Case Study Analysis: Island View Hotel and Resort


Introduction

This paper will explore a number of issues that have been identified as detrimental to the development of Island view hotel and resort. Island view hotel and resort is a five star property located on a coast 80 kilometers from a major regional city that has a population of 1.75 million people. Information on the establishment will be sourced from a case study. The paper will primarily focus on the challenges faced by the establishment in management. Analysis of the issues and recommendations are informed by theories and best practices in management.

Challenges

There are a number of challenges that have been identified in the management of Island view hotel and resort. However, the paper will only focus on a few that have been identified as the major challenges. A problem is defined as major in this paper if it affects the organization as a whole and has long term impact on productivity and profitability in the firm.

Poor Environmental Scanning

Environmental scanning is a vital process in strategic management. Organizations engage in strategic management with the aim of bettering the sustainability, overall productivity and organizational performance in the long term (Porter, 2008; Formica, & Kothari, 2008). The strategy formulation and implementation process is thus concerned with the attainment of short term goals with the aim of bolstering long term performance.

A critical review of the strategic planning process reveals that an analysis of the environment provides important information on the opportunities and threats that exist (Formica, & Kothari, 2008). This gives businesses the opportunity to deal with threats and harness the opportunities to better their prospects in the industry and the market. In addition to scanning internal capabilities and weaknesses, businesses are required to analyze the economic, political, sociocultural, ecological and technological landscapes (Class handout, n.d. c).

Environmental scanning should be a continuous process that is supported by the entire organization (Taylor, & Finley, 2008). This is not the case in Island view hotel and resort. The company accountant has constantly tried to keep Max and the rest of the management team on current economic news that he thought could affect the firm. However, the management believed that the news had no bearing on the operations of Island view hotel and resort.

This poor perception of environmental scanning and the relationship between Island view hotel and resort and events in others parts of the globe is brought out clearly in the comments made by the F & B manager. She does not understand how events in others parts of the globe could have a bearing on the activities and operations within Island view hotel and resort. This perception is driven by the fact that only a small proportion of guest to Island view hotel and resort come from overseas.

Whereas the poor perception of environmental scanning is blamed on lack of training in finance, it is evident from sentiments made by Rita Chew that the problem is entrenched in the organizational norms and lack of appreciation for environmental scanning and the relationship between a firm and the environment. Even though Rita Chew has no training in finance, she has noted the opportunity lost by the firm by not assessing the potential impact of the new road.

In a globalized economic environment, businesses compete at a global scale. Furthermore, from the coalignment model it is clear that environment events, strategy choice, firm structure and firm performance need to be aligned (Class handout, 2011). Therefore, even though Island view hotel and resort largely attracts local clients, it faces immense competition from overseas destinations. The lost opportunity pointed out by Rita Chew serves to reinforce the potential benefits of proper environmental scanning on the company.

The poor environmental scanning practices and a general lack of understanding of the potential gains associated with environmental scanning by the management has led to significant losses in terms of additional costs. The information provided by the consultancy firm could easily be gotten with minimal investment in environmental scanning. This is a fact that appears to have eluded the management team who can only accept such information from a consultant firms and not from their own accountant.

The management team and the company need to rethink their perception of environmental scanning and the effect that changes in the macro-environment have on the company. This may require training on strategic management and the effects of the micro and macro-environment on organizational operations (Jogaratnam, & Wong, 2009). Once the prevailing negative perception of the role of environmental scanning and information derived from such an endeavor is eliminated, the management team can then be ready to use information on the environment from either internal systems or consultants.

Stakeholders Relationship Management

Businesses do not operate in vacuums and they require the input and involvement of various stakeholders to be operational and to sustain their operations (Hollender, Breen, & Senge, 2010). Good relationships and understanding with different stakeholders is necessary in ensuring that a positive brand image is developed and sustained, businesses are supported in their initiatives and conflicts that may affects overall productivity are minimized (Drucker, 2010).

The plans to build a marina by Island view hotel and resort are being hindered by the $2.85 million cost and the expected resistance by environmental groups. The environmental groups had in the past ran forceful campaigns against the construction of the resorts and the environment protection authorities only gave the go ahead after the original plans had been scaled down.

This clearly shows that the environmental protection agencies were not included nor involved in the initial planning.

Another case of poor involvement of stakeholders is brought out in the recollections made by the local tour operator. The tour operator has intimate knowledge of the views held by customers from different resorts and hotels in the region. The fact that 45% of his clients were from Island view hotel and resort implies that the information he holds is important to the company. Despite making efforts to meet with people form Island view hotel and resort and getting his brochures into the hotel, no one has taken heed of his efforts.

There are two points to note: local tour operators who only depend on the sign on the side of the road (since they have not been permitted to distribute their brochures within Island view hotel and resort) play an important role in ensuring that clients reach Island view hotel and resort. Secondly, the information held by the local tour operator is vital in assessing client satisfaction and areas that Island view hotel and resort need to improve in service delivery.

Thus, cultivation of a positive relationship between Island view hotel and resort and the local tour operators is mutually beneficial on both entities. This is a statement that holds true for others form of relationships as brought out in a case where the management disregards input from the accountant which can help the company. Such disregard may affect the levels of employee motivation and involvement in driving at the organizational goals.

The dependence of the company on suppliers is brought out by the fact that the company has outsourced its non-core activities and depends on an adventure tourism company to run activities offered at the resort. Good relationship with employees of this adventure tourism industry would improve Island view hotel and resort access to suggestions such as the one made by the instructor who suggested that guest should book for each activity before 9 am each day to allow for proper resource allocation.

This is an example of a suggestion that can help Island view hotel and resort cut on spending during winter season. The management team has also not been involved in meetings held by the industry association. This undermines the goals for being a member of an industry association which include improved interaction, discussion and cooperation with companies or firms from the same industry (Holifield, Porter, & Walker, 2010; Hollender, Breen, & Senge, 2010).

Stakeholders’ involvement is a core competency to Island view hotel and resort. This is mainly because Island view hotel and resort is service oriented and therefore the interfaces between the stakeholders and the company to a large degree define the quality of service. By involving stakeholders, Island view hotel and resort will be better placed to strengthen this core competency. Renewal and continuous development of this core competency which is necessary for Island view hotel and resort to stay competitive is also made easy by increased involvement (Class handout, n.d. b).

Furthermore, the company can only align stakeholders’ involvement as a core competency to its competitive methods if it appreciates it as a core competency (Class handout, n.d. b). These are aspects that are still lacking due to the failure by Island view hotel and resort to actively involve the various stakeholders in fishing for information and mutually beneficial relationships.   

Poor Marketing and Promotion

Marketing and promotion is mainly concerned with communication of the product and services offered by a company to the market. Proper marketing and promotion strategies are required for a company to develop an effective marketing mix. This is brought out by the fact that promotion is part of the 4Ps of the market mix (Shahhosseini, & Ardahaey, 2011). Island view hotel and resort is part of an independent hotel cooperative that is made up of 87 independently owned hotels and resorts that operate in 26 nations.

Even though the cooperative does not offer management or operational support, it plays a significant role in marketing and making reservations for its members. Island view hotel and resort being a part of this cooperative is a plus in terms of marketing and shows some understanding and appreciation of the need for marketing and promotion by the company. However, there are a number of issues that ought to be addressed with respect to marketing and promotion in the company.

Efforts by Louise Labatt who was tasked with overseeing marketing were thwarted by the view that the promotion and marketing sought to promote all members properties as similar. Additionally, the website operators felt that promotion of kids activities did not sit well with the companies thrust. This brings out a number of low points in marketing and promotion. First, it is clear that there are differences between the marketers and the people tasked with the dissemination of information (website operators).

Marketing and promotion as a strategy requires the development of a clear understanding and appreciation of the strategy adopted by all the entities involved (Kotler, 2011). Additionally, there is a misunderstanding on the nature of services offered by the company. Generally, companies offer services and products that are defined by varying characteristics.

Promoting such services as similar would be faulty and does not mirror the tenets of marketing (Kotler, 2011). This is brought out clearly in claims made by parents who stated that they felt that their children were safe, and their kids loved Island view hotel and resort since they were kept busy all day even though they did not see any information relating to this on the website when they were making the decision on whether to book.

This implies that it is likely that some parents who would have chosen Island view hotel and resort go for other destinations due to lack of information on the website. Clearly, the website as used by Island view hotel and resort as a promotional platform does not clearly portray the value of the services offered by Island view hotel and resort.

This is an issue of great concern as it digs into the core competency of the company. The company offers an environment and services (process) that make it safe and secure for parents and children. This if communicated effectively to the market would improve the competitiveness of the company in this segment. The failure to do so is a strategic issue that ought to be looked into.

Even though the companies market as a group, they have individual goals, services and competencies. Marketing and promotion strategies targeted at promoting all members services as similar are therefore faulty and must be corrected. The disregard for accurate portray of the core competencies and value of services offered by the company is faulty.

Organizational goals or thrusts that go against such principles should be corrected. In this case however, it is clear that the interpretation of the thrust by the website operators and the marketing executives differ. Such differences ought to be looked at and corrected through discussions where different perspectives and viewpoints would be brought to the fore and a common understanding that is beneficial to Island view hotel and resort adopted.

Communication

Communication is a vital process in managing organizations. The importance of communication is seen in its role in supporting daily operations and strategic initiatives (Sonenshein, 2010). Most strategies fail due to lack of measures to support communication and interaction between the entities involved. Strategy implementation which is defined as a process of allocating resources consistently to products and services that produce the highest cash flows and will continue doing so in the future is largely dependent on communication.

This is because determination of the products and services that will produce the highest cash flows requires input from different groups of employees in an organization. Additionally, the consistent allocation of resources can only be attained if different employees tasked with the implementation of a strategy are appreciative of its goals and implications. Rita Chew states that if the new road has been planned to pass much closer to the resort (and there were no practical reason against such a move) the company would have had the opportunity to attract increased passing trade and negotiate with bus tour companies.

However, Island view hotel and resort had done nothing to proactively influence the authorities that were responsible for the alignment of the road. This shows poor communication with external bodies, groups and companies that can influence the overall performance of the company. It is clear that if the road had passed near, the company would have gained immensely in the long term.

The disregard for industry association meetings, employees’ input and the local tour operator’s efforts to be involved with the company are other incidences that point to poor communication within the company.

Strategy evaluation which is critical to the success of any strategic initiative should initiate managerial questioning of expectations and assumptions (Class handouts, n.d. a). It is probable that the management team would be more aware of global and domestic events that influence its operations if it were to listen and consider the inputs brought in by the accountant. Clearly, this would be an in important first step in questioning the negative assumption on the independence of Island view hotel and resort from the global environment.

Poor communication within the company is shown by failure by the management to even consider the information presented by the accountant. Another incidence of poor communication is brought out by the fact that Chew feels that there is merit in the management considering what the accountant has to say. However, she does not let her feeling known in spite of being aware of a case where proper communication would have improved the firm’s prospects.

Figure 1: The interaction between the organsiation, source and receipient in knowledge transfer. Source: (Schwartz, 2007)

There are other benefits relating to strategic evaluation that Island view hotel and resort stands to gain by improving communication. Better communication would improve the review of objectives and values. Furthermore, improved communication would stimulate creativity in generating alternative strategic options and criteria for evaluation (Class handouts, n.d. a).

These benefits arise from the effect of improved communication on sharing of ideas, discussion and address of assumptions and development of consensus on strategic and operational issues (Olsen, Tse, & West, 2008). Importantly, better communication systems, structures and policies would aid the involvement of different entities and help the development and growth of a culture that relays appreciation of the inputs made by different entities (Kemper, Engelen, & Brettel, 2011). Involving the entire organsiation will ensure that communication is properly contextualized and designed (figure 1).

Recommendations and Implementation

There are four problem areas that have been identified in the case. The problems that have been identified include poor communication, poor stakeholder relationship management, poor environmental scanning and poor marketing and promotion. The issues identified have a bearing on the competitiveness of Island view hotel and resort and if left unaddressed they could result in the eventual failure of the firm.

The issues have a bearing on the company’s ability to formulate, implement and evaluate strategies. Solving the problems is thus a strategic imperative to the company and requires integration of management principles into the operations of the company.

Poor environmental scanning is largely a result of the poor perception of the relationship between the company and its macro-environment. The coalignment model that shows a clear relationship between environmental events and strategy choice is not appreciated by the company. This raises questions on the objectivity and feasibility of the strategies that have been deployed by the management team in the past.

Training the management team and other employees on the coalignment principle (model) would help in dealing with this problem. Improving the communication systems and interaction between employees and with other stakeholders would also help in bettering the actual environmental scanning.

After appreciation of environmental scanning has been developed, the improved communication and interaction with stakeholders would place Island view hotel and resort in a better position to understand the opportunities and threats that exist in the operational environment.

Improving the level of stakeholders’ involvement would require the formulation of policies and structures that would aid their involvement. A change in perception and overall appreciation of the potentially mutually beneficial relationship with stakeholders is required for the improvements to be realized. Improving the communication pathways with internal and external stakeholders will also go a long way in improving stakeholders’ involvement.

Poor marketing and promotion is a result of the poor strategic management practices in the company. Marketing and promotion are strategic efforts and therefore should be carried out in a manner that allows for the discussion of assumption and expectations. By allowing for the involvement of different entities and objective discussions, the marketing and promotion efforts will be more focused and effective.

The differences in views of the goals of the company by the employees can be addressed by a proper visioning process. Such a process involves discussions and analysis of organizational values and requires effective communication and tolerance by employees (Sonenshein, 2010).

Poor communication is a problem that is a causative agent to the other problems faced by Island view hotel and resort. The strategy implementation and evaluation processes in Island view hotel and resort have been crippled by lack of proper communication. The levels of creativity and innovation that can be attained in the strategic management process are also limited by the poor communication structures. Island view hotel and resort should look at its communication system, policies, communication skills and the tools available for supporting communication.

These improvements will help the company better the levels of involvement of different stakeholders and help ensure that any assumption relating to organizational goals and the strategic management process are addressed in good time. Improving the data collection systems in the company for instance via creating a research department that will be tasked with collecting information on the internal, local and global environments will also help ensure that the improved communication helps better the strategic management process.

Conclusion

There are a number of challenges faced by Island view hotel and resort in its operational and strategic efforts. The main challenges that have been identified include poor communication, poor stakeholder relationship management, poor environmental scanning and poor marketing and promotion. Most of these problems are a result of poor communication in the Island view hotel and resort and negative attitude, norms and practices in Island view hotel and resort.

Various recommendations have been proposed on the measures that can be used by the firm to deal with the problems that have been identified. Improving the communication skills, policies and structures; training employees and the management team on the coalignment model thereby creating appreciation of the reliance of the firm on the environment; adoption of a strategic, participatory approach to marketing and promotion and implementing structures, strategies and systems that would support improved involvement with different stakeholders are some of the recommendations proposed.