ORGANIZATIONAL CHART HAPPY RESORTS

HUMAN RESOURCESADB-MBA Programme, Batch 10

Submitted toProf. Ivy Formasa

Submitted by Eileen Capilit

Marlo del RosarioMarjorie Anne Javillonar

Erin Lumanta-Sea

4 May 2011

Happy ResortOrganizational Chart

I. Scenario #1:

A. Facts A new resort business on a small Caribbean island Resort is under construction and is scheduled to open a year from now

B. Assumptions Resort has a 30-room capacity Budget resort Limited service; accommodation only Beach front location Proximity to restaurants and other dining facilities The strategy being applied is cost leadership and operational excellence

C. Organizational Chart

Figure 1 Limited Service Resort

The organizational chart is a functional type. As this is a limited service type of resort, the General Manager, which is the owner, oversees all departments that are under him/her as shown in the above organizational chart and is directly engaged in the recruitment of staff. Specifically, he/she also looks directly after the front office, which is where the physical interaction with resort guests happens on a daily basis. Reporting directly under him is a receptionist and bell boys.

Under the Audit Department, there would be a certified accountant who looks after sales accounting, payroll and purchasing or acquisition. Under the accountant, there would be staff that looks after sales accounting and payroll and purchasing. The payroll and purchasing staff looks after records of personnel as well.

On the one hand, housekeeping and maintenance are grouped together managed by a supervisor who looks after room attendants and maintenance personnel (electrical and plumbing).

The Sales Department will be managed by a Sales Manager who looks after reservations and marketing. Under the Sales Manager, there will be a Reservation Staff. The department will be in-charge of on-line and telephone bookings, as well as marketing and maintenance of resort website.

II. Scenario #2:

A. Facts Resort business was wildly successful in the last seven years A silent partner invested on the resort business Happy Resorts now owns hotels and resort facilities – two in Caribbean, two in Mexico and

one in South Pacific

B. Assumptions Headquarter is within the Caribbean Limited service for resorts; full-service for hotel (under 500 rooms) Branches in each area where there are two resorts are within commuting distance The strategy is still cost leadership and achieving operational excellence.

Table 1 Breakdown of Facilities

Particulars Resort Hotel

Number of facilities Caribbean (1), Mexico (2) and South Pacific (1)

Caribbean (1)

Resort/Hotel Type Budget 2 star

Location Beach front Beach front

Number of Rooms 30 60

Type of service Limited, accommodation only With breakfast; TV inside rooms

Amenities NoneSmall meeting rooms; small reception hall; recreation area; outdoor sports and team-

building facilities; mini restaurant

C. Organizational Chart

Figure 2 Limited Service Resorts and Full-Service (under 500 rooms) Hotel

The organizational chart is still a functional type for limited service type of resorts and full-service hotel. The difference is that the General Manager, which is the original owner now part-owner, has three Resident Managers directly reporting to him/her, who in turn oversee all departments that are under them as shown in the above organizational chart. Recruitment of staff for each area will now be handled by each Resident Manager, previously handled by the General Manager in the previous scenario, but final approval will be done by the General Manager, who also oversees overall Hotel & Resort Operations, Finance, Sales & Marketing and Human Resource departments.

Similar to the previous organizational chart, each Resident Manager looks after their respective Front Offices, Finance, Sales & Marketing and Housekeeping & Maintenance.

On the one hand, the Finance Departments for the Caribbean and Mexico branches are consolidated, meaning, there will only be one Finance Department per area that looks after the two branches under that area. This is also true for the Sales & Marketing Department. It will not be convenient and cost efficient if these departments are present in each branch per area.

On the one hand, Housekeeping & Maintenance and Front Desk will be subdivided into two units per area; one for each branch. As these are the units that have direct contact with resort guests, centralizing them would not be effective. There should be one unit each for each branch to ensure customers are looked after, and the facilities are well-maintained. In the case of the Caribbean Hotel, there will be an additional department, the Food & Beverage department, to cater to their guests’ dining needs.

The people directly reporting to each unit will be the same as that in scenario #1. Note also that the part-owner is only an investor, and does not have any direct function in the resort’s operations.

III. Scenario #3:

A. Facts Ten years later, Happy Resorts owns 80 hotels and resort facilities Many partners have invested on the company due to its success Hotels and resort facilities are located in the North, Central and South America, the

Caribbean, and South Pacific Happy Resorts also operates a cruise ship

B. Assumptions Headquarters is in Mexico given its size and geographic location Since company’s operations has evolved, operations are grouped into regions based on hotel and/or resort locations Based on a pre-feasibility study, the type and number of hotels in each continent/country was determined according to geographic size and location, population size and popularity among tourist and travelers. The information used and the breakdown by country is provided in Appendix 1.

Table 2 Breakdown of Facilities

Particulars Resort Hotel 1 Hotel 2

Number of facilities 38 30 12

Resort/Hotel Type Budget 2-Star 3-Star

Location* Depends on location Depend on location Depend on location

Number of Rooms 30 60 200

Type of service Limited, With breakfast; TV Full Service

accommodation only inside rooms

Amenities None

Small meeting rooms; small reception hall;

recreation area; outdoor sports and

team-building facilities; mini restaurant

Meeting rooms; ballrooms; swimming

pool; restaurant and bar; concierge; airport

transfers, etc.

*Beach front or in-land hotels

The overarching strategy is maintaining cost leadership through achieving operational efficiency and this is coupled with a focus strategy and instilling customer intimacy in the day-to-day operation of the hotels.

To meet the demands of the market and to capture market share in terms of providing venues for big events such as weddings, conventions and conferences, 12 type 2 hotels are scattered across regions with the most number and the specifications are given in table below.

Table 3 Hotel Type 2 Specifications

Particulars SpecificationsLocation Beach front and/or Major city-centerTips Tips are not commonRate structure Nightly rateOccupancy DoubleMeals Breakfast includedPeriod covered by room rate One nightType and number of beds One Double BedParking Self parking, no chargeType of accommodation Standard room, Doubleor room/unit occupancyAir conditioning With Air conditioningTelephone service Telephone in room (number provided); Charge for local callsRecreation and health facilities Hot tub or sauna; Exercise room (weights, aerobics, treadmill,

etc.)Type of outlet HotelBathroom facilities One private bathroomKitchen facilities None provided; Refrigerator (any size); Honor barOutlet operation Outlet open for business Year roundTelevision One television; Cable television, no charge; Movie channel(s), no

chargeTransportation Transportation to and from airport provided, chargePricing Unit Room price

Note: some specifications vary based on actual location of hotels

C. Organizational Chart

Figure 2 Full Service and Chain Resorts and Hotels and Cruise Ship

Figure 3 Hotel & Resort Resident Manager Line Function

Figure 5 Cruise Ship Hotel Department Line Function

1. Overall Organizational Chart

The organizational chart still follows a functional type in nature. However, given the number of hotels involved, the chart now branches out with the Board of Directors setting the overall direction through the Managing Director. The Managing Director oversees the overall operations of the group of Hotels and Resorts. From the previous setup, the four original functions by the General Manager is maintained and will now be under the Managing Director plus the Cruise Ship operations which will now have its own General Manager, in the form of a Captain. There will now be an Executive Director each for Hotel and Resort Operations, Sales and Marketing, Finance and Purchasing, and Human Resources departments. The four Executive Directors report to the Managing Director.

For Hotel and Resort Operations, the Executive Director will supervise the Regional Managers, one for each region – North America, Central America, South America, Caribbean, and South Pacific. Under each Regional Manager are the Resident Managers for each branch within the region and the Resident Manager oversees the branch operations with the following units – Front Office, Housekeeping & Maintenance, Food and Beverage, Sales and Marketing, and Finance.

For Sales and Marketing, the Executive Director will supervise the Regional Sales and Marketing Managers for each region and under each Regional Sales and Marketing Manager, there is a Sales and Marketing Manager for each country which means he will cover all sales and marketing functions for all branches under each country.

Same as the structure for Sales and Marketing, the Finance and Purchasing Executive Director will also supervise Regional Purchasing Managers including one Chief Accountant for all regions. Under the Chief Accountant and each Regional Purchasing Managers are the Regional Accountants and Purchasing Executives which oversees specific finance and purchasing operations for each region.

We also have an Executive Director for Human Resources who will supervise the Regional Recruitment Managers and Regional Training Managers. Recruitment and Training functions are kept at regional level to minimize cost.

For the Cruise Ship operations, this is discussed in detailed below. The Captain will oversee the following departments, Deck Department, Engine Department, and Hotel Department. Under the hotel Department, there are heads for the Food and Beverage, Services, and Concessionaries or In-house Management.

2. Cruise Ship Operation

Luxurious hallmarks are found throughout the Cruise ship -- sweeping staircases, soaring public rooms, a grand ballroom, and a 360° promenade deck. A space ratio of 57.25 makes her one of the roomiest vessels anywhere, and the ship has 14 decks of sports facilities, shops, bars, lounges, 5 pools and no fewer than 10 restaurants. With one staff member per couple, a very high level of service can be expected.

All sea vessels are operated under maritime laws and it is under the command of the Captain. He makes sure that all policies and rules are being followed and must comply with laws of the ports they sail from and to. Wherein, the Chief Officer is the second in command.

The Hotel Department manager oversees three units such as the food and beverage division, service division, and concessionaries or in-house management. Hotel department has the largest staff of any other department. Has no marketing and sales department since all marketing and financial projects are done by way of land based facilities.

The Food and Beverages division is responsible for feeding the guest and staff and meeting all the expectations of the guest and does not deal in financial matters regarding the food and beverage facilities. Under the food and beverage division includes dining room section, bar section, galley section, provision section and utility section.

Under the Service division, it includes the administrative section, cruise staff, steward section, laundry section and utility section. Under the administrative section, the purser which is the second in command to the hotel manager includes ships banker, information officer, human resource director and complaint handler. The purser holds all money on the ship – usually in a large safe. The purser staff also handles lost luggage, broken plumbing and cabin upgrades. Under the steward section, the cruise ship has a cruise director and he is responsible for the quality of the entertainment. This division includes entertainers, musicians, and children’s counselors and directs all of the passenger-entertainment activities. They are also coordinating the shore excursions. Under the laundry section, we have chief housekeeper who oversees the cleanliness of all passenger rooms and interior areas on the ship, passenger laundry, dry cleaning, all linens, and crew’s uniforms. We also have on board physician along with one nurse under the service division. The physician has a state of the art facility to practice medicine to secure the health of the crew members and even guests.

D. Strategies and Discipline

The success of Happy Resorts at this stage of operation hinges on adopting a focus strategy and this can be clearly observed in the previous section and in Table 4. While maintaining cost leadership in their Resort and Type 1 hotels, they have expanded their operation to include strategic placement of each hotel in all parts of the World. Then, to keep up with the increasing demand for more services they have established Type 2 Hotels which are basically classified as 3-Star Hotels. Likewise, when they decided to include cruise ship operation, they have easily integrated it into their business as the fleet can go within the area from Florida, USA in the North American continent cruising to Argentina in South America and unto the Caribbean Sea and shown in Figure 7. By focusing on Resorts and Type 1 Hotels, they have captured sufficient size in the industry segment; are ensured of sustainable growth; and has no direct influence on the success of any of their major competitors on all regions.

Figure 6 Peripheral View of the Geographic Areas/Continents Covered by Happy Resorts,

Figure 7 Cruise Ship Route

Table 4 Happy Resorts by Continent and by Type

Continents Regional Office Total Resort Hotel 1 Hotel 2Caribbean Puerto Rico (HQ) 15 9 3 3Central America Honduras 17 7 8 2North America Mexico 20 10 6 4South America Brazil 18 12 5 1South Pacific Fiji 10 0 8 2Total Number of Hotels

80 38 30 12

Source: Number of hotels was based on geographic size (land area), geopolitical subdivisions, population density, and popularity of place as tourist destination of continents and countries

Given the number of hotels and resorts that the company now owns, it maintains a discipline that is largely focus on operational excellence that it has established since they started making significant strides and expansion in business during their seventh year. It specifically follows Treacy and Wiersema’ operational excellence company traits on areas of 1) core business process that is sharpening distribution systems and providing no-hassle service; and 2) management system where standard operating procedures are maintain although most of the power are devolve to the Regional and Resident Managers, each office had to adhere to certain policies set by the head office to maintain the quality and type of service provided by each hotels and even the ones that leads the operations of the cruise ship. In terms of structure, while the functions are well defined and still has central authority and finite level of empowerment and follow chain of commands to ensure that the SOPs are maintained for most part, the Company now follows a discipline of customer intimacy that pushes empowerment close to customer contact especially to those that are directly involve with the day to day operation of the Hotels, Middle managers as shown in Figure 3s. This is necessary given that Hotel operation is part of the business services which basically sustain its operation thru good customer relation and the need to have customer loyalty. In terms of culture, again the companies discipline is a combination of operational excellence and customer intimacy. Operational excellence since it has to act predictably and believe one size fits which is similar to a tailored-fit approach to each type of hotel as described in Table 2. Customer intimacy since middle level management has to have that flexibility to think and do it their way as they would have better knowledge on what is the best thing to do given certain situation. This is especially true when it relates to customer concerns. However, each management level maintains full accountability to their upper management (e.g. Resident to Regional and so on and forth until Managing

IV. Summary

From a simple inn in the Caribbean, Happy Resorts evolved into a multi-million company that pride itself of combining the discipline of operational excellence and customer intimacy as the building blocks. As the Company grows, the organizational structure evolved from a simple hands-on management with little or no direct middle manager to a highly sophisticated but slightly decentralized system of management style. Although the Company continues to adopt a predominantly functional type of structure, middle level management starting from the Regional Managers until the Resident Managers are given the authority to decide on certain areas of operations. It should be noted however, that certain areas such as sales and marketing; finance and the overall HR function of the company are within the direct supervision of the Managing Director as these are areas where standard operation procedures must be kept at all times and all its establishments including hotels and the cruise ship are maintained and operated in the same manner and condition. This is part of the Company’s overarching strategy under cost leadership. At the same time, the decision to do business and invest in the four adjacent continents and the decision to operate more on Resorts and Type 1 hotels show that focus is another strategy that the company has observed in the last scenario.

Structural changes within Happy Resorts happened in response to market forces which include emergence of new markets and new growth areas; the number of investors; changes in the size and growth of the company; the type of management that is required for specific operations and size of resorts and/or hotels ; and the ever-changing needs of customers.