Managing Organizational Crisis

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Table of Contents

An organizational Crisis
Key issues that the organization faced afterwards
How the issues were managed
Recommendations
Conclusion
Reference List

An organizational Crisis

A major organisational crisis faced by Hampton Inn hotels in Libya during the Arab spring was a lack of highly qualified employees to roll out the major services of the organisation (Barnes 2001). The problem occurred when people in Libya started demanding changes in political leadership.

The business environment became untenable, well trained employees, especially those who had come from other countries, went back and locals who had the much needed skills also had flown out.

The organisation completely lacked skilled manpower to get back on its feet again. Services deteriorated as a result of reduced earnings.

Key issues that the organization faced afterwards

Guest inconveniences

Since there were no skilled employees, there were a lot of inconveniences caused to guests (Fink 2002). For instance, at one point guests complained about service delays and at times unnecessary inconveniences resulting from other guests in their rooms or even outside, in the swimming pool.

There were also some problems associated with the failure of the lighting systems. That is, the company fulltime electrician was not within, and so some rooms did not have functional lights, while others had during the night been awaked by the flashing lights outside their rooms.

Generally, such kind of disturbances compromises the services offered to the clients and does not appeal to them to make successive visits.

Poor Employee service

During that time of crisis, many clients indicated to have received substandard services from the front office.

For instance, based on the publicly available information, on one occasion some guests, who had contacted the front office for help, indicated that the person who served them was very rude even prompting some visitors to cancel the reservation.

Some guests were not served in time and others were left in the parking area without being served. Besides, some guest rooms had not been cleaned for some days. Guests had found waxy materials on the floor and around the comforter. Beds were dressed but not cleaned for some days as they carried some bad smell.

Guest room disorganisation

During the time of crisis, it was reported that the organisation of some of the guest rooms was below the standard which was previously associated with the organisation (Laye 2002). Some doors to guest rooms had been fixed in haste, that is, opening on the outside.

Generally, this kind of organisation predisposed the guests to not just disturbances, but also risk from outside as well. For instance, due to lack of enough staff to manage the swimming pool, some guests whose rooms were adjacent to it were subjected to the noise coming from the swimming pool site.

Refund policy

Because of the crisis, the revenue of the organisation also reduced significantly making it difficult for the company to sustain its refund programs. This program was initially started to compensate or refund the money to visitors who are not satisfied with the services offered by the organisation.

This is a welcome service in the hospitality industry where consumer satisfaction and preferences vary so much (Goeldner & Ritchie 2009, p. 436). During the time of crisis, it became hard for the organisation to honour its promises to reduced earnings against increased expenses.

Cost of Labour

According to the organisational reports, during and immediately after the crisis, the cost of labour increased fourfold becoming the largest single expense for the organisation, accounting for more than forty percent of operating costs (Carroll & Buchholtz 2013).

As a result, labour aspects consumed a good amount of time and efforts of organisational leaders. After the crisis there came another political threat, reports to alter immigration policies as well as a law to raise the minimum wage.

This aspect almost pushed the organisation to the edge. Generally, labour cost was the major expense in all Hampton hotels.

Multicultural Issues

Multicultural endowment and the political setting in Libya impacted negatively the organisation. Blending amenities and scarce resources to meet the requirements of the world’s diverse cultures after the crisis was a big challenge.

Cultural issues have never at any given time been such an essential determinant of the way a large hospitality firms should operate, but they do matter a lot as they significantly contribute to the bottom line of the company (Regester & Larkin 2008).

For instance, most visitors after the crisis were from Asia. There are some cultures that cannot be used to Asian, but can be used to people from the west, a good example is eye contact. This was a key challenge in defining the way organisational managers address themselves to visitors from Asia.

Increased Competition

Even during the time of crisis it was hard to believe that there was still a lot of competition in the Libyan hospitality industry (Laws 2013). The orthodox-like competition ensued with hospitalities always cutting down prices in efforts to attract more guests.

There were very sharp reductions in the number of visitors who make reservations, particularly during the time of crisis. This reduced the capacity of the organisation to compete favourably with other players, a factor that pushed down the cots of renting its facilities.

Shortage of Labour

The difficulty of getting and even retaining highly qualified personnel progressively turned into a major organisational challenge (Hiles 2011).

The level of wages, demography, inability to adequately address employee satisfaction as well as low pay were all cited as contributing factors to labour shortages at Hampton Inn during the time of crisis (Goeldner & Ritchie 2009).

In its own right, labour shortages do not compromise the standard of service, but if on just one occasion many guests checked in, relative to undersized employees this would lead to delay which is the worst treatment to be showed to guests.

How the issues were managed

Introduction of Yield Management

Yield management is a technology-based process that allows organisational leaders to link the demand of guest to available rooms (Drennan & McConnell 2007). For instance, high demand connotes higher rates as a result of the reduced discounts. On the other hand, reduced demand results in higher discounts.

Therefore, yield management is purely a demand forecasting systems aimed at helping the organisation to maximize on revenue. This is done by holding rates high particularly at a time when there is increased demand for accommodation (Hiles 2011).

Yield management has been proven to be very effective particularly in terms of optimising the effectiveness of an organisation (DuBrin 2013). The bottom is that the idea is only successful when indiscriminately applied to all organisational sections, both managerial and revenue generating.

Adoption of New Management

The organisation adopted new management as a way of containing the crisis, especially after the uprising.

In general, in hospitality industry the complex forces that undertake capacity controls, technological aspects as well as the transfer of capital always call for a new style of leadership and management that is well experienced in adapting to quick shifts, particularly in the traditional management functions (Olsson 2009).

The clients today are armed with a lot of information and expect forefront and other hospitality employees, and for that matter Hampton Inn managers, to be at least well-informed about their hotels offerings as themselves (Bernstein & Bonafede 2011).

Though it is challenging for business leaders as the hospitality industry just like before continues to be identified with not highly trained employees as well as a high level of cultural diversity amongst employees.

Customer Relationship Management

The main aim of customer relationship management is to meet the needs of clients to the point that they will continue being loyal to the business and that they will keep on buying from the company (Laws 2013).

Actually, it should be understood that it costs the business much less to maintain an existing client rather than trying to attract new ones. Therefore, profits can be affected drastically when a loyal client is lost to another competing corporation.

Besides, offering quality client service and on-time delivery of products can build loyalty and trust. Effective marketing approaches will as well create a positive outlook for the organisation in the eyes of its customers (Laye 2002). Nonetheless, these qualities are just a small portion of quality customer relation management.

Recommendations

With regard to the general service standards, Hampton managers should ensure that their employees work proficiently to avoid causing unnecessary discomforts to the guest. For instance, maintaining of rooms by cleaning of beddings and provision of standard mattresses (Devlin 2006).

Importantly, the managers should also empower the guests to fix some simple problems like bulb failure and closing of running taps. Besides, the management should prohibit clients from smoking inside the guest rooms, as this presents a bad picture on the manner in which the guest rooms are managed.

Monitoring and controlling of the plans should be employed. This aspect comprises a periodic check just to see if everything is on course (Barnes 2001). This also entails some undertakings that vary in choices as a way of having enough approaches to get services that have been incapacitated working again.

Some of these approaches could be to strategically change the tactic being used, change the strategies of implementation and even change organizational objectives.

In case of the problems which come as result of improper guest rooms organisation, Hampton managers should first listen to the cries of clients and fix the problems (Galloway & Kwanash-Aidoo 2005).

For instance, the management should design doors in such a way that they open towards the direction of fewer disturbances and must be fitted with sound absorbers to avoid unnecessary corridor disturbances.

Besides, the management should make sure that when new premises are being developed, the sizes of guest rooms are not limited to the point of denying the clients the full value for their money.

Adoption of action planning is also vital to the success of the organisation. First, for an organisation to successfully implement strategies, it must develop comprehensive action plans (Devlin 2006). On the same, the organisation may also choose certain persons that can be relied on to execute certain responsibilities.

Generally, the company may also estimate the resources needed to help such individuals deliver without any difficulty. In short, they will be changing their strategic plan or dividing their plans into units that can easily be worked upon by those people who are selected by the company.

Given that the hotel industry is becoming internationalised at a very fast speed, the management of this organisation may need to take into consideration the impact of international platform they are working on (Coombs & Holladay 2012).

In addition, they must be in the position to counter any effect resulting from the fast changing environment. In the case of competition the Hampton management should pay close attention to the globalisation trends like enhanced interactive systems which is currently underutilized.

In case of troubles associated with increased guest sophistication, Hampton management should put up interactive facilities like multiple telephone and faster internet connection, as they are among amenities that guests desire so much.

In case of yield management difficulties, Hampton Inn managers should adopt market strategy that focuses on a particular niche of clients (Reisinger 2009). Also, they should standardize their brands relative to competitors in order to enable consumers to easily identify them.

The organisation should as well consider making use of the data mining technologies. This is a technology that keeps track of customers and will enable the promotional team to explore novel ways of assessing the client information in order to make right decisions.

Addition, the organisation stands to benefit more if it is able to identify major organisational and industry elements that drive their operations. As such, it should evaluate them thoroughly in order to have the right information regarding the intricacy of the issue, and even the likely duration of its effect.

Human resource is an important factor in any organisation. Therefore, for this organisation to contain its issues, it should creatively implement HR practices, such as internal training of employees, to arrest the situation where skilled employees go out of the country because of unrest.

They should also understand that the HR issue is in fact a two way story. To begin with, it is important to shape and reshape the communication needs of the company (Drennan & McConnell 2007).

As such, the organisation may need to streamline functions and areas of operation so that there is no breakdown of communication through the organisation.

The second aspect is that organisational leaders must anticipate and act proactively to cushion the organisation or HR unit from the likely negative impacts of new approaches or strategies.

In case of labour shortages the Hampton Inn management should instigate innovative strategies for attracting and keeping high profiled employees (Coombs & Holladay 2012).

In addition, the management should explore alternative strategies that will help them achieve labour objectives like gain sharing, which has in the essence proved successful for maintaining front line workers in the Canadian context.

Also, the management should liaise with the training institutions in order to get access to the trainees before they are absorbed by other competing firms.

Majority organisations that have successfully established the above supporting factors usually succeed in the implementation of strategies in their businesses (Olsson 2009).

There are some organisations that have managed to develop action plans in terms of overseeing their human resource needs, sufficiently financing their plans, as well as coming up with plans for not only monitoring, but also controlling their undertakings, yet they still find some challenges when it comes to rolling such plans and approaches.

The explanation, most frequently, is that they lack the linkages. Linkages can be either vertical linkage or horizontal (Regester & Larkin 2008). In the case of Hampton Inn, vertical linkages will serve to support and coordinate all functions of the organisation at corporate and departmental levels.

In case of the multicultural issues, Hampton Inn management should blend amenities to meet the requirements of the world’s diverse cultures as it is fundamental to success for large, worldwide hospitality firms (Goeldner & Ritchie 2009).

In addition, the management should train their employees on the ways of handling guests with respect to their culture (Brotherton 2006). Hampton managers also need to consider the idea of employing workers from diverse cultures as this might easily help the hotel identify the client needs.

In case of cost containment, the Hampton Inn management should adopt cost sharing strategies across its affiliate branches in order to leverage the cost services while, at the same time, maintain the value expended to clients (DuBrin 2013).

This can easily be achieved by having specific and highly skilled workers being facilitated to operate in any of Hampton’s hotels at the times of need.

In addition, the management should also consider working with part time workers as they are always not eligible for retiree benefits and hence the hotel will have sufficient funds to better customer value.

Adopting a good organisation structure that is highly functional and responsive is the best. In most cases, business leaders, who have been highly successful at rolling out their strategies, take into consideration structure of their organisation (Fink 2002).

That is, before implementing, they first have to ask themselves whether an approach or strategy suits their organization and whether available resources and manpower can maximally support the strategy. Most businesses become unable to develop strategies, because they never planned to do so (DuBrin 2013)

Conclusion

As it has been established, the major reason of the crisis faced by Hampton Inn hotels in Libya was a lack of highly qualified employees, which was a result of the Arab spring. This aspect made it hard for the organisation to roll out the major services of the organisation.

The business environment became untenable, well trained employees, especially those who had come from other countries, went back and locals, who had the much needed skills, also had flown out. Services significantly deteriorated as a result of reduced earnings.

The organisation itself is well positioned in potential markets, where everybody is nearly drifting towards leisure. The end user complaints are majorly based around the bad location of hotels and the organisation of guest rooms.

Ideally, some of these problems are within the control of individual workers, but this doesn’t seem to be happening, as workers themselves and sometimes managers have been confirmed to be rude.

For instance, when it comes to money, guests have no say as some of the hotel policies like money back guarantee, refunds and cancellation policies have always been overlooked at the loss of the client.

Reference List

Barnes, J 2001, A guide to business continuity planning,Wiley, New York.

Bernstein, J, & Bonafede, B 2011, Manager’s Guide to Crisis Management, McGraw-Hill, New York.

Brotherton, B 2006, The international hospitality industry: structure, characteristics and issues, Butterworth-Heinemann, Oxford.

Carroll, A, & Buchholtz, A 2013, Business and Society: Ethics, Sustainability, and Stakeholder Management, Cengage Learning, New York.

Coombs, W, & Holladay, S 2012, The Handbook of Crisis Communication, Wiley-Blackwell, Chichester, U.K.

Devlin, E 2006, Crisis Management Planning and Execution, CRC Press, New York.

Drennan, L, & McConnell, A 2007, Risk and Crisis Management in the Public Sector, Routledge,. New York.

DuBrin, A 2013, Handbook of research on crisis leadership in organizations, Edward Elgar, Cheltenham.

Fink, S 2002, Crisis management: planning for the inevitable, iUniverse, Lincoln.

Galloway, C, & Kwanash-Aidoo, K 2005, Public relations issues and crisis management, Thompson / Scoial Science Press, Southbank, Vic.

Goeldner, C, & Ritchie, B 2009, Tourism: principles, practices, philosophies, John Wiley, Hoboken, NJ.

Hiles, A 2011, The definitive handbook of business continuity management, Wiley, New York.

Laws, E 2013, Tourism Crises: Management Responses and Theoretical Insight, Routledge, New York.

Laye, J 2002, Avoiding disaster: how to keep your business going when catastrophe strikes, Wiley, New York.

Olsson, S 2009, Crisis management in the European Union cooperation in the face of emergencies, Heidelberg Springer, Berlin.

Regester, M., & Larkin, J 2008, Risk issues and crisis management in public relations: a casebook of best practice, Kogan Page, London.

Reisinger, Y 2009, International tourism: cultures and behavior, Butterworth-Heinemann, Boston.

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