New Managing Director

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Background information

The Attika Resort Hotel is a 500-room hotel located in Athens. It has been under-performing for 5 years and its new owners, Attika Bank, have appointed a new Managing Director. You have been working at the hotel as assistant Director. You have been working at the hotel as assistant Director for many years. You have been asked by the new Managing Director to provide him with the existing organization structure of the hotel, which is the attached.

The Managing Director would like to help him collect all necessary information in order to decide if changes need to be made:

Attika Resort Hotel

1. What could be possible reasons for business change? Outline key reasons for change.

Every organization at some time faces the need to change quickly and to survive in a changing environment. Many companies recognize the need for greater product and service innovation to keep pace with technological and societal advances and compete with the growing power the other companies. Rather than focusing of ways to improve efficiency and cut costs, today's companies are rewiring their organization for creativity and innovation.

Our hotel also needs to change in order to survive in a rapid changing environment and to keep its competitiveness in the market because competition in our days is more intense than ever before. The possible reasons for our hotel to change are: the sales of its product forms and brands have reached to the decline stage. Sales decline for many reasons, such as technological advances, new more attractive products appear in the market and increased competition. Perhaps the product is not up to scratch, perhaps the quality is poor, maybe the price is too high, so to keep this weak product can be very costly to the hotel and not just in terms to reduce profit. Falling sales is a sign that there is something wrong with the product or the price. Sometimes the fall in sales might be as a result of the competition providing a better product or service. The failing reputation of the product can shake customer confidence in the hotel and its products. Management has now to decide whether to maintain or drop weak products to avoid a decrease in its profitability. Another reason for a hotel change is to provide its customers more innovative products and by doing this it will allow it to best achieve its objectives. The demand of the guests has reached higher levels and their expectations are increased as for the goods and services, thus our hotel in order to respond to changes in demand, to keep up with the new technology and to satisfy customers' wants and needs has to change its product. Also as the new requirements from the customers come up, the hotel must change the facilities which offer and to develop more amenities in order to attract more customers.

Another key reason for change is a change in technology in the organization's production process, that means how the hotel does its work as for how developed is the equipment which is used in the different departments, the reservation systems etc., technology has always played an important role in products and services provided to customers. Hotel management had to ensure that they are offering the most recent technologies to customers regardless of their industry. Today's technology offers great possibilities for increased efficiency, control and marketing. For example computers offer many efficient applications for document creation, creating marketing materials, record keeping and storing customer information. Hotels can research markets, competitors and create databases of customer email addresses for newsletters and direct marketing. Technology changes are designed to make the production of a product or service more competent and well-organized.

Poor planning is another reason for change a hotel. "Glocal Vantage, Inc "describes planning as follows: "Planning is not about what you will do in the future. It is about the future implications of present decisions and actions". It is very important to research the demand for a product or service, identifying the target market, calculating necessary capital and selecting a location and all are critical factors of planning that lead to determining a clear business plan. Another area of planning that should be considered is the managerial duties that will be required in day-to-day operations. The hotel management will not simply be selling the product and talking to customers but they will be concerned in all aspects of the business and should not underestimate the impact of these activities on their time and availability. Proper planning plays a critical role in the success of a company and should not be overlooked.

Globalization in our days is more rapid and the distance is becoming a shrinking barrier. Markets are globalizing so quickly as the hotels that compete in them. The game of every company in today's global economic, technological and social change is to survive. If a company is going to bear harsh and continuously in growing global competition, needs to be different and change the way of doing business. They should give up with the old ethics and customs and start creating a new management model, switch from management to leadership, build trust and drive out the fear of failure.

Weak and inexperienced management is one of the major reasons of business change. Lack of communication effects negative in the function of the hotel and is one of the things that managers should take care first of all in order to achieve their goals. Managers have to work extremely hard trying to understand the needs of their customers' and to understand the philosophy of the hotel that they are in if they want to be successful.

Another reason for change is to find ways to expand your business by making a strategic acquisition (when you buy another business and end up you controlling it) or merging with another business (when you integrate your business with another and share the control with the other owners).

Our goal is the guest satisfaction, so by changing our product we will succeed to provide greater products to our guests and to increase our profitability. The main changes within the hotel will focused on employee-participation teams, introducing new products and provide new training systems. Our hotel must develop improved production technologies; create new products and services which are desired from the guests and to upgrade the skills from our employees.

2. What recommendations would you make at the existing structure? Which of the reasons above (reasons for change) would each of your recommendation achieve?

As we can see in the existing structure, there are 7 departments and each of these departments has their own sub-departments in the hotel. The first thing that the management should take care about is to cut the unnecessary costs and to improve the communication between the related departments. I will recommend making some changes in the structure of the hotel. These changes are:

  • The connection of the marketing and sales departments because these two departments have a common goal to advertise and sell the product of the hotel. With this connection will achieve a reduce of the costs because now we will have only one manager who will has the responsibility of this department, less personnel and also helps manager to better control and communicate with his personnel.
  • The kitchen manager and restaurant & bar manager will be replaced with a Food and Beverage manager who will be responsible for the kitchen, bar and restaurant. His assistants will be the chef and the maitre. By doing this we reduce the costs that comes up from the wages and also we can control better the function of the departments. The reason why we need just one person to control these departments is because of the common goal that they have and this goal is to provide guests with food and beverage quality that will result in their satisfaction. This will achieve direct communication between the staff which plays a vital role here. There is no possibility for a restaurant to work without a kitchen and vice versa.
  • Finance and HRM department should be separated because the objectives of these two are not related. HRM has to do with the planning, recruitment & selection, hiring and support of the personnel and finance has to do with the control of the hotels revenue and expenses. By doing this the HRM manager will be better focused on planning and achieving the strategic goals of the hotel and the finance to better focused to protect the hotel assets.
  • The last change that I would like to make is to create a new department that is missing from the existing structure which is the maintenance department. The reason for this is that every hotel needs employees that specialized in specific jobs, such as electricians, plumbers, carpenters, decorators, etc. to be available at any time when something is not work properly.

With this structure the hotel will cut down the costs, will evaluate the current staff of the hotel and will find out if the right people are in the right places. The employees that don't have the required skills for the different jobs should be replaced.

The new structure of the hotel would be the following:

3. How would you recommend these changes to be made? Explain key methods for managing change effectively.

The first thing that the manager should do is to plan carefully the changes and to discuss with the board of directors the strategies that they will follow. After that he should arrange individual meetings with the managers that are going to lose their recent positions, to inform them for the changes that will be made and the reasons which lead them to take such decisions. The manager should explain them that in order to increase the profits of the hotel it is necessary to dismiss some employees according to their distribution. After the individual meetings, should be arranged a meeting with all the employees of the hotel. In this meeting we will introduce the new Managing Director; we will inform them for the new changes and the reasons for the changes. The management should clearly explain to the employees that these changes are made for the better function of the hotel and the reasons are to meet the expectations of the guests, to face the strong competition and to cut down the costs. They should also persuade them that these dismisses should be performed because they are very costly for the hotel and to inform them that from now and on to expect more changes in cases that employees do not perform well in their jobs. The management should motivate the employees through the peaks and valleys of change and support them by identifying and managing the several issues. Reward and recognition motivates employees to perform better to their jobs and that results in the achievement of the company's goals.

One of the most important skills of successful managers is dealing with change and in order to manage the change effectively should adopt specific methods to overcome employee opposition. This opposition may be overcome by invite the employees to participate in managing the change. The key methods of managing change are:

  • Communication and education are used when the management needs to provide information about the change to the personnel. Education is important when the change has to do with new technological knowledge or when the employees are inexperienced in this new technology. The manager should not forget that implementing change requires speaking to peoples' hearts as well as to their minds. ---Emotion is a key component to persuade and influence your personnel. Our personnel are more likely to change its behavior when they understand the rational reasons for the change.
  • Participation involves the management and the personnel in designing the change. This approach is time consuming but with this the personnel understand better the reason of the change and become committed to the change. Participation will help the manager to determine potential problems and understand the difference in perceptions of change among employees.
  • Negotiation is a different method of achieving cooperation and uses formal bargaining to win acceptance and approval of a desired change. For example if our sales department fears losing power because of the change, the manager can negotiate with the sales department to reach a resolution.
  • The manager can use pressure to force employees to change. Employees who don't want to accept the change they are going to lose rewards or even their jobs. This approach in any case should not be used because employees feel like victims and get angry at change managers. However, this pressure may be necessary in crisis situations when a rapid response is pressing.
  • The visible support of top management also helps to convince the employees for the change. Top management support makes employees to understand that the change is important for the hotel and it's especially important in our case because this change involves many departments.

When managers use appropriate managing methods, resistance to change softens and the change process proceeds more quickly and smoothly.

4. Investigate different methods of communication by Managing Director.

Communication is the method by which people share their ideas, information, opinions and feelings and is a two-way activity between two or more people. Communication is the process through which people and organizations accomplish objectives. Behind most success is effective communication. There are various methods of communication that the managing director could use:

One - way communication: the Managing Director can communicate with the personnel by sending them emails or memos in which detailed information as for the changes will be included. Emails should be short and to the point. Sending an e-mail cost less than to use paper or the telephone.

Two Way communication: The managing Director can use face to face communication. He will be able to see the person or the group of people he is communicate with and this will help him to gauge their response into the changes by reading their body language and actively participate in the conversation. Face to face communication is best when you need to discuss something in detail or when you evaluate the performance of an employee. He can use the phone in case that someone is missing the specific day in order to inform him about the incidents.

Collaborative: the Managing director can arrange team meetings to inform the personnel about the changes and to resolve immediately any problems that may occur.

5. Assess the importance of effective communication by Managing Director in business situations.

Communication is an important part of human relations. The benefits of effective communication are many and obvious as they enhance all aspects of our personal and professional lives. There are a large number of problems in business that are caused by ineffective communication: conflicts, misunderstandings, giving your company a negative image, lower productivity. Communication skill is the key for successful business and it takes many forms; internal and external, in writing, on the phone and in person. Good communication will ensure the managing director that all employees understand the message sent. They will also be more likely to respond positively to the message if it appears to be reasonable and fair to both the receiver and the managing director. Bad communication will have exactly the opposite effect. People will be confused by the message and less likely to do what the hotel wants. It is not only what you say (or write), but how you say it that is important. Your message should be easy to understand and take account of the receivers' own attitudes and feelings.

The managing director objective is to achieve effective communication within a hotel between departments and individual colleagues because this is essential for a productive working environment and for reducing the stress of employees. A good communication with employees will help managing director to better understand what his colleagues are saying and how they see the changes in the hotel. If there is a good communication between management and employees the relations between them are improved. Another thing that the managing director should have in mind is that good communication can save time and money. Sometimes being straight and strong can be a good quality in some business situations but it is important to know who you are communicating with and be able to adapt your style to match theirs, it can have a disproportionate affect on a more sensitive member of the team or guests. Likewise, someone who appreciates a straight approach may not respond well to somebody giving lots of detail.

      The possibilities of engaging in business situations are extremely affected by the communication skills of the managers and their teams. The key is communicating your core values, products and services in a clear, convincing way that will meet the requirements of the potential guests. Communication skills need to be developed on a continuous basis because by doing this you can build strong foundations of effective internal and external communication that achieves long-lasting results.



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