Posted: May 25th, 2022

Changing customers needs & market environment

Marriott International is one of the largest hotel chains worldwide. With its headquarters in Bethesda, Maryland, the organisation has over 5,700 properties spread across more than 100 countries around the world. Throughout its nine decades of operation, the organisation has undergone numerous changes in terms of management, processes, as well as corporate and business strategy. This paper discusses a number of change aspects relating to the organisation. These include two key changes in the organisation’s management style, role of senior management in preparing the organisation for its most recent change, use of vendors and spokespersons, an innovation that could positively impact on the organisation’s employees and customers, as well as the organisation’s ability to adapt to the changing needs of customers and the market environment.

 

Changes in Management Style

 

Marriott has been in operation since 1927. Though the organisation has undergone several changes in management style over its operational history, two key changes occurred in 1992 and 2011. In 1992, Marriott split into two divisions, Marriott International and Host Marriott Corporation (Marriott, 2013). The former would offer management services to hotel owners while the latter would retain firm-owned properties. This marked a momentous change for the organisation. The company would now focus on management contracts and franchise agreements as opposed to hotel ownership. In fact, majority of the organisation’s revenue today come from offering management services and franchisees (Touryalai, 2013). This has enabled the organisation to minimise the risks associated with hotel ownership. Shift of focus from hotel ownership to management services meant a number of changes in the organisation’s management structure. For instance, each division would have its own board of directors and administrative system (Marriott, 2013).

 

In 2011, the organisation’s long time CEO Bill Marriott stepped down from his position for Arne Sorenson. This marked a major change in management style. Bill has historically been described as a hands-on manager, a style predominantly inspired by his father, the founder of the organisation (Touryalai, 2013). His management style was largely characterised by leading from the front, a significant degree of micromanagement, as well as inclusive and participatory decision-making. Bill’s employee-oriented style of management saw the organisation generate positive employee outcomes over the years. From inception, the organisation has been a firm believer in the adage “take care of your employees, and they will take care of your customers.” Sorenson, the first non-family member to serve as CEO in the history of the organisation, brought a rather different style of management. Indeed, Sorenson is somewhat the opposite of Bill — he is a hands-off manager (Touryalai, 2013). His style is largely characterised by a great deal of delegation and autonomy. For Sorenson, a multinational organisation such as Marriott requires a substantial amount of decentralisation.

 

The tremendous success of the organisation is enough evidence of the effectiveness of its management. The success evidently indicates proper strategizing and sound decision-making. The hotel industry is one of the most dynamic industries, constantly bombarded by challenges such as terrorism as well as changing consumer tastes and preferences. Marriott has over the years weathered these challenges, growing from a small, family root beer company to an international hotel chain. Therefore, there is reason to believe that the organisation is managed properly.

 

Senior Management’s Role in Preparing the Organisation for Change

 

The role of the senior management in preparing the organisation for change cannot be overemphasised. The top management plays a crucial role in communicating the vision and urgency for change, addressing employee concerns as a result of the change, as well as mobilising and providing the required support (Hayes, 2014). This is important for minimising resistance to change and ensuring the success of the change initiative. One of the major most recent changes at Marriott was the change of leadership from the long serving CEO Bill Marriott (a member of the founding family) to Arne Sorenson (a non-family member). Bill had served as CEO of the organisation for about four decades. The change was, therefore, a defining moment in the history of the organisation.

 

The transition was quite seamless. With a people-oriented philosophy, Bill invested a great deal of time and effort in preparing the organisation for the new CEO. Sorenson joined the organisation over two decades ago after being handpicked by Bill himself. He quickly rose through the ranks and was appointed to the position of president after a few years, and became CEO in 2012. The transition happened easily as everyone in the organisation had an opportunity to think about it for a few years (Evans, 2016). Though Sorenson became CEO in 2012, the process of grooming him into leadership started three years prior, when Bill announced to the board his intention to prepare Sorenson to be his successor (Berzon, 2011). Bill’s approach to the transition made it easier for the organisation to accept Sorenson, thereby avoiding the usual problems associated with leadership transitions.

 

Use of Vendors and Spokespersons

 

The use of vendors and spokespersons is a common practice in organisations, especially large organisations. This is particularly true for Marriott. It is common for significant news or developments about the organisation to be delivered via press conferences and press releases, often by the CEO or the company’s spokesperson. This is important for minimising or avoiding confusion as far as corporate communications are concerned. It helps in ensuring that all corporate communications are delivered by one central figure. Consistency in corporate communications is crucial for maintaining a positive company reputation. The organisation also relies on vendors to a significant extent. Relying on vendors can deliver significant advantages for an organisation, especially in terms of optimising operating costs. By using vendors, Marriott is able to keep its operating costs at a desirable level.

 

Innovation

 

Innovation can have positive impacts on players in the hotel industry. One innovative idea that could positively impact on employees and customers at Marriott is beacon technology. Indeed, beacon technology has been identified as one of the key drivers of the hotel business today and in the future (Mandelbaum, 2016). Beacon technology essentially involves monitoring consumer habits and delivering promotional messages to customers via two-way, Bluetooth communication. The retail industry has made tremendous progress with the technology. In the hotel industry, beacon technology can be used to facilitate two-way communication between a hotel and its guests. Also, promotions can be sent straight to guests’ smartphones, which may accelerate the consumption of hotel services. This would give guests a more fascinating hotel experience. Moreover, guests would be in a better position to explore the hotel’s facilities. Beacon technology would be beneficial for not only customers, but also employees. For instance, the technology can be used to streamline check-in processes, which can reduce the burden on employees. This is a technology that Marriott should pay greater attention to.

 

Adaptive Ability

 

Marriott operates in a highly dynamic environment. Technological advancements, changes in consumer tastes and preferences, industry shifts, as well as regulatory adjustments are common phenomena, compelling players in the industry to continuously adjust their strategies, structures, and processes. Over the years, Marriott has undergone numerous changes due to the changing needs of customers as well as the market environment. The company has acquired or merged with rivals, entered into strategic partnerships, shifted business focus, as well as reorganised and consolidated business operations all in an attempt to respond to changes in the operational environment.

 

In 1971, for instance, the organisation increased its diversification efforts due to sluggish economic growth in the U.S. (Marriott, 2013). Still in the 1970s, the organisation shifted its focus from hotel ownership to hotel management in an effort to cushion itself against the risks associated with the former. In the late 1990s, Marriott became one of the first hotel chains to introduce a customer loyalty program (Marriott, 2013). This expanded the organisation’s base of loyal customers. The organisation also became the first hotel chain to introduce online reservation. In the early 2000s, the organisation pioneered the introduction of Wi-Fi in the hotel industry in response to increased guest demand for access to high-speed internet (Marriott, 2013). These developments evidently demonstrate the organisation’s ability to adapt to consumer needs and market changes.

 

One of the important ingredients for successful change implementation is open communication. Open communication channels create a climate of inclusion and involvement (Hayes, 2014). Employees get a chance to voice their concerns, articulate their perspectives, and participate in decision-making. This enables the organisation to not only get the support of employees, but also obtain new perspectives of doing things from employees. Marriott has historically been an employee-oriented organisation. The organisation treats its employees as its most valued asset. A crucial hallmark of this culture is open communication. This perhaps could explain the phenomenal success of the organisation in the highly dynamic and competitive hotel industry.

 

Conclusion

 

On the whole, Marriott continues occupying a glorious position in the global hotel industry. The organisation’s success can in large part be attributed to effective change management. With competent leadership and adaptability to change, the organisation has grown from a small, family root beer business to a powerful international hotel chain.

 

References

 

Berzon, A. (2011, December 14). Marriott CEO to step down. The Wall Street Journal. Retrieved from: http://www.wsj.com/articles/SB10001424052970203430404577097083490921006

 

Evans, C. (2016, August 5). The many side of Marriott’s Arne Sorenson. Surface. Retrieved from: http://www.surfacemag.com/articles/power-100-hospitality-arne-sorenson

 

Hayes, J. (2014). The theory and practice of change management. London: Palgrave Macmillan.

 

Mandelbaum, A. (2015). Hotel technology innovations that will drive business in 2016. Retrieved from: http://www.hospitalitynet.org/news/4072364.html

 

Marriott, J. (2013). Without reservations: how a family root beer stand grew into a global hotel company. U.S.: Diversion Books.

 

Touryalai, H. (2013, July 15. Marriott’s upgrade: new CEO Arne Sorenson freshens up the brand for millenials. Forbes. Retrieved from: http://www.forbes.com/sites/halahtouryalai/2013/06/26/marriotts-upgrade-new-ceo- arne-sorenson-enlivens-the-hotel-giant-aims-for-1-million-rooms/#4cf866dc5dd1

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