CASE STUDY – 5

MGM GRAND: A STRUCTURE FOR SUCCESS

Presented to,

Abhilash G N

Presented by,

Nivin Vinoi

P14199

PGDM - B

Presented in: 10/07/2014

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EXECUTIVE SUMMARYThis case is all about the success story of MGM Grand Hotel in Las Vegas which is at the top level of Entertainment and Service industry. It is a “city within a city”. Under the guidance and leadership of Larry Woolf, CEO of MGM Grand, it reached the apex level.

(Word count: 50)

The MGM Grand Hotel, Casino & Theme Park in Las Vegas, is one of the biggest organization in the entertainment and service industry. They mostly concentrate on the quality and quality perception of the customers.

The whole industry operates on a Hierarchical Structure where senior manager (or managers) on the top will be responsible for the operations of the entire organizations and lower ranking managers are located down the various levels of the organization. Flat hierarchy can’t be used here because in flat hierarchy on the top level only one CEO should control all this managers. If we try to implement this in big organization like MGM where about 8,000 middle employees are working the system will choke.

In all Las Vegas gambling centres Theory X autocratic management style is firmly entrenched. Theory X is the

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traditional view of motivation that holds that work is distasteful to employees, who must be motivated by force, money, or praise. At grand employees are selected very carefully. Since MGM paid their employees very high wages to encourage high performance and keep the union out we can say MGM also follows theory X. But what made MGM different from rest of others was that their new ideas like cross - training and multi-plan. In cross-training managers are required to perform the work of their employees periodically to gain insight into what it takes. It enhanced relations between managers and their employees. Through this training the efficiency of the company’s switchboard also improved. Adding to it MGM streamlined its bureaucracy through the addition of an integrated system called MutiPlan. It keep track of employees’ pension, dental, and health plans. This system allowed employees to perform calculations on loans, withdrawals, and account transfers for all their benefit packages through central hotel kiosks. Due to all this employee friendly terms they all are very faithful to the organization and also motivated. From this we can say Theory Y was also used in glance because of employees’ friendly terms. Theory Y shows that people are inherently motivated to work and do a good job.

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Quality Assurance (QA) program was another important Grand’s organizational structure. At the Grand size has not come at the expense of quality. Larry Woolf, chairman, president, and CEO has aimed high-quality service from start. Quality depends upon the time taken to make decision. If some complaints occur from the customer it will be suddenly solved by the lower level managers rather than moving towards the higher officials causing time delay for decision making. QA program focus on “Japanese-style” participative management. QA program is based on four core assumptions: the person who does the job is in the best position to know how to do it; people at the lowest possible levels should be responsible for problem solving and decision making; people are the organization’s greatest resource; and empowered employees consistently perform at high levels. Thus through certain innovative management techniques, Woolf has thus provided the Grand with what it will need to enjoy success.

(Word count: 500)

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