Conrad Hilton as an Entrepreneur in the Hospitality Industry - Case Study Example

Conrad Hilton: Case Study of an Entrepreneur in Hospitality Industry 2009 Introduction Conrad Hilton (1887-1979) was one of the legendary entrepreneurs in the hospitality industry, having founded the coast-to-coast Hilton group of hotels in 1943, which has since 1949 grown to one of the largest global hotel chains. Hilton was born in New Mexico of a Norwegian father and a strict Roman Catholic German mother. Hilton was a typical product of the American Dream, having imbued the values of a devout Christianity and working hard to succeed personally as well as wanting to be a do-gooder (Telegraph, 2006). Hilton bought his first hotel in Texas in 1919 and became a major player in the United States hospitality industry only in the 1940s. Conrad believed in the motto “Be Big. Think Big. Act Big. Dream Big” and repeatedly bought properties in America and set up hotels abroad, running these through the company’s own operations rather than franchising out thus developing the Hilton brand successfully. His first European venture was in 1953 and grew more international through the decade and the next. During the Cold War years, Hilton saw his hotel chain as the icon of individuality and capitalist success that could combat communism that he, like the typical American of the day, saw as the greatest threat to society. However, in 1963, Hilton was forced to split his business empire in two – Hilton Hotel Corporation (HCC) in the United States and Hilton International in the United Kingdom as the US shareholders were wary whether such a huge international venture could be managed as efficiently. Even though Hilton personally was not in favor of the split, he had to give in and he remained the president of the Hilton International which later became the Hilton Group. The two groups were reunited only in 2006, much after Hilton’s death. When he died at the age of 91, Hilton left his property to a charitable trust but his father challenged the will and recovered the property (Telegraph, 2006). Personal antecedents In the 1960s, the psychological antecedents of a person were considered to be a major determinant of a successful entrepreneur. Such a line of thinking regarding entrepreneurship has been focused on in the successive decades as well. Hence, psychologists attempted to analyze the personal behavioral patterns in terms of needs, responses, values, attitudes and beliefs that created a successful entrepreneur. In this view, a person who placed a high value to achievement not simply for his own personal success but for the organization made a successful entrepreneur. In this line of thinking, therefore, not just the owner of a venture, but even an executive in an organization could be rated as a successful entrepreneur (McCelland, 1971, cited in the Study Guide). Besides the emphasis on achievement, the other characteristics of a successful entrepreneur are the ability to take calculated risks, tolerance to uncertainty and personal values like honesty, integrity, duty and responsibility (Alizedeh, 1999, cited in the Study Guide). Other scholars have pointed out to personal characteristics of creativity, original thinking, visionary, optimistic, hard working and leadership qualities for an entrepreneur (Kuratko and Hodgetts, 2004, cited in the Study Guide). Conrad Hilton may be considered to be a case study of an entrepreneur who had all the personal antecedents listed above for being successful. Raised as a Roman Catholic, Hilton was a devoutly religious person all through his life. Even though he had a tumultuous romantic life and divorced thrice, he remained true to his values, as he mentions in his autobiography, and could not even rise to take his communion in church because he felt he had belied his religion (Telegraph, 2006). Hilton sincerely believed that his business empire was not only for his personal gain but as a means to enrich society, which is evident in his failed attempt to leave his empire for charity. He was a natural leader and managed to grow his business empire almost single-handedly. He was a visionary in the true sense as he expanded his business through tough times when many other businessmen turned pessimistic. He grew his business in America in the post-war years, which were booming times, but he expanded globally at a time when the Cold War was at its peak and few American businessmen ventured abroad. Hilton, on the other hand, stepped down from the American business to remain focused on the international business quite contrary to what others did. In contrast to the tendency of hotel chains to grow through franchises, Hilton hotels were company-operated so that the same quality of comfort and luxury could be maintained. Sociological antecedents In the sociological view of entrepreneurship, postulated since the 1980s, the societal and historical factors rather than personal characteristics of the individual determine successful entrepreneur. The societal factors not only influence the decisions of an individual to turn an entrepreneur but these also result in an acceptance of the values of the entrepreneur (Shapero and Sokol, 1982, cited in the Study Guide). The first group of factors is essentially historical that induce the individual. In such a view, entrepreneurship is also linked with the economic situation of the time and the country that influences entrepreneurship. Besides, sociological factors may also influence an individual turn to entrepreneurship as a career choice. Hilton may be considered as a product of his times. He bought his first hotel in 1919 which was the period of the American Dream. Following the end of the First World War, the American economy was booming and Americans believed that success came about through hard work and perseverance. Despite born of moderate resources, Hilton wanted to be an independent businessman through hard work, honesty and integrity. The Christian values that he imbued were typically the Catholic views of Americans of the time. Despite his early start, however, Hilton did not achieve quick success. Within a decade of his entering business, America was in the throes of the Great Depression that curtailed consumer spending greatly. It was only in the 1940s when the country came out of the Depression and began to grow again after the Second World War. Hilton’s rise as a global entrepreneur may be correlated with America rising as a global economic power through the 1960s and 1970s. Environmental antecedents The sociological antecedents of an entrepreneur are also associated with the environmental antecedents. The real success to Hilton’s business came through the 1950s and 1960s which were not only the golden years of American economy but also that of American multinational companies in the face of uncertainties of the Cold War. America at the time was wary of the growing influence of Communism in the world which threatened the values of individualism that was the basis of the American Dream. Many multinational companies emerged from the United States, Hilton being not the least of them. These companies became the icon of free market economics. Hilton passed away before the modern phase of globalization began in the 1980s but he foresaw what big business could look like. He built the hospitality chain based on typical American tastes, with all the hotels in different countries conforming to the ideas of American ideal of comfort and luxury. By 1999, Hilton International, which was Conrad Hilton’s pride, operated in 53 countries (ILO, 2001). Through his career as an entrepreneur, Hilton bought luxury hotels in America and abroad to build his hospitality empire in accordance with the tendency of multinational companies growing through mergers and acquisitions. This trend has been followed by the group even after his death. After the end the Second World War and through the 1960s, most American multinational companies used technology to standardize products and reduce costs. Hilton was no exception. The group’s New York property, which opened in 1963, was marked by the geometric design, uncluttered minimalism and simplistic public spaces and guest rooms. It was not only a symbol of American transparency but also that of standardization and cost saving. Technology was used to satisfy guests as well as create an ambience of profitability (Lashley, et al, 2007). Such standardization of products of global companies was the key to the success of multinational companies, according to theorist Theodore Levitt (1980). Standardization allowed for limited marketing costs for the purpose of globalization and as it required little differentiation in different countries. Through standardization, Hilton became one of the earliest American companies to aggressively address the international market while keeping its American characteristic intact. Conclusion Thus, Conrad Hilton was an exemplary American entrepreneur who epitome all the characteristics of the American Dream of the 1950s, anti-communist sentiments of the 1960s, the free-marketer individualist and the early globaliser of the 1970s. His personal character traits of hard work, vision, risk-taking attitude, tolerance to uncertainty and optimism gained him his success as did the sociological and environmental factors of the times. Works Cited International Labor Organization, Human Resource Development, Employment and Globalization in the Hotel, Catering and Tourism Sector, 2001, http://www.ilo.org/public/english/dialogue/sector/techmeet/tmhct01/tmhct-r.pdf Lashley, Conrad et al, Hospitality: A Social Lens, Elsevier, 2007 Shapero, A and Sokol, L, “The Social Dimensions of Entrepreneurship”, in Kent, C et al (ed), Encyclopedia of Entrepreneurship, Prentice Hall Inc, 1982 Telegraph, Conrad's Hilton chain fulfils his global dream, January 1, 2006, http://www.telegraph.co.uk/finance/2929259/Conrads-Hilton-chain-fulfils-his-global-dream.html Read More