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Strategic Management Plan And Hospitality Establishment

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Discuss about the Strategic Management Plan and Hospitality Establishment .



This report will try to evaluate the effectiveness of the strategic management activities which take place in two different hospitality organisations one of which is successful and the other is not able to attain the same level of success in their business. There business activities and processes carried out by a hospitality establishment are largely responsible for determining their performance in the market and how effectively they have been able to realise their business goals and objectives. There is bound to be significant differences between a successful hospitality establishment and an unsuccessful one in regard to the manner in which their strategic decision making takes place (Noe et al., 2006). In this report, the organisations selected for the comparative analysis are Part Hyatt Sydney (5 Star hotel) Mercantile Hotel (2 Star hotel).

Background of the two hospitality organisations

Park Hyatt Sydney is a premium hospitality organisation which provides 5 Star accommodation facilities to their customers in the market. The hotel is located at a strategic location overlooking the Sydney Harbour and this provides a wonderful and majestic view of the Sydney Harbour and Opera House to their guests. In Sydney among all the hotels Park Hyatt is the successful hotel where excellent quality services of the products are available for the customers in the market.  This hotel mainly caters their products and services to the niche (premium) segment of the market. The customers of Park Hyatt Sydney have refined tastes and preferences as they belong to rich and affluent background. The organisation has been effectively catering to the needs of the premium customers and played a very important part in helping for promoting satisfaction of customer in the market (, 2017).

Mercantile Hotel is a two star accommodation facility in Sydney which mainly caters to the budget segment in the market. The organisation provides products with better quality for the satisfaction and preferences the regular budget segment of the market. The organisation has received a good rating of 4.1 out of 5 on travel website Expedia.


Difficulties and Problems faced by Mercantile Hotel

Mercantile Hotel is presently facing a lot of problems in their business and always has negative impact on the productivity on market. Market competition is unable to tackle with the rivals in a proper way with their revenues and profits from their business have significantly decreased over the years. The rising cost of business expenses is another factor which has eaten up their profit margins. The management at Mercantile hotel is inefficient and they have been unable to take effective decisions for ensuring the growth and success of the organisation. The management at Mercantile Hotel is insensitive towards the needs and expectations of their employees (Shuck & Wollard, 2008). This had played a vital role in contributing towards greater employee dissatisfaction at the workplace. The clear lack of communication and coordination among the management and vital role has been played by the employees in bringing down productivity and performance of the employees in work place and this is the main reason why tackling the organization is unable for the business rivals in effective manner (Colquitt et al., 2011).

Organisation follows an autocratic style in leadership where involvement of the employees is not in decision making process. This organization never pays heed on the interest of the decision making of the employees who invariably brought down the motivation and enthusiasm among their employees. All the decisions undertaken by the management are forcefully trusted over the employees and this is the major reason why there is lack of commitment and dedication among the employees which is more so evident in the form of high rates of absenteeism and the high employment turnover levels within the organisation (Leblebici, 2012).

The lack of long term clear business vision has played a major role in preventing the organisation from expanding their business operations in an effective manner. The management only tries to satisfy their short term goals of maximising their profits and revenues without understanding the need for providing the necessary motivation and inspiration among their employees. The employees are not appreciated for their performance at the workplace and there is no performance based incentives for the employees. This has also played a very important role in contributing towards employee resentment against their management (Göbel & Zwick, 2013).

A degree of flexibility is needed by the worker of the organisation. If it is the not provided by the organisation they are contributing for the balance between the work condition and the life they are living as an individual can get effected. If the balance gets hampered the inconsistency may get reflected in the performance of the worker and that will work in a negative way to the organisation. Along with professional life the each employee has their personal life too. It is important for them to spend time with their immediate family member to rejuvenate their energy level. That is reason process of job rotation can make some meaningful contribution in this regard.


Solutions to the problems faced by Mercantile Hotel

The problems faced by Mercantile Hotel can be solved only by overhauling their organisational management. The organisation needs to incorporate a participative leadership style within their organisation. The significance of this leadership style is it does offer the opportunity to all the member of the organisation in the decision making process ( Lam, et al., 2015). In this style of leadership the responsibility and the authority used to get dispersed among the contributor of the organisation. (Stevens, 2010). This is the opportunity for the employee of the organisation to show their skill of decision making. One can perceive the flavour of authority out of this practice that can help them to gain sufficient enthusiasm to make better contribution to the job responsibility. The process of participation is the process to judge one’s capability of effective participation. This practice can help the employee to gain high level of confidence and at the same time it can offer a lasting sense of job satisfaction in the mind. This style of leadership can help the organisation to improve the process employee retention (Bortoluzzi et al., 2014).

In order to develop an effective work environment Mercantile Hotel need to configure a result oriented atmosphere within its area of operation. The employee of the organisation needs to understand the advantage of the Mutual Corporation and facilitation (Nahavandi, 2016). Organisational and interpersonal communication skill is very important to serve the purpose in this regard. The organisation can make an effective connection with its people through the process of communication in this case the organisation such as Mercantile Hotel need to develop an effective communication system to get the best result from the personnel of various functional departments. An effective communication process can ensure the strategic implementation. In case of Mercantile Hotel all the decision can get implemented properly through the communication process of organisational as well as interpersonal level.


The organisation needs to appreciate the performance and contribution of their employees towards organisational growth and success and they need to provide their employees with performance based incentives. They need to provide the employees proper opportunities for their growth and development of the career within organisation. Dedication and commitment towards the employees are needed to be inferred with the job roles which are significantly enhanced. This will promote healthy competition among the employees at the workplace and all the employees will try to get appreciation and recognition for their performance at the workplace (Miner, 2015). The performance of the employees needs to be monitored and evaluated from time to time with the help of performance appraisal tools and this will enable the organisation to identify their most component and dedicated employees who are playing an instrumental role behind the success of Mercantile Hotel. The organisation will be able to promote with the higher rank of the employees with the higher ranks with added responsibilities (Noe et al., 2006).  

Work flexibility is another aspect which Mercantile Hotel needs to seriously think about implementing within their business. This is another factor which can contribute towards enhancing the employee performance. It is necessary that quality time is needed to be sent with proper convenience of the work (Göbel & Zwick, 2013).


Understanding how Park Hyatt Sydney has been able to tackle these problems and ensurance of the growth of market

Strong leadership with corporate governance structure is made on Park Hyatt Sydney. The employees are the biggest asset of the organization. And they work with striving goals for the fostering subject of the work. Attractive packages for remuneration with festering jobs are done by the employees of the hotel (Marston, 2010). They work with the structure of the organization which has basic outlook for the organization.

A participative leadership with the work of the organization is played by Park Hyatt Sydney. The opinion and views are taken by the management for the consideration of the employees for the decision making process which are based on the target (Miner, 2015). Effective and accurate decisions are ensured with the success and growth of the organization. For the employee’s contribution in needed to be done towards the bonus and incentives depending on the performance.

The factors work with promotion of the job for employment. For fostering the commitment dedication with the detainment of long haul. Consideration is done on the employment with the objective to fulfil the quality of the service of the organization. The organization with the priority of the hotel with observational quality services with the market approval works with the target. By the product of the market Park Hyatt Sydney is capable to attract the customers for the satisfaction of the customers. Market competition works with the development of business rivals in appropriate manner with market advantage.      



Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2006). Human resource management: Gaining a competitive advantage.

Krishnan, K., Nandy, D., & Puri, M. (2014). Does financing spur small business productivity? Evidence from a natural experiment. Review of Financial Studies, hhu087.

Schmidt, S. S. (2008). The measurement of productive efficiency and productivity growth. Oxford University Press.

Loeppke, R., Taitel, M., Haufle, V., Parry, T., Kessler, R. C., & Jinnett, K. (2009). Health and productivity as a business strategy: a multiemployer study. Journal of Occupational and Environmental Medicine, 51(4), 411-428.

Göbel, C., & Zwick, T. (2013). Are personnel measures effective in increasing productivity of old workers?. Labour Economics, 22, 80-93.

Leblebici, D. (2012). Impact of workplace quality on employee’s productivity: case study of a bank in Turkey. Journal of Business, Economics, 1(1).

Stevens, R. H. (2010). Managing human capital: How to use knowledge management to transfer knowledge in today's multi-generational workforce. International Business Research, 3(3), 77.

Miner, J. B. (2015). Organizational behavior 1: Essential theories of motivation and leadership. Routledge.

Colquitt, J., Lepine, J. A., & Wesson, M. J. (2011). Organizational behavior: Improving performance and commitment in the workplace. McGraw-Hill Irwin.

Gilley, A., Gilley, J. W., & McMillan, H. S. (2009). Organizational change: Motivation, communication, and leadership effectiveness. Performance improvement quarterly, 21(4), 75. (2017). Our Hotel | Park Hyatt Sydney. [online

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