Reference no: EM131518948

Question: The ‘Dreaming of Stars' company owns a chain of large hotels. Its hotel located on America's eastern seaboard is its largest and comprises a casino, four restaurants, extensive conference facilities, and a health club. Over the last month, business activity at the hotel has been significantly down following a radical political group's terrorist threat to blow up a plane while in flight over American airspace. The terrorist threat has been taken very seriously by air aviation authorities and the matter has received considerable attention from the news media. Senior management at the hotel feel this is a largely uncontrollable setback, but that demand should return to normal levels in a couple of months' time. In the meantime, many unskilled workers have been temporarily laid off. Highly skilled chefs, however, are likely to find alternative employment if laid off and the director of F&B has argued convincingly that it would be to the long-term detriment of Dreaming of Stars if they were to be allowed to leave.

As a result of this stance, the highly skilled chefs have been employed in various menial facility maintenance tasks such as maintaining gardens, building storage racks in the store rooms and painting some of the hotel rooms. Upon receipt of his most recent performance report, the head of the maintenance department was left fuming. The performance report indicated a 70% adverse variance compared to budgeted expenditure for the month. He went straight to the accounting office and complained: This just isn't fair. The reason I'm 70% over budget this month is I'm using that elitist bunch of pastry cutters to do work that is going to get their fingernails dirty. I normally pay my boys $9 per hour, this crowd comes in at $13.50 per hour. These guys know I can't lay them off. They're treating work in my department likes it's a joke, and once they've gone back behind revolving doors I'm going to have to work my boys overtime in order to meet our scheduled maintenance for the year.