The Operations and Performance of the Hilton Hotel - Case Study Example

 The organization I investigated is the Hilton Hotel, which has branches in many countries across the globe. I interviewed the manager of their Miami branch, Mr. Rick Schultz to obtain information regarding the operations and performance of the hotel. Purpose and Mission of the Organization The mission of the Hotel is to control and manage the business through sustenance so as to benefit the coming generations. The management aims at providing hotels that advance the experiences of their visitors, engage their workers and increase their operational efficiencies. They also aim at advancing the designs of their buildings while strengthening their partnerships with other organizations when doing business. The purpose of the hotel is to provide adequate accommodation facilities, quality food and drinks along with recreational facilities to their visitors. The hotel aims to be constantly pleasurable to the visitors, invest in their workers and innovate better and newer products for their visitors. They also intend to augment their owners value and reinforce their loyalty to their constituents (Bardi, 2010). The manager considers the management of supplies to the hotels the most difficult challenge he encounters. This is because the products have to meet certain standards before the business makes their purchases. There are also many suppliers willing to provide their supplies to the hotels and this makes the approval of their tenders a tiresome activity. The products have to undergo several tests to determine their quality and safety before they are purchased. The process of getting approval for the funds to be spent is also very long. These tenders have to be approved by the management committees before the funds are released. This also takes a lot of time and hampers the operations of the hotel (Bardi, 2010). The Financial Condition of the Organization The Hotel’s profits have been on the rise over the years and their financial performance is relatively good. The shareholders of the hotel also receive substantial dividends on their investments. This is because the hotel accommodates many visitors throughout the year from all around the globe. The business owns over three thousand hotels in seventy four countries that have a very good reputation for their services and products. The financial condition of the hotels enables the managers to effectively carry out the activity of running the business. He is able to pay the workers, purchase supplies on a regular basis for the hotel and renovate the premises regularly. The profitability of the organization has enabled the hotels management to open up new branches across the globe (Dunning and Lundan, 2008). The manager views their workers as their intellectual capital and also as the most vital asset of the current organization. According to him, the workers bring into the business a lot of skills and expertise that enables them to operate efficiently. The innovations and creativity of the workers also enables the business to develop a competitive advantage over other similar businesses. The workers are the most important factor in the operations of the business since without them all its operations would fail. The business relies on their workers to offer quality products and services to their customers. The workers attitudes, values and behaviors at the work place also enable them to retain and attract new customers to the hotels. The profitability of the hotel relies on the worker’s productivity (Dunning and Lundan, 2008). The Ethical Practices of Hilton Hotels The organization indulges in the conservation of their water and energy sources. These efforts are carried out in their various branches across the various continents. The hotel has began measures to reduce their emissions of carbon products into the atmosphere. The hotel was the first in the industry to install a cell system to generate power for their activities. The management has also began implementing measures that aim at reducing their wastes. They aim to reduce their total wastes by 20% by the year 2014. The hotel indulges in the construction of programs meant to educate their team members. This is done with the aim of improving their performances and skills at the work place (Bardi, 2010). The manager encounters problems in the course of his duties when handling their customers. The manager has to handle customers who have different cultures, beliefs and backgrounds. These customers all have different needs and the manager has to ensure they all get the required satisfaction. This brings a lot of dilemma to the manager since some activities that they provide are against some cultures. The different varieties of food offered should cater for all their visitors tastes. This creates a problem since different communities consider various foods to be taboos in their societies. The manager also encounters problems in controlling their workers attitudes, values and behaviors at the workplace and towards their clients. The organizations website states that their goal is to reduce the consumption of water and energy resources. In addition, it stipulates the intention of the organization to reduce their emissions of carbon and other wastes. All this activities will enable the hotel to create a sustainable environment for the future generations. These accomplishments are to be achieved by the year 2014 as per the hotel’s management. The Internet ensures that the hotel has partnered with many other organizations in their efforts of conserving their environment. The Internet provides information regarding the hotel being the first in the industry to introduce a power saving system that uses cells. The organization is practicing social responsibility by leading efforts to conserve their environment. They have began projects in Europe to reduce their consumption of water and energy resources. They also have installed clean power systems in the United States, which have been very efficient in reducing their emissions of carbon (Bardi, 2010). Is Hilton An MNE? The Hilton Hotel is a multinational company with branches across seventy four countries around the globe and offering over three thousand hotels. The Hotels have their headquarters in Los Angeles, California and provides accommodation and recreational facilities for their customers around the globe. They have managers and teams who oversee the operations of their branches around the globe. The organization opted to become a multinational company due to the benefits they would reap in the future. The hotel has been able to expand her activities to very many countries, and this has helped them increase their profits. The hotel also enjoys the advantage of being managed from a central office, and authority is delegated to the managers in their respective branches. The hotel’s management uses the local communities to do business for them, and this enables them to cut the costs involved in entering a foreign marketplace. The activities of the hotel have helped to improve the economic conditions of various regimes around the globe. This has mainly been through the collection of taxes and the creation of employment opportunities for their populations. The hotels also help in increasing the levels of economic activities within a country. According to the manager, the hotels have reaped a lot of benefits from the managements decision. This is because it has enabled the expansion of the hotel and increased their profitability levels (Dunning and Lundan, 2008). Type of Planning the Manager Is Involved In The manager interviewed is involved in planning the hotel’s marketing activities. This type of planning has limitations in that only the members of a particular branch are affected by his decisions. The hotel’s strategic and operational planning activities are carried out at their headquarters in California. According to the manager, their involvement in the decision making process within the hotel is inadequate. He suggests that they should be actively involved in the strategic and operational planning activities of the corporation as a whole. This will enable them to have more control on the resources of the company. This planning type enables the creation of the hotel’s missions, visions, values and strategies to use. Operational planning will give them the ability to judge the performances of their organization. They suggest that the process of approving budgetary costs should include all the managers as it enables the hotel’s operations to run smoothly. The market planning activity helps the hotel in managing the delivery of their products along with their services. It also enables the branch manager to determine the most efficient way of satisfying his customer’s needs. This planning is only applicable for a period of three months to one year since it is dependent on the current team working in the hotel. It takes into account the analysis of the current situation that the organization operates in and their target customers. It also considers issues such as segmentation of the market, their goals, objectives and the budget constraints on their operations. Finally, the method of implementing these issues is also considered in this type of planning. This ensures that the hotel’s workers perform their activities more efficiently for the benefit of the hotel. The manager of the hotel is involved in the selection of appropriate suppliers to the hotel, defining their goals and the strategies to use in achieving them. For example, the manager said he encounters problems when the demands and supply for their products rise and then fall sharply. This happens when they have peak seasons which suddenly come to an end. They encounter problems in handling their operational costs because their income levels have fallen (Bardi, 2010). Porter’s Five Forces Henry Porter suggested that there are five forces affecting the performance of a business. He stated them as the risk of entry of new and similar competition into a market, the customers and suppliers powers, the level of competition and the risk of substitute products. These factors greatly affect the hotels performance of the business since they are present in its environment. There are many new hotels providing similar facilities though the Hilton relies on its reputation and quality of services and products to sell their commodities. The hotel has continued to experience high profits despite the entry of these new competitors. The hotel offers facilities that are considered to be reserved for the wealthy since they are expensive. Many hotels are offering more affordable facilities for the masses, and this result in the hotel losing a lot of customers. The services and products provided by the hotel still remain superior to their competitors though their prices are relatively higher (Hill and Jones, 2009). Their suppliers always provide the required raw materials at all times. They however charge high prices for their commodities when there is a scarcity for the resources. This creates a problem for the hotel since they have to encounter additional budgetary costs that had not been accounted for. This eventually leads to a reduction in their profits due to these activities. It hampers the growth and operations of the hotel resulting in occasional losses. The level of competition in the hotel industry is quite high with different hotels offering different and unique facilities. All these activities are performed with the sole purpose of outperforming their competitors. The hotel has managed to fight their competitors by ensuring that they always provide superior services and commodities. They have also managed to fight the competition in the industry by using aggressive advertising methods. The threat of substitute products has brought a lot of uncertainty to the hotel’s activities. This is because many companies are entering into the business. They provide tourists with travel, accommodation and different varieties of foods at cheaper prices. The recent global recession brought many changes in the spending patterns of their customers. This was a result of the fiscal impacts the recession had on their respective economies. However, the hotel manages to fight the risk of these substitutes by providing diverse forms of accommodation and foods. They are able to do this by charging different prices from their target customers. The prices charged to the customers vary depending on their social status and classes. The organization has managed to keep their profitability high despite there being hindrances in their operations (Hill and Jones, 2009). The hotels uses technology in the processing of various foods and make use of the latest technologies that enable them to cut on their energy and water resources. This is in the form of cell power systems installed in their premises. They also use technology for communication, storage of information and carrying out their trade activities. The use of technology enables the hotel to carry out their activities more efficiently while saving on operational costs. However, it is disadvantageous because many workers have been laid off in the course of the hotel adapting them. The examples of technology in use in the hotel includes items such as computers, fax machines, food processing systems and telephones among others (Bardi, 2010). The Manager’s Decision Making Functions The manager’s decisions are mostly reactive, and this is because he only has authority to respond to the issues affecting the normal operations of the business. For example, he addresses issues such as the shortage of raw materials and the inefficiencies of his staff members in serving their customers. He also participates in the proactive decision making process since he is charged with making his own decisions when in unfamiliar or urgent situations. This could include making a decision in case of an emergency such as a fire outbreak or a break in into their premises. The manager suggested they should be given more freedom by their leaders to make strategic decisions. He said that these activities will greatly advance their innovativeness and creativity (Hill and Jones, 2009). Development of Job Analysis and Specifications The development of the job analysis, descriptions and specifications takes place in the Human Resource Department of the hotel located in California. This activities are carried out by a specially created team that is assigned these tasks. They are operate from the hotels headquarters in California. The managers from the different branches are only required to give their recommendations on various jobs. They also give their suggestions on the most appropriate number of employees they are willing to work with. The ultimate decisions regarding the above issues are made by the department managing human resources. The managers prescribe the minimum qualifications for the workers who will be working under them in the various branches across the globe. This enables them to obtain the most effective teams to work with in order to achieve the hotel’s set objectives. The manager’s opinion is necessary he is responsible for assigning duties to the workers. It is also vital since the evaluation of the employees’ performances along with their supervision is their task. Organizational Structure The hotel’s organizational structure is headed by the hotel manager who is closely followed by the operations manager in terms of authority. The various departments in the hotels are headed by a departmental head who reports to the operations manager. The middle level workers comprising of accountants, clerks, secretaries, receptionists and chefs come after the departmental heads in terms of authority. They are followed in the power hierarchy by the non skilled employees who include the security men, the cleaners and others who carry out the handy jobs. The following is the organizational structure for the hotel. Organizational Structure The manager of the hotel has the power to delegate authority to the other professionals working with him within the organization. This includes the operations manager, the accountants, secretaries and chefs working within this hotel. The lower level employees have the powers to exercise authority only in events that have minimal impacts to the organization. Their authority is limited to sending one another on errands around the hotel and not decision making. This enables them to recognize their superiors in the hotel as the source of authority. The manager uses the staff type of authority when making decisions. This is because he allows his subordinates suggestions on various issues affecting the organizations performance. He always does this before reaching the final decision (Hill and Jones, 2009). How Are Human Resource Activities Handled In the Organization? The human resource activities in the organization include the selection and recruitment of workers to the hotel. This activities are organized from the hotel’s headquarters in California. The managers in the different branches only give their recommendations on the quality and number of workers they require to work for them. The human resource department carries out an analysis on the jobs and sets the minimum standards they require for their employees. They then hold interviews after advertising the vacant posts in the media. The successful candidates have to meet the required standards and pass several tests in order to be selected. The successful candidates are taken for training for a short period of time before being transferred to their new centers. The employees working for the organization are paid based on their skill levels and relevant experiences in the industry. The manager feels that he is underpaid in comparison to the work he performs. He claims that he always works for very long hours but still receives a standard salary. He also claims that the allowances the hotel’s management has been awarding him are insufficient. This is because of the inflation that has hit the country so hard and the rise in prices of various commodities in the economy (Dunning and Lundan, 2008). Type of leadership practiced The manager of the Hilton hotel uses a democratic style of leadership when leading his employees. He includes all his staff members in decision making and they all accept the responsibility of setting the hotel’s goals (Dunning and Lundan, 2008). The employees have the freedom of expressing their views to the manager who considers every issue raised before making the final decision. The manager actively participates in the building and strengthening of the interpersonal associations among the workers. This ensures they have bonded well and assist one another in the performance of their activities. In this organization, the leader is vital but is not viewed as the key figure that will bring success to the hotel’s activities. The manager functions more as a coordinator or an agent for the team. He coordinates their activities to ensure that they meet the hotel’s set objectives. The manager suggested that as a result of his leadership style the workers continued performing their routine duties even in his absence. This form of leadership allows the worker’s to be responsible and accountable for the hotel’s resources. The employees of the hotel are also relatively impressed by the leadership as indicated by their views on their manager. Methods of Motivating the Employees in the Hotel The manager motivates his employees using various methods, where he uses the techniques of enriching their jobs, rotating their duties, enlargement of their job’s scope and allowing them breaks in between their work shifts. He also allows the workers to share tasks and help each other out in case there are difficulties being encountered. He additionally involves the employees in the making of crucial decisions. These actions give the employees the feeling of belonging to the hotel and helps to increase their confidence when they are carrying out their routine tasks. The managers also communicates with the employees for the purpose of ascertaining the problems they are encountering at the workplace (Dunning and Lundan, 2008). The manager recommends salary increases for the employees who display exemplary performances of their duties. This encourages the workers to work extra hard in helping the hotel to achieve its set objectives. The employees of the hotel have always been encouraged to evaluate their own performances individually. This gives them the required motivation to work towards improving their performances. The manager rarely disrupts or criticizes the performances of his employees so long as they bring good results. This ensures that they build the confidence needed to effectively carry out their duties. This actions eventually help in augmenting the employees productivity while increasing the hotel’s profitability. However, the manager also uses several disciplinary measures to counter any inappropriate behaviors that the employees display. He uses suspensions and warning letters to deter such behaviors before requesting for the head office to dismiss the concerned employee. This deters similar behaviors from the remaining employees and helps in motivating them to work harder (Bardi, 2010). Quality of Communication within the Organization The manager says that the quality of communication within the organization is relatively good. This is because information from the higher level managers is efficiently delivered to the employees at the lower levels of the company. This is done through a variety of methods which include teleconferencing, the use of memorandums and directly communicating with the employees. This methods ensure that the employees of the organization get the relevant information from their managers. The hotel has also adopted several types of technology that advance the process of communication within the hotel. They often use telephones to connect users in different offices along with fax machines. The hotel produces newsletters on a monthly basis to help increase the awareness of their activities among their employees and customers. The hotel also provides various types of information technology equipment. This equipment in turn enables the efficient flow of information between conversing parties within and outside the hotel. It has created an internal communication computer network to assist in easing communication between the workers (Dunning and Lundan, 2008). The highly productive nature of the communication practices within the organization have been facilitated by the speed and cost effectiveness of the communication technologies (Hill and Jones, 2009). The ability of the workers to adequately use this technologies has also facilitated the flow of information within the hotel. Telephones being used in the hotel do not need the connections of an operator to function. This is because the hotel has installed switch boards that allow for the quick transfer of calls from one office to another. However, the flow of information from the senior management sometimes encounters communication barriers. This is because the terminologies used by the senior management may not be understood by the low level workers. The manager also suggested that the hotel should adopt newer technologies that will enhance communication between their employees. This is because some of the technologies that the hotel is using are outdated and have become obsolete in the market. Organizations Use of Workgroups and Teams The hotel manager uses work groups and teams in accomplishing certain tasks for the business. These teams are involved in activities that include the processing and production of various commodities, their distribution along with the marketing of the hotel. The use of the team’s enables the hotel to accomplish tasks that an individual would have taken long to finish in a short while. This in turn enables them to save costs that would have been incurred as a result of the usage of additional time on the activities. The use of work groups brings a lot of conflicts to an organization and the manager should be fast in eliminating them. Conflicts could arise due to the different opinions the members have and competition for the limited resources by the workers. Group conflicts could also result from the loyalties the members have developed towards each other. The manager uses several techniques within the hotel to resolve these issues. Among them are the use of his negotiation and arbitration skills to bring consensus among the conflicting parties (Dunning and Lundan, 2008). The manager provided the hotels processing activities as an example of a situation where the hotel uses groups to perform the organization’s activities. Different people have to collaboratively work together to ensure that the various foods they offer are prepared in time. Their coordination ensures that these activities are performed in a timely and cost effective manner (Bardi, 2010). The Managers Involvement in the Production, Operation and Financial Controls From the interview carried out on the manager, I was able to ascertain the duties the manager plays in the production, operations and financial controls of the hotel. The manager is responsible for controlling the use of resources in the production process. He is also responsible for ordering new supplies once the existing stocks have been exhausted. The manager oversees the allocation of duties in the production process among his workers. He has the authority to increase or decrease the number of workers in a production group whenever he considers it appropriate. The manager of the hotel implements and regulates the operational controls designed by the hotel’s senior managers. He is responsible for ensuring that the procedures being used by the employees are in accordance with the hotel’s set standards (Bardi, 2010). They are also responsible for dispensing punishments and rewards for workers who go against the hotels standards of conduct. This controls enable the managers to effectively regulate the resources to be used along with the costs to be incurred. The manager’s major role is to provide guidance and leadership to the workers working for the hotel. The manager is also involved in the financial control of the hotel. He controls his employees use funds in the activities of producing, distribution and marketing of the hotels activities and products. The manager’s control enables the company to avoid the misuse and wastage of funds. The financial controls the managers have on the organizations resources also ensure that the hotel’s activities are carried out within their budgets (Dunning and Lundan, 2008). The completion of various activities on the hotel’s development order is also guaranteed. This is because the funds reserved for use are not misappropriated. References Hill, C and Jones, G. (2009). Strategic Management Theory, an Integrated Approach. London: Cengage Learning. Bardi J. (2010). Hotel Front Office Management. New York: John Wiley and Sons. Dunning, J and Lundan, S. (2008). Multinational Enterprises and the Global Economy. New York: Edward Elgar Publishing. Read More