Case Study
The Situation
A
major hotel company in the U.S. has an opportunity with the potential for
significantly increasing its revenue base and global market share. There are,
however, human resource issues that must be considered. The nonunion,
U.S.-based company has the opportunity to purchase a chain of hotels in Italy.
The Italian company’s hotel employees are represented by unions and are
accustomed to many more benefits—such as more time off, more expansive health
care benefits, and more say in the operation of the hotels—than U.S. employees.
They also have boundaries around their work schedules and limitations on the
work they will perform in the hotels. In addition, the labor market for hotel
employees is very limited. The employees available for work in the cities where
the hotels are located require extensive training.
If
the hotel chain is purchased, there will be a need to retrain all employees and
possibly change shifts worked and jobs performed, as well as limit input into
decisions about the operation of the hotels. It is most likely that U.S.-based
employees will need to help with the training of current employees; however,
most of them have never traveled to Europe and therefore are not familiar with
the culture. One known difference in the culture is the lack of EEO laws and
regulations and a tolerance for sexual harassment.
The
executive team, without the CEO present, has convened a meeting to discuss
whether the hotel chain should be purchased; what the risks and rewards could
be; and if the decision is made to purchase the chain, what needs to be
addressed and what should be included in the budget to ensure a smooth
transition of ownership.
Formulating
Assumptions
Note
that not all of the specifics about the possible acquisition have been given,
such as the cost of the acquisition, the number of hotels and employees, the
current profit margins, the current cost of benefits as a percentage of total
labor costs, competitive data on the room rates, etc. If you feel it is
necessary to make assumptions about these factors prior to your role play, do
so, and state them in your study group conference area.
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