Discuss Huntsman Hotels plc

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Case Study Huntsman Hotels plc
Huntsman Hotels, PLC, owns more than 60 hotels throughout the United Kingdom.
Huntsmans hotels are considered budget accommodations; they are functional, clean
and reasonably priced. Additional information about UK hotel standards is available at
Most guests stay for one to three nights and are a combination of businessmen during the
working week and leisure travellers at weekends and during the holiday seasons. The hotels are
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typically situated in downtown locations and the city centres are easily accessible by public
transport. Tourists are attracted as many of the hotels are in popular visitor destinations where
the many local attractions mean that they will not be spending much time in their hotel rooms.
Due to fierce competition in the hotel industry from groups such as Travelodge, Premier Inns and
Ibis, there has been a shortage within the industry of managerial staff leading to difficulties in
staffing. This has impacted on Huntsman particularly badly and restricted the growth plans of the
company. In some cases, this has led to bookings being cancelled at short notice due to illness
which seems to have become a growing problem for Huntsman, damaging their reputation and
causing frustration amongst staff. This has necessitated the use of agency staff on occasion.
The Managing Director of Huntsman is Giuseppe Salieri who also owns 51% of the shares. He is a
well-known businessman and entrepreneur with various business interests, having made his
sizeable fortune in financial investment. He inherited the company from his father back in 2007
having identified a need for a well-run budget hotel chain to serve the needs of business people in
and around London, but, in the light of the subsequent recession, has since expanded the
operation to include hotels in the other major cities in the country. He has bold expansion plans
and has a reputation as a shrewd individual, taking swift action where he believes there to be any
underperformance or laziness. Managing people is not his strength unfortunately, and
consequently he has had a high turnover of staff, especially in his senior management team.
Jacques Marechal , their newly appointed Head of HR, has been recruited from arch rival Ibis to
help address the problems. He has worked in the UK and on the continent. He is faced with a
formidable task, especially since he is aware that Huntsman has a poor reputation for managing
its people, and has already experienced first-hand low morale and problems with workforce
planning. He knows he has a short time to identify the key issues and to come up with some
solutions before he becomes the next one to be fired. He has particular concerns about their
recruitment & selection processes, as there have been two recent tribunal cases where
substantial damages were paid out due to discrimination and other irregularities. He also hopes to
build in some contingency into the staffing model, so that staff can be re-deployed into different
roles when shortages occur.
The organisation has a flat structure with most key decisions being made by Giuseppe himself.
Managers tend to be aloof and are viewed as somewhat elite by the other employees, a view
reinforced by internal communication driven from the top. It is semi-unionised with many staff
being members of the GMB whereas managers are largely not unionised. There have been
sporadic industrial disputes with Huntsman in the past although recently relations have been
There is no formalised wage structure and any rises have been made on an ad-hoc basis either
because there was a perceived need to reward loyalty or to prevent someone from leaving. There
have been accusations of favouritism by some disgruntled employees towards Giuseppes inner
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circle, mainly family members who hold several top positions in the company as well owning as
the majority of the remaining company shares. Junior staff tend to get blamed if things go wrong
and there is a them and us culture.
Giuseppe has four main aims
1. To increase the competitive advantage of his organisation in the UK
2. To expand into Europe, particularly the EU.
3. To develop strategic partnerships with other hotel organisations
4. To invite a takeover by a larger group in the next few years as another of his business
ventures is in need of an injection of capital, and he sees a need to make his shares
attractive to potential investors.
The company recently acquired a small hotel chain headquartered in Marseille. Giuseppe
decided that half of the new hotels in France would be retained and rebranded as part of the
Huntsman Hotels Group; the other half will be sold. Giuseppe has decided to send some of his
existing UK-based managers, mainly family members, to France to lead the changeover of the new
hotels and then manage them after they re-open. He knows that he has insufficient managerial
staff to cover the new enterprise and needs to recruit more, in order to support Huntsmans
strategic objective of growing the organization slowly to make sure that new ventures are well
supported and opened on time and on budget.
If this new overseas venture is successful, Huntsman may decide to acquire or partner with other
small hotel groups in other European countries. Giuseppe would like to own 150 hotels in the next
five years. His 10-year plan is to own 300 hotels across Europe. This is an ambitious target, so it is
important that the organization finds an effective formula to operate successfully across the
The organization has never owned any hotels outside the UK before, Jacques knows that none of
their existing managers speak French fluently. He has only four weeks to rebrand and staff the
hotels. The new hotels must be ready to open after that time.
He will be expected to recruit a large number of staff for the new French hotels, because more
than 70 percent of the employees from the acquired organization left.
Managers and staff will need to be flexible and move between countries if any problems arise.
In their company literature, the organization states that their core values are to:
? Provide excellent levels of customer service to all guests.
? Provide a clean and comfortable environment for guests and staff.
? Recruit and retain excellent staff.
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? Support and develop staff so they can reach their full potential.
? Continuously strive to improve all aspects of the business.
? Ensure that all hotel buildings, fixtures and fittings are well-maintained in a proactive
Task 1
a. Adopting the role of the newly appointed Head of HR, prepare an informal memo of 1000
words for internal staff only that presents the need for change on THREE key HR issues of
your choosing. Balance your discussions with content designed to overcome any resistance
to change and to keep employees on your side. A brief mention of international issues
would be appropriate 45 marks
b. Following some research, design a one-page job advertisement for a new deputy hotel
manager in the UK that is compliant with current legislation. Include any other elements
that you see fit in order to present the job accurately and in an attractive manner without
misrepresenting the vacancy. 20 marks
Task 2
Adopting the role of the Managing Director Giuseppe Salieri design a 10-minute PowerPoint
presentation intended for potential investors and existing shareholders to convince them of your
plans to change the management of HR in Huntsman. You will centre on improved organisational
efficiency achieved through leading HR management, and the benefits that the changes will bring
to the company and its profitability. You will need to convince them that their share investment
and future dividends are safe, whilst preparing them for some possible difficult decisions along
the way. Many members of your audience will be highly knowledgeable so you will need to
include key phrases, and you should assume they have a reasonable understanding of HR
35 marks
N.B. It is suggested that no more than 8 slides be used. The content is more important than the
presentation itself, although it should be clear and legible.
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