Regency Hotel Case Study

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1. Introduction

The purpose of this report is to critically examine the issues faced by the Regency Grand Hotel both internally and externally. This report also discusses relevant theories and makes recommendations for the Regency Grand Hotel to address the managerial problems and return the organisation to its former status.

The decline in the performance of the hotel is a result of the drastic changes in the organisational structures. The introduction of the practice of empowerment has resulted in deterioration and resulted in conflicts among the hotel’s staff members.

This report elaborates on the issues related to theoretical approaches of empowerment, the job-design model, reward systems and team-work. These are used to diagnose the problems and assist in generating recommendations for the future.

2. Background Analysis

The Regency Grand Hotel is a five-star hotel with 700 employees who enjoy being part of this prestigious hotel in Thailand. Under the administration of Thai managers, the hotel provided sound welfare benefits and a good year-end bonus to their employees.

After being taken over by a large American hotel chain, the previous operational structure was redesigned by a new general manager, John Becker, who revolutionised the hotel’s organisational structure to one of empowerment of lower and middle level staff. In addition, Becker stripped away much of the hierarchical rules at the hotel in order to encourage employees to handle minor problems and satisfy customers more efficiently. However, contrary to his expectation, the overall performance and business profitability deteriorated with complaints and dissatisfied guests becoming common place.

3. Main Issues and Problems

As outlined in the introduction and background, the hotel’s take-over has proved a catalyst for numerous positive and negative effects that have arisen within the hotel. In this section, further points with be considered for further discourse.

3.1 The implementation of new practices

The acquisition has resulted in a change of management of the Grand Regency Hotel. Previously, the hotel was run by a Thai general manager, who stood down following the take over to make way for John Becker. Becker has built up experience in managing hotels in North America; however, the cultural differences between the regions should have required different management approaches being employed.

The biggest change that has been made is the introduction of empowerment. This is following the belief, from past experience, that empowerment will improve the hotel’s overall performance. With the principles of empowerment, Becker instructed his staff to employ their own discretion when it came to minor issues, which previously would have been referred up the hierarchical chain until a reasonable solution was found.

Becker gave greater authority to all staff members to solve small problems with their own creativity and initiative. As such, small mistakes were acceptable and initially expected. However, it was stressed that making the same mistake more than one was not acceptable. He also gave the ambiguous limit to employees to only make decisions for minor issues and that if there was a major issue at hand it was to be referred to a higher authority. The aim being to increase the speed and efficiency with which the minor issues are resolved.

The introduction of empowerment was designed to motivate all staff members to have a greater influence on the organisation, and hence increase the level of satisfaction of employees.

3.2 Expectations versus Reality

Contrary to the initial expectations of Becker, the implementation of empowerment has not led to greater outcomes for the organisation.

Empowerment has led to confusion from employees due to their inability to distinguish between the ambiguous and undefined level of importance of issues they encounter. This confusion led to middle management consulting persons higher up the...
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