DEPARTMENT OF AGRIBUSINESS MANAGEMENT AND ENTREPRENEURSHIP

College of Economics and Management

University of the Philippines at Los Baos
College, Laguna, 4031 Philippines
Telefax.: (63-49) 536-2846
E-Mail:damcem2012@gmail.com

Case Analysis

Case No. 1: H.I.D.

Submitted to:
Prof. Dia Noelle F. Velasco

In partial fulfillment for the requirements of the subject

Organization and Management (MGT 201)

Submitted by:
Marc Jason C. Delomen
Judy Ann V. Rebong
Luis Julius Bragais
September 23, 2016

I.

POINT OF VIEW
Consultant - Keith Houck was hired by Bill Collins, the president of H.I.D, to help the companys

management team with their strategic planning. Keith was given all the materials and resources he would need to do
his task and he was introduced to the management team immediately when he came on board.

II.

SYNOPSIS
H.I.D. is in the business of establishing and operating hotels. The company has twenty one properties

operating domestically and abroad. Bill Collins is the current president of H.I.D. for five years and has an ambitious
goal of expanding its operations aggressively. The management team of Bill has different views on expansion, with
concerns on human resources, profitability and market reach. Keith Houck, the consultant hired, is now faced with
the opportunity of aligning managements goals and objectives.

III.

ANALYSIS OF CASE SITUATION

3.1 Case Facts

Company Assets
H.I.D. runs ten Holiday Inns and two Quality Inns in Georgia (USA), eight hotels in Canada and
one property in the Caribbean during Bills administration.

Company Mission Statement

The company has a mission statement that says H.I.D. strives to exceed the expectations of our
guest by providing excellent value in well-run hotels located off the beaten track . In this way, we will meet
our profit, quality and growth plans..

Company Vision Assessment/Generation

Keith organized the senior managers in a meeting to get a glimpse of their visions for the
company's domestic operations on the next ten years. Bill Collinss had the most ambitious visions of
establishing twenty seven properties in five years and a long term goal of fifty in ten years. The other
managers was on a conservative projection of only fifteen hotels in five years and no more than twenty in
ten years.

Dave King, in charge of hotel operations indicated that profits will not be sufficient to finance the
expansion. He also pointed out that they do not have the human capital to operate the new operations nor
afford the increased overhead in hiring professionals. Tony Briggs was concerned about the market
competition.. Karen Setz has a forward looking vision of expanding to bigger towns but still in the same
state of Georgia. Bills vision on expanding is beyond the state of Georgia which includes California and
New Jersey.

Figure 1: Current locations of HID and Bills Target locations.

3.2 Assumptions Made

H.I.D has no Organizational Development and Corporate Planning Department

to oversee long term strategic planning.

Since the company has been operating for a decade, a customer relations
division as a company standard is established.

The mission statement addresses their customers, services, product quality but

fails to include their corporate values, employee relationship, utilization of technology and social
responsibility.

The company has been operating for ten years.

The mission statement of H.I.D. is outdated and that past profit projection

during its conception had been reached at present time with substantial revenues to support
existing operations but not expansion.
The tourism and hotel industry is a booming market with foreign countries
having liberal policies on companys expanding their operations. The market size of the hospitality
industry is increasing and H.I.D. has a relatively small share of the local and international market.
Senior managements strategic plan is focused on growth strategy and expanding
its operations.

The current financial position of the company allowed for an allocated budget

under Keith Houcks discretion.

3.3 Company Analysis

H.I.D. Mission Statement
H.I.D. strives to exceed the expectations of our guest by providing excellent value in well-run
hotels located off the beaten track . In this way, we will meet our profit, quality and growth plans.
The company mission statement focuses on capitalizing on hotels on a not so populated place
specially on small towns with mid range prices.

Financial Position
H.I.D. was able to accomplish its current financial goals to support its expansion.

Marketing
H.I.D. products entails hotel accommodations/services and their target market are clients that can
afford mid priced hotel accommodations/services located in rural towns. They also target these areas since
theres lesser competition.

Organization
The company has four divisions that oversees operations which forms a team of senior managers
that is accountable to the company president, Bill Collins. The human resources division is managed by
Karen Setz, operations of the hotels is overseen by the COO Dave King, Tony Briggs is in charge of
marketing and Art Johnson keeps the accounting records.

IV.

PROBLEM

4.1

Problem Analysis

The ambitious goal of Bill Collin brought Keith Houck on board to assess the companys direction. Keith
has to tackle the opportunity of unifying the companys objective that would benefit all the stakeholders of the
company. H.I.D.s organizational structure includes four senior managers and a president, all of the having different
opinions on the direction that the company should be taking. Concerns vary from skills and competencies to market
strategy and expansion. The incongruity between the senior managers and the president lead to disagreements in
what the company should be doing in the next few years. The lack of a unifying vision impedes internal
communication that helps in aligning the companys goal.

4.2

Problem Flow Diagram

Figure 2: Problem Flow Diagram

4.3

Problem Statement

Keith Houck is faced with the challenges of (1) identifying the mismatch in the management teams view of
the company in 10 years versus the companys Mission Statement; and (2) answering, what is the best strategic
plan for the company to have a unified mission and overall direction?.

V.

FORMULATION AND EVALUATION OF ALTERNATIVE SOLUTIONS

5.1

SWOT Matrix

External Environment Analysis

Opportunities

Threats

Internal Environment Analysisb

i) Existing properties in Atlanta

i) Profit loss due to aggressive

expansions

ii) Promising market in California and

Georgia
iii) Chance to unify their visions and
mission

ii) Internal breakdown of morale and

operations
iii) Uncertain market in the bigger
towns/cities

Strengths

SO Strategies

ST Strategies

i) Well-run profitable hotels

i,i) Build additional hotels in Atlanta

and in those outside Georgia such as
California and New Jersey.

i,i) Perform market analysis and come

up with options with the least risk of
profit loss. Gather other sources for
financial needs such as getting
partnership from small hotels.

ii) Has been operating for ten years

iii) Optimistic and determined president

ii,ii) Use their 10 year experience in the

hotel industry to strategize expanding to
California and Georgia.

i,iii) Build hotels outside Georgia and

increase marketing strategies.

iii,iii) The president, with the help of

the consultant, can revise the mission
and vision of the company to cater to
his ambitions.
Weaknesses

WO Strategies

WT Strategies

i) Disagreement between senior

managers

i,i) Build hotels in California and New

Jersey and increase marketing
strategies. They can reduce the
disagreement to a minimum by creating
a highly profitable business plan in
expanding to Atlanta.

iv,iii) Increase Marketing Strategies

ii) Lack of funding support for

expansion outside the city
iii) Failure in internal communication
iv) Hesitations in expansion marketing
strategies.

iii,ii) Update the mission statement to

achieve uniformity among all the
members of the management team.

ii,ii) Attract investors by showing a

highly profitable business plan in
expanding to Atlanta. Make the
company public by opening an IPO.
iii,iii) Improve the employee relations
division in mediating the conflicts
between the managers.
vi,iii) Follow the Four Management by
Objectives/MBO activities (set goals,
action plan, review process, appraising
overall performance).

5.2

Evaluation of Alternatives

Alternative Solutions

1. Follow the Four

Management by

RATIONALE

PROS

CONS

The four steps provide the

complete analysis in

MBO involves setting the

objectives at different

Performing the four steps

might take time especially

Objectives/MBO
activities (set goals,
action plan, review
process, appraising
overall performance).

setting the objectives of

the company.

levels, units, individuals

involved in the company
so as to achieve a unified
basis of performance.

when the company has to

perform the review
process.

2. Create a strategic plan

for H.I.D. that includes a
unifying Vision
Statement for the
company and update the
Mission Statement
(following the Strategic
Management Steps)

The strategic plans for

H.I.D, will express its
ultimate goal on what the
business wants to become.
The plan will also indicate
the competencies, skills
and resources needed for
allocation. It establishes
agreement on top
management, around
intended outcomes/results,
and assess and adjust the
organization's direction in
response to a changing
environment.

Strategic Management
Planning involve the
following advantages:

Designing a strategic plan

is complex process and
encompasses constant
appraisals of critical
components.

- Forces an objective
assessment.
- Provides a framework
for decision making.
- Inspires employees and
gives them direction
(Unity of Direction).
- Enables measurement of
progress.
- Aligns the companys
strategic intent and the
future state of the
business.
- Serves as a guide for
resource allocation.

It is a time consuming
process and management
will have to spend a great
deal of time formulating,
studying and sharing the
strategic management
process.
It could have difficulties
in implementation and
would require a clearly
communicated plan.
The planning process
itself provides
opportunities for missteps.
Some visions are very
generic or focus on
financial objectives and as
a result, poorly motivates
employees.
Success is not guaranteed

3. Maintain the current

Mission statement of the
company

Maintaining the mission

statement would eliminate
the factor of time which is
also a consideration
especially during
implementation.

The company can prevent

losses that could be
incurred from venturing in
larger towns, should these
hotels be unsuccessful.
Time would not be a

There would be no growth

for the members of the
company.
There would be lack of
motivation and
understanding among the

problem since the mission

statement is already being
implemented.

members of the
management team.
The management teams
view of the company
would not be unified.
The opportunity cost for
the decision would cause
a decline in motivation
not just in the upper
management but also in
the lower ranks.

VI.

RECOMMENDATION
6.1

Rationale

Based on the pros and cons listed, it is best to follow Alternative Number 2: Create a strategic plan for
H.I.D. that includes a unifying Vision Statement for the company and an updated the Mission Statement, following
the steps in Strategic Management. Strategic Management follows a set of procedures that would help the company
in deciding for its long-term goals. It also involves Strategic Control wherein the progress of the company with
regards to its set goals is being evaluated and when discrepancies arise, corrective actions should be provided. H.I.D
needs this type of planning since the managers have different views for the plans for the company that could only be
addressed with careful analysis and decision-making, eg. the locations where they would build their next hotels,
whether be it still at Georgia or at farther areas such as California and Canada. Strategic Management would also
help the company to cope better in certain changes in the environment and gives motivation across all employees.

6.2

Implementation Plan

Before any planning commence, a preliminary assessment of the available resources should be made to
determine the flexibility and capacity of the consultant. He should also establish his working relationship with senior
management, employees and shareholders. Convening H.I.D.s top management is essential in this process as their

views are the most influential in the organization. As many people as possible should be involved in the process
because involvement leads to stronger commitment. After establishing the resources and his rapport, he can now
proceed with the planning the companys strategic intent.

The first step in the process is to step back and make sure that previous goals and objectives have been met.
Evaluate these carefully and determine any components that contributed to the success of the company. Recognize
any parts of the previous plan that might be impractical or excessive in cost, either of time or money. Highlight these
and be sure to keep them in mind during the formulation of the strategic plan. Keep back-up ideas in mind in case
the original plan fails.

Creating a vision statement determines the companys future state, it also serves as a guide in creating a
mission statement. The statement should include the companys core values, core purpose and goals. After
determining the companys vision, a mission statement can now be formulated, it is a description of what an H.I.D.
does , the nature of its business and why they do it. Establish a clear image of what the vision and mission statement
is intended to accomplish.
There are several guidelines in creating a mission statement:1
1.
2.
3.
4.
5.
6.
7.
8.
9.

Customers. Who are your customers? How do you benefit them?

Products or services. What are the main products or services that you offer? Their uniqueness?
Markets. In which geographical markets do you operate?
Technology. What is the firms basic technology?
Concern for survival. Is the firm committed to growth and financial soundness?
Philosophy. What are the basic beliefs, values and philosophies that guide an organization?
Self-concept. What are the firms strengths, competencies or competitive advantages?
Concern for public image. Is the firm socially responsible and environmentally friendly?
Concern for employees. How does a company treat its employees?

Another important aspect is to communicate the vision and mission statement down the line. The senior
managers should be active in communicating the companys vision/mission statement and ensure to let everyone
know what the end result should be and why it is important.

Performing an external and internal environment analysis is crucial for H.I.Ds strategic plans to determine
the economic conditions that may present as a threat or an opportunity to the company and the resources and current
capabilities available for use. The company may also perform forecast analysis to determine the likely success of
their strategic plans. The external and internal environment analysis results in determining the companys strength,
weaknesses, opportunities and threats. This gives the company an overview of the present and future conditions that
will affect the companys strategic plans. Once the SWOT has been completed, management will be able to begin to
formulate their growth strategy in line with their vision and mission statements.

1 Copy verbatrim from David F.R. retrieved September 20, 2016 from https://www.strategicmanagementinsight.com/tools/mission-statement.html

Implementing the strategic plans entails forming a strike team. Make sure that the team is unified and
understands the purpose of the plan. Establish a team leader, if other than Bill Collins, who can encourage the team
and field questions or address problems as they arise. During implementation, constant monitoring and periodic
evaluations should be performed to determine if the implementation is on schedule. Control systems and
contingencies should be in place if there are certain factors that deviates from the design. It is also very crucial to
provide all the stakeholders progress reports so everybody is on board. Establish an incentive reward system to
recognize success throughout the implementation process. Figure 3 shows these process steps in the implementation
of strategic plans.

Figure 3: Strategic Implementation Flow Diagram

Figure 4: Schedule of Activities

VII.

CONTINGENCY PLAN

The second best alternative for the H.I.D. is to have a Management by Objectives or MBO Planning. This is
where the planning would be based on the objectives set at different levels, units, and individuals and using these
objectives as basis for the evaluation of performance of each. In implementing this plan, H.I.D must follow these
steps: (1) Goal setting starting from the top level down to the lowest level; (2) Developing action plans/courses of
action to meet the goals; (3) Reviewing progress; and, (4) Appraising overall performance. Having this type of
approach for H.I.D would help them achieve their goals while maintaining the motivation of its employees.

Step 1: Goal Setting

Corporate Strategic Goals

Divert major funds for expansion

Global brand awareness
Build 20 hotels in 20 years

Tactical Goals

To answer the concerns for human resources, the department should strengthen

its policy and programs on selecting qualified individuals. Provide them with the appropriate
training to equip them with the skills needed for the expansion. Incentives and loyalty programs
should be in place for individuals who exceeds the expected performance. The structure should
also be flexible to allocate positions for consultants for special projects.

The finance divisions main task is to fund the expansion and support each

action plan in terms of funding and asset allocation. Capital investment decisions and fund
allocations are extremely sensitive and requires constant monitoring to ensure that the money is
going for its intended purpose.

Marketing strategy and product awareness is crucial during expansions.

Consider which market are the easiest to reach based on the previous records. Plan and develop
marketing strategies for the identified target market. Carefully plan out the resources needed for
advertising and marketing since this can be costly. Utilize previous contacts and partnerships to
increase visibility.

Operational Goals
Improve recruitment, retention programs and labor cost management.
Reduce overhead cost and increase customer volume.

Increase exposure by improving local marketing efforts and enhance public

Maximize profits by giving personalized service and creating a customer

ratings.
retention program.
Use advancement in technologies for monitoring inventories, staff scheduling
and coordination.
Source out credible suppliers and create partnership in the local area.
Reduce maintenance and renovation cost.

Step 2: Develop Action Plans

Identify the task or the changes that will occur based on the operational objective. Delegate the task to
individuals based on their expertise. It is important to note that while each department has its own agenda, every
action should point to the main goal. Use the available resources for completing the task. Set timelines for each of
the defined tasks and place deadlines for efficiency. Use Gantt chart for the monitoring of the actions to be
performed. Discuss with the team the items that should be prioritized.

Step 3: Review Progress

Gather foundational information, review goals, competencies and development plans set out.

Use the details in preparing accomplishment reports and areas for improvement.

Prepare a list of accomplishments, relate them to your goals and higher level organizational

goals. Provide contextual contextual details for performance appraisal. Identify any challenges that limited
the companys abilities to succeed, as well as any support received.

Prepare a list for areas of development, identify any areas where the team struggled, or where

other departments may have noted that performance lacked, and make note of these. Identify any areas
where expansion is possible on skills/experience/expertise or share them with the other departments.

Draft a revised action plans, take a proactive approach and draft some possible remedial actions

based on your areas of development and the organization's higher level goals.

Step 4: Appraise Overall Performance

Include the adjustments as strategies in the strategic plan and roadmap with an alignment path when
appraising overall performance. The starting point is to ensure that their is a key strategic vision and mission in
place along with operational agenda items. Once that is complete, alignment planning as part of the strategic
planning process can begin. Ensure strong connection among the corporate strategic goals and its operational goals.
Identify whats working well and what needs to be adjusted. Determine how these adjustments should be made and
determine the best approach. 2

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