Roosevelt University

Management Theories & Practices in Hospitality Industry:Managing Change

A Research Paper Submitted to:

Professor Gerald F. Bober Manfred Steinfeld School of Hospitality and Tourism Management

Hospitality and Tourism Management (BSHTM)

 By:

Manerly Salvatore February 1, 2010

MANAGING CHANGE

According to F. John Reh (2009), “Managing change means managing people's fear.

Change is natural and good, but people's reaction to change is unpredictable and irrational. It can

be managed if done right” (Management About.com Guide, para. 1). However, change is possi-

ble and the need for change is increasing. Gruman (2008) states, “The only constant in today’s

corporate world is change” (p. 11). Therefore, change capability is necessary for the organiza-

tions that will succeed in the future.

In the hospitality and tourism industry, change is essential and has overtaken the entire

industry. D’Orleans (2008) writes, “In hotel business, almost every property, brand or segment is

undergoing change, such as green hotels, gen X/Y hotels, bedding, condo-hotels, timeshares and

technology” (p. 26). In order to cope with the undergoing change in customers’ demands or

needs, many hotels even adopted new names and brands. According to Chiang (2007), “The re-

branding and repositioning trends highlighted the importance of change management process in

the hospitality industry” (p. 19).

Constant change is also happening in the food and beverage industry. Van der Does and

Caldeira (2005) states, “Our organizations in food service business are challenged by rapidly

changing customer preferences, increasingly competitive landscapes, technology shifts and sup-

ply market fluctuations” (p. 18). Change is also an inevitable reality in the gaming and wagering

industry, Doocey (2008) specifies one of the many examples of change in the international gam-

ing industry, ”Table game management systems, once an esoteric technology for most casinos,

are slowly but surely becoming an indispensable service for the increasingly wired gaming floor”

(p. 34).

In tourism, change constantly challenges public sector planners and policy makers, but

also provides opportunities for the development and expansion of operators' businesses. Laws,

Faulkner and Moscardo (1998) report that growth in international tourism in the second half of

century is a reflection of a range of changes taking place in the global economy, social and politi-

cal environments. They further write, “Foremost among these changes is the widespread and

rapid economic growth that has made travel more feasible for an increasing number of the

world’s population and the improvements in transport and communication technology which

have made high-volume leisure or business travel possible to distant destinations”. (Laws,

Faulkner & Moscardo, 1998, p.2). In conclusion, “Without change there would be few opportu-

nities for the creativeness of successful entrepreneurs, while for tourists, the opportunity to enjoy

and experience a temporary change of place, culture or the pace of daily life is a prime motive

for travel” (Laws, Faulkner & Moscardo, 1998, p.1).

Heathfield (2009) then explains, “Change is not going away, however change is manage-

able and organizations can do change well” (Management About.com Guide, para 2). “Great

leaders understand how to leverage the power of positive change to keep their companies cur-

rent, vibrant and relevant. Conversely, change-resistant organizations often stagnate, failing to

adapt their concepts or offerings until it is far to late” (Van der Does & Caldeira, 2005, p.18).

However, Langer (1998) acknowledges that, “Change can also be stressful and difficult to deal

with, although it is clear from research in psychology that the more people avoid change the less

they are able to cope with it (as cited in Van der Does & Caldeira, p. 18).

In order to achieve successful change, Heathfield (2009) further concludes ,”Successful

change management requires effective communication, full and active executive support, em-

ployee involvement, organizational planning and analysis, and widespread perceived need for the

change” (para 3). Five successful change management by Heathfield seems to solve the problem

incurred by change in an organizations or companies, however many questions still remained

unanswered, such as how do you know that your organization or company needs to change, then

what needs to be change, how do you generate effective communication in a organization, how

do you gain full and active executive support and employee involvement, what are the strategies

in organizational planning and development in order to achieve the positive outcomes. In order

to address these questions and understand further, many researchers have studied cases of change

management successes and failures.

Based on his research, Gruman (2008) states, “You can manage change using two general

strategies — planned and emergent — and each is appropriate under certain circumstances” (p.

11). He further explains,

Leaders, however, tend to focus on the planned approach to change, which is ex-emplified by the work of John Kotter. Famous for his eight-step methodology, Kotter presents leaders with a blueprint for executing changes. Among his recom-mendations are: establish a sense of urgency, form a powerful coalition and create short-term wins. The leader’s role in the planned approach is to design, control and monitor the changes to ensure successful execution. Kotter’s methodology is valuable. It provides intelligent advice for leaders who, for example, must imple-ment clear directives given by senior leaders quickly and faithfully. Under differ-ent conditions though, another approach to managing change might be more ap-propriate”. The emergent approach is the conceptual cousin of Henry Mintzberg’s seminal work on emergent processes in strategy development. Essentially, Mintzberg’s theory is that leaders are forced to adapt the business strategies they developed in corporate boardrooms to the ever-changing realities of the market-place. The emergent approach to change therefore suggests that although you can plan certain elements of man- aging change, other aspects, including many of the initially planned portions, must evolve. Drawing on the science of complexity, managing change via the emergent approach is suited to specific conditions. For example, it works when smaller changes that support experimentation prove valu-able; when opportunity exploitation is more urgent than threat reduction; and when the prospective changes require a high level of acceptance from those who are implementing them. The leader’s role in this approach is less about controlling change from above than it is about enabling change to rise up from below. (p.11)

The conclusions of Gruman emphasizes how important the leader’s role in the success of

change management. Research conducted by the Elliot Leadership Institute agrees by stating,

“The ability to manage change, to be a change agent, is one of the 10 dimensions of executive

leadership identified as most critical to success in hospitality industry” (as Van der Does &

Caldeira, 2005, p. 18).

D’Orleans (2008) claims that managing and creating is a skill. “The real challenge is not

just to come up with a brilliant idea—it's to implement it” (D’Orleans, 2008, para 2). Heathfield

(2009) supports this statement and further explains,

Implementing change in an organizational environment that is already employee-oriented, with a high level of trust, is a huge plus. Understanding and responding to the range of human emotions during times of intense change, is also cited as critical. All of this may sound straightforward, but individual, such as leader or manager suggestions about how to do each of these successfully are priceless. (para 4)

In addition, John Reh (2009) writes, “Manager’s job as a leader is to address their resis-

tance from both ends to help them reduce it to a minimal, manageable level” (para 4). Leaders

need to overcome the resistance by defining the change and by getting mutual understanding.

“Definition is a two-way street. In addition to defining the problem, leaders need to get the em-

ployees to define the reasons behind their resistance” (John Reh, 2009, para 10). “Understanding

is also a two-way street. leaders want people to understand what is changing and why. Leaders

also need to understand their reluctance” (John Reh, 2009, para 11).

“Kotter’s model stresses the importance of employees in an organization, hence the need

for management to value employees” (Chiang 2007, p.31). Therefore, leaders need to focus on

opening and maintaining clear channels of communication with their employees so they under-

stand what is coming and what it means to them. They will appreciate it and will be more pro-

ductive both before and after the change. “Overall, the employees’ adaptation to the new com-

pany culture were dependent on the preparation done by management” (Chiang, 2007, p. 31).

Furthermore, Chiang (2007) explains, “A lack of assessment of the change process could

be fatal“ (p. 31). Therefore, it is also suggested by many researchers that organizations or compa-

nies to undertake steps to review their operations and satisfaction level of its employees and cus-

tomers regularly with regards to the change. This is to ensure that necessary action be taken

promptly.

At the end, Gruman (2008) concludes, “As with most leadership and management chal-

lenges, rigid prescriptions for action often fail to account for situational contingencies. Managing

change is no different. Insightful leaders know the planned approach is but one option” (p. 11).

References

D'Orleans, J. (2008, June 2). Implementing, managing change is everyone's job. Hotel & Motel Management, p. 26. Retrieved from Hospitality & Tourism Complete database.

Doocey, P., Holtmann, A., & Bulavsky, J. (2008). Managing Change. International Gaming & Wagering, 29(5), 34-35. Retrieved from Hospitality & Tourism Complete database.

Food Service Director Magazine (June 15, 2007). Managing Change for Success. Food Service Director, 20(6), 12. Retrieved from Hospitality & Tourism Complete database.

Gruman, J. (2008). Options for Change. Hotelier, 20(6), 11. Retrieved from Hospitality & Tourism Complete database.

Heathfield, S. M. (2009). Change, Change, Change: Change Management Lessons From the Field. Introductions - Changes Experienced, Management About.com Guide. Retrieved Jan 29, 2010 from http://humanresources.about.com/od/changemanagement/a/change_lessons.html

Laws, E., Faulkner, B., & Moscardo, G. (1998). Embracing and Managing Change in Tourism[serial online], 1-10. Retrieved from Hospitality & Tourism Complete database.

Leong Choon, C. (2007). Managing Change of Hotel Brand Name: Managerial Roles and Em-ployees' Concerns. Asia Pacific Journal of Tourism Research, 12(1), 19-32. doi:10.1080/10941660601035894.

Reh, F. J. (2009). Managing Change: Managing People’s Fear. Management About.com Guide. Retrieved Jan 29, 2010 from http://management.about.com/cs/people/a/MngChng092302.html

Van der Does, L., & Caldeira, S. (2005). Managing change a constant necessity in food service. Nation's Restaurant News, 39(33), 18. Retrieved from Hospitality & Tourism Complete database.