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SAMPLE ON

EXTERNAL BUSINESS

ENVIRONMENT

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TABLE OF CONTENTS

Introduction ..................................................................................................................................... 1

Task 1 Structure and operation of UK economy ............................................................................ 1

Task 2 Analysis of current government economic policy along with its effect on business .......... 3

Task 3 Income, wealth, employment and occupational distribution to provision of service .......... 5

Task 4 Assessment of demographic trends that has influenced employment pattern ..................... 7

Task 5 Analysis of social structure of people employed at Ritz Carlton ........................................ 8

Task 6 Structure, operations and influence of local government on Ritz Carlton ........................ 10

Task 7 Evaluation of role and influence of EU along with its impact on business ...................... 11

Task 8 Assess roles of pressure group and their political influence on issues ............................. 12

Task 9 Legal frameworks within UK along with difference between English and Scottish System

....................................................................................................................................................... 13

Task 10 Evaluation of UK and EU legislative process at national and local level ....................... 15

Task 11 Different types and characteristics of business operates in hospitality sector ................ 16

Task 12 Legal processes for formation and dissolution of registered company ........................... 18

Task 13 Analysis of structure and process used to determine responsibilities and control within

registered company ....................................................................................................................... 19

References ..................................................................................................................................... 20



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INTRODUCTION

External business environment comprises of many factors that is considered with external

and internal business market situation. The present research report has been made with an

attempt to analyze the structure and operation of UK economy with the current government and

economic policies. The research has also stated all those factors that impacts employment

patterns especially in hospitality industry. Thus the research report has been made on UK

hospitality industry in which hotel Ritz Carlton has been selected which is one of the largest

hotels in UK economy. Furthermore the role and influence of EU and its impact on business and

service industry has been mentioned. Along with this, the role of pressure groups and their

political influence in relation to national and local issues on hospitality industry has been stated.

Despite such aspects, differences between English and Scottish system is also discussed which

has been informing about the economic prosperity of the entire country (Kourteli, 2000). The

legal and other policies of EU have been impacting hotel Ritz Carlton from local and national

perspectives. In order to be a legal entity, it is crucial for the hotel to integrate with legal

obligations in both the formation and dissolution cases. Analyze the structure and processes

which determine responsibilities and control within registered company.

TASK 1 STRUCTURE AND OPERATION OF UK ECONOMY

Britain is considered as the first country that started industrial revolution in 18th century

and it is also called as capitalist country. The characteristics of the economic system of

capitalism are that it protects private enterprises. Due to growing economic condition of UK,

changes are taking place in the flow of resources and apart from that Britain began its market

economy about 300 years ago. UK is also the 6th largest in the world economy and it is a member

of the European Union (Capon, 2009). However on the other side, the economy faced global

crisis in the year 2008 and the situation of recession was about to come. The population of the

economy has been increasing from past many years and out of the total population, the major are

the senior citizens. Today the economic prosperity of UK has been increasing and under which

agriculture is the only sector which has been contributing around 0.7% in UK GDP. The ratio



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was same till the year 2012; but changes occurred in the present scenario due to dominant

component of the UK’s economy (New EU legal framework for accreditation, n.d).

From many cases, it has been observed that hospitality industry in UK has employed

more than 4 million people in different business functions. UK economy operates in free market

economy and the exchange rate also floats from diverse perspectives which lead to high level of

immigration (Todd, 2013). The major factors that enhance the economic prosperity of UK are

education, population, effective commercial businesses and competent health and social care

services. The ruling bodies of UK have been executing many changes in taxes and other

regulatory policies for determining restriction free trade (Allen and Raynor, 2004). European

Union has established numerous sorts of tax policies for different business types that help in

increasing rate of GDP. Similar to other businesses, the rate of taxes are also different as per the

income level of citizens and hence its plays crucial role in economic development. All the

citizens are required to contribute some amount in national income so that the degree of

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economic prosperity can be encouraged (Rauch, 2013). The ratio of supply and demand can be

managed with the help of economic conditions.

The economic structure of mixed market is critical and that also affects market scenario

from different aspects. It is considered as an economic system in which both private sector and

state directs the economy with numerous regulations specified by market and planned

economies. The structure of the economy helps business entities to be at market place by owing

privately towards economic dominance. Here central bank plays crucial role in determining the

exchange rate since government is specifically involved in decision making process. Mixed

economy functions through private enterprise as well as Government and hence Government

interferes with or regulates the private enterprise in various ways.

TASK 2 ANALYSIS OF CURRENT GOVERNMENT ECONOMIC POLICY ALONG WITH

ITS EFFECT ON BUSINESS

There are numerous policies in UK government that has been changing the scenario of all

sorts of industries and apart from this; it also changes the ratio of flow of money. Numerous

fiscal and monetary policies are been applicable in the country that further impacts tax and other

policies. On the basis of income and GDP ratio, the percentage of tax can be determined. The

government is also focused towards the purchasing power of customers so as to determine the

degree of supply and demand (Gani, 2011). Monetary policy is being developed so as to maintain

the flow of resources in adequate manner. It is being determined by setting independent interest

rates but at the same time it aids government to meet inflation target. Hence through this, the

economic policy of UK is able to manage ratio of expenditure such as salaries, infrastructure and

other nominal expenses. The regulatory body of UK has been generating income and revenue

from the sole source that is in the form of taxes and subsidies. In response to this, service

industries of UK have transformed the way of managing business that is- it has introduced many

opportunities for enhancing earning capability. The ratios of taxes have been changing which

improves standard of livelihood (Fernando, 2011).



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People who have been working from many years have been looking for more

opportunities so that they can enhance standard of living. In order to reduce the degree of post

tax income, the government has been augmenting the level of direct income (Allen and Raynor,

2004). The economic policies of UK assist the country to generate many profits and they are

even integrated with legal framework. At the time of changing economic practices, some of the

businesses find it difficult to change business activities and this also impacts business

regulations.

The productivity factor of the company can be enhanced with the help of managing business

operations effectively and this has been possible due to monetary and fiscal policies. In order to

manage banking and other regulatory aspects, the government of UK has been changing the way

of delegating money in terms of financial facets (Goyal and Goyal, 2002). Fiscal policy is related

to direct changes in the economy due to influence of economic activity though changing taxation


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and government spending. On the other side in UK, central Bank and integral bodies of NBHS

regulates flow of money. Hence due to such changes, Ritz Carlton may have to change the

pricing strategies as per the purchasing power of customers.

Fiscal policy is government’s decisions regarding spending and taxing and thus these

changes the scenario of trade and expenditure. If government wishes to stimulate growth in the

economy, it will increase spending of goods and services and at the same time, this will also

increase demand for goods and services. Hence the policy possesses optimistic impact on

business entities since this helps them to acquire benefits by supplying more products and

services. On the other side, monetary policy is a decision of government regarded with money

supply and interest rate. This is basis of people’s spending on goods and services. Business is

able to acquire huge profits if the aspects of monetary policy remain constant.

TASK 3 INCOME, WEALTH, EMPLOYMENT AND OCCUPATIONAL DISTRIBUTION TO

PROVISION OF SERVICE

Economic prosperity as well the rate of GDP has been increasing due to contribution of

travel and tourism sector and this also increases the value of nation in other markets. In the

subsequent research, the hotel taken is Ritz Carlton which promotes the standard of services

through adequate modes and tools. The hotel has maintained pricing and other standards for

becoming competitive. The expenditure ratio of hotel has been changing due to the category and

variety of services (Jain and et.al., 2002). This is also the other factor that generates employment

opportunities in the nation and at the same time, it also enhances efficacy of hospitality industry.

The ratio of prosperity has been generating due to different employment opportunities. From past

many years, hospitality industry is the considered as the largest contributor of employment

opportunities. Hospitality industry has been serving different types of services which increase the

employment possibilities. In service industry, most of the candidates prefer to get office working

jobs since it does not require any type of effort.

The hotel industry is able to give appropriate services to the customers so that

opportunities of business proposition can be encouraged. The Equal Opportunity Act is being

followed by the company so that equal pay can be given to all the employees at the hotel. The



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probabilities of wealth maximization are higher and at the same time, it increases profitability

aspects of the industry. Moreover employees are also provided with training and coaching

sessions for contributing in the achievement of goals and objectives (Kew and Stredwick, 2005).

Demand for hospitality services has been increasing due to the efficient services which Marriott

has been providing. The industry is highly focused towards innovation and creativity for meeting

the demands and expectations of customers. The industry is also experiencing many problems

due to changing social factors since it alters business and market decisions frequently.

Hospitality industry is comprised of several amenities such as food and beverages,

accommodation and travel & tourism, all such activities needs to be integrated with service users

and providers both (Mason, 2007).

Income can be defined as a sum of money that individual gets against the work done by

him in an organization. Sometimes, organization faces issues related to the term income due to

inequality and discrimination in the aspect. In hospitality industry, the distribution of income and

wealth is on fair basis this also aids in generating growth possibilities of business up to higher

extent. The top management at the hotel is accountable to deliver payment to the workforces and


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he must consider actual facts about equal distribution of resources. In many cases, it has been

seen that hotel industry discriminates employees from several grounds and this affects their

employment patterns.

TASK 4 ASSESSMENT OF DEMOGRAPHIC TRENDS THAT HAS INFLUENCED

EMPLOYMENT PATTERN

Continuous changes are prevailing in employment patterns due to demographic factors,

the factors that lead to employment situation. Demographic factor is concerned with customers

and other factors that directly impacts business decisions. Demographic patterns can change

employment patterns in hospitality industry as due to the efficiency of people; changes are

prevailing in employment courses. People preference has been changing and this also alters their

way of working which leads to changes in demand of services. Hotels of UK are considered as

the most competent industry that generates many opportunities of growth and success and at the

same time it develops need for diverse amenities (Pizam, 2010). The younger generation of UK

market emphasizes on innovative services; therefore hospitality industry prefers to employ them

so enhancing the degree of competitive services. Changes in social factors changes the way of

service delivery and similarly it also results in customer retention. This leads the hospitality

industry to introduce many changes in employment patterns and similarly it can also be called as

effective.

The level of income distribution has been changing as per the standard of people and this

in turn also facilitates adequate employment opportunities. In hotel Ritz Carlton, it has been

observed that employees who have low income level searches for diverse opportunities since

they wish to fulfill needs and demands (Shaikh, 2010). The hotel has been trying to retain

employees for longer period by providing them different types of opportunities and benefits.

Similarly the hotel also generates employment options as per the level of education and as per

the standard of job role. Sometimes the preference of job changes if the candidate is not able to

meet the specification of terms of employment. Hence from the above discussion, it is clear that

demographic aspects can affect employment patterns.



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Hospitality industry has been getting impacted through numerous trends prevailing in

demographic aspects; however up to some extent this is also encouraging the hotel to give

essential and appropriate services to the customers. For instance- currently the trend of online

shopping, banking and online information availability has changed entire scenario of business

practices. This has helped the hotel to make the premises WiFi so that customer can access

information about anything they desire to buy. As per the demographic factors such as income

and gender, hotel industry is making specific changes in product line. For example- luxury

services has been added in hospitality industry for higher class people.

TASK 5 ANALYSIS OF SOCIAL STRUCTURE OF PEOPLE EMPLOYED AT RITZ

CARLTON

In order to remain at the market place, it is crucial for the hotel industry to manage social

relationships with the customers since it also encourages possibilities of growth and success

(Rauch, 2013). And as a result, hotel Ritz Carlton has been deriving long term sustainability and

competitive advantage alongside, effective market share. Social relationship can exist between

employer and employee, customer and employer and business with society. For the development

of business, it is essential for the hotel to develop competent and long term relationships with the

customers which also works in customer satisfaction. On the other hand, employees of the hotel

are also emphasizing on building cordial relationships so that work processes can be managed

adequately (Allen and Raynor, 2004). Employees of the organization has been emphasizing on

diverse services so as to build adequate relationships with the customers. The degree of

profitability has been increasing due to the reason that services of Ritz Carlton are effective

enough that it captures attention of customers. In order to develop cordial relationships with the

clients, numerous amenities are given by the hotel management.

Ritz Carlton has been emphasizing on enhancing the quality of services through guiding

and training the employees towards best services. The employees are also guided to build up

sustainable relationships with the customers for enhancing the degree of customer loyalty. In

terms of relationship, hospitality industry has been inviting opinion and views of employees so

that innovative and adequate decision can be made (Blaževic and Jelušic, 2006). Prominent



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amount of focus is being given to the customers of Ritz Carlton which further reduces

possibilities of customer complaints. The hotel is also able to enhance the degree of customer

satisfaction with the innovative category of products and services. Some of the employees are

provided with additional benefits so that word of mouth publicity can be facilitated. Hence social

structure contributes management to enhance profit as well as sustainability aspects through

innovative business prospects.

As apparent, hospitality industry is one of the fastest growing sectors due to contact with

number of potential clients of business in different countries. Thus it is essential for the

hotel to employ only talented and qualified work pool so as to deliver prominent services to the

clients. The subsequent hotel has been selecting only requisite and educated people so that better

communication can be developed with the clients. It is seen in many cases that people in

hospitality industry that directly comes in contact with the customers’ needs to emphasize more

on developing quality skills which in turn also results in customer retention. People at hospitality

industry should be involved only in ethical and legal practices so that customers can be protected

from cheating and other issues.


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TASK 6 STRUCTURE, OPERATIONS AND INFLUENCE OF LOCAL GOVERNMENT ON

RITZ CARLTON

Municipal as well as local government both has been affecting practices of hotel from

different grounds. Local government priory emphasizes on local business entities so that MNC

may not impact marketing and other decision of business. All the hotels of UK hospitality

industry have been changing their policies and strategies in which they have to consider direct

and indirect impact of competition on local market. The local authority of the business has been

emphasizing on different tier systems so that political scenario can be changed (Gani, 2011). The

categories of local council are Country councils, district councils, unitary authorities,

metropolitan districts and London boroughs that alter business operations along with

organizational structure. This also restricts many of the industries in the case of international

trade. Political bodies have been influencing the terms and conditions of business and at the same

time, it directs local government to change monitoring and other processes.

Local government changes terms and conditions of business and hence this also makes

favorable changes in hospitality structure. The rules and norms of government have been

changing as per the effectiveness of hospitality industry. Earlier it has been seen that most of the

hospitality organization involves in unethical and illegal practices for undue profits and

advantages (Gestel and Nyberg, 2009). In order to reduce this aspect, government has introduced

many new reforms which are mandatory to follow and which also directs management to get

involved only in ethical and adequate services. Through this, Ritz Carlton has made many

changes in existing business operations where in promotion, selling and advertising the services

is directly integrated with legal and ethical practices.

The local government has been posing threats to hospitality industry since it is greatly

concerned with environmental aspects. In current era, government has raised its focus on

environment protection and hence hospitality industry is guided to consider the same. Issues

related to cleanliness have been increasing and this leads the hotel to develop more concern

towards making the place clean and clear. The industry critically faces range of issues related to

cultural aspects as it is also essential for the hotel to maintain interest of customers by



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emphasizing on their values and beliefs. The hotel needs to integrate the services with economic

aspects so that business can be sustained at market place.

TASK 7 EVALUATION OF ROLE AND INFLUENCE OF EU ALONG WITH ITS IMPACT

ON BUSINESS

Here is the list of all those policies which EU has prepared for the purpose of stating

influence of EU on business practices. Some firms change their processes as per the economy

alterations. Thus to study the impacts, detailed description of different EU is requisite to

showcase. For example- regional policy has been made with the purpose of enhancing economic

capacity of those areas that requires government support for enhancing the ratio of employment.

In order to facilitate development in the economy, such policy has been introduced and along

with this, it also plays crucial role in achieving the pre determined standards. This also reduces

the impacts that government policy pays on subsequent economy.

However on the other side, international policy has been developed for improving the

rules and norms for export and import. EU policy defines some norms and at the same time, it

also defines the way to manage barriers in international trade (Jackson, Cunningham and Dutton,

2001). Thus with the help of international policy, Ritz Carlton can persuade customers of

different markets. This can also result in maintenance of corporate relationships with other

clients. Through this, opportunities of growth and prosperity can be augmented. Monetary Policy

Commission can assist Ritz Carlton to manage pricing strategies and this is also useful in

acquiring inflation targets. Through this, potential customers can be retained and hence this can

boost the opportunities of business sustainability. Employment policy is also useful for Ritz since

through this, varied types of employment patterns can be generated (Gani, 2011). Hence from the

description, it is clear that with the help of different EU policies, employment opportunities can

be encouraged.

EU has made several policies related to free movement of goods and services and

amendment on using business labor and capital. With the help of policies of European Union, it

is easy for the organizations to trade freely within the country and that also maximizes the

opportunity of growth and success. Hence from the discussion, it is clear that the regulations



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under EU are beneficial in terms of trade and this is can also develop possibilities of business

expansion.

TASK 8 ASSESS ROLES OF PRESSURE GROUP AND THEIR POLITICAL INFLUENCE ON

ISSUES

Influence from pressure group and from political parties is contrary to each other as both

are involved in the formulation of different policies and strategies. Pressure groups in UK bring

blight in democracy as the existence of pressure group means that there is a channel of easy

access where problems of organizations and citizens can be raised. Pressure groups can be

classified into varied ways and the overarching definition of a pressure group is like minded

individuals that seek to government influence (Jamali, Khoury and Sahyoun, 2006). In UK

economy, pressure group emphasizes on developing environmental efforts. Hence all the

companies in different sectors are directed to conserve energy resources for developing efficacy

of natural resources. The government has also build up many reforms where in organizations

need to consider environment issues which can also lead to changes in business processes.

There are numerous modes through which Ritz has been creating awareness amid people

for the protection of natural resources. Pressure groups also release efforts on stakeholder

management and for that business has to operate activities in ethical and legal manner (Pizam,

2010). In response to pressure groups, Ritz has started developing efforts on environment

protection through the means of reducing wastages of resources. All the organizations have been

adversely affected from issues of pollution; therefore activities that create pollution are fewer to

some extent.



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These are some of the potential impacts which have been influencing Ritz Carlton hotel as well

as other firms. Pressure group also analyzes if the organizations in UK economy are focused

towards legal framework. It identifies the myriad of methods that is directly integrated with

policies and issues of bureaucrats (Kourteli, 2000). Pressure group is too powerful as its sets

different committees so as to fulfill the function of supporting election candidates financially.

However on the other side, Small Scale pressure groups with little funding find it extremely

difficult to operate this within the context of political influence.

TASK 9 LEGAL FRAMEWORKS WITHIN UK ALONG WITH DIFFERENCE BETWEEN

ENGLISH AND SCOTTISH SYSTEM

There are three different legal systems in the UK (Scotland, Northern Ireland, England &

Wales) and the UK Parliament enacts statue for all the regions apart from Scotland. The legal

framework of EU covers the operation of accreditation in support of voluntary conformity

assessment requisite by legislation. England and Wales covers two basic types of court which are

being mentioned as under:


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Civil courts: Under civil court, magistrate court is considered as the only civil jurisdiction

which emphasizes on adoption, guardianship and child welfare. It also has county court

where in each court is known as small claims court which has its own geographical zone

and it basically deals with personal injury (Scottish legal system, n.d). However the high

court performs both civil and criminal functions. Queen bench deals with actions that are

related to contract or tort and on the other side; family division covers cases of divorce

and adoption.

Criminal courts: Magistrate court considers only criminal cases and it tries to end the

process through detailed analysis. If the magistrate believes that the seriousness of the

offence warrants a longer sentence than the criminal court here can delegate the case to

Crown court (Kew and Stredwick, 2005). Crown case is a judge and jury that normally

consider serious crimes such as murder, rape, grievous bodily harm etc.

In order to comprehend differences between Scottish and English System, some examples are

stated here. In England, there is a well developed code which applies to commercial leasing

based on the Landlord and Tenant Act; however in Scotland there has been very little statutory

intervention. Scotland is a member of third aspect of British Law and is known as a mixed

system since it is influenced by both civil and common law and has characteristics of both

approaches (Rauch, 2013). The laws made by European Union apply in the same way to

Scotland as well and it does to England by virtue of Scotland’s position as a constituent of the

UK. The courts are also other source of law in Scotland; however the doctrine of judicial

precedent operates within the hierarchy pyramid of courts.

The age of capacity is also different in English and Scottish system since The Age of

Legal Capacity (Scotland) Act 1991 is an Act of Parliament applicable only in Scotland which

has actually replaced the pre existing rule of pupilage and minority with the simple rule that a

person can get full legal capacity at the age of 16. However contrary, the Scottish age of capacity

earlier was 21 and now it has reduced to 18 under the age of majority Scotland act 1969. Hence

the introduction of age legal capacity has replaced previously formed rules and the regime of 16

(legal capacity) have also changed furthermore.



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TASK 10 EVALUATION OF UK AND EU LEGISLATIVE PROCESS AT NATIONAL AND

LOCAL LEVEL

In UK, evaluations are conducted primarily by the European Commission and they

develop several amendments for code of conducts. Evaluations are even conducted under the

mandate of political body or within a specific parliamentary committee. The government bodies

also posses several types of assistance to firms such as technological and scientific assonance

and that also impacts legal framework of businesses and firms (Policy and legislative evaluation

in the EU, 2013). The legal process of UK is comprised of several elements that produce

different patterns and code of conduct as well. The organizations working in UK are also bound

to maintain legal processes in which all the legal laws and frameworks are must to consider.

There are some differences in national and local level which are mandatory to consider since that

makes firms legal entity.

The government has also made it compulsory in which, the companies are required to

specify all aspects in auditing process for transparency management. As per the evaluation of

legal processes of EU, the commission recently enhanced the role of stakeholders in which they

should be provided with transparent evaluation process since they are the major contributors in

company’s processes (New EU legal framework for accreditation, n.d). European Union and the

norms direct the organizations to use scare resources in adequate manner and the company

should develop trust amid employees and customers for showcasing legal framework. European

Commission also directs the service industry to adopt some principles such as openness,

participation, accountability, effectiveness and coherence of EU governance.

All the regulatory policies in UK are different and this has been helping the businesses to

protect the interest of employees for longer period. EU has specified working hours for

employees and under that every employee is accountable to get extra payment if he has done

extra work other than the specified hours. However instead of that working hours are specified to

8 hours which is mandatory for all to consider. Some regulations have also been considered such

as minors are not allowed to buy alcohol and cigarettes since it is legally against the age capacity



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act. Under the fiscal policy, government is allowed to spend resources in increasing demand and

supply aspects.

TASK 11 DIFFERENT TYPES AND CHARACTERISTICS OF BUSINESS OPERATES IN

HOSPITALITY SECTOR

The grouping of business can be divided into different manners and according to that, it

also categorizes their services. Some examples of businesses are retail businesses, hospitality

businesses, health and social care sector and commercial business (Capon, 2009). The categories

of business activities can be specified as per the purpose; since the present case is stating about

hospitality industry; therefore description about services of Ritz Carlton hotel has been stated.

Being a largest hotel of UK, Ritz is involved in different types of business activities such as:

Housekeeping: Hospitality industry is mainly involved in appropriate recreational and

relaxation services which need to be carried in adequate manner. All the hotels are

required to consider housekeeping services in which they take care about cleanliness and

other hygienic factors for safety and security of guests. Housekeeping services are

mainly related to cleanliness and for that proper guidelines are required to develop so

that customer satisfaction can be encouraged (Rauch, 2013).


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Food and Beverages: In hospitality industry, F&B reigns supreme and it is also the

largest element of hospitality industry. Food and Beverage on the other side is also the

other form of customer satisfaction as travel and tourism sector is majorly concerned

with enjoying different types of cuisines and food types. It includes bars, restaurants and

other catering services. It is also considered as a basic element for which guest visits

different types of hotels.

Accommodation: Hospitality industry is concerned with luxury services and that can be

provided by offering all sorts of services. Ritz Carlton hotel is involved luxury services;

therefore accommodation comes on first priority. Hotels, beds and breakfast and other

places that offer lodging represent a broad segment of the hospitality industry. Thus

simply, it is essential for the hotels to deliver several sorts of amenities so that customers

can be retained (Mason, 2007).

Travel and tourism: The entire services of hospitality industry are integrated with travel

and tourism all the activities are common in both the sectors. Thus another chief segment

of hospitality industry encompasses transportation. This includes airline, trains, cruise

and ships. Travel and tourism requires knowledgeable employees so that they can guide

all about places in specific destination (Hall, 2013).

Different types of organization are stated as under:

Sole trader: It is the type of business where the owner is the single entity that manages

entire business functions and he alones enjoys all sorts of profits and losses. At the same

time, he has to take critical decisions for managing business resources.

Private limited organization: The firm that lies under this category manages business

under private bodies and here the influence of government is limited.

Public limited company: Public limited company is owned and managed by the

shareholders or by government and here the business has to consider public interest up to

higher extent.



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Cooperatives: These are the types of business firms that majorly does not work for profit

maximization as the main aim of such cooperatives is to sell products and services to

customers without adding much profit margin.

TASK 12 LEGAL PROCESSES FOR FORMATION AND DISSOLUTION OF REGISTERED

COMPANY

Apparently formation as well as dissolution of companies both the processes needs to be

legally integrated since it is mandatory in legal framework (Jamali, Khoury and Sahyoun, 2006).

Necessities that should be included in formation process of the company are specified as under:

Registering the business: After planning for the establishment of business, it is crucial

for the business owner to register the company under legal authority. The process is

cheaper and straightforward. Here information about all the stakeholders as well as

capital invested is required to include.

A limited company: It is imperative to create a legal entity and for that business must

specify the type of business such as Sole Trader, Partnership, Limited Liability

Partnership, PLC. Through this, company can typically transit business affairs to set

appropriate process (INTRODUCTION TO THE LEGAL FRAMEWORK, n.d).

Information about the company: Every organization can become a legal entity if states

information about capital invested, name of shareholders and stakeholders etc. This

comes to an important decision where business must specify itself with a name.

Shareholders, directors and stakeholders: While forming the company, it is mandatory

to state who the board members of the firm are and what will be their profit and loss

sharing ratio (How to: register a company in the UK, 2012).

However in case of dissolution, specific legal formalities should be fulfilled under Section

1003 of the Companies Act 2006 (Gestel and Nyberg, 2009). The business who wants to get

dissolved needs to meet following requirements:

Final auditing of the reports: Conduction of final auditing is required as that only

specifies that business is unable to operate in future time period.



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Address business debts: While dissolution, it is essential to specify debts and liabilities so

that assets can be sold out for paying the amount of debts. Legal framework of UK states

that business has to recover debts before dissolution (How to close company, 2012).

Mutual consent of all shareholders: All the shareholders must be informed about the

dissolution and the process cannot be called as complete if it does not have share holder’s

concern.

TASK 13 ANALYSIS OF STRUCTURE AND PROCESS USED TO DETERMINE

RESPONSIBILITIES AND CONTROL WITHIN REGISTERED COMPANY

All the processes of business must be legally concerned and under all actions, they should

conduct activities in appropriate manner. All the businesses must involve share and stakeholders

as they are the important parts of organization (Blaževic and Jelušic, 2006). The top management

is also required to manage ethical and legal entity in business processes for becoming legal

entity. In order to operate business smoothly, it is requisite to set vision, mission and objective

and all that should be communicated adequately within the organizational members. The

businesses are also directed to undertake adequate decision making process and that should be

transparent so that legal framework can be maintained (Todd, 2013). Legal framework of EU

also directs code of conducts and according to that, legal processes can be managed. As per the

legal laws, it is essential for the companies to consider interest of all stakeholders so that

business growth and success opportunities can be maintained. Apart from such concerns, it is

also crucial to plan and prepare everything for business management.



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REFERENCES Books

Capon, C., 2009. Understanding the Business Environment. Financial Times Prentice Hall.

Fernando, C. A., 2011. Business Environment. Pearson Education India.

Goyal, A and Goyal, M., 2002. Business Environment. VK Publications.

Jain, T. R and et.al., 2002. Business Environment. FK Publication.

Kew, J. and Stredwick, J., 2005. Business Environment: Managing in a Strategic Context. CIPD

Publishing.

Pizam, A., 2010. International Encyclopedia of Hospitality Management. Butterworth-

Heinemann.

Shaikh, S., 2010. Business Environment. 2nd ed. Pearson Education India.

Journals

Allen, D. and Raynor, E. M., 2004. Preparing for a new global business environment: divided

and disorderly or integrated and harmonious?.Journal of Business Strategy.25(5).pp.16 –

25.

Blaževic, B. and Jelušic, A., 2006. Modelling regional economic development. Kybernetes.

35(7/8). pp.1190 – 1202.

Gani, A., 2011. The effect of business environment on trade in Gulf Cooperation Council

countries. Journal of International Trade Law and Policy. 10(3). pp.200 –212.

Gestel, N. and Nyberg, D., 2009. Translating national policy changes into local HRM practices.

Personnel Review. 38(5). pp.544 -559.

Jackson, J., Cunningham, I. and Dutton, A., 2001. The impact of the Employment Relations Act

1999 on Scotland’s voluntary sector. Employee Relations. 23(3). pp.256 – 270.

Jamali, D., Khoury, G. and Sahyoun, H., 2006. From bureaucratic organizations to learning

organizations: An evolutionary roadmap. Learning Organization. 3(4).337–352.

Kourteli, L., 2000. Scanning the business environment: some conceptual issues. Benchmarking:

An International Journal. 7(5). pp.406 – 413.

Mason, R. B., 2007. The external environment's effect on management and strategy: A

complexity theory approach. Management Decision. 45(1). pp.10 – 28.



Toll Free No: +1 213-929-5632



Online

Hall, S., 2013. The Implications of Fiscal Policy and Monetary Policy to Business. [Online].

Available through: <http://www.ehow.com/facts_6899691_implications-policy-monetary-

policy-business.html>. [Accessed on 19 November 2014].


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