Case Study

Organizing for Change

Background:

Magellan Hotels is a growing company which brands and operates the Magellan brand of luxury, full service hotels. Magellan does not own any of the hotels. Currently, there are 10 hotels worldwide, and Magellan plans to grow to 100 hotels within the next 5 years, by convincing hotel owner/developers to either build new hotels or convert existing hotels to the Magellan brand.

At present, all of the decisions for the hotels are made at the corporate level. Marketing and Advertising, Operating Standards, Staffing guidelines, all Human Resources policies and procedures, all purchasing procedures (and in fact most of the purchasing), all accounting and finance activities.

The CEO has come to believe that this operating model is neither desirable nor sustainable with the growth trajectory of the company. One of the core attributes of the Magellan brand is that the hotels are highly "localized". Designed to reflect the local art, architecture, food and culture to the extent possible. Far from a desire to "be the same" in every location, Magellan believes that each hotel should be a unique experience.

On the other hand, the needs to be a certain level of consistency in service levels, the guest amenities and other attributes which make a brand identifiable (and preferable) to the company's guests. There also needs to be a level of operating consistency between the hotels to assure that each operates at a level of profitability sufficient to drive the development of new hotels. This also means that to the extent "shared services" can be leveraged to drive profitability they will be.

You have been hired to design a comprehensive organizational structure which will meet the following objectives:

Operate a centralized "shared services" center which will provide "back of the house" services to the hotels in the following areas:

Accounting (all functions)

Recruiting, compensation and benefits administration.

Development of a training program for use in all hotels.

Sourcing, purchasing and procurement of those items used by all hotels (i.e. toilet paper, soap, shampoo, linen, etc.)

Marketing and Advertising.

Brand Loyalty program.

Guest satisfaction surveys

The shared services center will have a small cadre of managers who are responsible for the following for the services they provide:

Accuracy and timeliness

Cost containment

Responsiveness to the hotels as measured by a quarterly satisfaction survey.

Give each hotel General Manager a wide degree of flexibility, but held accountable for the following:Day to day operations to specified benchmarks of

Labor productivity (man hours per unit sold).

Cost per unit sold (for items purchased by the central purchasing services)

Guest satisfaction

Integration of the hotel into the local political and social community.

For both the hotel level and the shared service center, a very flat organization which balances a minimum number of management levels with the necessity of specialization at the shared service center and span of control at the hotel level.

Your deliverables include the following:

Recommendation of a personality assessment for use in recruiting and screening General Managers. Whether you choose Meyers Briggs or DISC, you need to describe the personality traits which best meet the needs of this role based on the assessment standard attributes.

Recommendation of a personality assessment for use in recruiting and screening of the Shared Services managers. Whether you choose Meyers Briggs or DISC, you need to describe the personality traits which best meet the needs of these roles based on the assessment standard attributes.

Development of an incentive compensation plan which will reward the hotel General Manager and the Shared Services center managers for achievement of their respective goals. These will be two separate documents, but each plan must have objectively measurable benchmarks for each area to be used as a basis for the incentive comp.

Develop 2 organizational charts. One for the hotel level, and one for the corporate shared services level. Both charts should reflect a servant leadership approach.

Develop a communication plan which will be sent to the existing managers in the company outlining the change. This will be in the form of a memo from the CEO and must address the reason for the changes, and the "what's in it for me" for the managers, and a "vision statement" which outlines how both the hotels and the shared services center will work together to provide the best experience possible for the brand's guests and provide a substantial return on investment for the hotel owners.

Each of the topics above must be under a separate "bold" header and include your recommendation, the basis (facts and data) for your recommendation, and your cited sources.