The Georges HotelThe CaseThe Georges Hotel is a small European-style boutique hotel located along the Magnificent Milein Chicago

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The Georges HotelThe CaseThe Georges Hotel is a small European-style boutique hotel located along the Magnificent Milein Chicago. It is co-owned by two brothers, Jeff and Chad Mitchell. The brothers grew up in thehospitality business; they were raised at the roadside motel their parents owned in the 1960s.Even as a child, Jeff loved the hospitality business. As soon as he was old enough, he workedside by side with his father and was happiest when greeting guests at the front desk and showingthem to their rooms. He even enjoyed the less glamorous work and did not mind being asked tosweep the parking lot or to clean a room when housekeeping was short-staffed. It didn’t matterwhat he did as long as it was motel work. He never tired of the guests, no matter how crankythey were on arrival. Jeff always greeted them warmly and was there again in the early morningto wish them bon voyage when they packed up their cars and drove away. Today Jeff is chiefexecutive officer of the Georges Hotel. He makes most of the decisions and manages the hotel’sday-to-day operations from his corner office on the top floor.Chad is the younger Mitchell brother. He had no interest in working at the motel as a child, andhe remains the same as an adult. Chad is vice president of community relations at the hotel, andhe too has a top floor corner office. He still has little interest in the hotel business, though. Hespends most of his time playing golf. When Chicago’s weather precludes golfing, he jets off tohis favorite courses in Florida and Arizona or to his second home in Palm Springs, leaving hiswife, Cindy, to monitor his interests in the partnership. Cindy has no interest in golf, hates thehot climate of Palm Springs and greatly prefers her work at the hotel.Cindy is the director of human resources. She has been a working member of the managementteam since the brothers bought the run-down hotel and renovated it to create the Georges.Although Cindy had no management or HR experience before her work at the Georges, she is anatural leader. She is personable, well respected by the staff and is an asset to Jeff in the day-todaymanagement of the hotel. In many ways, it’s the perfect situation for all three Mitchells.Cindy loves her work, and her management role enables Chad to shun the office and remainnearly guilt-free while jetting from one golf course to another, and Jeff is not burdened by Chad’s disinterest in the hotel. Instead, he has an excellent partner in Cindy, with whom he oftenconsults on difficult decisions.The next generation of Mitchells is already being groomed to take over when the time comes.Jeff’s daughter, Julie, is nearly finished with an MBA program. She will start in sales andmarketing after graduation and then move on to gain experience in operations and generalmanagement. Jeff wants her to have a solid background in all aspects of managing the hotel soshe is fully prepared to assume the responsibilities of CEO when he retires.Chad and Cindy have two sons, Michael and Brandon. Michael graduated with honors in hisMBA program and is now a sales and operations associate at the hotel. Brandon is currentlyenrolled in a culinary arts program. He loves the creativity and hands-on aspect of cooking, andCindy doesn’t expect they will get him out of the kitchen and into management. She and Chadanticipate that Michael will be the future CEO of the Georges Hotel.Family relationships at the hotel include more than just the immediate family. Although Jeff hasbeen divorced since his daughter, Julie, was five years old, Julie’s mother came from a largefamily. There is an extensive network of nieces and nephews—all of whom are Julie’s cousins—employed throughout the hotel. The same is true for Chad and Cindy’s family. Cindy’s brother,Dale, is the catering services manager, and a number of Cindy’s cousins and children of friendsare employed at the hotel.These family connections at the hotel occurred spontaneously because Cindy always preferred tohire by referral. As a result, many employees brought in family members as new hires. Cindyand Jeff believe that family connections among employees benefit the hotel. When jobs areavailable, Cindy continues to hire by referral, reminding employees that family connections arevalued and not frowned on. Family and employees are so important that when Jeff, Chad andCindy wrote the hotel’s mission statement, they agreed to equally emphasize hotel guests andemployees. The hotel’s mission promises guests exemplary service and a memorable hotelexperience. For employees, it promises a superior work environment and continued support for asatisfying career.To foster the family atmosphere, staff members are encouraged to invite family members tolunch. Families are always included in summer picnics and holiday parties that are hosted by thehotel. Employees post their children’s pictures and announcements of new babies, graduations,weddings and other family accomplishments on the bulletin board in the break room. Cindy andJeff try to remember the names and relationships of staff members so they can personallycongratulate parents on their children’s accomplishments.The hotel has done well financially in spite of the expense of renovating the original structure.The hotel was generating a profit within two years of opening, and it continues to be profitablewith a high occupancy rate and a solid reputation as a desirable convention venue. Jeff believes itis now time to build on that success and expand to a second Georges Hotel. He has had his eyeon another run-down hotel near the riverfront section of Chicago for several years. It closedyears ago and has been abandoned and boarded up while a lengthy court battle ensued overownership rights and bankruptcy. The legal cloud finally lifted after years of litigation; as thecurrent owner, the bank is looking for a solid buyer. With the Georges’ history of successfulrenovation and with current interest rates at historic lows, Jeff believes the time is right for asecond Georges Hotel in Chicago. When the second hotel is up and running, he wants to moveon to a third. And then, who knows? Jeff envisions a chain of Georges Hotels in major citiesacross the United States.As exciting as the possibilities are, Cindy believes that to ensure their success as a multiunitorganization, they need more structured management and employee policies than they currentlyhave. The HR department has primarily been an administrative agency, and there hasn’t beenmuch need for things to be otherwise. There is no employee handbook, little formal policystructure, no employee complaint procedure and very little supervisor training. Cindy anticipatesthat a larger hotel organization will require a far more strategic HR department than she currentlymanages.Nepotism has worked well for staffing the current hotel, but Cindy recognizes the downsides tohiring friends and family and knows it will not be adequate for staffing a multiunit organization.For example, there is an assumption among some employees that if you are a close friend or arerelated to a supervisor or a manager, you have a job at the hotel for life. Consequently, someemployees do as little as possible with no repercussions, and supervisors are reluctant todiscipline employees because they are probably someone’s family member or good friend. Thereare also attendance problems, but everyone protects their friends and family, and employees havelittle accountability for performance. Cindy wants to resolve these employee issues beforeopening a second hotel. At the same time, she wants to ensure that the implementation of newpolicies will not diminish the positive aspects of family that are inherent in the organizationalculture of the hotel—values she believes have contributed significantly to the success of theorganization.In Cindy Mitchell’s OfficeCindy picked up her phone and punched in the number for Jeff’s administrative assistant. She iscalling to schedule a meeting with Jeff for later in the week. She has drafted some policy changesshe believes are necessary for the new larger organization, and she wants to share them with Jeff.“Jeff loves construction,” Cindy thought to herself while she waited for the administrativeassistant to answer. “I remember when we built the first hotel. He got so caught up in thebuilding process that he forgot about the management structure needed to successfully operatethe facility after it was completed. Adding a second hotel is a huge challenge and the perfectopportunity to solidify our management processes so we can replicate it to additional hotels aswe add to the Georges. I’m excited to get started.”ScenarioThe hotel is moving into a period of significant transition. Transition presents an opportunity fororganizations to restructure and adopt policies that will carry them into a successful future.Unfortunately, transition can also generate the opposite, and some organizations cannot successfully navigate the process. We see it all too often in the news. Things go wrong,management makes poor decisions, and when the financial losses mount, the organization losesits identity and market share, and it finally goes out of business.Adding a second hotel is a transition point, and strategic planning is needed to prepare theorganization for the future. It will take approximately two years to finalize the purchase of thenew unit, renovate the property and get ready to open. There is time to prepare.Respond to the following questions.1. Devise a three-year strategic plan for this organization in terms of innovative andexemplary customer service.2. What did you do to understand, determine a course of action, communicate, getagreement to and implement the course of action and how effective was the outcome?3. What can be learnt about the human capital aspects of running Georges Hotel?4. What should be accomplished in the next two years to prepare for the new hotel?5. What is required for the first year of operation of the second Georges Hotel to ensure it isas successful as the first?6. What other human resource initiatives could be undertaken to achieve maximumorganizational performance at the new hotel?7. What did you learn about the organization, management, people, and managing change?8. What skills have you developed and what knowledge have you acquired as a result of thisassignment?