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2.2 INTRODUCTION
Today, in an era of increasingly interconnected world economy and fierce competition, crises
have gathered greater importance. Thus, no matter how financially powerful and successful an
organisation can be, it is still not immune from a crisis situation and the consequent long term
damages it can cause. Examples of recent crises include the downfall of Enron, one of the
worlds largest energy companies at that time and the recent world economic recession impacting
on business activities.
2.3 ORGANISATIONAL CRISIS
Crises come in many varieties, the Homemade Crisis !"ahn,#$%&', often initiated by
mismanagement, fraudulent behaviour, in(udicious expansion or diversification.
)ne well*+nown case was that of ,our -easons .otel Company. /n the mid #$$0, it acquired
1egents .otel2 but this integration of the luxury hotel chains had left ,our -easons .otel
Company in high debt. 3oreover, not only the company was financially in a difficult situation
but it also had to face global economic downturn which started in #$$4 and thus affecting the
organisations profits !5ngela 6anning and 1obert 6ewis, #$$7'.
Therefore, crises can also be rooted in external negative events or changes in the mar+et
environment li+e the 044%84$ economic downturn which hindered business operations.
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/. 3itroff !0449' identifies seven potential groups of ma(or crisis events:
#' Economicrelated! ;roblems with labour force, the fall of the stoc+ mar+et, economic
recessions, changes in trade policy, sharp decrease in organisations profits.
#' In"ormational! 6ost and tampered data.
0' #$%sical! 6ong term brea+down and quality problem, product failures.
&' H&man Reso&rces! <andalism by employees, corruption.
9' Re'&tationrelated! 6oss of goodwill.
=' #s%c$o'at$ic acts! Criminal and terrorist acts such as the 3arriott and 1it> Carlton
.otels ?last in @a+arta in @uly 044$.
A' Nat&ral disasters! ,ire, flood, and earthqua+es damages. /n Becember 0449, the tsunami
hit hard the 5sian tourism industry.
Consequently, a crisis situation !Claesser, 044&' is an unwanted, unusual situation for an
organisation, a time of acute difficulty or danger which necessitates an immediate response by
management.
Dryste+ !#$%7' and -chulten !#$$=' have argued how a crisis can negatively impact, to a
considerable extent, on the development of an organisation.
5 management view of crisis as defined by C.3.;earson and @.5 Clair !#$$%' is as follows:
An organisational crisis is a low probability, high impact event that threatens the
viability of the organisation and is characterised by ambiguity of cause, effect, and
means of resolution, as well as by a belief that decision must be made swiftly.
2.( THE HU)AN I)#ACT O* ORGANISATIONAL CRISES
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1esearch on the impacts of crises on employees has received limited attention in literature
!1ic+.5.3yer, Christian Conte and -arah ;eterson, 0447'. ;erhaps, the first casualty of a
downturn is the people who bring in revenues to the company.
5 survey conducted by the ?oston Consulting Croup !?CC' and the European 5ssociation for
;eople 3anagement !E5;3' between Eovember 044% to @anuary 044$ to understand human
resource challenges in times of crisis, showed that the most popular planned action in the current
recession crisis is to cut down on recruitment. 6i+ewise, a survey by the Chartered /nstitute for
;ersonnel and Bevelopment !5utumn 044$' indicated that employees in FD are increasingly
free>ing pay, cutting bac+ on training and slashing bac+ hiring, in response to economic
recession. The report also shows that fewer than a half of the employees feel that they were fully
informed or fairly well informed about what was happening in their organisation during the
ongoing economic downturn and more than half interviewed employees thought that it will
indeed be difficult or very difficult to find a new (ob if they were to be fired. Thus, with many
companies in distress, downsi>ing has become a common practice.
The term downsizing has been referred !Cascio, #$$&' as the reduction of a companys
employees through elimination of (obs or positions and is therefore seen as a faster way to reduce
labour cost in a downturn. )rganisations with the aim to adapt to uncertainties of the mar+et
environment and unexpected crisis situations, have favoured the flexibility strategy.
2.+ ALIGNING CRISIS )ANAGE)ENT STRATEG, AND TALENT
STRATEG,
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Eo organisational strategies in fact can be applied without the inclusion of .uman 1esources
!?aird et al, #$%&'. Consequently, the fit model of .13 advocates the increased recognition of
the critical role of people in the attainment of organisational strategies.
;eople are, thus, at the centre of the implementation of organisational strategy and the .1
strategy is eventually designed to fit the requirements of organisational strategy. The .1*driven
model shows that if people are in fact the +ey to competitive advantage, therefore there is a need
for organisations to build on people strengths !B Torrington G 6 .all, #$$%' to develop talent.
?arney !#$$#2 #$$=' found that li+e H.13, talent management is also grounded in the resource*
base theory of organisations. The theory was developed by .amel and ;rahalad !#$$%', who
stated that a firms competitive advantage is gained though the development of human resources
so as to outperform rivals !cited by 5rmstrong, 044A'.
2.- THE NEED *OR TALENT IN TI)ES O* CRISIS
Talent 3anagement needs to integrate organisational culture so as to gain competitive edge. The
term talent has increasingly gained popularity at the wor+place during the last decade. ?arron
!044%' described talent management as being the development and fostering of new employees
through practices li+e interviewing, hiring, orienting and the successful integration of those new
employees. /t can therefore be argued that talent management is a strategic tool used by
organisations.
5ccording to <. <aiman and C. <ance !044%', talent implies a sense of value, rarity and
inimitability in human characteristics that contribute to an organisations competitive edge. The
Chartered /nstitute of ;ersonnel Bevelopment !0447' referred to talent management as putting
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emphasis on individual member of the wor+force who can eventually ma+e an immediate
positive difference or has the capabilities to ma+e such a difference at some point in time of
crisis. ?erger and ?erger !044&' stated that what is more important is how to manage talent
effectively and that, somehow, most people in an organisation have some talents for which
management must invest for their development.
2.. TALENT #LANNING
-chut> and Carpenter !044%' stated that alent !anagement is an integral part of the "#
planning$.
/n #$$9, ?ulla and -cott !cited by 5rmstong, #$$$' defined .1 planning as a process for
ensuring that the human resources re%uirements for an organisation are identified and plans are
made for satisfying those re%uirements$. .1 planning thus see+s to identify the number of people
required, the type or sort of people needed, how to employ people and most importantly, to
develop people so that they can perform effectively and increase organisational performance.
Talent ;lanning, therefore, see+s to integrate strategies to boost the productivity of the wor+force
by developing and improving processes for attracting, developing, utilising and retaining people
with proper s+ills and aptitude so as to fulfil actual and future organisational needs !6oc+wood,
044=2 cited by -chut> and Carpenter, 044%'. /t entails that firms should always search for
talented individuals who fit the organisational culture and add value to the firms goals.
Consequently, organisations should be committed to rewarding performance and developing
professionals needs.
2./ THE I)#ORTANCE O* TALENT IN THE HOTEL SECTOR
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The .ospitality industry on a global basis is one of the fastest growing industry. 5s estimated by
the Iorld Travel and Tourism Council !IITTC, 044A', the travel and tourism industry
represents %.7 J of total employment worldwide. 6i+ewise, the tourism industry in 3auritius is
considered as one of the main pillars of the economy with a Cross Tourism 1eceipt !CT1' for
the #
st
quarter of 044$ amounting to 1s #4,0A= million. .owever, it is to be noted that CT1 has
decreased compared to the same period of 044% !?an+ of 3auritius' due to the world recession.
The hotel sector !Economic -ocial /ndicator, /ssue Eo 7A=, @une 044$' consists of 97 Hlarge
hotels !well established beach hotels with more than %4 rooms', with a room capacity of %,$00
representing 7% J of total room capacity with 00,&#9 individuals employed in the sector by the
year 044%.
5s pointed out by )6eary and Beegan !044=', the industry is characterised by long wor+ing and
unsociable hours and also poor conditions of wor+. Deeping talent therefore is not an easy tas+
especially in the hospitality industry associated with a high labour turnover.
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0.$ BE<E6);/EC T56EET
The discipline of .1B includes the practical field of training and development that puts
emphasis on the wor+place as being a rich source of learning !?illet, 044#'. /n a survey by ?CC
and E5;3 in 3arch 044$, it was found that in this current world economic recession, many
organisations plan to cut on individual training such as coaching. Training was seen as an easy
item in the budget to cut cost but was often a wrong decision as it impacts negatively on
employees commitment.
3anpower -ervices Commission !#$%#2 cited by 5rmstrong, #$$$' defines the purpose of
training in the wor+ situation as the development of the abilities of manpower needs of the
organisation$. -ubsequently, it is a means for organisations to add value to the employees. ,irms
that recognise that competitive advantage is obtained through the high quality and talented
people it employs needs to invest in the development of the s+ills and competences of its
wor+force. .ere, there exists a variety of training techniques which can be categorised as either
on*the*(ob or off*the*(ob training.
2.01 SU))AR,
This unit defined some crisis situations and how human resource and talents are managed in
times of crises in order to be better prepared for any type of threat and how to tap on
opportunities.
The alignment of crisis management strategy and talent strategy have been discussed. /n
addition, the need and importance of talent in the hospitality sector was explained
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