Posted by Alex on Wednesday, April 4, 2012 at 8:51pm.
In this mock executive team meeting, you will assume the role and responsibility for a specific function (for example, human resources, marketing, finance, legal, and operations). The team will be given a scenario in which strategic decisions are to be made for rapid global expansion. The purpose of the meeting is to reach decisions that will then be shared with the chief executive officer. The decisions made by the executive team will affect the future success of the organization and will address risks and opportunities of the expansion. You will summarize your decisions in a memo to the CEO.
Group Role-Play Specifics
Use the Conference area or chat room of the study group for your team discussion as you develop your role play assignment. Be sure to save the dialogue thread
1. The Players
Players: Chief financial officer (CFO), chief human capital officer (CHCO), chief marketing officer (CMO), and chief operating officer (COO)
Role of the executive team: Executive teams comprising the top executives of the disciplines of finance, human resources, marketing, and operations, all reporting to the chief executive officer, make or influence major decisions and strategies for the organization. The positions all report to the chief executive officer. Most often, the chief of information technology and the general counsel are also members of the executive team, but for purposes of this role play, these two positions are not included.
Professional focus of each position: While all positions have responsibility for achieving the business goals of the organization, each has a unique expertise and lens.
The chief marketing officer (CMO) is tasked with advertising, sales, and the image of the product or service, and is concerned with increasing revenues and expanding the market. The CMO's mantra could be, "The more products we can sell, the better!"
The chief financial officer (CFO) has a focus on the bottom line of the organization, the profit margin. He or she will not only look at revenues, but also at how much of the revenue is converted into profit dollars. The CFO's mantra could be, "It doesn't matter how much we sell; what matters is how much profit we make."
The chief human capital officer (CHCO) is tasked with ensuring that the organization has the right knowledge, skills, and abilities (KSAs), now and in the future. His or her focus will be on the availability of labor; what KSAs potential employees have; what will need to be done to recruit; what to offer in compensation, benefits, and work culture; training and retaining employees; what laws and regulations are applicable; and whether unions are involved. At times, the CHCO will be responsible for the safety and security of employees. The CHCO's mantra could be, "We can never be successful unless we have skilled employees!"
The chief operations officer (COO) is responsible for ensuring that products are made in a quality manner or that services are performed satisfactorily. In many cases, the COO is also responsible for the buildings, equipment, and maintenance of the organization. In this case study, the COO is responsible for the overall management and success of the hotels. The COO's mantra could be, "The most important element is the facility and how well the employees are performing."
The chief executive officer (CEO) is responsible for the entire organization and reports to a board of directors. He or she is also concerned with the price of the company's stock. Boards are concerned more and more about ethical standards and the image of the corporation that is perceived by the public and by shareholders. The CEO's mantra could be, "What will the board or our stock holders think of this? Will it represent us well?"
2. The Situation
A major hotel company in the U.S. has an opportunity with the potential for significantly increasing its revenue base and global market share. There are, however, human resource issues that must be considered. The nonunion, U.S.-based company has the opportunity to purchase a chain of hotels in Italy. The Italian company's hotel employees are represented by unions and are accustomed to many more benefits—such as more time off, more expansive health care benefits, and more say in the operation of the hotels—than U.S. employees. They also have boundaries around their work schedules and limitations on the work they will perform in the hotels. In addition, the labor market for hotel employees is very limited. The employees available for work in the cities where the hotels are located require extensive training.
If the hotel chain is purchased, there will be a need to retrain all employees and possibly change shifts worked and jobs performed, as well as limit input into decisions about the operation of the hotels. It is most likely that U.S.-based employees will need to help with the training of current employees; however, most of them have never traveled to Europe and therefore are not familiar with the culture. One known difference in the culture is the lack of EEO laws and regulations and a tolerance for sexual harassment.
The executive team, without the CEO present, has convened a meeting to discuss whether the hotel chain should be purchased; what the risks and rewards could be; and if the decision is made to purchase the chain, what needs to be addressed and what should be included in the budget to ensure a smooth transition of ownership.
Each member of the team has a role to play in the conversation, and each member is expected to look at the situation through the lens of his or her discipline. For example, the CFO may want to cut benefits in order to reduce labor costs; the COO may be concerned about the buildings and the flexibility of employees' assignments; and the CMO may be concerned about whether guests in the U.S. hotels will expect the same level of service and type of hotel as those found in Italy, and if not, how to market the change. The CHCO will be concerned with achieving the organizational objectives, but knows that without the ability to attract and retain employees who are capable of being trained to deliver good service, the hotels will not be able to remain open.
Role play the meeting and the conversation that would likely transpire, beginning first by reviewing the CEO's message below, which shares with the executive team the situation they face and the recommendation they are to make.
3. Formulating Assumptions
Note that not all of the specifics about the possible acquisition have been given, such as the cost of the acquisition, the number of hotels and employees, the current profit margins, the current cost of benefits as a percentage of total labor costs, competitive data on the room rates, etc.
4. Memo from CEO
To: Executive Team
From: Chief Executive Officer
Subject: Potential Acquisition
As you know, I am on vacation in Italy. I have just learned that there is a chain of hotels in Italy that our company could purchase if we desire. We certainly need the added revenue, but only if it provides us with profit and goodwill with our current guests. While there are some risks since the quality of the buildings and the service of the current staffs are not up to our standards, the acquisition could allow us to expand into the Italian market quickly. There are several unions representing the employees, and the employees cannot work except in their defined job, unlike in our nonunionized hotels in the States. Further, the benefits offered to the employees seem very generous, but perhaps either the unions can be decertified or we could raise the hotel room rates enough to continue their current package. The salaries and wages seem high too, but again, maybe we can raise the hotel rates to accommodate this.
You all know I believe in respect for each individual, and it is one of our core values. From what I observed, we may need to change our values or have some serious talks with some of the employees about their behavior toward women and minorities. I have to wonder if there are not laws in Italy that address discrimination and sexual harassment, like we have in the States. We know that U.S. business travelers go to Italy, and I think they would welcome seeing our hotel sign on hotels here, but we may have to do some work on some of the hotels to bring them up to our standards.
I expect, upon my return, that you will have a memo ready for me that will address the pros and cons of this potential acquisition, along with your recommendations for whether we should purchase the chain.
Thank you in advance for your memo and your time. I will see you in one week.
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