Management of Change at Hilton Hotels - Case Study Example

Management of Change Executive summary Hotel industry is one of dynamic and fast growing branches around the world. The organization under analysis is Hilton hotel chain. Hilton hotels need change because environments generally change much faster than hotels structure and service quality. The main changes will concern services and staff. In order to meet the requirement of the clients Hilton hotels will implement Internet services for all hotels involving into the Hilton group. The training of staff will be a necessary part of change, as new technology needs new skillful workforce able to cope with new tasks. The role of a leader and communication will be taken into account to reduce resistance to change and speed the process of change. Prescription for change High rates of its development, great volumes of currency receipts have an active influence on various sectors of economy that promotes formation of hotel industry. The most well known Hotel chains are Hilton, Radisson, Sheraton, Crowne Plaza, Holiday Inn and Ramada, Concord, and Ritz. The development of hotel industry is a current need. The history of development of various hotel corporations, as a rule, testifies, that the level of profit is a result of quality service. The main objective of hospitality operator is to maintain the level of service quality and develop strategies to improve their services. The organization under analysis is Hilton hotel chain. It should be noted that hotels and environments have a two-way reciprocal relationship. On the one hand, hotels are open to, and dependent upon, the social and physical environment that surrounds them. Hotels need financial resources and political legitimacy (a set of laws by which to operate) provided by outside institutions and governments (Hayes, Ninmeier, 2003). Customers are significant members of the environment. And knowledge and technology are also a part of the environment: they are produced by other actors in the environment and purchased by the organization as educated labor or as pure knowledge assets. Organizational environments change includes changing knowledge and technology, new values, new markets, and changes in the global distribution of wealth. Environmental change is a main cause of organizational failure. As environments change, they pose new problems for managers of organizations. New knowledge, for instance, can invalidate the existing knowledge of an entire hotel industry. When environments become turbulent, complex, and resource constrained, the knowledge and skills that Hilton hotels once possessed can become useless, and even a hindrance to change. Hilton hotels will acquire new knowledge and technology, and employ these assets in production quickly. From a Hilton management standpoint, technology is a major environmental factor that continually threatens existing arrangements. At times, technological changes occur so radically as to constitute a "technological discontinuity," a sharp break in industry practice that either enhances or destroys the competence of firms in an industry. Fast-changing technologies, such as information technology, pose a particular threat to organizations. To ensure customer satisfaction Hilton hotels should implement and develop new strategy based on Web services. It is not a unique and a new form of service (some hotel chains have already used this service, but still it is one of the most beneficial area for attracting a new customers). The idea of web-enabling Hilton hotels is to provide hotel management companies with the tools they need to compete more e effectively and to grow their businesses successfully. With the help of Internet Hilton hotels, known for its patchy supply chain and bungling circulation processes, will have the possibility to improve efficiency, inventory, audit control and to diminish infrastructure and operation costs by web-enabling their business online. Internet will support the hotel industry to be better equipped to handle business desires, paying attention to clients' needs, competitors and prospective partners. It is especially important for hotel business which includes more than one hotel. The need is to find ways to manage the purchasing and brand requirements for each hotel and franchise. The change entails developing a business process model of how activities function, analyzing relationships among business units, and implementing changes that would eliminate redundant processes and make business units more effective. Five major steps (Hammer, Champy, 1993) for change business processes include: Develop the business vision and process objectives. Senior management needs to develop a broad strategic vision, which calls for redesigned business processes. For example, Hilton hotel management looks for breakthroughs to lower costs and accelerate service that would enable the firm to regain its competitive stature in the consumer products industry. Identify the processes to be redesigned. Hilton hotels should identify a few core business processes to be redesigned, focusing on those with the greatest potential payback. Symptoms of inefficient processes include excessive data redundancy and reentering information, too much time spent handling exceptions and special cases, or too much time spent on corrections and rework. The analysis should identify what organizational group owns the process, what organizational functions or departments are involved in the process, and what changes are required. The methods for identifying organizational information requirements described earlier in this chapter may be useful here. Understand and measure the performance of existing processes. For example, the objective of change is to reduce time and cost in developing a new Internet service Hilton hotel needs to measure the time and cost consumed by the unchanged process. Identify the opportunities for applying new technology. The conventional method of designing systems establishes the information requirements of a business function or process and then determines how they can be supported by in formation technology. However, information technology can create new design options for various processes because it can be used to challenge longstanding as assumptions about work arrangements that used to inhibit organizations. Build a prototype of the new process. Hilton hotels will design the new process on an experimental basis, anticipating a series of revisions and improvements until the redesigned process wins approval. Many systems fail because of the opposition of either the environment or the internal setting. The complete cycle of change will take from 4 to 5 months. The change process will not be speedy, but the main objective of the programme is to ensure that all the aspects and spheres of change will be ready to work in renewed conditions. The speed of change can vary in accordance with the success of learning process and training of staff, and their resistance to change. Proposed Actions The proposed actions include wide scope of activities needed to support the successful implementation of change. The implementation will focus on actors and roles. The belief is that Hilton hotels should select actors with appropriate social characteristics and systematically develop organizational roles, such as "product champions," to innovate successfully. Generally, this focuses on early adoption and management of innovations. The perception and use of information systems can be heavily conditioned by personal and situational variables. To further complicate the picture, what users say they like or want in a new information system may not necessarily produce any meaningful improvements in Hilton hotels performance (Johnson, Scholes, 1998). In the context of implementation, the systems analyst is a change agent. The analyst not only develops technical solutions but also redefines the configurations, interactions, job activities, and power relationships of various organizational groups. The senior manager is the catalyst for the entire change process and is responsible for ensuring that the changes created by a new system are accepted by all parties involved. The change agent communicates with users, mediates between competing interest groups, and ensures that the organizational adjustment to such changes is complete. In order to leverage change, Hilton hotels should used primary and secondary activities. Primary change activities are most directly related to the production and distribution of the hotels services that create value for the customer. Primary change activities will include inbound logistics, operations, outbound logistics, sales and marketing, and service. The service activity will include maintenance of the hotels' high standards and quality services. The other groups is support activities which make the delivery of the primary activities possible and consist of hotels infrastructure (administration and management), human resources (employee recruiting, hiring, and training), technology (improving products and the production process), and procurement (purchasing input). When technology-induced changes produce unforeseen consequences, the Hilton hotels can benefit by improvising to take advantage of new opportunities. Information systems specialists, managers, and users should remain open-minded about their roles in the change management process and not adhere to rigid narrow perceptions. Although systems analysis and design activities are supposed to include an organizational impact analysis, this area has traditionally been neglected (Welford, Gouldson, 1993). There are many reasons why Hilton hotels will have different shapes or structures. Hilton hotels differ in their ultimate goals and the types of power used to achieve them. Some Hilton hotels have utilitarian goals. The kinds of power and incentives differ accordingly, as does the overall shape of the Hilton hotels. In the infrastructure of Hilton hotels service quality is the major question. Without qualitative service the hotel enterprise is not capable to achieve the overall objectives. Hilton hotels are marked by increasing capital markets activity over the past 5 years. It is estimated that average annual returns for full-service hotels are anticipated to exceed 13 percent over the next 10 years, with hotel industry investment alternatives performing at single digit growth rates (approximately 7 percent to 9 percent). The use of dynamic lead-time policies allows Hilton hotels to capture some of the cost reductions (when service values decrease rapidly over time). Besides results on a log-linear decision rule that optimizes the overall profit of the firm under certain conditions, they also provide methods for assessing the value of coordinating mechanisms between operations and marketing. The customer satisfaction is achieved by changing oparations model concerning fleible level of prices and time. Web services, call centers and separate messenger service are used in order to provide support for those activities outside the hotels. Messengers are employed to carry mail, important and urgent messages, and other forms of communication the regional and head hotels. Due to constant programs of modernization, regular investments into the hi-tech equipment and constant training of the staff, gives Hilton hotels opportunity to satisfy the most specific inquiries which can arise at during business trip. Hilton has full-service hotels and limited service properties operated under franchise agreements with National hotel chains. It has become a favorite of both business and leisure travelers. Strengths of the industry include knowledge, relationship selling and history (Sterman, 2000). Because information systems potentially change an organization's structure, culture, politics, and work, there is often considerable resistance to them when they are introduced. Microeconomic theories have no explanation for organizational resistance to change. In general, behavioral theories are superior for describing this phenomenon. The main reasons for failure of Hilton hotels located abroad are an inability to adapt to a rapidly changing environment and the lack of resources-particularly among young firms- to sustain even short periods of troubled times. New technologies, new products, and changing public tastes and values (many of which result in new government regulations) put strains on any organization's culture, politics, and people. In general, most organizations do not cope well with large environmental shifts (Bardi, 2002). There are several ways to visualize organizational resistance. Changes in technology and Internet services are absorbed, deflected, and defeated by hotels task arrangements, structures, and people. In this model, the only way to bring about change is to change the technology, tasks, structure, and people simultaneously. Other authors have spoken about the need to "unfreeze" organizations before introducing an innovation, quickly implementing it, and "re-freezing" or institutionalizing the change (Senior, 2001). A systems approach to leadership would regard the leader, the follower and situation as inter-dependent units, all engaged in the production of outputs, and would consider - what are the relationships involved and r: what extent are they aimed at mutual goals Several key factors interact in i leadership-group situation and a modern approach is to consider that the leader and the group adjust their behaviour dynamically to each other Lagone, Rohs, 1993). Good leaders must be able to cope with complex technological change in their organizations. General leadership skills are not sufficient in enriched environments. It must directly relate to the tools, medium, strategies, and competencies found within this culture. Leader should possess the competencies to use and evaluate new tools, but he/she must also have the insight into the impact these tools will have on the future of organizations. The ability to develop a shared vision for technology within an organization is an essential part of management. Changes in technology often produce a "chaos situation" where change management in the use of instructional technology in teaching and learning becomes increasingly important. The leader must be ready to cope with difficult situations. Effective leaders recognize that what they know is very little in comparison to what they still need to learn. To be more proficient in pursuing and achieving objectives, a person should be open to new ideas, insights, and revelations that can lead to better ways to accomplishing goals. This continuous learning process can be exercised, in particular, through "engaging yourself in a constant dialogue with your peers, advisers, consultants, team members, suppliers, customers, and competitors" (Channon, Constable, 1990). The effective leader of Hilton hotels should find one of the most appropriate ways to solve this problem - to change a style of management to more progressive one. On the one hand, leader could provide strict control, but in a time the authoritarian style will stop working also. It will not help to make progress (Cope, 2000). The situation when hotels have observed a lack of flexibility and a slow decision-making process is common for many organizations working on the basis of "command and control" style. It does not serve its customers well, and as a result, such situation can decrease company's profitability. Communication, employed by Hilton hotels, is affected by internal and external environment, by the nature of the task, and by technology. Most hotels employ formal communication which is created to achieve specific organisational objectives and are concerned with the co-ordination of work activities. In this company people are brought together on the basis of defined roles within the structure of the organisation. The nature of the tasks to be undertaken is a predominant feature of Hilton. Hilton hotels use line communication which means authority flows vertically down through the structure, for example from the managing director to managers, section leaders, supervisors and other staff. There is a direct relationship between superior and subordinate, with each subordinate responsible to only one person. Line relationships are associated with functional or departmental division of work and organisational control (Dow, 1999). Staff relationships has a great influence on the decision making process. Persons in a staff position have no direct authority in their own right but act as an extension of their superior and exercise only 'representative' authority. Successful management of Hilton Hotels lies in responding to internal and external change. This involves the clarification of objectives, the specification of problems, and the search for and implementation of solutions. Hilton hotels are seen as an information-processing network with numerous decision points (DeFranco, Noriega, 1999). An understanding of how decisions are made helps in understanding behaviour in the organisation. Applying Handy's theory it is possible to say that Hilton hotels apply 'A Web' type or power culture characterized by total control and power from the center (Senior, 2001). This type of culture helps to account for variations among organisations and managers. This type helps to reduce complexity and uncertainly. It provides a consistency in outlook and values, and makes possible the processes of decision making, co-ordination and control. For Hilton hotels 'A Web' type of culture is clearly an important ingredient of effective organisational performance. It is possible to conclude that increased importance attached to the quality of working life has drawn attention to the satisfaction of people's needs and expectations at work achieving with the help of change. It has also drawn attention to relationships between the quality of working life and employee commitment, levels of work performance and productivity which on the high level in both companies. Change emerged as the most favorable approach, wherein the hotel industry closely connected with the intermediary, setting price levels which are acceptable to both parties, giving, receiving and acting on information, and providing adequate support and incentives. Hilton hotels use very effective methods and techniques to overcome change resistance and provide successful implementation of new technologies. Customers want more help with the Internet, and Hilton hotels provides them with full range of Web services. Hilton uses customer-oriented policy, which is based on a particular customer, and his "needs and wants". And, as the most important, Hilton pays much attention to staff training and uses practically management innovations appeared recently. References 1. Bardi J.A. Hotel Front Office Management Wiley; 3 edition, 2002. 2. Channon, D. F. and Constable, J. Cases in Strategic Management, John Wiley and Sons, Chichester, 1990. 3. Cope, Mick. Know Your Value. Publisher: Financial Times Prentice Hall, 2000. 4. DeFranco A., Noriega P. Cost Control in the Hospitality Industry. Prentice Hall; 1 edition, 1999. 5. Dow, D. "Exploding the Myth: Do All Quality Management Practices Contribute to Superior Quality Performance" Production and Operations Management, Vol. 8, No. 1, 1999, Spring pp. 1-25. 6. Johnson, G., Scholes, K. Exploring Corporate Strategy. Hemel Hempstead: Prentice Hall, 1998. 7. Lagone, C. A., & Rohs, F. R. Community Leadership Development: Process and Practice. Journal of the Community Development Society, 1993, 26, pp. 252-267 8. Hayes D.K. Ninmeier J.D. Hotel Operations Management Prentice Hall; 1st edition, 2003. 9. Hammer, M, Champy, J, Re-engineering the Corporation. Nicholas Brearley, London, 1993. 10. Hilton hotel. (n.d.) Available at: www.hilton.com 11. Senior, Barbara. Organisational Change, Capstone Publishing, 2001. 12. Sterman, J. D. Business Dynamics: Systems Thinking and Modeling for a Complex World, Irwin McGraw-Hill, New York, 2000. 13. Welford, H. Gouldson, K. Environmental Management and Business Strategy, Pitman, 1993. Read More