Business Environment and Leadership–

Case Study

ID: S226413

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1. Perform a SWOT and PESTEL analysis for your chosen company.
Premier Inn is one of the largest budget hotel chains owned by Whitbread PLC in the UK. It
has won several awards for its dedicated services in the tourism industry. It has over 800
hotels housing 76000 rooms in prime locations. At Premier Inn “we pride ourselves on
comfort and quality, so whether you’re staying for business or leisure, you’ll always enjoy a
warm welcome from our friendly teams, as well as comfortable king-sized beds, ensuite
bathrooms, a TV with Freeview, and Wi-Fi in every room” (Whitbread , 2020).

SWOT Analysis

Strengths of Premier Inn include a high level of brand recognition, focused customer care,
etc. Weaknesses of Premier Inn are its relatively less global presence, hygiene issues, etc.
Opportunities for Premier Inn are building more brand value through improved customer
experience, new strategic tie-ups in markets other than the UK market, etc. Threats that
Premier Inn face are increased competition from similar budget chains, probable legal suits
against poor hygiene maintenance, etc.

With a strong brand image and an increased customer focus, Premier Inn has become the
market leader in the budget hotel chains category.

The company undergoes analytics focusing on customer service by providing low cost for
higher quality services and provide offers with packages of lunch or dinner or even
sometimes giving suites to their regular customers with a lot of discount. They even care
about marketing and does so by going through different ad agencies and social media to find
potential consumers.

PESTEL Analysis

Political

UK government has collaborated with the members of the hospitality industry to accelerate
growth. The hospitality industry is the fifth-largest industry in the UK, creating employment
for over 2.5 million people.

Economical

Economical downturns are now happening due to Covid-19. UK government is assisting

businesses to survive this tough phase of the economic cycle by providing loan grants with
easy terms. Another possible economic assistance from the authorities is underway.

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Social

Social factors influence consumers buying behavior. Consumers now want high
responsiveness alongside low prices. Another important factor is the ease of accessibility.
These are existent in the UK tourism industry.

Technological

It is an age of advanced and sophisticated technologies nowadays. The hotel industry needs
mid-level technical support for operating electrical appliances. The IT service is also an
important factor that ensures connectivity for customers.

Environmental

CSR is an important activity that every organization carries out as its liability to the
environment it works in. It is highly practiced in the UK.

Legal

The minimum wage has been increased by the UK government several times. New laws and
regulations to protect the hotel industry are also enacted from time to time.

2. From the analysis in task 1, in your opinion, evaluate how the

changes in PESTEL factors have influenced the Opportunities and
Threats for the business. Critically comment on how the company is
addressing their Strengths to negate Threats and Weaknesses affecting
their Opportunities.
The changes in PESTEL factors have greatly influenced the opportunities and threats for
Premier Inn. The advantages that PESTEL analysis presents are opening new opportunities
for the hospitality industry while the disadvantages are hindering the growth. Premier Inn is a
direct recipient of these advantages. Political factors encourage Premier Inn to start the
expansion of business on a global scale and in the UK. Several incentive packages are
introduced by the UK government to keep the pace of growth. Technological innovations
have also presented new business opportunities to pursue. AI and automation processes have

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made the services easier to deliver to satisfy customers. Social factors present opportunities
and pose threats at the same time. Opportunities include newly-emerged needs, an increased
standard of living, and a more travel-friendly attitude. Threats that social factors pose are a
low-cost preference, high responsive approach towards customer demands. Environmental
measures by Premier Inn create a positive impact on its customers and prospects.
Government appreciates businesses that take initiatives to contribute to the environment they
operate in. Economical factors are business-friendly because of Covid-19. Loans are granted
to businesses that are suffering due to limited or no operations. Legal factors pose mostly
threats to businesses. They include regulations to bring order in the industry, safeguard the
industry from monopolies, minimization of unfair business practices within the industry, etc.

Premier Inn is successfully addressing their strengths to negate threats. The core strength of
Premier Inn is its brand image. It’s a widely recognised hotel brand in the UK. Its hotels are
geographically spread to the point that they are found within a five-mile radius in the UK. It
has the highest occupancy rate in the budget hotel chain category. All these have helped
Premier Inn gain the largest market share in the UK, making it the largest in the industry.
Although it has the highest market share now, new hotel chains from across the globe have
presented new offers for people in the UK that can drive it away from the top in no time. It is
going to be difficult to hold the top spot for Premier Inn in the near future as new competitors
are entering the market with more personalized packages for customers. Recent reports of
hygiene issues have surfaced on the tv, which is resulting in lost customers.

Premier Inn is a UK-only hotel chain that has no locations outside the UK. It’s a weakness
that the organization can turn into an opportunity. Premier Inn can begin consulting with
other established firms to form strategic alliances to join the overseas market. In this way, it
can smoothly start its expansion on a global scale, which would be difficult to start otherwise.
Hygiene issues are tarnishing the brand image that Premier Inn holds in the minds of people.
Just by improving the hygiene maintenance system, it can retain old customers and even gain
some new more customers in the face of the Covid-19 pandemic. Once the improvement is
introduced, it should be heavily advertised to let people know it. It also communicates a
message of sheer commitment towards cleanliness, which is a big branding move.

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The hotel service has been quite effective as using the PESTEL factors to dig out their
opportunities and things like new government and legislations collaborate them in being
competitive in the market place and use of technology and social economy they have build a
place where everyone would feel free and cost effective simultaneously, hence having
economic growth and availability.

3. Compare and contrast the different styles of leadership. Comment

if the leadership style is appropriate for the company of your choice.
Leadership is a process by which an executive can direct, guide, and influence the behavior
and work of others towards the accomplishment of specific goals in a given situation.
Leadership is the ability of a manager to induce the subordinates to work with confidence and
zeal (Prachi Juneja, 2016).

Authoritarian Leadership Style

Authoritarian leadership, also known as autocratic leadership, is a leadership style in which a

leader holds all the power to make decisions. Under this type of leadership, subordinates have
no power to even recommend suggestions. As a result, the organization becomes a one-
person entity that decides what is good for the entire organization and sets objectives
according to their own will. Employees do not feel comfortable working in an autocratic
environment because they remain petrified of their leaders most of the time. It is not suitable
for organizations that look to empower employees and make them feel included in the
decision-making. It is mostly suitable for a bureaucratic environment.

Laissez-Faire Leadership Style

Laissez-Faire leadership, also known as autonomous leadership, is a leadership style that falls
between the autocratic style and the democratic style. Leaders with this style love to delegate
authority to employees that are capable of handling it. They let employees bring solutions to
their problems. Even at times, employees enjoy full freedom to make decisions without
consulting with their leaders. Organizations that require instant and frequent decision-making
use this sort of leadership style. In this setup, power is decentralized to include employees in
decision-making. Employees feel empowered the most under laissez-faire leadership.

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Research and development units and advertising departments increasingly practise this
leadership style.

Democratic Leadership Style

Democratic leadership, also known as participative leadership, is the most popular and
widely-used leadership style. In a democratic environment, leaders encourage employees to
put inputs in processes and decisions but retain the power to make the final decisions.
Employees feel empowered, but not as much as the ones under laissez-faire leadership. Many
organizations, as well as states, use a democratic leadership style for the growth of their
respective institutions. People perform well under participative leadership because it gives
them a sense of inclusion in the organizations they work. A focus on employee development
often reflects in democratic setups under the concept that they will be the future leaders.

The democratic style is arguably the best form of leadership. It ensures participation and
employee development. It also receives the highest level of commitment from employees.
The Laissez-Faire style is an extreme form of leadership. It is entirely built on trust. It is
suitable for firms that have skilled employees. The autocratic style is the least preferred
because of its one-man show nature. The leaders with this style want their assigned tasks to
be done by employees on time. Any delay results in severe punishment.

In autocratic style, the communication flow is upward and the reporting is vertical. It is the
most strictly monitored and controlled environment. Laissez-Faire leaders encourage
horizontal communication patterns and the reporting is not closely supervised. In a
democratic environment, communication goes two-way: upward and downward. The
reporting is a bit rigidly monitored than the laissez-faire setup.

The democratic leadership style is appropriate for Premier Inn. It is going to be helpful for it
to achieve its objectives with this leadership approach.

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4. Recommend a suitable leadership style that helps them grow and
overcome the challenges posed by the business environment. Justify
your choice using appropriate literature.
The democratic style is suitable for managing hotels. Premier Inn is a hotel chain that has a
number of employees that work on a regular basis. For the repetitive tasks, there is no need
for an executive/middle manager to make decisions regarding these tasks. It will take up their
valuable time for unnecessary petty issues. Democratic leadership calls for inputs from
employees to improve the quality of decision-making.

Democratic leadership brings in favourable results for any organization. The same will be the
case for Premier Inn too. In a democratic environment, employees work feeling empowered.
As a result, the employee turnover rate is relatively low. The organization does not need to
spend on training new employees. The employer's reputation reaches a high for democratic
firms. A research finding shows that democratic leadership has a stronger influence on job
satisfaction than laissez-faire leadership does (Al-Ababneh, 2013).

Democratic leadership comes with visions. These visions take an organization to accomplish
the mission it set in its initial days. These democratic leaders are flexible and adaptive to
changes. In fact, they embrace changes with wide-open arms. The business environment is
always dynamic. Losing sight of the dynamic business environment costs an organization
almost a big fortune. Democratic setup is growth-friendly and always on the run to increase
its efficiency to achieve its objectives. Premier Inn is going to see smooth growth with the
help of participative leadership.

5. Comment on the Responsibility, Response, and Obligations in their

Ethics and Social Responsibilities in the processes at Premier Inn
using evidence from your research.
Corporations have certain responsibilities towards the communities in which they operate.
They have obligations towards their stakeholders as these stakeholders get impacted and
affected by their policies and actions, in turn, they also impact and affect these corporations.

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This means that businesses don’t just have financial accountability but also social and
environmental responsibility (Aga, 2004). Corporate social responsibility (CSR) is a concept
that outlines that a corporation has responsibilities towards society and its community beyond
its profit-making efforts. CSR is generally understood as being the way through which a
company achieves a balance of economic, environmental, and social imperatives (“Triple-
Bottom-Line-Approach”), while at the same time addressing the expectations of shareholders
and stakeholders (United Nations Industrial Development Organization, 2015).

Being a low-cost hotel service, Premier Inn was faced with allegations of environmental
pollution. Climate change conferences globally vocalized the issue to bring it forth.
Environmentalists at these conferences pointed their fingers towards Premier Inn and other
low-cost hotel services. It was fair for them to react that way. In response to that reaction,
Premier Inn restructured the ways it operates with an increased focus on making its
hospitality service environment-friendly.

Since then, Premier Inn has been a socially responsible organization in the UK hospitality
industry. It has complied with all rules and regulations of the UK government. Premier Inn
website reads, “At Premier Inn we want to lead the decarbonisation of aviation, and
ultimately achieve zero-emissions flying across Europe” (easyJet plc, 2020). Premier Inn
strives to contribute to the UN’s SDGs and its strategic plan incorporates that. It launched its
sustainability strategy in 2019, which is focused on cutting down negative environmental
impacts.

However, some hospitality industry experts believe that CSR appears to derail the focus on
profit-maximization goals. But this is not entirely true. Rather, it’s a partial view of the real
scenario. CSR increases the acceptability of an organization in the public eye. Advocates of
CSR believe that CSR allows aviation businesses to look beyond economic returns and take
the wider social concerns into consideration (Ira A. Jackson, 2004). Premier Inn reflected on
the matter very brightly.

Premier Inn’s new business model ensures the environmental benefits presence in its
operations. Its strategic direction gives a strong indication of the changes brought to comply
with the environmental regulations. Premier Inn now uses less-congested managers to
minimize its room service costs, thus, allowing it to offer low prices. This has also
contributed to its decarbonisation policies. Premier Inn is an internet-based booking service,

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hence, booking takes place in digital formats. As a result, it is almost a paperless system. It
helps minimize paper waste, which is environment-friendly.

The company has been very strict about their corporate social responsibility and partake in
activities like arranging food for beggars, creating social gathering for charity and fund and
delivering Christmas presents to kids with disabilities or orphans. They are also known to
contribute in “save trees” program and even have build a group of companies to tackle water
and air pollution. They have been quite successful at the movement.

Reflection Report

I have learned how to develop a SWOT analysis along with PESTEL factor analysis in the
beginning. Secondly, I evaluated the SWOT analysis and PESTEL factors and how these
factors are contributing to the growth of the chosen company. Thirdly, I outlined the different
leadership styles that are in practice and commented on which leadership style the chosen
company should use. Based on the comment, I recommended the democratic leadership style
for the company. Lastly, I shed light on the CSR practises of the company and their impact
on the company’s brand image.

SWOT analysis revealed some very important information about Premier Inn. I pointed out
some ways on how it can accelerate its growth. There were limitations that are hindering
Premier Inn’s growth. These bottlenecks can lead to Premier Inn losing its current market
position. Despite limitations, Premier Inn has a number of opportunities to expand its
business. PESTEL analysis showed the stagnant economic conditions due to Covid-19. The
operations of Premier Inn remain closed until further notice. The UK government is
providing support in this tough time to sustain.

Leadership is important in today’s business context, which is always dynamic. I learned

about several leadership theories that outline different leadership styles. The styles are

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autocratic, laissez-faire, and democratic. I learned about the differences among these styles.
Among them, I deemed the democratic style fit for Premier Inn and chose it. Several research
publications supported my choice of leadership for a business in the tourism industry. I
further explained why democratic leadership is the perfect pick for Premier Inn.

Ethics and CSR are now a crucial part of business operations. Organizations are termed as
corporate citizens of society and must act as responsible citizens. They are subject to certain
obligations to their stakeholders and the public at large. They also need to operate in an
environment-friendly way. Premier Inn has been an airline that contributes to the protection
of the environment. It incorporated into its strategy to become carbon neutral in the future. It
initiated waste-minimization policies recently.

In writing this report, I was able to relate theories to practical business situations. The theory
and practicality do not always seem to be on the same page in real-life scenarios. What is
theoretically correct might not be practically correct all the time. This paves the way for
further in-depth research of the current theories and the new ones. The future is always full of
uncertainties. The research can only improve the quality of decision-making but is unable to
remove the risks and uncertainties. This is the limitation of the theories and research.

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References
Aga, A., 2004. Management Paradigms Beyond Profit Maximization. Vikalpa: The Journal for
Decision Makers, 29(3), p. 13.

Al-Ababneh, D. M., 2013. Leadership Style of Managers in Five-Star Hotels and its
Relationship with Employee’s Job Satisfaction, s.l.: International Journal of Management &
Business Studies.

Premier Inn plc, 2020. Premier Inn Corporate. [Online]

Available at: https://corporate.Premier Inn.com/corporate-responsibility/sustainability
[Accessed 20 February 2021].

Ira A. Jackson, a. J. N., 2004. Values-Driven Performance: Seven Strategies For Delivering
Profits With Principles. Ivey Business Journal, 69(November/December 2004).

Prachi Juneja, 2016. Management Study Guide. [Online]

Available at: https://www.managementstudyguide.com/leadership_basics.htm
[Accessed 20 February 2021].

United Nations Industrial Development Organization, 2015. UNIDO. [Online]

Available at: https://www.unido.org/our-focus/advancing-economic-competitiveness/
competitive-trade-capacities-and-corporate-responsibility/corporate-social-responsibility-
market-integration/what-csr
[Accessed 20 February 2021].

Whitbread , 2020. Whitbread. [Online]

Available at: https://www.whitbread.co.uk/our-brands/premier-inn
[Accessed 20 February 2021].

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