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BUSINESS AND BUSINESS ENVIRONMENT

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Introduction:
The report deals with the Hotels of Western London and vividly discusses about
public, private and voluntary organisation. It also discusses about the size and the
scope of these organisations. It also provides and emphasis on the interrelation of
different departments within the organisations. The hotel selected for this report is
Manchester Royal Exchange and at the last part of the report organisational audit is
being conducted for the selected organisation.
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LO1

Introduction:

The environment of a business is essential for its growth and sustainability for the
future. There are various factors on which the development of a business depends.
They can be broadly classified into- external environment and internal environment.
The internal environment of business involves the workings of the management and
the execution of the objectives. The external environment involves the various
factors which company cannot control like competition, inflation etc. The primary aim
of this project is to into a detailed study of the external and internal factors affecting
business.

P1 Explain different types and purposes of organisations; public, private and

voluntary sectors, and legal structures.
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Profit Organization:

The type of organisation in which the primary motive is to gain profit and use that to
expand the business for creating a perfect future market for the business is called
profit organisation. Ideally, profit organisations are run by one or two people. (Carmel
et al., 2015)

Non-Profit Organisation:

The type of organisation in which charitable functions are given preference to

personal profit is called non-profit organisations. They are run by clubs or trusts.
Their primary aim is to create awareness in the people about the government and
funds are raised through donations.

Non-Governmental Organisation:

Just like non-profit organisations, non-governmental organisations are also the

same. The primary difference between the two is in the way the funds are
collected(Bouckaeret al. 2016). Non-governmental organisations collect funds from
government grants and taxes. They are primarily run by trustees. The primary in of
non-governmental organisation is to change and upgrade the lifestyle of
underprivileged people.
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SMEs:

SMEs are small manufacturing organisations who work for their interests and are
formed by one or two people. They inculcate a strong interpersonal relationship
between the employees and are very flexible in their operation. SMEs generally have
a maximum staff of 250.

Legal structure:

Sole trader:

The type of organisation in which the liabilities and responsibilities rest on a single
person is known as a sole trader organisation. The advantage of such a business is
that the profit is enjoyed by a single person and hence the profit is spent on
improving the business at the person sees fit(Steingold, 2017). The disadvantage is
that the business is lost along with the trader.

Partnership:

The type of organisation in which all the business related issues are solved by
consulting among each other is known as a partnership. The partnership is formed
between 2 and can extend up to 200 people. The advantage of such a partnership
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that all the profit is distributed evenly among the partners. The disadvantage is that
the business can be lost due to misunderstanding among the partners as well.

Private Limited Company:

The type of company in which shareholders spend their assets for improving and
increasing the market value of the company but have minimal control over the
business is known as a private limited company. This type of organisation has limited
capability of shareholders and capacity of employees is 200.

P2 Explain the size and scope of a range of different types of organisations.

Public Sector Organisation:

The type of organisation which are owned by the government and funded from the
government tax and acts for social activity and provides free service to all are known
as public sector organisation.

The National Audit Office in the United Kingdom is responsible for auditing
government offices, government departments and non-departmental public bodies.
They are responsible for ethical and financial value for money public policies.

Size: Total 796 staffs on the payroll(National Audit Office, 2019)

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Scope: They are responsible for carrying out random audits to keep the public
policies free from corruption or overspending or over Budgeting. Thus they are the
moral or ethical checkers for the government who otherwise has a large sum of
money to deal with.

Private sector Organisation:

The primary goal of this type of organisation is to gain profit but provide quality or
value for money services to the people while upholding a good image of the
company at the same time.

Motel One Manchester-Royal Exchange is the most popular hotel in the UK.

Size: more than 500 employees are engaged to provide world-class services to hotel
customers (Motel-one.com, 2019).

Scope: This hotel is ranked 17 among the 122 Manchester hotels. This hotel already
has more than 8 branches all over; they want to expand their business and increase
their raked and market value.Revenue rises by 12% to EUR 401m.

Voluntary Organisation:
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The type of organisation which provides free consultations to the legal citizens of the
UK.

Wellcome Trust is one of the largest spending voluntary organisations in the UK

which work for the betterment of health facilities all over the world and funding
researchers on critical epidemics(Wellcome.ac.uk, 2019).

Size: More than 2057 employees are working in this organisation.

Scope: They organise research and scientific deliberations on various diseases.

They work to improve the health standard of the people of the UK and the world.
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LO 2:

P3: Explain the relationship between different organisational functions and

how they link to the organisational objectives and structure
Organisational Structure Motel One Manchester-Royal Exchange:

Motel One Manchester-Royal Exchangeis a private sector organisation whose main

intention is to gain a huge profit margin while providing quality and standard services
to the common public. They operate in the retail sector and a competitive market.
The entire company is managed by the General Manager, and it is divided into
various departments like operation, marketing, IT and finance(Motel-one.com, 2019).
Every department is again headed by a junior manager who reports to the general
manager. This matrix structure makes the organisation more strong. The various
departments can be discussed as follows:
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Marketing Department:

Department responsible for introducing services and products into the market and
also popularising them in the market is the marketing department. The newly
developed products are also promoted by the marketing department of the Motel
One Manchester-Royal Exchange.

Finance Department:

The expenditure of money on various wings of the company and managing all the
accounts of Motel One Manchester-Royal Exchangeis done by the finance
department.

Sales and Production Department:

The strategy of selling and guiding the team for selling them to the customers is
done by the sales department. While the specification of how the product needs to
be and to what specification is determined by the production department. The
production department is also responsible for providing and using the best and
affordable quality raw materials for production purposes(Motel-one.com, 2019). The
production department also carries out regular research to undergo any small
changes required to adapt to the changing needs of the customers.
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Human Resource:

The most important part of any Industry is human resources. The HR department is
responsible for employing and recruiting able people to the required positions and
also train them in that of the work if necessary. ( Cathcart et al., 2014)

IT Department:

The IT department of the Motel One Manchester-Royal Exchange is responsible for

keeping all the information related to the sales, inventory, raw materials required etc.
in the company database. They are also responsible for providing any technical
assistance to the customers as well as the other employees.
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The interrelation between the different departments:

Each department of the Motel One Manchester-Royal Exchange is essential for the
success of the company as a whole. Each department is indispensable in its
operation in its way. The contribution of any department cannot be ignored. This can
be easily understood through the following example: the marketing department is
responsible for improving the business through market surveys and necessary
popularising techniques and methods whereas the actual implementation of the
technique is being done by the human resource department of the company who
work in the field physically. The marketing department formulates a plan, and the
human resource department executes them. The market survey that the marketing
department uses for formulating their plans is also collected by the IT department of
the company through sale trends, changing shopping styles etc. The finance
department always keeps a keen eye on the expenditure of any wing of the company
(Cathcart et al., 2014). They allocate funds for operation and also keeps in check
any unnecessary and unforseenfunancial needs of the company. The organisational
structure in place keeps The Motel One Manchester-Royal Exchange running
seamlessly through a continuous flow of chain of commands. Each tier of managers
report to their seniors, and this goes on till the top to the actual board of directors. So
in this way, the board of directors keeps control and clutch over the company without
actually physically doing them. So we can easily observe that all the departments
may seem to be working independently and they do, but their operation affects the
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other departments of the company as well. This interwoven network of different

departments together forms the beating heart of the company.

Conclusion:

To conclude, there are various types of organisations in businesses. They are

approaches, and operational methods vary widely from one another. Various legal
structures have also described. In this project various essential parts of any
organisation had discussed with examples, their size and scope are also mentioned
here.Proper organisational structure is also explored. The interrelation between the
different departments of any organisation has also been expressed with
interdependencythrough examples.
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I would like to show my gratitude for listening to my presentation.

Thank you!

Any Questions

Please ask me any question if you feel I need to elaborate.

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LO3

Introduction
Business refers to the activity of making a living or money by selling, buying or
producing products or goods in the market. The business environment is the sum of
internal and external factor that impact the operation of the business. In reference to
such aspects, the negative and positive impact of the macro environment over
selected organisation Motel One Manchester-Royal Exchange is provided in the unit.
In order to establish inter-relation of the external factor the strength and weakness of
the organisation have been evaluated.

P4 Identify the positive and negative impacts the macro environment has upon
business operations, supported by specific examples

Fig 1: PESTLE Analysis

(Source: Emens 2017)
The major uncontrollable and external factors that often influence the business
operational decision making along with their strategies and performance is known as
the macro environment. These factors are often responsible for impacting marketing
strategies and controls business outcome. The alternation in the business operation
under external factors is the key to success. The PESTEL analysis tool has been
used to monitor the macro environment positively and negatively impacting the
business of Motel One Manchester-Royal Exchange.

Political Factor: In respect to positive side external elements, the pragmatic and
positive collaboration with the UK government has brought hospitality sector into
success areas of economic growth. The hospital sector in which Motel One
Manchester-Royal Exchange operates has been the 5 th largest sector that
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contributes approximately £34 billion in gross tax income and employ 2.9 million
staffs (Ukhospitality.org.uk 2019). The government of the UK has been in support of
business like the tourism and hospitality sector that is a high growth industry and
working strategically can strengthen the economy. The institutions of regional
development funds for hospitality sector are the major sign that depicts growth in the
sector that Motel One Manchester-Royal Exchange might utilise to increase its sales
volume. On the contrary, increased rate of taxation, labour wage and trading
regulation might negatively influence the efficiency of industry and business. Brexit
depicting exit of the EU may be disadvantageous for the business opportunity that
Motel One Manchester-Royal might encounter (Sahramaa 2018). It would be an
encouraging factor for the hotel to expand its budget hotel chain in the location like
Dublin, and Warsaw.

Social Factor: The social changes in the cycle of living standards and lifestyle have
brought several cultural and social changes around the world. There are certain
thought patterns that might influence customer’s attitude in decision making in
respect to quality services, accessibility and variable room rate provided by Motel
One Manchester-Royal in the market. The lack of responsiveness to consumer
demands, security, value for money, centralised and online reservation system might
lead the hotel to be less competitive in the market. The focus on customer
satisfaction and revitalising business strategy respect to customer preference and
social values would positively influence business growth. Moreover, Motel One
Manchester-Royal Exchange noted to have a large variety of services is effective to
track visitor and tourists across the globe.

Economic Factor: The increment in taxation rate and value of British Pound Sterling
has been responsible factors to influence the profitability of the hospitality business.
On the positive side, the increase in hourly and personal wages has led to a rise in
high-income customers that might drive increased revenue of the hospitality
business. In Manchester, where Motel One Manchester-Royal Exchange is located
to have a high rate of international tourist influx might benefit the organisation if
targeted strategically. Additionally, the fluctuation in the EU economy improved the
turnover of the organisation with a closed 78% occupancy and EBITDA of £39 million
produced in the fourth quarter of the year 2018 (Motel-one.com 2019). 

Legal Factor: The legal environment is an important factor for the development of
the hotel industry. The safety and health law considered by Motel One Manchester-
Royal allows it to have a productive and sound workforce effective to meet the
organisational objective. The increase in the minimum wage rate might cause an
increase in operating cost of the respective organisation as a budget hotel. This
would ultimately hamper policy of the hotel that offers competitive prices to its
targeted audience. The hotel engaged in Employment legislation, Discrimination and
Equality Act would be able to facilitate equality in the workplace, where each
individual work collaborate to improve organisational performance (Emens 2017).
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Moreover, the implication of adequate human resource management policies would

be helpful to eliminate conflicts and improve organisational productivity.

Technological Factor: It is a viable factor that directly impacts business operations.

On the positive side, the Motel One Manchester-Royal Exchange utilises online
booking facilitating registration of the hotel room, and related services have made
business effective within its sector. The usage of the free digital membership
program, redeemable gift vouchers, feedback facilities have positively influence the
operation of the hotel in the hospitality sector (Motel-one.com 2019).  However, as
the ways of communication changing rapidly, the organisation might use the latest
development in IT that helps to organise smooth functioning for hotel chain cross
several regions. The usage of mobile would also provide a broader platform for
creating brand awareness and undertaking effective advertisement campaigns.

Environmental Factor:The environmental guideline in the UK is a mandatory factor

for all kind of business. This makes it important for the organisation to operate
sustainability in the society while engaging itself in limiting waste production, it
proper disposable and reduction in high energy consumption. It would allow Motel
One Manchester-Royal Exchange not only to have a positive relation with the
stakeholders. The awareness about millennial consumers also made vital for the
organisation to employ in environment-friendly actions to develop business relation
and profitability.
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LO4

P5 Conduct internal and external analysis of specific organisations in order to

identify strengths and weaknesses
In this segment of the unit, the external and internal analysis of chosen hospitality
organisation Motel One Manchester-Royal Exchange has been carried to identify its
weaknesses and strengths. For evaluation of internal strength and weakness along
with external threat and opportunity of selected hotel organisation, SWOT analysis
has been carried out (Phadermrod et al. 2019). It is an effective tool to build
strategic planning and analyse the competitive position of the organisation in the
marketplace.

Fig 2: SWOT Analysis

(Source: Phadermrod et al. 2019)

The SWOT analysis of Motel One Manchester-Royal Exchange-

Strength Weakness
 A successful budget hotel chain  Less spacious rooms
 Central location in the heart of the city  Overemphasis on service standards
centre  302 rooms
 Luxury furniture and authentic interior  Costly some range of consumers in
designs the market
 World-class facilities  Limited market presence
 71 hotels at a different location
 Profitable operation in 9 countries
Threat Opportunity
 Currency Fluctuation  Expansion
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 Competition  Require investment in technology

 Increasing customer expectation  Increase in international tourists
 Shifting of the consumer to other  High economic growth
brands  Keep employees happier
 Terrorism

Table 1: SWOT of Motel One Manchester-Royal Exchange

(Source:(Motel-one.com 2019)

In reference to the above table, it is deduced that the Motel One Manchester-Royal
Exchange’s world-class facilities, luxury furniture and impressive interior designs
have been the profitable factor for the hospitality organisation. The hotel ties
effectively with the city’s historic features and rustic steel surface, furnished with
natural rivet and grains has been able to make contour tops and bars high on
industrial charm. The central location and company's successful budget hotel chains
are the strength of the organisation that allows it to be competitive in the hospitality
sector of the UK. The organisation having business in 9 countries and hotel in 71
locations has been an effective factor to facilitated higher profitable revenue to the
Motel One Manchester-Royal Exchange (Motel-one.com 2019).  However, the hotel
has been efficient to gain a profitable return in the hospitality sector, and the
weakness identified refer to the area of improvement that Motel One might focus on
effective business operations. The hotel noted to have less spacious accommodation
and only 302 rooms at Manchester that has been high visited place in current years.
Such less number of rooms may rise as a weakness for the organisation to
accommodate greater customer flow in tourism seasons. There are limited market
presences, and accommodations provided by the hotel are often costly to a certain
group of customer. This draws the attention of the hotel to emphasise the opportunity
of expansion in the emerging market like Russia, Brazil, China and India. In concert
with the staffs in the organisation, overemphasis on the norms of services quality has
been a negative factor to influence the morale of the workforce and ultimately their
productivity. The increase in the hospitality sector in the UK as well as a large
number of hotels in Manchester like Corbieres Bar, The Rice Bowl, Chinese
Restaurant, Tattu, Sam's Chop House etc., may be a threat to the respective
organisation, decreasing its sales and profitability (Tripadvisor.in 2019). The
fluctuation in the currency value might cause an increase in goods and services
prices, thus leading the costlier operation. In reference to such aspects, the high
economic growth and increase in the number of tourists would be a significant
opportunity for the hotel to gain back the competitive advantage in the market. They
can achieve greater profitable revenue through quality services at reasonable prices.
The shift of customer to other brand and terrorism are a greater threat to the
hospitality business as it might hamper the reputation of the organisation at the
marketplace. As the preference of customers towards personalised services is
increasing rapidly, the opportunity to invest in technology would be helpful to achieve
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the same. The integration of ICT, online marketing and advertisement may help to
tap diverse customer range by focusing on their satisfaction. Therefore, the strategic
implementation of opportunities would help the hotel to strengthen its weakness and
mitigate threats effectively.

P6 Explain how strengths and weaknesses interrelate with external macro

factors

Fig 3: TOWS Analysis

(Source: Forbes.com 2019)

TOWS Analysis-

Threat Opportunity
Huge rivalry from family business owners Improvement in tourist numbers and leisure
and in-house hospitality services customers

Weakness Strength
The hotel has luxurious targeted customers, An impressive interior design consisting of all
which might limit business to attract middle to type of modern and luxurious facilities
low-level income customer range.

Table 2: The TOWS analysis of the Motel One Manchester-Royal Exchange

(Source: Forbes.com 2019)

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The TOWS matrix is an effective tool to systematically evaluate external macro

factors with internal strength and weakness of the organisation. The chosen matrix
would enable Motel One Manchester-Royal Exchange to formulate its choices in
context to available resources strategically. These strategic choices may be used to
provide a hotel with a strategic approach to develop its present business
performance in the market to accomplish enhanced strategic position (Dandage et
al. 2019). The factors mentioned in the above table has been analysed using
Porter’s Five Forces. Porter’s Five Forces is an effective tool to understand the
competitiveness of the business environment.

The threat of supplier: In the service sector, threats of the supplier are low. In here,
Motel One Manchester-Royal Exchange may have strong support and linkage in its
operational areas to maintain healthy bargaining power with suppliers. The
sustainable business plan established by Motel One Manchester-Royal Exchange
would be effective to maintain the organisation's cost advantage.

The threat of buyers: As budget hotel chain in which Motel One Manchester-Royal
Exchange operates its business falls under the service industry, the buyer has high
bargaining power. In case the buyer's comfort is highly prioritised, the service quality
remains standardised with strong differentiation would facilitate low switching cost for
consumers. Buyers are attracted to high-quality services at low prices.

The threat of new-entrants: The threat of new entrants in the hospitality sector
have noted to high due to rapid growth in sector and Government facilitating and
encouraging industry on a priority basis. For Motel One Manchester-Royal
Exchange, it might be difficult to maintain their competitiveness in hospitality and
hotel chain business.

The threat of rivalry: There are high competitions in the hospitality sector
particularly in the UK. Motel One Manchester-Royal Exchange receives significant
rivalry from other family business and high rate star hotels like Corbieres Bar,
Chinese Restaurant, The Rice Bowl, Sam’s Chop House, Tattu etc (Tripadvisor.in
2019). The low price margin due to high competition might threat business
profitability. The opportunity for improvement in leisure customer and tourism in
Manchester is significant to gain a higher customer base and ultimately develop
competitive business performance.

The threat of Substitution: The threat of substitution is high in the hospitality

industry because of the large number of alternative local and in-house service
providers. In order to mitigate this, the maintenance of customer comfort and
satisfaction would create little room for substitution. The current increases in services
like Airbnb have influenced the credibility of the expensive hotels like Motel One
Manchester-Royal Exchange (Forbes.com 2019).
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Conclusion
In affirmation to the above study, it is concluded that macro and micro factors
influence the business operation in both negative and positive ways. PESTEL
analysis is significant to evaluate the impact of external factors on the business
performance of Motel One Manchester-Royal Exchange. Additionally, SWOT and
TWOS analysis are effective to analyse the strength and weakness of the
organisation, while mitigating treat and utilising the opportunity to improve the current
situation of the company.
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Conclusion
The report has comprehensively the highlighted about the public, private and the
public organistion with specific examples for each of these organisations. It alsio
highlighted the signfcant interrelation in between the various departments of the
organisations. At the end of the report, the environmental audit of the organisation
reflected the current organisation that the organisation is confronting and it can be
inferred that it is a quite alarming situation for the organisation.
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