Download Shangri La PDF

TitleShangri La
TagsStrategic Management Competence (Human Resources) Employment Organizational Culture Employee Retention
File Size198.5 KB
Total Pages12
Document Text Contents
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 April Kowloon Shangri-La, Hong Kong (Shangri-La assumes management)

 In March 1994, Shangri-La Hotel, Jakarta opens and Shangri-La Hotel, Surabaya opens

 In 1995, Shangri-La had a total of 35 hotels and resorts in Asia

 In 1997, Shangri-La Hotel, Qingdao opens

 In April 1999, Shangri-La Hotel, Wuhan opens and Shangri-La Hotel, Harbin opens

 In 2003, Putrajaya Shangri-La Hotel opens

 July 2003, ANA harbor Grand Hotel rebrands as Shangri-La Hotel, Sydney, Australia.

 July 2003, Shangri-La Hotel, Dubai opens

 August 2004 Shangri-La Hotel, The Marina, Cairms re-branding

 February 2006, Shangri-La Barr Al JIssah Resort and Spa, Muscat opens

 In 2007, Shangri-La Hotel, Guangzhou opens

 Best Business Hotel Chain in Asia Pacific by Business Travelers (U.K. and Germany)

 Best Hotel Chain by Chinese Hurum report (China)

Company Mission, Vision, Core Values and Philosophy

Mission - “Delighting customers each and every time”

Vision - “The first choice for customers, employees, shareholder and business partners”

Philosophy - “Shangri-La hospitality from caring people”

Guiding Principles (Core Values)

 We will ensure leadership drives for results.

 We will make customer loyalty a key driver of our business.

 We will enable decision making at customer contact point.

 We will be committed to the financial success of our own unit and of our

company.

 We will create an environment where our colleagues may achieve their personal

and career goals.

 We will demonstrate honesty, care and integrity in all our relationships

 We will ensure our policies and processes are customer and employee friendly.

 We will be environmentally conscientious and provide safety and security for our

customers and our colleagues.

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 Shangri-La offers a more competitive compensation package to help retain its trained

employees. That package might include a higher salary or greater incentive-based pay

to better align the goals and efforts of employees with that of the company. An important

component is to offer a compensation package that is sufficient to retain employees but

not so high as to eliminate operating profits.

 Shangri-La pursue creative methods to mobilize its workforce around the globe for the

short and long terms

 Opportunities were provided to move up within properties and to move across to other

properties.



Reference

Thompson, A.A. (2009). Crafting & Executing Strategy (7
th
ed.) New York: McGraw-Hill/Irwin.



QUESTIONS/ANSWERS:

1. What are the key elements of Shangri-La Hotel’s strategy? Which of the five generic

competitive strategies described in Chapter 5 is the company employing? What is

Shangri-La’s strategy for competing internationally?



Operating in four main business segments including:

 Hotel ownership and operations,

 Property development including commercial buildings and serviced apartments,

 Hotel management services to group-owned and third-party hotels, and



2. What policies, practices, support systems, and management approaches underlie

Shangri-La’s efforts to execute its strategy?



The policies, practices, support systems, and management approaches underlie Shangri-La’s

efforts to execute its strategy are:

Training

.

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Culture Training

The managers of Shangri-La believed that superior service was a key to their differentiation

strategy and they worked to build a strong, service-based culture to ensure that each employee

delivered service the

“Shangri-La Way.” This culture encouraged employees to go the extra mile and emphasized the

importance of acknowledging and fixing mistakes when made. The culture also encouraged

employees to take responsibility for customers’ satisfaction.

Compensation System

The three-tier compensation structure was designed to support organizational goals at various

levels. At the first level, which included hotel general managers and division heads,

compensation included a salary and a bonus. The bonus was tied to financial results (i.e., gross

operating profit and gross operating revenue attainment) to help hotels reach goals.

Compensation for the second tier, which included level two and three employees, was linked to

financial results and, more specifically, to customer satisfaction and customer loyalty scores,

which were key indicators of how well Shangri-La executed its strategy. In the third tier, which

included level four and five employees, there was a common bonus pool that linked

compensation not to individual performance, but to overall property performance.

Career Path

The company’s career path was designed to retain Shangri-La’s well-trained workforce by

offering well defined career paths. These career paths offered upward mobility driven by rapid

international expansion as well as lateral mobility by moving from hotel to hotel. The company’s

policy of promoting from within helped enhance the value of the career paths.

Organizational Structure

Shangri-La’s five-level organizational structure was also supportive of its strategy execution as it

empowered them, within limits, to directly address guests concerns. At each level in the

organization employees had a specific dollar amount that could be used to address customer

requests that might fall outside of normal operations.



3. How important are the company’s training and Shangri-La Care program to its

success? What is your assessment of Shangri-La’s compensation policies and career

growth effort? What pluses and minuses do you see?



A well-designed reward structure based upon monetary and nonmonetary rewards is the

most powerful tool to build commitment and to sustain employees’ commitment to organizational

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on not only training its workforce to implement a strategy that emphasizes a unique experience,

but they must work hard to retain that workforce through both financial and non-financial forms

of compensation. The company should design the compensation structure in a manner

that is sensitive to the diverse cultures in which they operate



10. What recommendations would you make to Symon Bridle to improve Shangri-La’s

prospects for continued success?



- Shangri-La offers a more competitive compensation package to help retain its trained

employees. That package might include a higher salary or greater incentive-based pay to better

align the goals and efforts of employees with that of the company. An important component is to

offer a compensation package that is sufficient to retain employees but not so high as to

eliminate operating profits.

- Attentive students will tend to pick this up and make recommendations focusing on this issue.

While we have no reason to believe that the company is not making hires that are supportive if

its culture, it would be worthwhile for them to explore developing a selection process that

focuses on identifying key characteristics in their applicants.

- Shangri-La will have to engage in more aggressive training to ensure that their way of doing

things is perpetuated as they expand internationally. Expansion of operations without retention

of the organization’s culture is likely to produce inconsistent service across countries. Shangri-

La should expand their operational training and cultural training efforts to maintain a high quality

of service and decision-making.

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