Thesis: Business Asessment the Corporate Structure

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Business Asessment

The corporate structure at an organization like Embassy Suites tends to be somewhat formalized and dense. The fact that some of the members of the Embassy Suites management team have to report further on to the Hilton managerial team, mostly to the senior vicepresident for franchising operations, means that the organizational structure is further continued with relation to the mother company and that many of the development or growth strategies need to be first run through the management at Hilton before being implemented.

With the individual locations, this is much more simplified and the best example is probably the Embassy Suites in Asheville, North Carolina. Scott Turbow is the manager of hotel here and in this position he is able to impose a different organizational culture than that being implemented at a greater corporate level. One of the first things is the level of autonomy, both internally and in the relationships between the hotel and the other external entities.

In terms of the latter, this means that many of the decisions are made internally and that Scott Turbow only imposes general franchise requirements, many of these being issues in terms of quality or personnel. This leaves many important marketing or management decisions to be made autonomously, with the sole goal of maximizing the profit for the hotel and increase its volume of clients. This also directly implies an autonomous approach internally.

The first basis for this is to encourage an open communication between the employees, but also between the different levels of the organization. This is essential and it's much easier done in a particular singular location than in a larger organization like the Embassy Suites as a whole. This is both a top-down and a bottom-up approach by which the employees are encouraged to communicate with their managers, including in terms of passing on both their problems and their creative ideas. At the same time, this is also a horizontal communication, with employees working together and communicating within the team and between the different departments.

Innovation and creativity is also encouraged through the leadership, along with the continuous training of personnel, a way by which Scott believes perfection can be achieved, especially when it comes to dealing with the customers. Customer satisfaction goes beyond the simple franchise requirements as much as making the customer the central element of the leadership model.

At the same time, this is not necessarily an instrument to contest the authority that Scott has as a manager of the location he is running. However, his authority is not only confirmed by the position he is in, but also by the fact that he works as an interface between the employees at the local Embassy Suites and the rest of the organization, most notably the management in the mother-company. It is not the type of leadership that is imposed by force, but rather a leadership in which Scott approaches employees and defines with them the organizational culture.

The organizational structure at the Embassy Suites in Asheville, North Carolina is much flatter and more simplified than at the mother-company. While the corporate structure includes many additional positions, such as that of senior vice-president for franchising operations, the hotel in Asheville has four main executives in charge with much of the operations: the director of sales and marketing, the director of operations and human resource, the director of food and beverages and the director of guest services and front offices. This makes the entity much more flexible in the decision making process than the mother-company.

The ethical behavior and social corporate responsibility of the individual location is first of all manifested internally, in relationship with the hotel's employees. The relationship with the employees is based on three main pillars, as Scott has pointed out: motivation, incentives, benefits. All of these three ensure that the employees are happy in their working environment, both in terms of being appreciated for the work they do and from a financial perspective.

With the current economic crisis, this becomes ever more important and Scott is determined to find out the appropriate solutions by which he can ensure that the employees have work and are getting paid for it. This does mean, at the moment, cutting through on some of the secondary activities, like team building ones, but this is not necessarily something that dramatically hampers the morale of the individuals, at least not as much as simply cutting wages or hours to work.

The individual location is also involved in community work and activities, however, the current financial and economic environment has somewhat shifted the focus internally, towards attempts to protect the employees' positions and avoid reducing wages and letting people go.

For an entity operating in the hotel business, it is more difficult to branch out into other business activities and radically diversify its portfolio of services, mainly related services are also from the same industry. At the same time, the fact that the basis for operations is a franchise somewhat limits the degree to which the management can decide to branch out towards other segments of the economies. Further more, as will be further discussed, the current economic conditions make such expansions very risky, due to the low aggregate demand on the market and the general difficulties in terms of financing conditions.

However, the Embassy Suites Hotel in Asheville has managed to expand gradually into some related services which don't necessarily affect the viability of its core activities. Such an activity is event organizing. The hotel offers customers the possibility of organizing anything from weddings to Bar Mitzvahs in an attempt to fill as much as possible available niches.

These are related activities to the core activity of the organization, mainly because they also imply the potential use of other hotel services, including catering or valet services. The advantage is that occupying these niches has a low risk rate. The hotel does not really stand to lose anything, only to make an additional revenue in case it manages to rent out some of its halls and, potentially, the rooms as well, if the guests decide on spending some nights at the location of the event. This is a win-win situation for the management.

The hotel has started to tackle the possibility of entering the conventions segment as well, with the management recognizing the need to expand into that area as well. The problem with organizing and hosting conventions is that this type of event is somewhat more specific and much more customer-oriented than some of the others are. With a convention, the hotel needs to have all the necessary technical and technological equipment to enable adequate presentations, as well as anything else that might be required in this case.

In terms of the PEST analysis, the economical factor is of most concern during this period of time. As previously shown, the current economic conditions reduced the capacity of the hotel to expand into other segments of the economy and, internally, reduced some of the auxiliary human resources activity that were boosting morale and were motivating employees, such as team building actions or similar events.

Nevertheless, the economic effect on the development of the business activity was not that tremendous, with the management innovating on the marketing segment in order to increase or retain the number of consumers. This means that despite the current economic condition, increased use of technology or a more efficient use of resources can maintain the same or even increase the number of socnumers.

The technological aspect of the PEST has a greater impact on the activity of the hotel and it is closely related with what has been mentioned in the previous paragraph in terms of branching out with the marketing activity. Technology has now become an essential instrument, at least through two perspective. First,… [END OF PREVIEW]

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