MGT 521 Hilton Worldwide

Structure Follows Learning Team A

Strategy
History of Hilton in Havana

• America imposed an arms embargo on the Cuban

government on March 14, 1958.

• The Habana Hilton opens March 22, 1958. At a cost of

$24M, the hotel was a partially owned asset.

• Castro enters Havana on January 8,1959. Suite 2324,

in the Habana Hilton, became his headquarters.

• Hilton managed the hotel until October, 1960, when

casinos were closed and all hotels were nationalized.

Figure 1: Hilton Havana Advertisement

US News and World Report March 28, 1958
History of Hilton in Havana

Is Hilton ready to Gamble Again in Havana?

Current Strategic Objectives

Financially Focused
• Outperform competitive set’s annual EBITDA and RevPar figures

• Increase long-term value by separating hotel, real estate, and

timeshare business segments into three separate companies

• Create cost efficiencies by driving business to preferred booking

channels
Current Strategic Objectives

Guest Focused
• Develop technology plans to enable state-of-the art merchandising
across all guest engagement channels

• Expand implementation of digital room selection process and check in

• Execute system-wide roll out of Digital Keyless Entry system

• Increase Hhonors program enrollments and enhance member

value-adds
Current Strategic Objectives

Team Member Focused

• Redesign compensation plans to align with financial goals and bias
performance

• Implement industry-leading benefits, including parental leave,

enhanced paid time off, GED assistance and flexible work programs

• Develop a robust talent, skill, and capability assessment process

• Establish one global platform for all training and curriculum

Current Strategic Objectives
Owner Focused
• Provide increased stakeholder value through Hilton Performance
Advantage Services

• Increase “repeat ownership” figures, of franchises, by providing a

diverse portfolio of brands

• Continue to grow the pipeline of 3rd party developed room inventory

• Increase conversion rate of competitor/independent hotels to Hilton

Worldwide brands
Current Strategic Objectives

Community Focused
• Create hospitality job opportunities through apprenticeship
programs, career engagement, and life skills training

• Strengthen communities through volunteer projects and

company-wide Global Month of Service

• Preserve the environment through company-wide conservation

efforts along with tracking and monitoring tools
Current Hilton Structure
Global Expansion
How expanding into Cuba may affect work functions:

• Property Operations

• Brand Standards

• Global Development, Architecture, Design &

Construction

• Finance and IT
Global Expansion
How expanding into Cuba may affect work functions:

• Human Resources

• Legal Compliance and Government Relations

• Commercial Services

• Time Share Operations

Change Management Strategy

Key Components for the Restructure

• Change Management Strategy

• The Hilton Leadership Team

• Five Key Components

• Post-rollout
Change Management Strategy

Assessment of the Change

• Identifying Obstacles

• Prospects of a successful restructuring

• Develop a strategy

• Document overall risk and specific risk

• Assess the readiness of the organizations impacted by the change

Change Management Strategy

Communicating the Plan

• Management to design a plan

• Communicating the plan

• Communicating risk

• Communicating benefits
Change Management Strategy

Training for Change

• Preparing for resistance

• Sponsor activities

• Sponsor roadmaps

• Understanding culture
Change Management Strategy

Feedback Mechanism
• Surveys
• Interviews
• Focus Groups
• Data Collection
• Feedback Analysis
• Corrective Action
Change Management Strategy

Recognizing Success
• After Action Review

• Avoid the Loss of Valued Employees

• Evaluate Success and Failures

• Identify Next Global Market Expansion

Change Management Strategy
Action Plan
• Phase 1 – Preparing for Expansion:
1. Develop a plan that focuses on finances, guest, team members
and owners
2. Develop a training curriculum for the management team

• Phase 2 – Managing Changes and Resistance:

1. Leaders will communicate expansion
2. Create job opportunities, hospitality, and employee training
3. Create volunteer projects
Change Management Strategy
Action Plan
• Phase 3 – Reinforcing Change:
1. Conduct surveys

2. Analyze all data collected and feedback

3. Recognize success
Structural Alternatives

• Strategic Alliances

• Trade

• Investment

• Licensing & Franchising

Strengths and Weaknesses

• Strategic Planning

• New Markets

• Favorable Regulations

• Financial Risk
Recommended Structure
Franchising
References
Arthur, Luke(2016).,The Advantages and Disadvantages of International Franchises, Retrieved October 7, 2016, http://small
business.chron.com/advantages-disadvantages-international-franchises-22488.html

Global Hotels and Motels Industry Profile, New York: Datamonitor, 2015, Retrieved October 7, 2016, http://www.datamonitor.
com/

Heil, Karl (2016)., Strategy in the global environment., retrieved from http://www.referenceforbusiness.com/management/Str-
Ti/Strategy-in-the-Global-Environment.html

Hilton Worldwide About Us, “Executive Committee”, Retrieved October 7, 2016, http://www.hiltonworldwide.com/about/leade
rship/

Hilton Worldwide About Us, “Corporate Responsibility”, Retrieved October 3, 2016, http://cr.hiltonworldwide.com

Hilton Worldwdie About Us “ 2015 Annual Report” Retrieved October 6, 2016, http://ir.hiltonworldwide.com/financial-reporting
/annual-reports
References
Jones, G., & George, J. (2016). Contemporary Management (9th ed.). New York, NY: McGraw-Hill

Periu, M. February 9, 2015, American Express Open Forum “What You Should Know About Doing Business With Cuba”, Ret
rieved on October 7, 2016, https://www.americanexpress.com/us/small-business/openforum/articles/evaluate-cuba-opport

Prosci. (2014). The System And Tools For Managing Change. Retrieved From: http://www.change-management.com/tutorial
-change-leadership-mod3a.htm

Wall Street Journal October 2015, Accessed October 2016 http://www.wsj.com/articles/hilton-to-spin-off-hotel-properties-into

-real-estate-investment-trust-1450300095

Wallack, H. October , 2015, “SHRM Delegation to Cuba Finds Entrepreneurial Buzz in Havana and HR Issues Similar to U.S
.” Retrieved October 7, 2016, http://blog.shrm.org/blog/shrm-delegation-to-cuba-finds-entrepreneurial-buzz-in-havana-and