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Case study solution the regency grand hotel

Case Study: The Regency Grand Hotel

Case Study Analysis The Regency Grand Hotel is a five-star hotel case study solution the regency grand hotel Bangkok, Thailand that was established 15 years ago by a local group of investors and has been operated by a local general manager throughout this period of time.

The hotel has provided above industry standard employee benefits and salaries and it comes with a high level of job security. Further, a large, year-end bonus is rewarded to employees regardless of the employees or the hotels overall annual performance. The Regency has always been very profitable since its inception just 15 years ago. Under the local management, innovation and creativity were discouraged and employees were punished for their mistakes and discouraged from trying ideas that had not been approved by management.

Because of this, employees were afraid to be innovative and take risks. The Regency has always emphasized administrative control, which resulted in many bureaucratic procedures throughout the company.

However, the Regency was recently sold to an American hotel chain and the current general manager decided to take an early retirement once the hotel changed ownership. John Becker was selected as the new general manager due to his previous success with integrating newly acquired hotels within the United States. But, most of his management has been in poorly profiting organizations with low morale.

Quickly after becoming general manager of the Regency, Becker introduced the practice of empowerment Floyd 2 with hopes of duplicating the success that he has achieved in the United States. He also substantially reduced the number of bureaucratic rules and allocated more decision making control to front-line employees. Although Becker believed that the introduction of empowerment would greatly benefit the overall performance of the hotel, the business and overall performance began to quickly deteriorate.

There are many organizational problems that the Regency is facing since the acquisition. Human capital is defined as the knowledge that people possess and generate.

It is valuable because employees help the organization discover opportunities and minimize threats in the external environment. Human capital is also non-substitutable because it cannot be easily replaced by technology.

  1. Under the local management, innovation and creativity were discouraged and employees were punished for their mistakes and discouraged from trying ideas that had not been approved by management.
  2. Because of this, employees were afraid to be innovative and take risks.
  3. Low power distance societies expect equal power sharing and view relationships with superiors as interdependence McShane 53.
  4. Further, a large, year-end bonus is rewarded to employees regardless of the employees or the hotels overall annual performance.
  5. In this particular context, this case study is based on how problems aroused when employees could not adopt organizational change or mistakenly violated against the prescribed practices and led the company to a disaster.

Because of these characteristics, human capital serves as a competitive advantage as well as a huge risk for almost all organizations McShane 11.

When key people leave, they take with them the knowledge that makes the company effective. This is exactly what happened when the former general manager of the Regency took early retirement at the change of ownership.

Having 15 years of experience operating a continually profitable hotel and being a native to the country, the former general manager knew what it took to be successful and motivate his employees. He had the advantage of understanding the culture and the people that made up that culture, something that John Becker did not have.

When the former general manager of the hotel left, he took with him all of the human case study solution the regency grand hotel needed to operate a successful hotel in Bangkok with him without sharing it with it John Becker. This problem arose early in the acquisition phase whenever John Becker decided to implement empowerment throughout the organization. John Becker has made a critical error in re-structuring the management style of this hotel.

He assumed that since empowerment has proven to be continually successful in American organizations, then the same must hold true for organizations in other parts of the world. As has been demonstrated in other parts of the case, this is, indeed, incorrect. In order to have an effective global mindset, one must have the ability to understand and respect other views and practices around the world. One must also be able to empathize and act effectively across cultures and be able to comprehend and appease intercultural matters with multiple levels of thinking.

Becker placed these expectations on the lower-level employees without Floyd 4 considering the fact that since the opening of the hotel over fifteen years ago, employees were discouraged from trying out ideas that had not been approved by management. In fact, they were afraid to be innovation decision makers. Further, when employees frequently came to him with questions or concerns, he was quick to become frustrated and would avoid them altogether.

  1. In this particular context, this case study is based on how problems aroused when employees could not adopt organizational change or mistakenly violated against the prescribed practices and led the company to a disaster. Becker did not empathize for the differences between the American and Thai cultures, nor did he act effectively or reasonably across these cultural barriers.
  2. John has 10 years experience with the American company. Because of these characteristics, human capital serves as a competitive advantage as well as a huge risk for almost all organizations McShane 11.
  3. There is not a proper meaning, description or criterion defining what a main problem is. Some employees of the hotel were moved to other positions when the hotel was sold to American hotel chain.
  4. It is imperative to provide effective feedback to employees in order to maintain goals and increase motivation.

Becker did not empathize for the differences between the American and Thai cultures, nor did he act effectively or reasonably across these cultural barriers. Adding to the problem of a lack of a global mindset are errors in interactions and communications.

It is imperative to provide effective feedback to employees in order to maintain goals and increase motivation. Effective feedback must be specific, it must be relevant, it must be timely, it must be credible, and it must be sufficiently frequent.

One of the most significant errors in this case was the lack of interaction and positive reinforcement between management and lower levels employees to stimulate confidence and allow concept of empowerment to continue.

Furthermore, employees eventually lost confidence in their decision making abilities and continued to rely on their supervisors for decision making. By not providing positive reinforcement to the employees who took initiative and welcomed the concept of empowerment, extinction of the behavior eventually occurred.

The final problem that was illustrated in the case was the ignorance of the differences in cultural dimensions between the people of Thailand and the people of the United States.

As demonstrated in the case, the people of Thailand tend to value a high power distance society while people of the United States, and organizations alike, tend to value a low power distance society. They also prefer authority figures to resolve conflicts. Low power distance societies expect equal power sharing and view relationships with superiors as interdependence McShane 53. Becker, under the concept of empowerment, emphasized the freedom of decision making and autonomy for the lower level employees, which was not successful.

The Thai employees in the case also seem to value a high uncertainty avoidance, while John Becker emphasized his value of low uncertainty avoidance. One who has a high uncertainty avoidance feels threatened by ambiguity and uncertainty while one with a low uncertainty avoidance tolerates ambiguity and uncertainty. This perfectly depicts that though Becker expected the employees to be able to distinguish between major and minor decisions and handle the minor decisions on their own, the high uncertainty avoidance of the Thai people hindered the operating performance of the hotel.

The ignorance of the differences in cultural dimensions between the Thai individuals and American individuals could have easily been avoided with just a moderate level of cultural research. The preferred solution that should have been implemented in order to avoid each of these organizational problems would have been to offer the original hotel case study solution the regency grand hotel manager a retirement bonus or some sort of fitting incentive if he agreed to stay with the organization for an additional six months after the acquisition and change of management.

When the original general manager left, he took with him a great deal of human capital that can be directly attributable to the previous success of the hotel.

  • Employees were not allowed to be innovated and creative;
  • Because of this, employees were afraid to be innovative and take risks;
  • In addition to the first choice, open lines of communication within the organization such as the open door policy;
  • However, the Regency was recently sold to an American hotel chain and the current general manager decided to take an early retirement once the hotel changed ownership.

By retaining this manager, as well as the human capital that he possess, John Becker would then have had the opportunity to learn about what made the hotel so Floyd 6 successful in the past and what the stated goals were for the future. Becker would then have the opportunity to learn about the Thai culture and how vastly different the cultural dimensions are between American and Thai societies.

Case Study – The Regency Grand Hotel

One downside to this solution is the cost of retaining the original general manager and the willingness of the general manager in order to implement the organizational learning technique. However, in this case, the cost of retention far outweighs the potential consequences that hotel management could face if they do not educate themselves on the Thai culture and change their management style to fit the needs of the employees and the customers.

Floyd 7 Works Cited: The Regency Grand Hotel.