Strategic Management and Leadership: The Hong Kong and Shanghai Hotels Group – Page 2

For every business to be a success, no matter its scope of operation, there must be number of underlying factors without which this amount of success would decrease or completely miss out. Most of these factors depend on the strategic management and leadership skills and techniques applied in running the businesses in question. After giving what I feel as some basic measures of success in The Hong Kong and Shanghai Hotel Group, I will now outline a number of reasons behind this huge success. Briefly, factors influencing this success includes among the following:

  1. A highly and professionally qualified top management, that boasts of wide experience in the fields to which they render their services. It is of prime importance for any form of business especially one that undertakes quite number of unrelated activities to have a management team that is heavily endowed with the specific knowledge pertaining the carrying out of such an endeavor. For example, in March 2011, The Hong Kong and Shanghai Hotels Group named a few new General Managers. Those named took positions in major branches of the company that required a greater intensity of managerial decisions due to the projects they were running at that time (Mice Biz, 2011).
  2. Maintaining an employee motivation program that keeps them satisfied and willing to deliver more. One strategy of ensuring success in all types of businesses is enhancing employee satisfaction and positive morale. This is an important consideration for the human resource department (Tempel, 2001, p. 112). With this in mind, The Hong Kong and Shanghai Hotels Group management has a very effective human resource stimulus. When expansion is due, higher staff promotions are mostly from within (Hsyndicate, 2013). A few or sometimes no top management staff comes from outside of the company. With such information in mind, the employees are motivated and to deliver with an anticipation of getting promoted somewhere along their work lives with The Hong Kong and Shanghai Hotels Group. The codes of ethics are against exploitation of employees in foreign countries, as most multinationals do (Gallagher & Andrew, 2007, p. 588). This really turns out as a factor promoting the huge success of this company.
  3. Diversification of business ventures. Diversification of a multinational’s portfolio brings many benefits with it (Taylor & Thrift, 2013, p. 14). As I mentioned earlier, The Hong Kong and Shanghai Hotels Groups do not carry out the business of food and accommodation only. It operates other kinds of business too: commercial properties division and clubs services division (Businessweek, 2013). This enables the company to avoid extreme instances of off-peak season cash flow reductions. With such diversified portfolios, it is almost 100 percent guarantee that profits will always be high. This also follows the current trend of other multinational hotels (Telfer, 2008, p. 99).
  4. The innovation strategy in the projects developed by The Hong Kong and Shanghai Hotels Group is exemplary ( Green Hotelier, 2013). The drive from the project managers, incorporated with consumer’s preferences and choices as seen through the analysis of their feedbacks, results to a very strong innovation system. Through this strategic innovation, this company is able to come up with new methods of delivering existing services more efficiently and effectively (Microsoft, 2011). This also helps in initiating new programs that consumers deem suitable to them. The company also includes online reservations as a way to keep up with information technology advancements, a requirement viewed as many to be of help to such a multinational company (Palvia, Palvia, & Zigli, 1992, p. 554). This strategy helps in maintaining current customers as well as acquiring new ones through the good mouthing of the loyal ones. This also is one of the key things promoting success in The Hong Kong and Shanghai Hotels Group.
  5. The Hong Kong and Shanghai Hotels Group’s indulgence in strategic, corporate, and social responsibility programs. This helps to create a good image of the company across the globe. The management is keen to identify area within which to get involved in a manner that will yield maximum results. The company has in the past participated in helping victims of natural catastrophes like floods and earthquakes especially in countries where they have opened up establishments or are in the process of doing so. For example, following the earthquake in Japan and the flooding in Thailand in 2011, the staff of The Hong Kong and Shanghai Hotels Group provided care and support to the affected members and of staff and to their local communities as well.
  6. Working without conflict with the political environment of the countries in which its business operates. The top management of this company ensures that there is compliance with all rules and regulations required, before operations starts. They lobby and press for favorable working positions in the best strategies possible like it is required (Cooke, 2003, p. 14). This has seen The Hong Kong and Shanghai Hotels Group being able to operate smoothly without any discontinuations of operations cropping up due to a legal proceeding. This compliance with all rules and regulations makes it possible for production and issuance of services by the company to continue without interruptions thus ensuring productivity all year long.
  7. A properly managed international strategy also leads to the success reaped by this company. The Hong Kong and Shanghai Hotels Group includes in its top management professional from different countries. They are especially from such countries in which the operations of this company are popular. This strategy helps in bringing a good working relation of the company especially in the across the border facilities. In the international branches, this company employs majorly the locals since they understand their country better (Dowling, Festing, & Engle, 2008, p. 250). It strengthens the working conditions in the international branches thus leading to huge successes.
  8. The presence of a clear competitive strategy also helps to accrue the huge success enjoyed by The Hong Kong and Shanghai Hotels Group. The top management has a wing that specifically deals with studying and relating to what other players in the multinational hotel industry are doing. This enables the company maintain relevancy in this field of business venture (Hood & Vahlne, 2012, p. 374). The competitive strategy has helped this company to do among other things: establishing the Peak Tramways and Peninsula Clubs and Consultancy Services. This two especially enable it to be on top of their competitors in both Hong Kong and Thailand. Customers choose their services due to the kind of transport they offer and the consultancy services that distinguish them from their close competitors in that area (Mak, 2004, p. 84).
  9. Another factor that has resulted in the year-to-year success of The Hong Kong and Shanghai Hotels Group is the strategic corporate governance applied. This company commits its efforts to ensure that it conducts business towards high standards of corporate governance and ideal control processes to safeguard the interests of all stakeholders, especially its highly esteemed shareholders (Sowerby & Ferguson, 1940). This company reviews the governance policies regularly thus ensuring the improvement of internal controls that really relate to the amount of success expected in the business.
  10. Another key factor of success in this company is the strategic learning and development programs it runs. The Hong Kong and Shanghai Hotels Group commits to develop future leaders from within. It thus customizes various development plans in which participants are coached one on one by the top management. Managers are the best mentors (Marquardt & Loan, 2006, p. 53). This ensures installation of the company’s goals to them at that young stage. The learners grow with it and are able to transform it into success once they take over management.

It is significantly true that all the above factors have contributed to the huge success of The Hong Kong and Shanghai Hotels Group. However, a closer look at all of them helps to identify those that are most important in facilitating this success. First, the strategic move by the management to diversify their operations is one of the very best reasons for success. The Hong Kong and Shanghai Hotels Group is lucky to have a leadership team that is so flexible in terms of innovative ideas. Portfolio diversification is one of the major techniques of ensuring positive balances in cash flow movement for an internationally or even locally running business. The diversification of this company includes the establishment of other hotel facilities, in different locations, and the indulgence in other non-hotel business ventures. Each location has a peak and an off-peak season of visitors. It is hardly possible to have an off-peak season simultaneously in all locations. This means that there in no one time that this company is completely short of business. It utilizes the off-peak seasons to provide its employees with short vacations for rest and rejuvenation. Expanding the portfolio to even non-hotel ventures also helps so that if the hotel business gets global crisis, The Hong Kong and Shanghai Hotels Group sustains their cash flow with the returns from the non- hotel ventures since they are not affected. Still of major importance is the competitive strategy found in this diversification aspect. It is a common trend for all companies participating in the multinational hotel business to include other kind of services different from the routine hotel services of food and accommodation. Having this in mind, the management in The Hong Kong and Shanghai Hotels Group has taken up that challenge and successfully practiced diversification in a wider way compared to any of the competitors in the location it operates. These are the most important features of success that make The Hong Kong and Shanghai Hotels Group to secure a good market share in the areas it has establishments.

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