Report on Organizational Issues Faced by Luxury Hotels

This report analyzes the organizational issues faced by a company investing strategic human capital in the luxury hotel industry, based on a case study. It explores ethical considerations, such as copyright and plagiarism when using secondary sources, and the importance of employee retention through various incentives beyond monetary rewards. The report examines environmental factors, including political, economic, social, technological, and legal influences on hotel operations. It also discusses leadership styles, emphasizing the need for leaders to possess conceptual, human, and technical skills, and the application of different leadership approaches for experienced versus new employees. Finally, the report addresses competitive advantages, highlighting challenges like economic slowdown, price pressure, changing customer habits, and globalization, concluding that a positive work environment is crucial for employee satisfaction and optimal performance.

Contents
Introduction......................................................................................................................................2
Ethical Issues...................................................................................................................................3
Environmental Issues.......................................................................................................................5
Leadership issues.............................................................................................................................6
Competitive advantage....................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
This report outlines the different types of organizational issues faced by the company at the time
of investing strategic human capital with the alliances in the luxury hotel industry. This report is
based on the case study given by the Micheal Ferrary and in this case study, he explained about
the issues that are facing by at the time of doing investment in the hotel industry. In this report,
all the ethical, leadership issues, environmental issues and the competitive advantages problems
are going to be discussed. The purpose of this report is to explore the organizational designs and
the issues that allow the other firms to invest in the company. The capital requires investments
for the training of employees and employment opportunities. When it comes to analyzing various
complex problems in an organization, be it social or political or any other problem, we come
across many methodological problems. It is very difficult to quantify a lot of factors as a lot of
dimensions are involved in it that is political, social etc. the strategic human capital is basically
stands for the human resource management and physical capital refers to the real estate
management.
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Ethical Issues
The Ethical issues arise at the time of doing analysis and research work since the study is
focused on the use of secondary sources, the key concern for ethical issues would be related to
the use of copyright, due to the adoption of the material of another researcher. Besides this, the
researcher would also on the issues of plagiarism that is common when secondary sources are
used. In order to avoid these issues and problems of copyright and plagiarism, the researcher
would initially be paraphrasing the material and citing the sources used. This would allow the
researcher to minimize the issues of copyright. On the other hand, for plagiarism, the researcher
would paraphrase the material and use plagiarism checker software to minimize these issues
(Becker, 1975). The author intends to use the secondary sources in order to conduct the study. It
has been observed from the existing literature that accessibility of the secondary source would be
difficult since the research is not concerned with a general concept but on a specific organization.
In terms of this issue, it has been observed that the researcher would have to analyze whatever
material is available. Besides this, in case the researcher fails to acquire the data, the author
would be focusing on contacting the organization in order to gain first-hand information from
their reports and other documents. The other ethical issue which was found in the case study is
that the authorities do not want to throw out the old employees from the organization blatantly.
Instead, they want to create a situation where they leave the organization themselves at the time
of doing alliance with the hotel industry. The ethics say that all the employees should be
retained, especially the talented and experienced people (Blundell & Meghir, 1999).
In recent years, many new incentives have been introduced by the organization and authors in
this article mention a few of them which are:
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1. Learning activities
2. Verbal praise
3. Flexible working hours
4. Increased authority
5. Time with manager
6. Autonomy
7. Public praise
8. Time off from work
9. Choice of assignment
10. Written praise
A very interesting fact which is notable here is that the authors mention in this article that cash
rewards comes down to number 15 in importance on the list of incentives for retention of
employees in an organization.
The concept of modern reward management breaks the confines of money rewards and brings it
ambit the other types of rewards as discussed above. The main focus is only to retain the
employees by whatsoever mode. It is important to maintain a strong connection between
enjoyment of incentives and the output. The reward is a kind of compensation which the
individuals receive on performing well in the organization. For employee to perform better, it is
necessary to motivate them. It varies from individual to individual. Some are motivated by
monetary incentives; on the other hand, some are motivated by using non-monetary techniques.
Motivation is basically used to induce the employees to work and different organizations use
different employee recognition techniques to help the employees feel that they are important for
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the organization and are required to be retained (Shultz, 1999). In addition, another accessibility
issue that could be encountered is accessing the company itself. The organization deals in a
security related industry whereby it extends from providing secure prisoner transportation to
securing the safe transportation of money. In order to access the organization, the researcher
hopes to take assistance and help from the supervisor and the university with an extension of
time for the submission of the research.
Environmental Issues
This section of the report focuses on the impacts of various environmental factors on the
operations of the hotel industry in the corresponding market. The environment of the
organization can be defined to be of two important categories, external and internal environment
(Schultz, 1961). The external environment of the organization consists of the political, economic,
social, technological, legal and environmental factors that affect the operations of the
organization in the corresponding market.
Political factors- The government policies and regulations are changing every year and new
rules will create the problem. The investment of capital in the other company is highly affected
by the political factors.
Economic factors- The market of the hotel industry is not stable as it is totally dependent on the
number of tourists or people and hence the business of the company is directly related to the
economic factors.
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Social factors- The organization focuses on the employment opportunities, which in turn tackles
one of the most important global issues of the current time. This in turn allows the organization
to have a positive social image and supportive societies to carry out its business operations.
Technological factors- The societies contain the required technologies to allow the organization
to have smooth business operations. There is still a generation that is fighting with daily
developments of technology (Son, 2010).
Legal factors- It is very important that any legal framework of the country will be there to
support the operations of the organization.
Leadership issues
According to the case study, a good leader should have all the conceptual, human and technical
skills and what is the required proportion of these skills to be possessed by a great leader. A
leader should be truly committed to what he is doing and work with firm determination. The
more efforts put by the leader, the more output an individual brings. When we talk about
leadership styles, every leader has a different approach towards this. Some follow autonomous
style, some follow democratic style, some are inclined towards autocratic style, but most of the
leaders follow participative approach. The leaders who help the individuals working in the
organization participate in the activities taking place around them are proven to be successful
leaders. Those who participate in the activities of the organization, especially in the decision-
making process, remain motivated. A good leader promotes team spirit by working in group
activities and a good leader knows how to lead a team.
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Talking about the leadership issue, the organization doesn’t follow this leadership for beginners
or fresher’s and instead this is used for people who are experienced and who do not require much
supervision because the company believes that it is not beneficial and effective for fresher’s and
in case of trainees or other new employees this style has been proven to be a disaster. Trainees
can only come up with good results if they are under strict supervision. Here the freedom is with
the employees who own good expertise to lead themselves and in real they are their own leaders.
The leaders provide the followers with a plan of action, however, the main decisions are taken
only the followers because when confidence is reposed in the people, they provide better results
and they feel to be an integral part of the organization and hence, comes up with high output. For
fresher’s, the company follows a participative approach of leadership. The company focuses on
involving all the employees, especially the new ones in taking important decisions of the
company so that they can feel to be a significant part of the organization. Leaders hold a very
important place in polishing the information acquired by the employee and training the personnel
in the organization. Behavioral theorists make sure that the efficiency in leadership is in direct
relation to the approaches adopted by a leader. On the other hand, contingency theorists hold a
view that efficient leadership is situational and a specific form of leadership is perfect in some
circumstances but not mandatorily all. Recent theories about leadership have dealt with far-
sightedness and zealous behavior. Every organization adopts a varied form of leadership that is
appropriate in its working atmosphere and other dimensions. The above mentioned leadership
approaches are widely used in the organizations on the floor. Some organizations adopt a
participative form in order to help the employees work more efficiently and induce them to work
by giving those incentives including monetary and non-monetary. There is not a particular style
adopted in every organization.
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8

Competitive advantage
As discussed in the case study about the merger and acquisition of the hotel industry to raise the
investment of strategic human capital, there are some of the challenges are faced by the
organization to gain the competitive advantage:-
Economic slowdown- Although the sales of the company or hotel have grown continuously for
the past few years, but it may be possible that it comes down because of low consumer
confidence and slowdown in the economy (Goldin, 2014).
Cash-strapped shopper- The customer of the hotel industry is still facing some problem with
the increase of social security payroll tax and facing reduction in government food stamp benefit.
Price pressure- There are many other competitors available which are offering similar services
at a low price and they are creating a huge problem for the success of any organization (Autor,
2004).
Changing habits- The interest of the customer is changing and same in the case of travelling
habits in the coming year, the customer will have different preference and taste and they will
look for the easier way of spending their free time at tourist places.
Globalization– Globalization is also one of the biggest challenges and firstly there will be the
challenge from the supplier side because in future when companies think about the expansion of
their business they will have to target the different market and because of this they have to target
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the different supplier (Walker, 2002). In future also the culture will influence hotel activities in
different ways, such as language problems, pricing difficulties and culture collisions etc.
Conclusion
It is concluded that all the issues faced by the organization need to be resolved by taking a set of
actions and according the author the employees are the most important source in an organization
and it is very important to keep them happy because if they are happy they will work with more
enthusiasm and produce better results. Managers keep on searching for strategies by which they
can create a congenial environment in an organization because a positive environment has a very
positive impact on employees and the outcome is improved. A good environment should be
created at the workplace so that employees can feel at home while working and do not take the
work as a burden. Expert professionals should be appointed by the organization to create such an
environment and provide the employees with the best atmosphere. The culture of the workplace
should be such as to keep the employees free from stress. A happy environment at job should be
created to maximize the output of employees. The leaders should understand what will help the
employees to give their best output.
If all these major issues will deal with the intelligence, then the investment in the hotel industry
also leads to the profits in the future. Thus, Micheal emphasizes to improve the Human resource
planning so that employment opportunities as well the investment, both will improvise as we
know that entering into the alliance company increase the number of job positions.
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References
Autor, A. (2004). The Basic Theory of Human Capital. Retrieved from
http://econ.lse.ac.uk/staff/spischke/ec533/Acemoglu%20Autor%20chapter%201.pdf
Becker, G. (1975). Human Capital: A Theoretical and Empirical Analysis. NBER. Retrieved
from http://www.nber.org/chapters/c3733.pdf
Blundell, R., & Meghir, G. (1999). Human Capital Investment: The Returns from Education and
Training to the Individual, the Firm and the Economy. Institute for Fiscal Studies.
Retrieved from http://www.ifs.org.uk/fs/articles/fsbdms.pdf
Goldin, C. (2014). Human Capital. Harvard University, Department of Economics. Retrieved
from
http://scholar.harvard.edu/files/goldin/files/human_capital_handbook_of_cliometrics_0.p
df
Schultz, T. (1961). Investment in human capital. Retrieved from
http://la.utexas.edu/users/hcleaver/330T/350kPEESchultzInvestmentHumanCapital.pdf
Shultz, T. (1999). Human Capital Investment in Women and Men: Micro and Macro Evidence of
Economic Returns. An International Center for Economic Growth Publication. Retrieved
from http://pdf.usaid.gov/pdf_docs/PNABS409.pdf
Son, H. (2010). Human Capital Development. Asian Development bank. Retrieved from
https://www.adb.org/sites/default/files/publication/28427/economics-wp225.pdf
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Walker. (2002). Human Capital. Retrieved from http://www.ssc.wisc.edu/~walker/wp/wp-
content/uploads/2012/01/e623HC1.pdf
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