Portman Analysis

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Case Analysis: The Portman Hotel Company
Group R2, Section 3

Problem Identification
Portman hotel developed and new strategy to cater its customers by giving them a completely new experience which is not provided by any hotel in US at present. But their plans and departments have not been very well aligned with their core values and strategy. SWOT Analysis

PESTEL Analysis

Factors
1. Organizational Structure
There is no definite structure in the company which is leading to friction between the supervisors, PV’s and other departments.

2. Due to lack of processes and discipline
The workers at Portman hotel were most of the times unhappy as they have to constantly cover for each other.

3. Less returns to the employees
Since this concept was new in the market so the customers did understand this concept in its right way which led to lower tips for the employees which led to more dissatisfaction among the employees as their pay structures were designed with expectations of very high tips.

4. Motivation and Incentives
Job profile of PV’s required a lot of motivation and incentives but the reward system had no scope for performance based incentives. Moreover other departments considered them equivalent to maids

Critical Factors
1. Decentralization
Due to this no-one was clear about their scope of jobs. This type of work culture has been tried for the first time in the industry and there were no experienced employees who can cater to such needs. This is one of the root cause of the problems as most of the friction among the employees has been due to this.

2. Difference between expectations and actual roles and responsibilities The expectations from the PV’s have been set very high in the company. Whereas the real work had a very different expectations required. Citing another example, Floaters were considered as careless and unorganized on the contrary their job required to be flexible and dynamic so that they can cater to all the floors. This led to differences among the employee as more employees have to cover up for each other.

3. Recruitment
Good recruitment was very crucial to the company but as the business grew they were not able to spend the adequate time for exhaustive recruitment process. Also, with employees being dissatisfied with their job profiles, left the job which led to lots of wastage of resources spent in recruiting them.

Constraints
1) Portman Hotel Company tried to infuse Asian hospitality into the American culture. They went for a labour intensive strategy which involved higher costs. Labour costs were three times greater in America than in Asia. 2) They made assumption regarding the level of tips. Instead of $200 per week, the average turned out to be $40. The reason being low occupancy in the early months and also Americans were yet to understand the personal valet system. 3) Due to low occupancy in the hotel, they moved away from using stable teams and instead resorted to “floaters”. This approach backfired and resulted in loss of team loyalty and time.

Framework/ Theoretical Explanation
Fundamental Attributable Error Theory
This is when the behavior of an individual or a group is attributed too much to an internal factor, when in fact; an external factor is at play. It is where the actions of a person or a group are associated with the "kind" of person he or they may be, rather than associating the actions to an outside source. Justification for applying this theory

1. The Floaters were not trusted by PV’s as they were accused of stealing their tips. They were thought to be careless and forgetful. However, in reality they were the scapegoats of the process followed by the organization.

Expectancy Theory
This theory suggests that a person will choose to behave in ways that will allow him to maximize pleasure and minimize pain. A simple mathematical formula is used...
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