International Managers in Tourism - Implications for Human Resources - Essay Example

International Managers in Tourism: Implications for Human Resources 2006 Introduction In today’s world order, globalization has become an accepted phenomenon. Not only are manufacturing companies looking for markets and low-cost production centers around the globe to maintain their competitive edge and to grow, service organizations also find growth prospects limited in home countries over the long run. Especially, countries that were economic laggards a few years back – like many in Asia and Latin America – are emerging as new economic powers hence inviting large doses of foreign investment both in manufacturing and services. That tourism industry will follow suit and globalize is a natural corollary. With blurring of economic boundaries, tourism organizations increasingly find their customers a mix of nationalities. Not only do the hotel industry in home countries cater to foreign guests – corporate and travel –but most large tourism organization find it imperative to extend operations in locations other than home countries. In such a scenario of global economic growth, international managers have a key role to play in their respective organizations that require to function in different organizational and inter-personal cultures as well as with varied forms of governments and markets. As Stanek (2000) says, "Today's global organizations require international managers that understand and can respond to customers, governments and competitors alike". In no other industry are the differences in culture so marked as in the hospitality industry. The implications for Human Resource Management are profound. Wright et al (1999, cited in Granell, 2000) found from a survey of organizations that globalization was the most important pressure for change in organizational culture, followed by technology advances, skill shortages and competition. Particularly for American and European companies, globalization was found to be the main incentive to change. In this paper, I will discuss the case of Hilton International expanding setting up a new subsidiary in Hong Kong and the requirements of staffing, training and retaining managers for the new subsidiary. Hilton International – An Overview The Hilton Group headquartered in Beverley Hills, California, is the world’s largest group of hotels. It was founded in 1999 when Carlton Hilton bought the first hotel in Texas. Today, the group has over 2,700 branded hotels around the world in 50 countries (Hilton Worldwide). These hotels are either wholly owned or operated by a management contract. The group is divided into four global regions: the UK and Ireland; Europe, the Middle East and Africa; Asia Pacific and South Asia; and the Americas. Hilton Hotel Corporation manages the operations in the United States and Latin America while Hilton International, headquartered in the United Kingdom, operates the other regions (Maxwell and Lyle, 2002). When in 1999, Hilton purchased Stakis plc, the quality initiative known as Hilton Equilibrium and the Human Resource initiative known as Hilton Espririt were developed to integrate the two different perspectives. The focus was providing the guests a balance between personal needs and life needs. The Hilton brand statement, “putting back a little of what life takes out” was aimed at giving the highest level of customer satisfaction. The management realized that expansion in a large number of companies have resulted in the employment of a large number of people from different backgrounds. A survey found that although a vast number of Hilton guests speak English and the group has declared English to be the official language since 2002, only 7 percent of employees are adept at the language. The Hilton University aims to increase English proficiency of the employees. The Human Resource in the Hilton Group functions on the basis of a balanced scorecard and at least 40 hours of training is imparted to each employee every year. Global Expansion of Hilton Group In the United States, Hilton has a wide of variety of hotels – from luxury, four-star hotels, convention centers to mid-priced, extended stay hotels, destination resorts, airport hotels and vacation ownership properties (Hilton Worldwide). Apart from the 2,300 hotels in the United States, Canada and Mexico, Hilton has global alliances through the UK-based Hilton International. These Hilton hotels are in Australia, Europe and Asia. The worldwide expansion of Hilton has brought into focus the HR initiative of Equilibrium since the competence of the staff is core to the business plan of a service organization like Hilton. Staffing a Hong Kong subsidiary – Issues In this case study, I will focus on the HR issues related to staffing a possible Hilton subsidiary in Hong Kong. Going beyond the routine HR function, this is a strageic HR function, defined by Wright and McMahan (1992) as “the pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals” (quoted in Joliffe and Farnsworth, 2003). For Hilton, the issue of staffing the Hong Kong subsidiary is crucial in its expansion plan while maintaining its brand value. Hilton, with 85 years of experience is the most trusted brand in the hospitality industry. However, most of the Hilton properties are in the US, UK or Europe, with very similar cultural environment. Expansion in an Asian country involves tremendous cultural integration, overcoming language barriers and acclimatization of the staff and their families in the new environments. Cultural integration is the most crucial aspect from the HR perspective since insensitivity to local culture might result in resistance from the local people, thus affecting overall services. For example, Granell (2000) describes the experience of a Cuban expatriate in Hong Kong who did not dare to take any decision without consulting feng shui after he found that local people did not respect a non-believer. Typically in Asia, collectivism prevails, by which group learning and execution of tasks are preferred to the western notion of individualism, in which individual aspirations and performance are encouraged (Granell, 2000). There are more subtle differences in the work cultures of the eastern and western world. Like, Americans are typically work-centered and do not hesitate to work late hours if a project needs to be completed. Europeans and Asians, on the other hand, despise working into “unsociable hours”, thereby provoking resistance if ordered to do so (Jassawala et al., 2004). Expatriates need to understand the values, attitudes and behavioral practices, including language use and gestures as well as inter-personal skills, in the host country. The managers who are to be sent to the Asian subsidiary needs to be aware of such differences. As Granell (2000) recognizes, an effective expatriate manager is one who can assess one’s own cultural background, understand the other’s culture and identify gaps and integrate strengths. HR professionals, whose roles are defined as “functional experts”, “business partners”, “facilitators for change” and “productivity consultants” (Ulrich, 1988 quoted in Granell, 2000), in particular need to consider the aspect of cultural integration most seriously when staffing a foreign subsidiary. Values and belief in Asia are vastly different from those in the western world as are behavioral patterns, despite Hong Kong being a British colony till a few years back. Many expatriates often find hostility in the host country because of political differences between the countries. For example, Jassawalla (2004) described an American expatriate in Hong Kong having a tense relationship with his local colleagues after the U.S bombing of the Chinese embassy. Ethical issues, too, may emerge on decision-making of expatriates. For example, bribes, a common phenomenon in Asia, may be abhorrent to an American but have to handled delicately rather than aggressively in the host country. International managers require to be trained to develop soft skills, like listening and language skills as well as collective functioning and a good humor to take such differences in stride. Volatility in the political and economic sphere in the globalized world of today poses greater challenges for the international managers, who have to juggle between political disturbances, trade issues, exchange rate fluctuations in addition to the cultural differences (Syed-Mahmoud, 2003). Hence, the international managers have to be much stronger individuals than those who work in local environments. For a HR professional, recruiting international staff for the new subsidiary is the first crucial task. Technical skills and IQ levels are essential for any managerial job but for an overseas assignment, emotional intelligence (EI) is no less important (Jassawala et al, 2004). EI can be estimated by asking the managers questions on situations they are likely to face on their assignment. Other personality traits, like sense of humor, optimist attitude, adventurous nature and enthusiasm for interacting with different types of people are also essential for such assignments. As the HR professional, managers with such traits should be chosen with care. Intensive training is required before the assignment. Many expatriates feel that a trip, along with spouse, to the host country before the assignment commences goes a long way for the manager to understand his or her aptitude for the cultural acclimatization. Pre-departure training on inter-personal skills, information about housing arrangements and other daily family requirements like schools, hospitals, etc. are essential as well. Although English is sufficient for an assignment in Hong Kong, as English is the official language in all Hilton hotels, learning rudiments of the local language is helpful since the hotel is likely to have a large number of local employees who may not be very fluent in English. Besides, a smile and a few phrases in the host language break the culture barrier by a large extent. While training expatriates is most crucial from Hilton’s perspective, training of host country staff is no less important. Cultural integration of host employees, sensitivity of the expatriates is crucial. To retain good employees, particularly the local, a good incentive package should be developed. It should be kept in mind that for a multi-location organization, employees at all locations do not have the same needs (Syed-Mahmoud, 2003). Empowering of employees, both local and expatriate, gives the best result in increasing their productivity without raising hindrances of culture. On the whole, the role of the HR professional in the staffing of a global subsidiary is most crucial in the growth aspiration of the tourism organization. A service company like Hilton cannot afford to dilute its service level, which may well be the case in a situation of wrong staffing in a new location. Cultural differences between the expatriate manager and local staff may seriously damage the reputation of the group thereby affecting its business prospects in the entire region. The entire process of recruitment, training and monitoring of employees in a new outfit should be done with great care. Works Cited Granell. E, Culture and Globalisation: a Latin American challenge, Industrial and Commercial Training, Vol 32, No 3, 2000, pp89-93 Guthrie, John, Hilton International: Creating a Global Service Culture, available at http://www.clomedia.com/content/templates/clo_article.asp?articleid=797&zoneid=9 Jassawalla. A, Truglia. Ciara and Grarvey. J, Cross-Cultural Conflict and Expatriate Manager Adjustment, Emerald Group Publishing Ltd, 2004 Jolliffe L & Farnsworth R Seasonality in Tourism Employment: Human Resource Challenges, International Journal of Contemporary Hospitality Management, 15/6 2003, pp312-316 Seyed-Mahmoud A, The Future of Human Resource Management, Work Study Vol 52, No 4, 2003, pp201-207 Stanek MB "The need for global managers: a business necessity", Management Decision, 38/4, 2000, 232-242 Hilton Worldwide, available at http://www.hiltonworldwide.com/en/ww/press_media/corporate_profile.jhtml;jsessionid=AMSU1YOQSYSYQCSGBIX2VCQKIYFCXUUC Read More