Reference no: EM132195173

Background:

Heywood Hospitality is a hotel management company, specializing in the management of full service, branded hotels throughout the United States. The company started 20 years ago by the two founders and has grown quickly and steadily since. The company manages the owned hotel portfolios for several large insurance companies. Presently, the company manages 85 hotels throughout the United States. The brands managed include Hilton, Marriott, Wyndham, Westin, Sheraton, Crowne Plaza, and Embassy Suites.

Currently, the company is structured in two ways. The operational structure for the actual day to day oversight of the hotels is based on geographic areas. The Senior Vice President of Operations reports directly to the CEO. There are 5 geographic areas, each area is led by an Area Vice President of Operations

Which is SVP operations: West, East Coast, Mid Atlantic, Southeast, and Central

Each area has a small team which is focused by discipline:

Area Vice President: Area Director HR, Area Director Revenue Management, Area direct sales, Area direct finance

Each of the Area Director positions report to the Area Vice President and provides direction and support to the hotels in their area.

In addition to the Operating structure, the company has small discipline specific teams which serve as resources to the operating teams. Each of these reports directly to the CEO.

CEO: SVP operation, SVP sales and marketing, SVP revenue management, SVP finance, and SVP HR

Each of the corporate teams provide overall policy, procedures, and support for the area teams.

For example, the SVP of HR develops human resources policies and procedures which are to be implemented by each of the area teams. The SVP of finance develop policies and procedures which are to be implemented by each of the area teams. Etc. No one on the area teams reports to their corporate discipline on a direct line basis, but informal relationships exist.

This structure has been in place since the origination of the company. As the company has grown, the company has added Area teams when the number of hotels increased to the point that these teams could be financially viable. For the corporate teams which report directly to the CEO, the number of people on the teams has been increased as well, as necessary. There are about 4 people on each corporate team, including the SVP. Team member positions range from Director to Coordinator (secretarial/administrative).

The CEO believes that while this structure has generally worked well, there are some significant issues arising as the company continues to grow. The CEO has asked you to recommend a new structure to improve the performance of the company.

Here are the challenges the CEO sees with the current organization:

The discipline SVP’s have a difficult time in getting cooperation from the area teams on certain issues. If the SVP of operations or an Area Vice president does not believe a policy to be effective, they simply don’t implement it.

The Area Vice Presidents have a difficult time getting specific assistance from a Corporate Team on issues which may be important to their geographic area. They feel that the corporate resources are too stretched to be anything but policy factories.

Each Area tends to try to keep hotel General managers they like and who perform well in their area – and not allow them to be promoted into another region. In addition, the Area Vice presidents tend to “push off” their poor performing GM’s to another Area VP by not disclosing performance issues. Over time, this has led to a number of promotions of poor general managers into another area.

There are growing inconsistencies between the areas with respect to discipline activity. For example, the Area Director of Finance in the West has an outstanding process of communicating with owners and asset managers. The Area Director of the Southeast does not follow the same process. As a result – owners (who may have hotels in both regions) are beginning to complain about these inconsistencies.

The Area Directors generally do not cooperate with each other. They focus on serving the hotels in their area and making their Area Vice President happy.

There is no promotion route for an Area Director to move up.

The Area teams complain that the staff on the Corporate teams have no hotel experience and “don’t understand” how hotels operate.

There is limited cooperation between the corporate discipline teams, and each fight with each other for resources constantly.

There is no “bench” for promotion to a corporate team from the field. If a corporate SVP were to leave the company – they would need to be replaced with someone from outside the company.

Since the corporate team skill sets are so unique – it is virtually impossible to shift resources between teams when that is necessary for a project. What ends up happening thus is that the company needs to hire temporary consultants rather than simply allocate existing resources.

The CEO wants you to recommend a new structure which addresses and hopefully solves these problems, or at least mitigates them. You must incorporate your knowledge of how individuals behave and how they are motivated as well as how best to accomplish the goals of the organization.

You cannot change the number of areas – unless you figure out a way to dramatically increase the scope of the teams to oversee the number of hotels in their area. Each team is now at its “maximum capacity”.

You can change the levels in the new structure. For example, SVP’s in the current structure could be Director level in the new structure – however you can do this ONLY if their responsibilities are changed (reduced) as well.

Finally, the new structure cannot have more people nor cost more than the current structure. You will need to develop your new structure with the same or less cost and the same or fewer people than the current structure.

Your paper must address each of the 12 items of concern. You may not be able to solve all of them, but you can improve each of them.

You must include revised org charts in your paper. Use the “Smart Art” functionality in Word.