license for passing or cancelling all
monetary burdens(O’Connor, 2011).
 Settling Creditors Claims: All the claims from the creditors are inspected and have
to pay the liable amount. This is important to pay all the liabilities of business as only
after this dissolution process can be gone in next stage.
 Collecting Money Owed to Business: All the money that is owed to the business is
to be collected by respective parties. The debtors of company are to be approached for
taking all the money given to them.
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 Selling and Distribution of Assets: After settling the claims of the business all the
assets that are left are either distributed or sold in the proportion of stake of each
owner in business. The funds can be used to pay off all the liabilities of company and
to pay shareholders invested capital.
3.3 Structure and processes which determine the responsibilities and control within a
registered company
There are various people involved in the business environment of registered company
such as shareholders, non – executive directors, financial reports, auditors and so on and each
and every member has different roles and responsibilities. The information related to
organizational structure is given in the memorandum of companies (Cherbakov and
Galambos, 2005). Organization needs to maintain memorandum of association and article of
association. The responsibilities and controls of various structural bodies are explained with
the help of following diagram.
• Board of Directors: Board of directors have to meet regularly in order to monitor full
and the effective control of company (UK Government, 2014). For this purpose
general meeting are to be arranged in a particular point of time. This is the top
management who is also responsible for making strategic decisions. Company’s
Secretary is appointed who will ensure that all the responsibilities are being followed
by all member of Board in a proper manner.
• Non-Executive Directors: After directors there are non – executive directors who
are responsible for sharing all the essential information with the board member in
order to make decision effective and worth full. Directors have to bring their
independent judgment in order to solve various issues related to the strategy,
performance, resources etc (Jordan, 2005)
• Executive Directors: In a corporate hierarchy then comes the role of Executive
directors, who are accountable for checking all the financial expenditure done on
companies operations. They require to proper disclose, the entire amount paid to the
chairman, directors, pensioners and stock options at the time of making the
company’s annual report should be mentioned
• Financial Reporting and the Controls: Financial reporting and control are the
functions of financial reporters. They evaluate the options available for business to
invest in profitable funds. They are responsible for given suggestion for making
19

things clear with financial perspective. The accountability of presenting a perfect and
well-balanced assessment of the company’s position lies with financial reporters.
• Role of Auditors: Annual audit of the organization is presented by the board of
directors. There is professional relationship between the auditors and the board of
directors. All the auditors should have direct access to the non-executive directors.
They are accountable for conducting proper auditing for companies financial
performance for each year. This helps in finding out future opportunities for business
(Jordan, 2005).
• Rights and Responsibilities of the Shareholders: Shareholder is considered as
owner of company as they have share of firms. They expect for good dividend and
share in profits of business. Shareholders have a responsibility to elect the directors
to run the company on behalf of them. Shareholders should use their voting rights as
much as they can, so that positive interest in the company could be maintained
(O’Connor, 2011).
CONCLUSION
The report explains the legal frame work of UK economy and its impact on business
operations. The nature, element, structure and regulatory of UK economy have been
discussed in above report. It can be concluded the Economy of the UK is encouraging as well
as disappointing for companies of hospitality sector. In order to make a good image in market
IHG hotels have to follow the rules and regulation developed by local government and
European Union.
20

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