Globalization within the Context of the Hospitality Industry - Essay Example

Globalization Grade 6th December, This paper discusses the issue of globalization within the context of the hospitality industry. The Sheraton group of hotels has been used as the focus on the issues of globalization as analyzed in this paper. The human resource issues raised by globalization in the hospitality industry are discussed in the context of this report. It focuses on the strategies which have been used to attain globalization by the Sheraton group. The human resource challenges faced by the group in its quest to attain globalization have also been analyzed. The report concludes by proposing ways through which the hotel can use to improve the human resource aspect while adopting the globalization trend moving into the future. Background Globalization can be defined as a way through which companies move from the native countries and start their operations in other countries. It entails several aspects like operations, products among others. It can be identified as a means through which companies avail their services in many countries around the world. In recent times, the desire for companies to attain globalization has been on the rise. Going international makes many companies discover new markets. In the hospitality industry, the globalization trend has been extensively employed as there are numerous hotels within this industry which have an international outlook. The demand for high standards of hospitality services can be identified as the global feature driving these companies towards globalization. The demand for hospitality services has been on the rise as international business increases across the globe. The rate of movement by people around the world has increased tremendously in the 21st century. The demand for hospitality services like hotel rooms continues to increase annually as the years progress. Hotels continue to expand their services in the aim of satisfying their clients. Loyal clients of hotels have been the main reason for the desire to globalize within the hospitality industry. The competition within the industry continues to rise as new organizations come into the market (Aaker, pg 5). Globalization has become the new way to create an extra market for the organization within the hospitality industry. The creation of an international brand is crucial for many organizations within this industry. People travel from numerous places in the world, and with an international brand, a hotel can easily sell the name once it enters into the new market. While creating an internationally recognized brand is an essential requirement for a hotel, the globalization of the hotel services comes first. The services have to be availed before the name becomes recognized. In many organizations today, going global has become the new way of conducting business. Hotels have not been left behind in this new trend. Through globalization, hotels can be able to diversify the services they offer and likewise improve the business earnings for the company. The human resource continues to play a crucial role in ensuring that the employees hired can effectively deliver the diversified services efficiently. The concept of globalization has been adopted differently within the hospitality industry. Previously in the mid 20th century the issue of globalization seemed like a dream within the hospitality context. Only companies in the manufacturing industry could be thought as having the capability to globalize their operations. This trend changed and globalization started coming into the industry (Smith, pg 188). Hotels would partner with others and try to standardize the services offered across all the hotels. These hotels would be able to share clients as well as other operational items like menus. This ensured that the guests who stayed at any hotel which was in the program would receive similar services elsewhere. Issues started arising concerning the sharing of clients when complains were raised in some of the hotels. This aspect was done away with and hotels started opening new establishments in different countries. Some companies opted to globalize their hotels services while others sought to globalize the name of the hotel. The former system meant having hotels owned by a single company operating in different countries under different names, the other system, commonly used today was giving all hotels owned by a company a single name whenever they were. This method has been extensively utilized by organizations seeking to establish an international brand name. The element of globalization in the hospitality industry has had numerous implications for the industry and organizations too. Numerous acquisitions have taken place within the industry as hotels seek to globalize. Many organizations opt to purchase existing hotel and reopen them, as opposed to construction of new buildings. This fact has seen numerous hotels changing managements severally in a span of short time. Acquisitions of existing hotels carry with them the reputation of the previous hotel. This may be advantageous or disadvantageous, for the new ownership depending on the reputation possessed by the previous hotel. To the organizations, globalization has brought about many human resource concerns. While organizations seek to attain an international standard, the level of skills and training available in a certain country may not be able to sustain the expected standards. This may force an organization to import expertise from other countries, and this may be too costly. This has created an issue of concern for the human resources departments within the industry in general. The implications of globalization on the organization adopting it are vast. Though globalization can create a new market fro a hotel, several considerations need to be addressed before venturing into the global arena. A hotel can increase its financial income tremendously by globalizing its operation. Competition within the local market for the industry players seems to drive larger organizations towards globalization. Many organizations, having adopted the globalization element, have been faced with numerous challenges within the human resource department. It becomes an essential matter, therefore, for organizations seeking to attain sustainable globalization to address the impacts of globalization on human resource effectively. Addressing this issue can enable organizations to come up with valuable strategies on how to adopt the globalization trend comprehensively. Globalization can lead to the growth of a hotel both physically and economically. When an organization globalizes its operation, numerous aspects of the human resource department need to be addressed (Scott, pg 165). The impact of globalization on the human resource can be identified as vast. For sustainable globalization to be achieved, amicable solutions to the human resource issues need to be drafted. Globalization immensely makes use of the human resources and the needs of the human resource come at the core of globalization. The impacts of globalization The Sheraton group of hotels has adopted a global appearance. This group of hotels has establishments in many countries across the world. All hotels of this group operate under the name of Sheraton. The company has undergone tremendous changes from its inception in 1937 when it was just a single hotel. The hotel uses acquisition of old hotels as a way of constructing new hotels in various countries. Once it has acquired the hotels, it renovates them to the desired standards which the organization has set for its establishments. The group can be identified as a market leader in the hospitality industry. It became the first hotel to be listed in the New York stock exchange and as at 2011 it had a total about 478 establishments across the globe. The hotel has been a characteristic example of organizations in the hospitality industry which have adopted the globalization element. There have been numerous impacts of globalization on various aspects of the hotel in relation to the human resource. Customers Service delivery to customers is carried out by the employees, it is the duty of the human resource to equip the employees with sufficient skills to deliver the services. The clients of the hotel have been able to access standardized services while traveling into various countries around the world. The presence of the hotel in many places within the globe makes the customers travel without worries of where to search for a hotel once in a new country. Customer satisfaction can be immensely enhanced by this fact. The hotel has also adopted a way of constructing low cost hotels in some areas. This is aimed at providing a variety of services to its customers in terms of price. The human resource ensures the availability of the necessary human capital in all these establishments to deliver the required standards as per the level of establishment. These budget hotels have been called the Sheraton inns. They offer similar standards of services as the rest of the hotels but at a cheaper price to the customers. The human resource provides desirable training to employees to equip them with the essential skills of delivering and maintaining satisfactory services to the customers. Through globalization, customers of Sheraton can be able to book hotel rooms from any of their hotels around the world. Globalization, however, can create a monotonous travel for a client. An individual may not notice the difference of the places he/she goes to because the services he receives are the same everywhere. This may make the client not to enjoy a holiday. The duty of training staff to maintain customer satisfaction puts immense pressure on the human resource. Strict training programs must be drawn and the human resource must ensure their implementation. This program increases the responsibilities of the human resource and diversifies the duties carried out by the human resource. Management process Management can be defined as the utilization of the available resources to achieve organizational goals and targets. The human resource falls in the category of the various resources catered for by the management process. Globalization directly impacts on the management process of the human resources. The issues arising for the organization are whether to establish a central management point for the human resource or to decentralize the management process. The Sheraton hotel does not have a central management point. Each hotel has its own human resource department although the organization requires that the running of the hotel be carried out per the specified standards laid down by the organization. The process of management of the human resource has been unified by laying down strategies concerning what is expected by the owners of the hotel from the management. Though this seems impressive as a way of maintaining standards in all the hotels, it may not be a strong point for the management team for a unit. Controlling the management process make it difficult for a hotel to utilize any special skill possessed by employees. An employee with a special skill may not be able to use the skill at the place of work because the organization does not allow. A waiter, for example, may possess skills in dessert making. In a normal setting, such an employee would be allowed to make specialty desserts. This may not be applicable in the Sheraton situation as the organization expects waiters to serve food prepared by the cooks. Managers have different management styles, when the management system is dictated, a manager may feel intimidated, and his performance may not reach the optimum. The effects of globalization on the management process may have a direct impact on the output of a unit’s management team. If a manager is let to do as he wishes, new ideas may be integrated into the hotel which may see the hotel create a new market for itself. Employees Employees form an essential part of any establishment in the hospitality industry, especially hotels. The human resource comprises of the members of staff employed in an organization. The employees at Sheraton are equipped with knowledge of the expected standards. The hotels conduct time to time training for employees to ensure they remain informed about the hotel needs. At times, the hotel exchanges employees within the several units so that they can get an experience of how the other hotels carry out their work. These programs of training and exchange of skill help a lot in motivating the employees. It also ensures that the employees deliver their services in a unique way, peculiar with the Sheraton group. These responsibilities of ensuring staff have the right skills become bestowed on the human resource. With the model of globalization adopted by Sheraton, the human resource responsibilities increase significantly. The human resource constantly conducts training to improve the skills of employees. This move ensures that the standards of Sheraton hotels’ services are maintained at all times. In line with maintaining standards, the hotels conduct recruitment of senior staff members through internal promotions. Rarely does the organization recruit from outside the group hotels. This ensures that the management teams are also conversant with the operations of Sheraton. This may, however, make employees lose touch with the industry. If the standards at Sheraton go below the industry’s standards, it may be extremely difficult to correct them with the same members of staff. This happens when employees lack experience of the industry’s standards. Changing the standards once they depreciate may become an uphill task for the management. The expectations from the employees will be too high as they have skills limited to the standards of the group and not the industry in general. This globalization may make an organization lose touch with the industry as it seeks to set its own standards across the globe. Products The products of the hospitality industry are mainly services offered to guests in different ways. Globalization of the Sheraton hotels has led to the standardization of the hotel products based on the class of a unit. The human resource is expected to recruit staff with the right skills to be able to produce the standardized products and maintain the product standards as well. This necessitates the need for the human resource to work closely with the production departments in ensuring the maintenance of product standards. This has ensured that the clients remain satisfied by the services offered in different units within the group. The company has been able to create a market niche for itself at the global arena, through standardizing its products. The organization has also been able to come up with unique products to cater for the different clients who seek the services. This can be said to be what caused the hotel to create a low cost class of hotels within the group. This class of hotel targets the low spenders who visit the hotel. In globalization, this can be identified as creating a different product for a different market. When globalization occurs, diversification of hotel products becomes essential. The different categories of products offer customers a range from which they can choose their desired product. Though there has been a different product line, this range is not wide enough to cater for many international clients. The human resource has been forced to hire expatriates in some hotels to conduct internal training on some products. A Chinese chef may be brought from China to train staff in the hotel in Djibouti on Chinese cuisine. Majority of the units classified as budget hotels are located in the United States. This category of the hotel has not been availed in the global market fully. This means that at the international level, the number of products available still remains limited. Strategies The hotel has continued, through out the years, to be a leader among various international chains of hotels. The group has integrated the human resource function in various strategies employed in the globalization of the brand. The numerous identifiable strategies the hotel has employed can be evident in the following aspects. Name The hotel has made it easy for people all over the world to recognize its hotels. By using the common name in all the units under its ownership, clients from all over the world are able identify the hotels which belong to Sheraton. The name of the hotels has been maintained all the way through from1937 when it was established. Even when the Starwood group acquired Sheraton in 1998, the name did not change. The organizational structure and behaviors have remained the same. The human resource continues to be extremely influential in maintaining the culture of the organization to create the name of Sheraton. Maintaining the name makes the hotel appear stable even when it may not. This, in turn, has boosted the confidence of the clients who may never realize the change in ownership. The name “Sheraton” displays all over through the operations and the behavior of members of staff. The responsibility of ensuring that staff uphold, and maintain the cultural values of the Sheraton, lies purely within the human resource mandate. The hotel has also been able to maintain the loyal clients of the organization through maintaining the name of Sheraton. Maintaining the name has won the confidence of many clients. Gaining the confidence of these clients has helped the hotel maintain considerable levels of occupancy during the low seasons in various countries. Products and services The services which the hotel offers have been maintained throughout its globalization program. This can be termed as what has given the organization a head start in globalization. The human resource has continued to play a significant role in the maintenance of product and services standards. Promotions for the products and services offered, continues to be an integral part on the employee culture initiated by the human resource. Opening of new hotels has been immensely simplified in the process. When the organization is opening a new hotel, they do not need to start drafting new ideas concerning the services to be offered in the new hotel. This can be said to have made the opening of new units extremely easy and thus the quick global expansion. The hotel has also maintained product standards as a way of keeping it customers satisfied. This has ensured that the existing clients are maintained as they can provide business to any new units opened. Other than the products, the human resource has created a customer services center. The center can be accessed through a toll free number (1-800-325-3535) which guests can call to make enquiries. This number can be accessed from any place in the world. All queries concerning services offered by the hotels can be answered by a simply dialing the number, and speaking to customer representative. This service has allowed the hotel to maintain contact with the guests at not cost to the clients. The availability of a toll free service can be said to have encouraged many potential clients to make enquiries concerning the products of the hotel. With an affordable and accessible means of communication, guests have been able to maintain contact with the hotels. The hotels have also been able to keep a track of their clients. This feedback has been essential fro the organization to come up with right products for their clients. Standardization The human resource continues to offered assistance to the group in standardizing almost all aspects of its operation in every hotel. This has made it easy to run the hotels as the standards are already known by everyone including the staff. The human resource continues to equip staff with skills and information concerning the standards of the hotel. With the staff being informed on the standards, they have been able to maintain them with ease. This has also helped reduce the issues of conflicts which occur severally within the hospitality industry. A smooth running of the hotels has been realized with the reduced conflicts experienced. The organizational culture has also been standardized across the globe by the human resource (Smith pg 134). This has kept the motivation level of employees high as well as the clients. It has also created a surmountable client base for repeat guest. People who do not want to be subjected to different services whenever they travel have found a comfort zone in the Sheraton hotels. The services that guests get from Sheraton hotels have enticed the guest want to maintain contact with the hotel. Recommendations The human resource of the Sheraton hotels has played a significant role in the globalization of the organization. It has been able to adopt and incorporate numerous aspects of the organization into the globalization trend. There are various aspects, though, where improvement may be necessary in order to attain sustainable globalization in the future. The human resource needs to be able to recruit some senior managers from outside the organization. This would ensure that the organization receives new ideas from outside. The current system used constricts new ideas by limiting their availability. The strictness of organization’s employee duties need be made laxer. This will enable utilization of special skill portrayed by employees. This would significantly improve the quality of services delivered while offering a chance to employees to show their hobbies at work. The integration of these proposals in the human resource would put the hotels in a competitive position while helping the organization achieve globalization in future Conclusion Globalization has been a common trend in business in recent years. All businesses have a desire to attain global acknowledgment. There are many reasons driving organization towards globalization. The challenges faced in the global arena, however, are numerous. Dealing with these challenges can put an organization among the top in terms of globalization. Before organizations can undertake globalization ideologies, they need to assess the demand for their products at the international level. All aspects of the organizational structure also need to be considered. The impact of globalization of the organizations is also essential to ensure sustainability. Organizations also need to make analysis of how the industry changes shall affect their globalization quest. This can help them strategize on how to maintain their position in future. References Aaker, David A. and Erich Joachimsthaler. Brand Leadership. New York: The Free Press, 2000. Bhagwati, Jagdish. In Defense of Globalization. New York: Oxford University Press, 2004. Scott, Richard. Organizations and Organizing: Rational, Natural, and Open Systems Perspectives. New York: Pearson Prentice Hall, 2007. Smith, Charles. International Trade and Globalisation, 3rd edition. Stocksfield: Anforme, 2007. Read More