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Understanding Business Organization

Understanding Business Organization - Essay

Introduction

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The case study will give an account of different business organisations. Understanding other business organisations by analysing various aspects will be discussed thoroughly in this study. This study takes the famous UK-based hotel chain, Premier Inn, to clearly understand the idea. This study will also highlight different organisational structures and their importance in business organisations. The Organisational structure of Premier Inn will be explained thoroughly in this study. Both positive and negative effects of the organisational structure will be discussed here. Moreover, the business environment of Premier Inn will also be explained by analysing the internal and external factors.

Premier Inn's most prominent hotel brand in the UK was established in 1987. Whitbread owns the organisation (Premier Inn,2022). The giant hotel chain first opened in Germany, Frankfurt. Premier Inn across the World owns eight hundred hotels, and there are almost 78000 hotel rooms all over the world. Since 2012, they have expanded their hand toward Great Ormond Street Hospital Children’s Charity as a supporting partner.

2 Organisational Structure of Premier Inn Hotel

An organisational structure is essential for every organisation to improve its services and products. The system is created to merge the work done by the organisation and corporate objectives (López-Andreu et al.,2019). It helps an organisation reach the top of success with more effectiveness. Efficiency also can be achieved with the help of an appropriate organisational structure. Basic organisational structures include matrix, networking, functional, team, and divisional.

Benefits of a firm Organisational structure: Organisational structures help improve the quality of work with greater employee engagement. The decision-making process is also gets accelerated by a robust organisational structure (López-Andreu et al.,2019). It also influences communication positively. It also helps to lessen the conflictual situations that often arise in an organisation among the employees.

Premier Inn and its organisational structure: The unique organisational structure of the Premier Inn hotel chain is an added advantage. With the help of this organisational structure, they can stand out with competitive advantages in this ever-changing business market. They follow the tall structure as a corporate structure. The vertically integrated model allows the organisation to grow faster than its competitors (Lawrence,2018). Ownership of the property, brand, hotel operations and inventory distribution are the significant factors of the hotel chains. The tall structure helps the organisation maintain harmony in every step as every step has its own higher authority who can control any situation. Many leaders and many layers smoothen the functions of the organisation.

Impacts of Organisational structure:

A tall structure as an organisational structure allows an organisation to supervise its lower-level employees more closely. The manager can control and observe the lower-level employees’ work and also rectify them before time if anything wrong happens. The layers help each employee with their respective work, making it more efficient. On the other hand, the excessive tall structure can hurt the control line (Smith et al.,2019). Communication and productivity are also get affected by this. 

3 Business Environment Analysis of Premier Inn Hotel

The factors of the business market that are responsible for the performance of an organisation. It has a significant effect on an organisation’s success (Jusufi and Lubeniqi,2019). The business environment can be understood by analysing various internal and external factors of an organisation and the industry to which the particular organisation belongs.

3.1 SWOT Analysis

SWOT analysis helps an organisation to get to know about the internal strengths and weaknesses of that very organisation. The strategic framework also helps to determine the external opportunities and threats too.

3.1.1 Strength

The strengths of Premier Inn include its unique organisational structure. That helps the organisation to build a substantial competitive advantage. Their customer base is another strength (George,2021). Their location also added benefits to their business. They value their customers and work hard for the satisfaction of their customers. Brand image and occupancy rate in the UK can also be a strength.

3.1.2 Weaknesses

The biggest weakness of the hotel is the less-educated staff. Many guests complain about their hygiene-related problems. Especially during and after the pandemic, the guests were more concerned about this department, but Premier Inn failed to reach their expectations (Banu et al.,2018). The exploitative work practice of Premier Inn also came into the eyes of the trade union Unite. They also raised their voice against this. Refund issues are also a weakness of Premier Inn. 

3.1.3 Opportunities

Expanding the business globally will be the most significant opportunity for Premier Inn as they have a limited global presence. They can make a move into a new business market. Their 28 hotels are running successfully in Germany (George,2021). The Republic of Ireland also welcomes Premier Inn with a huge success. Technological advancement also can improve service and customer satisfaction. The government of Germany offers the hotel chain various growth opportunities.

3.1.4 Threats

Environmental issues can be considered a threat to the organisation’s business environment. Premier Inn also faced these threats during and even after the pandemic (Banu et al.,2018). Lockdowns and different governmental guidelines act as a threat. Ever-rising competition in the business market also affects the business of Premier Inn to a certain extent.

3.2 PESTEL Analysis

PESTEL analysis of the industry gives a clear idea and plan to run a business without failure. The macro elements of the business environment can be analysed by using this strategic tool (Kara,2018). An organisation can evaluate these external factors of the industry and the country it belongs to or the country in which the organisation is trying to expand its business.

3.2.1 Political Factors

The hospitality industry and tourism industry go hand in hand. The government takes extra care of the rules and regulations of the country and its respective industry (Zhan et al.,2019). Newly imposed tourism laws and high taxation rates badly affect the hotel industry. The conflict between different countries also has an adverse effect. Although most countries are trying to be accessible for travellers, it positively affects the industry.

3.2.2 Economic Factors

Different economic fallouts like inflation and recessions hugely affect the hotel industry. The ever-changing economy makes the industry increase the price range. So, many people cannot afford a luxurious stay. It directly affects the sales of the industry (Kara,2018). The foreign exchange rate is also responsible for the adverse condition. Although a rise in the global expenditure scale helps the industry welcome more guests.

3.2.3 Social Factors

The industry attracts this generation. They are fonder of travelling. This attitude helps the industry to boom. The hotel industry, including Premier Inn, is trying to make its workforce more diverse. Local people will also be a part of their workforce (Zhan et al.,2019). It helps to boost the business as it attracts more people. However, workforce conflicts due to diversity also cannot be ignored.

3.2.4 Technological Factors

Technology is booming nowadays. Various functions can be accelerated in the hotel industry by introducing new and advanced technology. The installation of CCTV, the introduction of AI, and blockchain will also help to improve the services (Kara,2018). It will also boost the communication among the employees and the guests. But, leakage of data and privacy issues are some problems that can arise due to advanced technology. The unemployment rate will also increase.

3.2.5 Environmental Factors

Different country has different environmental conditions. These climatic factors also have a significant effect on the hospitability industry. Harsh climatic conditions prohibit travellers from visiting many countries. It affects the sales and growth of the economic conditions. The pandemic also hugely affected the business of the hotel industry (Zhan et al.,2019). Many employees, as well as loyal guests, lost their lives. It affects Premier Inn’s growth. Although, countries with suitable climatic conditions can help the industry spread itself globally.

3.2.6 Legal Factors

Several legal factors affect the hospitality industry. The hotel industry needs to follow the country-imposed laws like health safety laws and food and beverages safety laws. Rules of taxation create problems sometimes (Kara,2018). However, these guidelines also help the industry to run systematically. Governments of many countries also reduced taxation rates to boost the industry’s growth.

Conclusion

It can be concluded from the above study that every organisation should have a prominent organisational structure to follow and achieve success. The study explained all the sides of the organisational structures, including their impact on an organisation and its growth. Premier Inn’s tall organisational structures are discussed here. The benefits, as well as the purpose of organisational structure, are explained thoroughly. The study also demonstrated the business environment of the organisation Premier Inn. It analysed various internal and external factors of the organisation by SWOT analysis. The study also highlighted the macro elements of the hospitality industry by assessing the factors like political, legal, socio-cultural, and so on. A complete corporate structure survey with an overview of the hotel Premier Inn is given here to understand the improvement sectors. The organisation can also improve their performance by improving its strategies and incorporating them. The study showed all the factors that influenced the growth of the organisation and industry too.

References

Banu, N.T., Rahman, S. and Khan, R., (2018). Freddy’s Coffee Shop: Expanding the Coffee Business in Bangladesh. SAGE Publications: SAGE Business Cases Originals.

George, R., (2021). Tourism and Hospitality Products, Branding, and Pricing. In Marketing Tourism and Hospitality (pp. 249-283). Palgrave Macmillan, Cham.

Jusufi, G. and Lubeniqi, G., (2019). An overview of Doing business in Western Balkan: The analysis of advantages of Doing Business in Kosovo and North Macedonia. ILIRIA International Review9(2), pp.168-169.

Kara, E., (2018). A contemporary approach for strategic management in tourism sector: pestel analysis on the city Mu?la, Turkey. ??letme Ara?t?rmalar? Dergisi10(2), pp.598-608.

Lawrence, P., (2018). Whither large International Non-Governmental Organisations?. Third Sector Research Centre. Plowden Fellowship Report, University of Birmingham, ESRC.

López-Andreu, M., Papadopolous, O. and Jamalian, M., (2019). How has the UK hotels sector been affected by the fissuring of the worker–employer relationship in the last 10 years?.

Pan, W., Chen, L. and Zhan, W., (2019). PESTEL analysis of construction productivity enhancement strategies: A case study of three economies. Journal of Management in Engineering35(1), p.05018013.

Premier Inn, (2022). About us. [online] Available at: <https://www.premierinn.com/gb/en/why.html> [Accessed 27 May 2022].

Smith, M., Busi, M., Ball, P. and Van Der Meer, R., (2019). Factors influencing an organisation’s ability to manage innovation: a structured literature review and conceptual model. Managing Innovation: What Do We Know About Innovation Success Factors?, pp.69-90.

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