Recommendations for Organisational Change at the Lakeside Hall Hotel - Case Study Example

THE LAKESIDE HALL HOTEL: A REPORT ON WORK AND ORGANISATIONAL CHANGE EXECUTIVE SUMMARY This report presents recommendations for organisational change at the Lakeside Hall Hotel. It has been developed following the request by the owner of the hotel, Mr. Michael Davies, for a comprehensive report on how the business can improve its performance in the market. The vision of the organisation can be seen in light of what defined its success in the past. Overall performance of the organisation was built on two pillars: excellent service and investment in employee training and development. Because of this, the report is based on the need to restore the organisation into the position of a market leader in the holidays and short break market. The report is built on how to re-establish the organisation in this position by improving quality of service and investment in the employees. Situation analysis for the organisation is based on McKinsey’s 7-S model. The current state of affairs at the hotel is presented in line with the different factors of this model. Generally, the report observes that the hotel is in need of an episodic change process. This is necessary as a way of restoring the organisation to a state of equilibrium with changes in the business environment. The report presents recommendations on what needs to be done to achieve this end. These recommendations are based on the Berkhard and Harris model of change management process. Generally, the report recommends that the hotel addresses three key areas: employee performance, service and employee training. Implementation of the recommendations will depend on how the organisation deals with risk areas that are common during the process of organisational change. Since the recommendations presented in this report will affect all members of the staff in the hotel, it is recommended that the management of the hotel takes extra care in addressing the overall costs of implementing the change in terms of emotions and employee attitudes. TABLE OF CONTENTS INTRODUCTION This report presents recommendations for improving the performance of the Lakeside Hall Hotel. It is divided into three key sections. The first section contains an analysis of the current situation at the hotel. It answers the question of where the business is at the present time. The second section contains information about the desired vision of the hotel. It answers the question of where the hotel has to go. Lastly, section three gives information on how the hotel will get to the desired position. THE CURRENT SITUATION AT THE HOTEL The Lakeside Hall Hotel has been marketed as a leader in the high-end holiday and short break market. Success in this market segment has been supported by superior physical facilities and a good strategy that has led to good performance. That the hotel has failed in its performance in the recent past as compared to its initial successes in performance and service standards is an illustration of how urgent the need for change is. Lakeside Hall Hotel has fallen into a situation in which the practices and approaches that proved highly successful in the past are no longer effective for the organisation. This is not a new phenomenon at all. According to Cummings and Worley (2009, p. 16), organisations accumulate knowledge about what is effective and what is not. Using this knowledge, they develop systems, procedures and decision-making frameworks that exploit both the accumulated knowledge and past success (Burke 2012, p. 161). This means that when organisations successfully achieve their objectives within a particular time frame, they develop practices and frameworks that are modelled on the initial success. This is true for Lakeside Hall Hotel. Since the hotel achieved initial success in terms of performance and standards in the hospitality industry, it developed an organisational framework and culture that was fine-tuned to ensure future success. This was reflected in both the culture and marketing of the hotel. The hotel focused on both corporate and individual clients. For corporate clients, the primary market has been couples and elderly families in need of a retreat. Although this model has been successful so far, what is important to note is that the management and staff of the hotel have developed ingrained patterns that are based on assumptions and expectations of the performance of the organisation. This means that the current culture at the hotel has encouraged it to maintain old patterns regardless of the feedback from the market that the patterns are no longer appropriate. This mismatch between the current practices at the hotel and the actual reality in the industry is manifested in several scenarios which represent what exactly needs to be changed at the hotel. These are outlined next. What Needs to be Changed The question of what needs to be changed at the Lakeside Hall Hotel can be answered by evaluating the current situation at the organisation using McKinsey’s 7-S model. The necessity of using this model lies in the fact that under it, change is seen in terms of the interplay of complex factors (Michalski 2009, p. 6). As such, successful change lies in ensuring that all the different factors under this model reinforce each other in their operations. Since the situation at the hotel is complex, it is prudent that this model be used to analyse how the situation is and what actions need urgent attention. First, there is the issue of shared values within the organisation. The corporate culture at the Lakeside Hall Hotel has been defined by several beliefs and attitudes among its employees. The overriding factor is that the hotel’s staff favours the status quo as opposed to change. This is reflected in the attitude of senior managers who have served in the hotel for quite a long time. It is this attitude that has led to a decline in standards at the hotel. This means that the quality assurance framework in the system is either nonexistent or has completely failed in its functions. Another issue regards the organisational structure of the hotel. The hotel is run by two duty managers who co-ordinate the day-to-day operations. Both are responsible for different aspects of operations: one being in charge of personnel and front of house activities and the other one managing the food and beverage operations of the hotel. Also, both managers are responsible for different heads of departments who are in charge of all staff under their departments. Although there is nothing inherently wrong with this organisational structure, the poor performance at the hotel is a result of how the structure is used to implement the strategy of the hotel. Staff refers to the number and designation of personnel in charge of operations within an organisation. The efficiency of the staff is closely interconnected to the level of skills that the members possess as well as the working environment (Kandula 2003, p. 203). Two key priority areas stand out with regard to these two factors. One is the need to adopt a performance management system for the employees. Absence of such a system is the reason why employees in the sales department feel that they are not focused on performance. The second one is that the employees lack sufficient management skills in their operations. This is because of the ad hoc nature of training in management skills that they are exposed to. The strategy of the hotel has been guided by the objective of being a leader in the holiday and short break market segment. Since this is a high-end market, the hotel has banked on high quality service and employee development as a way of achieving this. However, it can be seen that the organisation has failed to maintain this strategy in the current business environment. This explains the state of inertia in which the hotel is. Reasons for Change Theoretically, organisations are faced with the need to change as a result of sudden disruptions in their external environments (Holtom & Porter 2013, n.pag). Such changes make it necessary for the management of business organisations to rethink their overall mission, vision and the main reasons of being in business (Smith & Graetz 2011, p. 9). In practice, a change in any one of the factors which define the external environment in which a business operates is enough to necessitate overall organisational change. Basically, when viewed in light of the life cycle theory, an organisation goes through the following five stages during its life cycle: creativity, direction, delegation, coordination and collaboration (Daft, Murphy & Willmott 2010, p. 383). What is important to note from this is that all the different stages of an organisational life cycle are related to each other and are derived from a common underlying process (Colwill 2010, p. 121). As such, as an organisation changes from a single highly creative entity during the start-up phase to a large entity of different elements which are working together, changes are needed in terms of control, autonomy and leadership. According to the teleological theory of organisational change, the need for organisational change arises from the constant changes in the environment of the business. Such changes make it necessary for an organisation to continuously reformulate its goals, mission and objectives in an industry (Kezar 2001, p. 54 Lastly, the need for organisational change can be explained in terms of the dialectical theory. According to this theory, the environment in which businesses operate is characterised by multiple events, forces and values which are in constant competition for dominance (Burke 2012, p. 148). The need for organisations to change occurs when two opposing forces of values collide. As such, the change implemented by the organisation is a reflection of synthesis from the two competing forces, values or events. There are several implications for Lakeside Hall Hotel resulting from these theoretical perspectives. What is needed at the organisation is a purposeful and initiated episodic change. From the description of how the situation is at the hotel, it can be seen that the organisation has entered a revolutionary period. The period of relative equilibrium resulted into the organisation failing to adapt fast enough to environmental changes. As such, the organisation has fallen into a state of inertia that has been caused by routines, technology and top management tenure. Because of this, there is need to trigger organisational change in the hotel as a way of restoring a new equilibrium with environmental factors. THE FUTURE VISION OF THE HOTEL The vision of the hotel is simple. From past history, success has been a result of two basic things: investment in people and excellent service standards. These have been the pillars of the organisation’s success in the past. Ideally, the future vision of the hotel should be guided by these. From the analysis of the current state of affairs at the hotel, what is clear is that the organisation has drifted from this ideal position. Although the hotel was once a leader in the high-end holiday and short break market segment, degeneration of service and management has lead to a decline in performance. However, there still exist numerous opportunities in this market. Therefore, the vision of the organisation should seek to help the hotel be a destination of choice in the holiday and short break market. This means that the ideal vision is to restore the market position by focusing on the two main pillars: high quality services and investment in employee training and development. Action Plan After highlighting the reasons for change and what exactly needs to be changed, it is now important that the process of implementing the proposed change be evaluated. This will provide an explanation of how change shall be implemented in the organisation. The process of change takes place in three broad stages of unfreezing old habits, changing to new habits and refreezing the adopted habits (Perkins & Muondo 2013, p. 121). What this means for the hotel is complex. First, there is need to change the status quo in the organisation. This means that the first stage of the change process at the hotel will actually entail dislodging the beliefs of individuals who are required to participate in the change. Second, implementing change at the hotel will entail adoption of new practices and procedures. This will automatically arise from the fact that the established systems in the organisation will become susceptible to change as a result of unfreezing. Third, when the systems and structures of the organisation shift, the organisation endeavours to establish the new beliefs into the culture and habits of the organisation (Yolles 2006, p. 190). In this last stage, the change process within the organisation is solidified. For the Lakeside Hall Hotel, we recommend that the change process be implemented in accordance with the framework provided in the Berkhard and Harris’ change management process. This model is developed from the basic formula of organisational change that takes into consideration different aspects of the organisation and how they affect change. In this model, change within an organisation can be viewed in terms of the cumulative effect of three factors: the level of dissatisfaction with the status quo, the desire for the proposed change and how practical the recommended change is (Cameron & Green 2009, p. 169). In order for organisational change to be effective, the cumulative effect of these three factors should exceed the cost of changing the organisation (Harsh 2011, p. 304). The framework is made up of four basic steps of managing change. In the first stage, an analysis of the organisation is done. This involves understanding the forces that affect change within the organisation. The second stage entails determining the need for change and developing the vision for the organisation. The third stage of the framework is gap analysis. During this stage, the desired future state of the organisation is defined in contrast to the currents state of affairs. After this, the change process gets into the action planning stage. This entails making assessments so that the actual work that needs to be done is defined. Lastly, the transition that comes with the change process is carefully managed throughout the organisation. We use this model to analyse and recommend organisational change for Lakeside Hall Hotel for the main reason that the model is useful in highlighting several problem areas during the change process that are common in the case of Lakeside Hall Hotel. These problems include lack of dissatisfaction with the status quo among the staff members of the hotel, the proposed end state has not been communicated to the key players and lastly, the tasks required for the change process are too complicated. Gap Analysis of the Lakeside Hall Hotel The present state of affairs at the hotel reveals several dimensions that need to be addressed. In essence, the following gaps exist at the hotel. 1. A gap between the desired standards of service at the hotel and what actually happens. 2. A gap between the expectations on the sales staff and their actual performance. 3. A gap in management training for the employees of the hotel. GETTING FROM HERE TO THERE: RECOMMENDATIONS We recommend that Lakeside Hall Hotel takes specific actions so as to implement the change that is needed in the organisation. This section outlines these specific recommendations and actions that should be taken in the organisation. How to Address the Gap in the Management skills of Employees The Lakeside Hall Hotel needs a workforce that is highly motivated, multifunctional and skilled in its operations. It is only when the workforce of the hotel is secure enough in terms of multiple skills that the management of the hotel can rest easy about performance and overall standards in the industry. We recommend the following actions to be taken by the management of the hotel in order to address this gap. 1. Review current roles and jobs of all employees. This will involve assessing what all employees possess in terms of knowledge and skills. This assessment should be examined against the specific duties and responsibilities that are contained in their job portfolios. This review should involve employees of all cadres at the hotel. Beginning from the top management to the sales force, the review will reveal mismatches between skills possessed and the actual needs that come with the job position in the current business environment. 2. Develop continuous learning as an integral part of the job for all employees in the hotel. We recommend that the hotel prioritises training in management skills for all its employees. This will be critical in helping the hotel re-establish itself as a leading organisation in developing people and investing in continuous learning and knowledge transfer. 3. The organisation should also invest in management training programmes for both departmental heads and senior managers. This will reinforce the knowledge of each of these individuals as well as offer a platform for exchange of knowledge about the culture and practice in the organisation. How to Address the Gap between the Expectations on the Sales Staff and their Actual Performance We recommend that the hotel adopts a new policy on performance management. This is much critical as a way of streamlining not only the performance of the sales staff but also that of the entire staff of the hotel. The new policy should address the following specific areas: 1. It should cover all the different dimensions of performance management and development. This is in contrast with the current practice in the sales department where the staff members are given unrealistic goals and lack room for development. 2. It should have specific provisions that guide the management on what to do when cases of performance shortcomings are identified among the employees. 3. It should emphasise on linking individuals’ performance and accountability. This will provide the much needed support to both the sales team and the sales manager in work performance management and development. 4. The policy should incorporate rewards for excellent performance as well as sanctions for underperformance. How to Address the Gap between the Desired Standards of Service at the Hotel and the Current State of Affairs We recommend the following steps to be taken in order to restore standards in the services offered by the hotel. 1. All senior and middle level managers who are in charge of different departments within the hotel should assess the primary functions and standards of quality in the services offered in each department. 2. Following this review, the heads of department should report to the senior managers their findings and recommendations about how to improve service delivery in their respective departments. The recommendations developed should cover the following areas: key responsibilities of each department, parameters for service quality in each department and how to ensure that the personnel in each department remain focused on their responsibilities and quality. 3. Regular reviews of the operations of every department should be carried out as a way of maintaining overall standards at the hotel. Risk Assessment There are several risk areas associated with implementing the recommendations provided in this report. Since these areas of risk require the attention of the management, they are listed in the section that follows. First, there is need for both the management and the change implementation team at the hotel to deal with potential dissatisfaction in the organisation. Many organisations that have attempted to implement change based on this model have experienced general dissatisfaction with deadlines, resource allocation and the entire change process (Abrahamson 2004, p. 34). It is important that the management of the organisation takes these issues into account when actually implementing the process of change. Second, there are possibilities of risks occurring upfront, during the implementation and after the implementation of the changes. For instance, during the first steps of the change process, there may be failure by the change team to communicate practical steps to other stakeholders in the process. This risks not only their overall participation but also the level of acceptance that the stakeholders will have for the change project. Third, since the recommended changes for the Lakeside Hall Hotel touch on both the processes and the people in the organisation; it is possible that the large-scale nature of the process will bear a much larger risk. It is observed that such disruptive changes in an organisation carry a much larger potential risk in terms of consequences and other barriers to the change process (Fallik 2013, p. 56). CONCLUSION In summary, Lakeside Hall Hotel is in need of episodic change. This is a purposeful process that will transform both the systems and the staff of the hotel in order to reflect the current realities in the business environment. An analysis of the situation at the hotel reveals that there is need for three key areas to be addressed: employee training, service delivery and performance management. By implementing the recommendations provided in this report, it is believed that the performance of the hotel will improve in line with the vision of regaining a leading position in the market in terms of quality and investment in the employees. REFERENCES Abrahamson, E 2004, Change without Pain: How Managers can Overcome Initiative Overload, Organisational Chaos and Employee Burnout, Harvard Business School Press, New York. Burke, W W 2012, Organisation Change: Theory and Practice, Sage Publications, London. Cameron, E & Green, M 2009, Making Sense of Organisational Change, Kogan Page Publishers, London. Colwill, E 2010, ‘The Use of Metaphor in Consulting for Organisational Change’, in Buono, A F & Jamieson, D (eds), Consultation for Organisational Change, Information Age Publishing, New York. Cummings, T G & Worley C G 2009, Organisation Development and Change, South-Western Cengage Learning, Mason. Daft, R L, Murphy, J & Willmott, H 2010, Organisation Theory and Design, South-Western Cengage Learning, New York. Fallik, F 2013, Managing Organisational Change: Human Factors And Automation, Taylor & Francis, Philadelphia. Harsh, P 2011, Organisational Change, Dorling Kindersley, New Delhi. Holtom, B C & Porter, L M 2013, ‘Introduction: The change imperative’ in, Graduate Management Admission Council, Disrupt or be Disrupted: A Blueprint for Change in Management Education, Jossey -Baas, New York. Kandula, S R 2003, Human Resource Management in Practice: With 300 Models, Techniques and Tools, PHI Learning, New York. Kezar, A J 2001, Understanding and Facilitating Organisational Change in the 21st Century: Recent Research Conceptualisations, Jossey-Bass, California. Michalski, A 2009, ‘The McKinsey 7-S framework: invented in the 1980s and still a possibility’. Accessed at: http://books.google.co.ke/books?id=6c_BfbXscFMC&pg=PA6&dq=McKinsey%27s+7+s+model&hl=en&sa=X&ei=-Z3fUtqqEaq8ygPq6IDwDA&redir_esc=y#v=onepage&q=McKinsey%27s%207%20s%20model&f=false (22 January 2014). Perkins, S & Muondo, R A 2013, Organisational Behaviour: People, Process Work and Human Resource Management, Kogan Page Publishers, London. Smith, C T & Graetz, F M 2011, Philosophies of Organisational Change, Edward Elgar Publishing, Northampton. Yolles, M 2006, Organisations as Complex Systems: An Introduction to Knowledge Cybernetics, Information Age Publishing, London. Read More