Strategic Management in Hospitality - Case Study Example

Strategic Management in Hospitality INTRODUCTION According to Hitt, et al. (2009, p.354), “organizational culture is a set of ideologies, symbols, and core values that are shared throughout the firm and influence the way business is conducted.” Today, most organizations are reconsidering and reconstructing their organizational culture for it is one of the factors for success. Culture has a significant role in an organization considering that it is a lifetime results of weaknesses, strengths, failures and past experiences of people. It is often cited that if an organization is planning to implement change, it must first understand its culture. Several researchers of change from diverse fields have suggested that “a major reason for why organizational change efforts usually fail to materialize as planned is the frequent neglect of aspects of organizational culture” (Balogun & Johnson, 2004). In most organizations, culture is considered as an aspect of competitiveness that is why they are giving high importance on the values and beliefs of their people as attributes of culture (Alvesson & Sveningsson, 2008, p.3). The main purpose of this paper is to evaluate the organizational culture of Pennine Centre and its potential implications for the centre’s future. In assessing its culture, different assessment models and typologies will be considered. However, in reality there is no particular model or theory that is appropriate for any given organizational culture (Carleton & Lineberry, 2004, p.56). Furthermore, because leadership is one of the prominent issues in making the change successful, this paper will also provide advices on how to develop effective leadership. LITERATURE REVIEW Several researchers have proposed different models and theories as they have studied the process of changing organizational culture. Thompson and Luthans (1990) are among the authors of change that stand on the idea that organizational culture is difficult to change because of its nature. Jex (2002, p.418), for instance, states that “organizational culture is difficult to change because there are always those who benefit from the culture’s remaining static.” In the study of Kono and Clegg (1998), they are using the mail survey on corporate culture in the United States, India, and Japan. In order to transform the culture, they are using the organizational culture theory of Edgar Schein in the 1980s which has three processes namely: unfreeze, change, and refreeze. This theory of Schein (1985) has linked the culture and business performance of an organization. The result of the survey explained the culture transformation model wherein in order to have the change process successful there should be a change of top management and an increased sense of crises (Kono & Clegg, 1998, p.151). There should also be joined forces between the workers and the organization itself so that employees’ performance will be optimized (Tomer, 1998). EVALUATION OF PENNINE CENTRE’S ORGANIZATIONAL CULTURE The culture of Pennine Centre is tangible manifestations of attitudes, beliefs, values, habits, and traditions that are reflected inside the organization. This is a definition put forward by Sandler and Craig (2003, p.21) in their study about performance. The organizational culture of Pennine Centre could be defined as one of the four core cultures developed by Harris and Brannick (1999, p.13) namely: customer service, innovation, operational excellence, and spirit. The generalized framework of assessment developed by Hofstede (2001) can be used to evaluate the culture of Pennine Cetre. In his framework, he identified the four universal categories of culture: power distance, uncertainty avoidance, individualism, and masculinity. In terms of power distance, Pennine Centre is positive in the issue of inequality. In the identity of William Carroll, it has been very obvious that there is a hierarchical boss-subordinate relationship in the centre. There is also uncertainty of avoidance because of his authoritarian personality. The employees are into individualism instead of collectivism because Carroll is encouraging internal competition among them by setting punishments and offering big incentives. In terms of masculinity, there is the presence of sex bias as he questioned even the pregnant member in his team about monthly sales figures without giving respect to feminism. Another proposed typology is the model of Deal and Kennedy that talked about culture as the strength in the organization (Osborn & Brow, 2005, p.78). Based on this cultural model, it is time for Pennine Centre to change its existing culture for it is not performing well. The profits are falling, the wide range of facilities is not fully utilized, employees of every department are not cooperating, and the practices are not aligned with the culture. The basic underlying assumption of the model is to understand the pre-existing culture of the centre and improved its performance. In order to achieve these goals, Pennine Management Enterprises (PME) must change and reorient the beliefs and behaviors of their employees. The model also identified that the culture of Pennine Centre is weak. It is weak in terms of domestic orientation and being short sighted, and the management is mostly run by powers and politics in the personality of William Carroll. The culture of Pennine Centre can also be assessed through the help of Peters and Waterman model as they identified the characteristics that would contribute success to the organization (Jex, 2002, p.423). Based on the eight identified characteristics, the centre is not a highly successful organization. People in the centre are not courageous to make decisions and promote their ideas, and they are not treated with respect and dignity making them unproductive. Furthermore, the centre is not putting too much effort to satisfy their customers that is why more and more retail outlets are closing down, and they lacked marketing and advertising for Pennine Hotel. They are also involved in business activities wherein they do not understand on how it is to be managed, and the values circulating in the organization are not widely accepted by employees such as the autocratic style of William Carroll. POTENTIAL IMPLICATIONS FOR THE PENNINE CENTRE’S FUTURE Internal competition in Pennine Centre will only lead to poor business performance for people will not anymore cooperate and innovate. The centre must not only focus on offering big incentives for performance; instead it must think of other options to enhance the business and encouraged employees to be very much committed. Carroll’s autocratic and aggressive style of leadership would only lead to discouragement and de-motivation of employees that created a climate full of fear and distrust. The essence of integrating human resources would diminish and its importance would be dismissed in the business goals and objectives. Pennine Centre is almost complete with leisure and entertainment facilities; however, these are not fully utilized and did not contribute higher profits. This only implied that PME is not capable of handling this area which consequently led to low returns of investment and failing of sales. It only happens that there is a variety of promotional strategies but the centre fails to implement one. If PME will not change its management, then there is a big tendency that the centre will not recover nor improve its performance but incur more loses and probably lead to bankruptcy. DEVELOPING EFFECTIVE LEADERSHIP Most of the proposed model and theories for organizational culture emphasized the significance of the role of ethical strategic leadership to enable the change successful (Osborne & Brown, 2005, p.82; Bryman, 2003, p.286). Strategic leaders who care for their people, and give importance on trust and integrity often inspirit employees to develop and uphold an organizational culture. Furthermore, it has been cited that changed initiative often failed in part because leaders did not thoroughly handle the situation by aligning practices and culture. According to Hitt, et al., (2009, p.355), “changing a firm’s organizational culture is more difficult than maintaining it; however, effective strategic leaders recognized when change is needed.” In the case of Pennine Centre, in order to realize its change initiative, it must have well-developed strategic leaders. Appointing Claire Simpson as the new managing director is a good step of culture transformation because she is a people focused manager. It is where the characteristics of masculinity by Hofstede (2001) framework will be applied. It is the time for women to prove their capacity in managing people that is said to be much better than masculine ones. IMPLEMENTATION: LEADERSHIP DEVELOPMENT Individual and team development are needed to become an effective leader. In the case of Pennine Centre, department managers are longing for teamwork that is why team development is considered best for the centre. Team development will provide an opportunity to all employees to voice out their concerns through feedbacking and team assessment survey. Clair Simpson as the new managing director needs to revisit the team’s goals and values, and asked the team members for a greater commitment. Having an improved road map of communication and coordination the team members will be able to stick together and help everyone. It is also necessary for the senior management to monitor the performance of the team members by meeting them individually so that performance will be challenged. Considering the culture problems that exist, the senior management needs to call several joint sessions and considered the ideas of the members in identifying the preferred culture that will replace the pre-existing culture. The different organizational culture model will help in the transformation of culture. The internal competition among employees that is put forward by William Carroll should be changed. If there would be no teamwork, then performance will not be improved, and change of culture will not be realized. People in this kind of environment are short sighted and more concerned about themselves, they care less on the organization as a whole (goals and objectives), and give less effort in improving performance. As long as people are focused on internal competition wherein they only look for themselves, and give all their effort just to compete with their teammates, Pennie Centre will not go far and will remain to be uncompetitive. International competition among individuals has linked their insights from tournament theory (Zanini, 2007, p.46). This theory functioned as an individual theory because it illustrated high performance on individualism rather than teamwork performance. It also showed that individual effort and promotions are the determinants of worker’s performance. However, McGregor’s X and Y theory contradicts with the assumption of tournament theory. Theory X is more or less the same with tournament theory in terms of motivating employees wherein they only desire for an economic gain and security (Miller, 2009. p.40). On the other hand, Theory Y talked about companies’ culture wherein employees are motivated intrinsically by having authentic relationships with their coworkers and more concerned on their productivity and effectiveness. In order for the leaders to establish an environment of desirable organizational culture, they must focus on the behaviors and actions of their people that need to be changed. In order for Claire Simpson to do this thing, she must first reorient the people and remove all their fears in terms of punishment, and subjective appraisal system. IMPLEMENTATION TECHNIQUES Implementing strategic change is a complicated process wherein it requires a lot of effort and close collaboration between the organization and its people. Because culture is learned over many years, transforming people’s actual behavior and values calls for an intensive and tenacious reinforcement. To begin, Claire Simpson needs to develop a dynamic vision and mission statement for Pinne Centre for it is the strength of organizational culture. The statement must be aligned with the people’s culture and it must be lived so that there would be teamwork in all department levels. Simpson can also restructure the different positions under her management such as removing those managers that show little interest in the rest of the organization. Among the other techniques to consider are direct communication, role modelling, indirect communication, and performance criteria. People will be more motivated if leaders will manage to have face to face communication with their members. Leaders should also set an example consistent with what they are implementing for the members to follow whether it’s a change of standards, practices or behaviours. An effective leader is open to change, knows how to handle his or her people, and reinforce the culture of the organization. CONCLUSION Pennine Centre is an organization that desperately needs to change its culture for a better future. With the aid of the different assessment models and typology, it has been found out that Pennine Centre’s organizational culture is weak. It is weak by having internal competition among the employees, and because of powers and politics in the identity of William Carroll. Instead of teamwork and cooperation, people in the centre are into competition and rivalry. The autocratic style of William Carroll created a climate full of fear and distrust that lead to discouragement, de-motivation and poor performance of employees. Appointing Claire Simpson as the new managing director is a good decision of PME considering that she is a people focused manager. 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