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PUTTING THE CYCLE OF SUCCESS INTO PRACTICE: A CASE STUDY
Within Australia, Australian Hotels Inc AHI, operates nine hotels and employs over 2000 permanent full-time staff. One of its latest ventures, the Sydney Airport Hotel SAH, opened in March 1995. Similar to many international hotel chains, however, AHI has experienced difficulties in Australia in providing long-term profits for hotel owners, as a result of the country's high labor-cost structure.
The first of the initiatives was an organizational structure with only three levels of management. Partly as a result of this change, there are 25 percent fewer management positions, enabling significant savings. This change also has other implications. Communication, both up and down the organization, has greatly improved.
The hotel also recognized that it would need a different approach to selecting employees who would fit in with its new policies. In its advertisements, the hotel stated a preference for people with some 'service'experience in order to minimize traditional work practices being introduced into the hotel. Over 7000 applicants filled in application forms for the 120 jobs initially offered at SAH. The balance of the positions at the hotel was predominantly filled by transfers from other AHI properties.
A series of tests and interviews were conducted with potential employees, which eventually left 280 applicants competing for the 120 advertised positions. After the final interview, potential recruits were divided into
three categories. Category A was for applicants exhibiting strong leadership qualities. Category C was for applicants perceived to be followers, and Category B was for applicants with both leader and follower qualities.
Department heads and shift leaders then composed prospective teams using a combination of people from all three categories. Once suitable teams were formed, offers of employment were made to team members.
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The most crucial way, however, of improving the labor cost structure at SAH was to find better, more productive ways of providing customer service. SAH management concluded this would first require a process of 'benchmarking'. The prime objective of the benchmarking process was to compare a range of service delivery processes across a range of criteria using teams made up of employees from different departments within the hotel who interacted with each other. This process resulted in performance measures that greatly enhanced SAH's ability to improve productivity and quality.
1) How did the benchmarking process enhance SAH's ability to improve productivity and quality?
A. It provided insights into customer preferences.
B. It identified performance measures for improvement.
C. It resulted in improved communication methods.
D. It led to a reduction in employee numbers.
2) SAH's new organizational structure requires A. 75% of the old management positions.
B. 5% fewer management positions.
C. 25% more management positions.D. 25% of the old management positions.
3) What approach did SAH management believe would improve the labor cost structure?
A. Focusing on customer service improvements
B. Increasing the number of management levels
C. Reducing the number of available positions
D. Cutting staff salaries
4) Categories A, B, and C were used to select...A. department heads
B. new teams C. new managers
D. front office staff
5) The high costs of running AHI's hotels are related to their...
A. management
