Marriott Budapest Case Study Report

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Marriott in Budapest
Case Study Report

2011

Table of Contents

Introduction…………………………………………………………………………1

Problem Identification ……………………………………………… …….1

Analysis……………………

Recommendations……………………………..

Summary……………………………………………….

References…………………………………………………………...

INTRODUCTION
Budapest is the capital city of Hungary and along the shore of the Duna River downtown, the infamous Marriott Hotel is situated. Until Marriott showed an interest in this establishment, it was a franchise of another major hotel chain called Inter-Continental and the hotel was named Budapest Duna Hotel. It was in 1992 when the government decided to privatize the Duna hotel and this posed as an imminent threat to the Inter-Continental franchise since owning the Duna Hotel would mean controlling the majority in market share of the Hungarian hotel industry therefore could lead to bidding wars. Once the tender was made by the Hungarian Privatization Company, two of the biggest bidders in the hotel industry emerged to claim this valuable asset, Inter-Continental and Marriott International. Marriott International emerged victorious and took over the previously government owned Duna Hotel. Marriott hotel faced many problems in setting down rules and guidelines since the “iron clad” rules set down by the government were hard to change. Previously, Managers working at Duna hotel needed to have a constant relationship with government officials and had to follow their rules or be replaced. Due to this concept of command economy, employees regarded their managers as their “master” and had no right to intervene with their decisions which were based on a certain “plan” given down to the hotel by the government and everyone in the organization had to follow it.

PROBLEM IDENTIFICATION
* Communist Era Attitude towards work in the organization * Unsettling tension amongst employees in the hotel
* Leakage of trained staff into the competition
* The freezing process started by Pete Blake had to be completed

ANALYSIS
Overview
Peter Blake upon his arrival to Budapest Marriott made the first method of change by restructuring the communist era attitude towards work to a more flexible management scheme. His next step was to bring in a more professional and experienced set of managers to establish the basic operations of the hotel by supervising the main functional areas. He also fired the previous General Manager suddenly sending out a message to the employees that the “old” way of doing things was over and he also made English the main language of the hotel. Peter Blake and the Marriott management decided to reduce the workforce of the hotel by assigning a new team to interview all the employees and pick out the ones that can be justified in terms of a business approach. Peter Blake introduced the standard Marriott “Standard Operating Procedures” (SOP’s) to base the corporate culture on efficiency and profit orientated values and change the influence of the previous owned franchise, Inter-Continental. Blake emphasized on the recruitment of young graduates that had no experience in the industry with the idea of training them by increasing their responsibilities and making them the future Managers of the hotel. “Marriott international believed that the shareholder value was created by the excellence performance of every individual employee” (Andrew Shipilov, n.d) therefore they introduced the method of giving performance appraisals to every employee to increase consistency. Justification

The previous mentality towards work did not help in improving the profits and customer satisfaction because the hotel was run according to a “plan” that did not meet the required objectives and goal that most hospitality industries aimed for which is based on efficiency and profit oriented values. Top management was the only level of employees who had the power to take decisions whereas the middle and lower level employees had no...
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