Anda di halaman 1dari 15

DEPARTMENT OF AGRIBUSINESS MANAGEMENT AND ENTREPRENEURSHIP

College of Economics and Management

University of the Philippines at Los Baños

College, Laguna, 4031 Philippines

Telefax.: (63-49) 536-2846

E-Mail:damcem2012@gmail.com

Case Analysis

Case No. 1: H.I.D.

Submitted to:

Prof. Dia Noelle F. Velasco

In partial fulfillment for the requirements of the subject

Organization and Management (MGT 201)

Submitted by:

Marc Jason C. Delomen Judy Ann V. Rebong Luis Julius Bragais

September 23, 2016

  • I. POINT OF VIEW

Consultant - Keith Houck was hired by Bill Collins, the president of H.I.D, to help the company’s management team with their strategic planning. Keith was given all the materials and resources he would need to do his task and he was introduced to the management team immediately when he came on board.

II.

SYNOPSIS

H.I.D. is in the business of establishing and operating hotels. The company has twenty one properties operating domestically and abroad. Bill Collins is the current president of H.I.D. for five years and has an ambitious goal of expanding its operations aggressively. The management team of Bill has different views on expansion, with concerns on human resources, profitability and market reach. Keith Houck, the consultant hired, is now faced with the opportunity of aligning management’s goals and objectives.

III.

ANALYSIS OF CASE SITUATION

3.1 Case Facts

Company Assets H.I.D. runs ten Holiday Inns and two Quality Inns in Georgia (USA), eight hotels in Canada and one property in the Caribbean during Bill’s administration.

Company Mission Statement The company has a mission statement that says H.I.D. strives to exceed the expectations of our guest by providing excellent value in well-run hotels located off the beaten track . In this way, we will meet our profit, quality and growth plans.”.

Company Vision Assessment/Generation

Keith organized the senior managers in a meeting to get a glimpse of their visions for the company's domestic operations on the next ten years. Bill Collins’s had the most ambitious visions of establishing twenty seven properties in five years and a long term goal of fifty in ten years. The other managers was on a conservative projection of only fifteen hotels in five years and no more than twenty in ten years.

Dave King, in charge of hotel operations indicated that profits will not be sufficient to finance the expansion. He also pointed out that they do not have the human capital to operate the new operations nor afford the increased overhead in hiring professionals. Tony Briggs was concerned about the market

competition

Karen Setz has a forward looking vision of expanding to bigger towns but still in the same

.. state of Georgia. Bill’s vision on expanding is beyond the state of Georgia which includes California and New Jersey.

Figure 1: Current locations of HID and Bill’s Target locations. 3.2 Assumptions Made ● H.I.D has

Figure 1: Current locations of HID and Bill’s Target locations.

3.2 Assumptions Made

● H.I.D has no Organizational Development and Corporate Planning Department to oversee long term strategic planning.

Since the company has

been operating for a decade, a customer relations

division as a company standard is established.

● The mission statement addresses their customers, services, product quality but

fails to include their corporate values, employee relationship, utilization of technology and social responsibility.

The company has been operating for ten years.

● The mission statement of H.I.D. is outdated and that past profit projection

during its conception had been reached at present time with substantial revenues to support existing operations but not expansion.

The tourism and hotel industry is a booming market with foreign countries

having liberal policies on company’s expanding their operations. The market size of the hospitality

industry is increasing and H.I.D. has a relatively small share of the local and international market.

Senior management’s strategic plan is focused on growth strategy and expanding

its operations.

The current financial position of the company allowed for an allocated budget under Keith Houck’s discretion.

3.3 Company Analysis

H.I.D. Mission Statement

H.I.D. strives to exceed the expectations of our guest by providing excellent value in well-run hotels located off the beaten track . In this way, we will meet our profit, quality and growth plans.”

The company mission statement focuses on capitalizing on hotels on a not so populated place specially on small towns with mid range prices.

Financial Position H.I.D. was able to accomplish its current financial goals to support its expansion.

Marketing

H.I.D. product’s entails hotel accommodations/services and their target market are clients that can afford mid priced hotel accommodations/services located in rural towns. They also target these areas since there’s lesser competition.

Organization

The company has four divisions that oversees operations which forms a team of senior managers that is accountable to the company president, Bill Collins. The human resources division is managed by Karen Setz, operations of the hotels is overseen by the COO Dave King, Tony Briggs is in charge of marketing and Art Johnson keeps the accounting records.

IV.

PROBLEM

  • 4.1 Problem Analysis

The ambitious goal of Bill Collin brought Keith Houck on board to assess the company’s direction. Keith has to tackle the opportunity of unifying the company’s objective that would benefit all the stakeholders of the company. H.I.D.’s organizational structure includes four senior managers and a president, all of the having different opinions on the direction that the company should be taking. Concerns vary from skills and competencies to market strategy and expansion. The incongruity between the senior managers and the president lead to disagreements in what the company should be doing in the next few years. The lack of a unifying vision impedes internal communication that helps in aligning the company’s goal.

IV. PROBLEM 4.1 Problem Analysis The ambitious goal of Bill Collin brought Keith Houck on board
  • 4.2 Problem Flow Diagram

  • 4.3 Problem Statement

Figure 2: Problem Flow Diagram

Keith Houck is faced with the challenges of (1) identifying the mismatch in the management team’s view of the company in 10 years versus the company’s Mission Statement; and (2) answering, “what is the best strategic plan for the company to have a unified mission and overall direction?”.

  • V. FORMULATION AND EVALUATION OF ALTERNATIVE SOLUTIONS

    • 5.1 SWOT Matrix

External Environment Analysis

Opportunities

Threats

Internal Environment Analysisb

i) Existing properties in Atlanta

i) Profit loss due to aggressive expansions

ii) Promising market in California and Georgia

ii) Internal breakdown of morale and operations

iii) Chance to unify their visions and mission

iii) Uncertain market in the bigger towns/cities

Strengths

SO Strategies

ST Strategies

i) Well-run profitable hotels

i,i) Build additional hotels in Atlanta

i,i) Perform market analysis and come

ii) Has been operating for ten years

and in those outside Georgia such as California and New Jersey.

up with options with the least risk of profit loss. Gather other sources for

iii) Optimistic and determined president

ii,ii) Use their 10 year experience in the

financial needs such as getting partnership from small hotels.

hotel industry to strategize expanding to California and Georgia.

i,iii) Build hotels outside Georgia and increase marketing strategies.

iii,iii) The president, with the help of the consultant, can revise the mission and vision of the company to cater to his ambitions.

Weaknesses

WO Strategies

WT Strategies

i) Disagreement between senior managers

i,i) Build hotels in California and New Jersey and increase marketing

iv,iii) Increase Marketing Strategies

ii) Lack of funding support for expansion outside the city

strategies. They can reduce the disagreement to a minimum by creating a highly profitable business plan in

iii,ii) Update the mission statement to achieve uniformity among all the members of the management team.

iii) Failure in internal communication

expanding to Atlanta.

iv) Hesitations in expansion marketing strategies.

ii,ii) Attract investors by showing a highly profitable business plan in expanding to Atlanta. Make the company public by opening an IPO.

iii,iii) Improve the employee relations division in mediating the conflicts between the managers.

vi,iii) Follow the Four Management by Objectives/MBO activities (set goals, action plan, review process, appraising overall performance).

  • 5.2 Evaluation of Alternatives

Alternative Solutions

RATIONALE

PROS

CONS

1. Follow the Four Management by

The four steps provide the complete analysis in

MBO involves setting the objectives at different

Performing the four steps might take time especially

Objectives/MBO activities (set goals, action plan, review process, appraising overall performance).

setting the objectives of the company.

levels, units, individuals involved in the company so as to achieve a unified basis of performance.

when the company has to perform the review process.

  • 2. Create a strategic plan

The strategic plans for

Strategic Management

Designing a strategic plan

for H.I.D. that includes a

H.I.D,

H.I.D,

will express its

Planning involve the

is complex process and

unifying Vision Statement for the

ultimate goal on what the

business wants to become.

following advantages:

encompasses constant appraisals of critical

company and update the Mission Statement

The plan will also indicate the competencies, skills

  • - Forces an objective assessment.

components.

(following the Strategic

and resources needed for

It is a time consuming

Management Steps)

allocation. It establishes

  • - Provides a framework

process and management

studying and sharing the

agreement on top

for decision making.

will have to spend a great

management, around intended outcomes/results,

  • - Inspires employees and

deal of time formulating,

and assess and adjust the organization's direction in response to a changing

gives them direction (Unity of Direction).

strategic management process.

environment.

  • - Enables measurement of progress.

It could have difficulties in implementation and

would require a clearly

  • - Aligns the company’s

communicated plan.

strategic intent and the

future state of the business.

The planning process itself provides opportunities for missteps.

  • - Serves as a guide for resource allocation.

Some visions are very generic or focus on financial objectives and as a result, poorly motivates employees.

Success is not guaranteed

  • 3. Maintain the current

Maintaining the mission

The company can prevent

Time would not be a

There would be no growth

Mission statement of the company

statement would eliminate the factor of time which is

losses that could be incurred from venturing in

for the members of the company.

also a consideration especially during implementation.

larger towns, should these hotels be unsuccessful.

There would be lack of motivation and understanding among the

   

problem since the mission statement is already being

members of the management team.

implemented.

The management team’s view of the company would not be unified.

The opportunity cost for the decision would cause a decline in motivation not just in the upper management but also in the lower ranks.

VI. RECOMMENDATION

  • 6.1 Rationale

Based on the pros and cons listed, it is best to follow Alternative Number 2: Create a strategic plan for

H.I.D. that includes a unifying Vision Statement for the company and an updated the Mission Statement, following

the steps in Strategic Management. Strategic Management follows a set of procedures that would help the company

in deciding for its long-term goals. It also involves Strategic Control wherein the progress of the company with

regards to its set goals is being evaluated and when discrepancies arise, corrective actions should be provided. H.I.D

needs this type of planning since the managers have different views for the plans for the company that could only be

addressed with careful analysis and decision-making, eg. the locations where they would build their next hotels,

whether be it still at Georgia or at farther areas such as California and Canada. Strategic Management would also

help the company to cope better in certain changes in the environment and gives motivation across all employees.

  • 6.2 Implementation Plan

Before any planning commence, a preliminary assessment of the available resources should be made to determine the flexibility and capacity of the consultant. He should also establish his working relationship with senior management, employees and shareholders. Convening H.I.D.’s top management is essential in this process as their

views are the most influential in the organization. As many people as possible should be involved in the process because involvement leads to stronger commitment. After establishing the resources and his rapport, he can now proceed with the planning the company’s strategic intent.

The first step in the process is to step back and make sure that previous goals and objectives have been met. Evaluate these carefully and determine any components that contributed to the success of the company. Recognize any parts of the previous plan that might be impractical or excessive in cost, either of time or money. Highlight these and be sure to keep them in mind during the formulation of the strategic plan. Keep back-up ideas in mind in case the original plan fails.

Creating a vision statement determines the company’s future state, it also serves as a guide in creating a mission statement. The statement should include the company’s core values, core purpose and goals. After determining the company’s vision, a mission statement can now be formulated, it is a description of what an H.I.D. does , the nature of its business and why they do it. Establish a clear image of what the vision and mission statement is intended to accomplish.

There are several guidelines in creating a mission statement: 1

  • 1. Customers. Who are your customers? How do you benefit them?

  • 2. Products or services. What are the main products or services that you offer? Their uniqueness?

  • 3. Markets. In which geographical markets do you operate?

  • 4. Technology. What is the firm’s basic technology?

  • 5. Concern for survival. Is the firm committed to growth and financial soundness?

  • 6. Philosophy. What are the basic beliefs, values and philosophies that guide an organization?

  • 7. Self-concept. What are the firm’s strengths, competencies or competitive advantages?

  • 8. Concern for public image. Is the firm socially responsible and environmentally friendly?

  • 9. Concern for employees. How does a company treat its employees?

Another important aspect is to communicate the vision and mission statement down the line. The senior managers should be active in communicating the company’s vision/mission statement and ensure to let everyone know what the end result should be and why it is important.

Performing an external and internal environment analysis is crucial for H.I.D’s

strategic plans to determine

the economic conditions that may present as a threat or an opportunity to the company and the resources and current capabilities available for use. The company may also perform forecast analysis to determine the likely success of their strategic plans. The external and internal environment analysis results in determining the company’s strength, weaknesses, opportunities and threats. This gives the company an overview of the present and future conditions that will affect the company’s strategic plans. Once the SWOT has been completed, management will be able to begin to formulate their growth strategy in line with their vision and mission statements.

1 Copy verbatrim from David F.R. retrieved September 20, 2016 from https://www.strategicmanagementinsight.com/tools/mission-statement.html

Implementing the strategic plans entails forming a strike team. Make sure that the team is unified and understands the purpose of the plan. Establish a team leader, if other than Bill Collins, who can encourage the team and field questions or address problems as they arise. During implementation, constant monitoring and periodic evaluations should be performed to determine if the implementation is on schedule. Control systems and contingencies should be in place if there are certain factors that deviates from the design. It is also very crucial to provide all the stakeholders progress reports so everybody is on board. Establish an incentive reward system to recognize success throughout the implementation process. Figure 3 shows these process steps in the implementation of strategic plans.

Implementing the strategic plans entails forming a strike team. Make sure that the team is unified

Figure 3: Strategic Implementation Flow Diagram

VII.

CONTINGENCY PLAN

Figure 4: Schedule of Activities

The second best alternative for the H.I.D. is to have a Management by Objectives or MBO Planning. This is where the planning would be based on the objectives set at different levels, units, and individuals and using these objectives as basis for the evaluation of performance of each. In implementing this plan, H.I.D must follow these steps: (1) Goal setting starting from the top level down to the lowest level; (2) Developing action plans/courses of action to meet the goals; (3) Reviewing progress; and, (4) Appraising overall performance. Having this type of approach for H.I.D would help them achieve their goals while maintaining the motivation of its employees.

Step 1: Goal Setting

Corporate Strategic Goals

Divert major funds for expansion Global brand awareness

Build 20 hotels in 20 years

Tactical Goals

○ To answer the concerns for human resources, the department should strengthen its policy and programs on selecting qualified individuals. Provide them with the appropriate training to equip them with the skills needed for the expansion. Incentives and loyalty programs should be in place for individuals who exceeds the expected performance. The structure should also be flexible to allocate positions for consultants for special projects.

○ The finance division’s main task is to fund the expansion and support each action plan in terms of funding and asset allocation. Capital investment decisions and fund allocations are extremely sensitive and requires constant monitoring to ensure that the money is going for its intended purpose.

○ Marketing strategy and product awareness is crucial during expansions. Consider which market are the easiest to reach based on the previous records. Plan and develop marketing strategies for the identified target market. Carefully plan out the resources needed for advertising and marketing since this can be costly. Utilize previous contacts and partnerships to increase visibility.

 

Operational Goals Improve recruitment, retention programs and labor cost management.

Reduce overhead cost and increase customer volume.

ratings.

Increase exposure by improving local marketing efforts and enhance public

○ Maximize profits by giving personalized service and creating a customer retention program.

Use advancement in technologies for monitoring inventories, staff scheduling

and coordination.

Source out credible suppliers and create partnership in the local area.

Reduce maintenance and renovation cost.

Step 2: Develop Action Plans

Identify the task or the changes that will occur based on the operational objective. Delegate the task to individuals based on their expertise. It is important to note that while each department has its own agenda, every action should point to the main goal. Use the available resources for completing the task. Set timelines for each of the defined tasks and place deadlines for efficiency. Use Gantt chart for the monitoring of the actions to be performed. Discuss with the team the items that should be prioritized.

Step 3: Review Progress

Gather foundational information, review goals, competencies and development plans set out. Use the details in preparing accomplishment reports and areas for improvement.

● Prepare a list of accomplishments, relate them to your goals and higher level organizational goals. Provide contextual contextual details for performance appraisal. Identify any challenges that limited the company’s abilities to succeed, as well as any support received.

Prepare a list for areas of development, identify any areas where the team struggled, or where

other departments may have noted that performance lacked, and make note of these. Identify any areas where expansion is possible on skills/experience/expertise or share them with the other departments.

Draft a revised action plans, take a proactive approach and draft some possible remedial actions based on your areas of development and the organization's higher level goals.

Step 4: Appraise Overall Performance

Include the adjustments as strategies in the strategic plan and roadmap with an alignment path when appraising overall performance. The starting point is to ensure that their is a key strategic vision and mission in place along with operational agenda items. Once that is complete, alignment planning as part of the strategic planning process can begin. Ensure strong connection among the corporate strategic goals and its operational goals. Identify what’s working well and what needs to be adjusted. Determine how these adjustments should be made and determine the best approach. 2

REFERENCES

2 R. Lannon retrieved September 21,2016 from https://www.projecttimes.com/articles/four-steps-to-align-your-organization-to-its-strategic-plan.html

Blatstein, I.M. (2012). Strategic Planning: Predicting or Shaping the Future? Organization Development Journal, Vol. 30 Issues 2, pp. 32

Cox, M. Z., Daspit, J., McLaughlin, E. and Jones III, R.J. (2012). Strat.Mgmt.: Is It an Academic Discipline? Journal of Business Strategies, Vol. 29 Issue 1, pp. 27-28

David, F.R. (2009). Strategic Management: Concepts and Cases. 12th ed. FT Prentice Hall, p. 83-94

Johnson, G, Scholes, K. Whittington, R. (2008). Exploring Corporate Strategy. 8th ed. FT Prentice Hall, p. 11-12

K. Katsanos. 2010. What Are Some Disadvantages of Strategic Management?. Retrieved September 13, 2016 from

http://smallbusiness.chron.com/disadvantages-strategic-management-80740.html

King, D.L., Case, C.J., Premo P.M. (2010). Current Mission Statement Emphasis: Be Ethical and Go Global. Academy of Strategic Management Journal Vol. 9 (2), pp. 71-87

L.E. Mojica. MGT 201 Planning and Strategic Management Lecture Notes.

Lannon R. 3/10/2015.

Steps To Align Your Organization To Its Strategic Plan. Retrieved September 21,2016 from

https://www.projecttimes.com/articles/four-steps-to-align-your-organization-to-its-strategic-plan.html

M. Wilkinson. 10/18/2011. Why You

Need

a Plan: 5 Good Reasons. Retrieved September

20, 2016

from

http://managementhelp.org/blogs/strategic-planning/2011/10/18/why-you-need-a-plan-5-good-reasons/

M. Martin. 2/19/2010. How performance appraisal is helpful for a small business

Retrieved September 22,

.. 2016 from http://smallbusiness.chron.com/performance-appraisal-helpful-business-improvement-3073.html

Rothaermel, F. T. (2012). Strategic Management: Concepts and Cases. McGraw-Hill/Irwin, p. 34-37

R. Robbins.11/21/2005.The advantages and disadvantages of strategic management. Retrieved September 20, 2016 https://charityvillage.com/Content.aspx? topic=the_advantages_and_disadvantages_of_strategic_management#. V-J6mhDnako

R.

Rollinson.

9/20/2016.

Strategic

Planning

Basics.

Retrieved

September

20,

2016

from

https://balancedscorecard.org/Resources/Strategic-Planning-Basics

Williams, L.S. (2008). The Mission Statement. A Corporate Reporting Tool with a Past, Present, and Future. Journal of Business Communication Vol. 45, (2), pp. 94-119