Case Study Hilltons Transformation Twenty years ago, Hilton was a small city (about 70,000 residents) that served as an outer suburb to a large metropolitan city. Hilton treated city employees like family and gave them a great deal of autonomy in their work. Everyone in the organization (including the two labor unions representing employees) implicitly agreed that the leaders and supervisors of the organization should rise through the ranks based on their experience, few people were ever hired from the outside into middle or senior positions. The rule of employment at Hilton was to learn the job skills, maintain a reasonably good work record, and wait your turn for promotion. As Hilton s population grew, so did the city’s workforce, to keep pace with the increasing demand for municipal services. This meant that employees were promoted fairly quickly and were almost assured lifetime employment. Until recently. Hilton had never laid off any employee. The organization’s culture could be described as one of entitlement and comfort. Neither the elected city councilors nor the city manager bothered departmental managers about their work. There were few cost controls, because the rapid growth placed more emphasis on keeping up with the population expansion. The public became somewhat more critical of Hilton’s city’s poor service, including road construction at inconvenient times and the apparent lack of respect some employees showed toward taxpayers. Even before the layoffs, managers of outside departments resisted the changes more than others. These managers complained that their employees with the highest seniority were turned down for promotions. They argued for more budget and warned that infrastructure problems would cause liability problems. Informally, these outside managers were supported by the labor union representing outside workers. The union leaders tried to bargain for more job guarantees, whereas the union representing inside workers focused more on improving wages and benefits. Leaders of the outside union made several statements in the local media that the city had “lost its heart” and that the public would suffer from the actions of the new professionals.

Discussion Questions

1. Contrast Hilton’s earlier corporate culture with the emerging set of cultural values.

2. Considering the difficulty in changing organizational culture, why does Hilton’s management seem to have been successful in this transformation?

3. Identify two other strategies that the city might consider to reinforce the new set of corporate values.