Moscow Aerostar Hotel Case

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TO: Laurie Sagle, Director of Training & Personnel
DATE: Septemer 22, 2008
RE: Memo on Moscow Aerostar Hotel issues; HR

Problem Statement: Moscow Aerostar’s lack of cultural understanding has translated into faulty recruiting, training, and incentive building practices, which has produced an environment of de-motivated, unproductive Russian employees, unsuccessful managerial talent development, and a company without cohesive/identifiable core values. There is adverse impact on the budget and a threat of long-run non-sustainability in the Russian hotel market.

Situation: Although this four-star hotel is recognized for its high quality service and strong reputation and has talented expatriate leaders (strength), the reality is that the uncommitted, demanding (yet highly paid) Russian employees have caused the need for more expatriates and a continuous lack of productivity (weakness). Under current HR circumstances, it cannot mitigate the threat of a competitor establishing a more sustainable model in the future. Due to globalization and the nation’s economic development, which brings about greater inflows of tourists and business travelers resulting in greater demand for such hotels, great opportunities exist especially in a key city such as Moscow.

Recommendation: The expatriate management needs to learn and analyze Russian cultural norms/underlying cultural values and abandon its ethnocentrism. Additionally, the entire human resource approach needs to be revised, and current employees re-trained/reviewed, to create common core values and fortify a relationship with the Russian employees. Specifically, Russian cultural values and business norms need to be taken into consideration during modification of all levels of the HR strategy: interviewing/recruiting, training/orientation, compensation/incentives and the general work environment/expectations. Understand what is important to the Russians and use this as the basis for motivation. Furthermore, use...
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