West Indies Yacht Club Resort: When Culture Collides


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Cross Cultural Management analysis: American VS British Virgin Island people

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West Indies Yacht Club Resort: When Culture Collides

  2. 2. AgendaA.  IntroductionB. Questions 1.  Framework and Problems 2.  Managerial behaviour 3.  RecommendationsC. Limitations
  3. 3. What are we talking about?
  4. 4. BVI Tourism Facilities: Smaller mid- 36 islands 1950-70 scale to upscale16 inhabited Traveling elite hotels Airport problem 1970à Bareboat charters (much more affordable)
  5. 5. Upscale hotels in the BVI Little Dix Bay Peter Island Yacht RESORTS Biras Creek Drakes Anchorage Resort ClubRooms 34 12 98 50 1 restaurant, 3 tennis 1 restaurant 1 restaurant court, private beach Anchorage for Small boats, water- 1 restaurantFacilities with bar, small charter boats skiing Marina marina, several miles Hiking trial Snorkelling Beach of nature trails. 3 sandy beaches DivingPrice (per night) 395%-695$ 400$-600$ 480$-1000$ 395$-525$ Rotate every 2-3 year Managed byExpatriates 3 year contract Oversaw operations within the group expatriatesValue for customers Limited activities Water sports Limited activities
  6. 6. West Indies Yacht Club Resort"   1964 Kimball family fall in love with the place. "   place with 5 cottage and a pubà "   Dubois ecology and weirdness"   1973 after several visits Kimball "   want to buy a small property "   buy the whole property "   Differentiate the resort: Bungalow and sailboats"   1987 Sandy Point Resort management contract "   Enlarge the resort and its facilities"   1990 Fully operational water sports oriented"   OCCUPANCY PROBLEMS (-40à60% off peak)"   REWARDS by magazines (CONDE NAST)
  7. 7. WIYCRKSF"   Eco-conscious and comfortable place for travellers "   Try to maintain the natural shape of the resort"   Differentiation " Watersports, sailining, fishingboats"   Successful marketing strategies "   TARGET FAMILIESKey Issues WEST INDIES YACHT CLUB RESORT Rooms 96"   Competition Facilities Marina with all water sport facilities "   Other resort start having watersport 2 restaurants Natural trials Fuel dock" Labor Cost (regulations) beach Price (per night) 390$-595$ "   Talk later Value for clients Water Sports
  8. 8. Questions I part Framework and ProblemsWhat are the problems that Johnson and the resort currently face? Which problems are potentially related to cultural differences? What local government regulation and policies limit WIYCR management options?What theories of motivation might explain why BVI employees seem to bedifferent than US employees?
  9. 9. Problems that Johnson and the resort are currently facing •  6 expatriates managers had been hired and quit in just 2 year. Misundersta •  A deeper analysis of the case nding Expatriate between local shows that the former managers managers’ and turnover used to manage areas in which expatriates staff. they have to stay strictly in contact with local employees.two categories of employeesuse to work in a differentway and where not able tocollaborate. This problem •  the number of guestsmakes the resort a very hard complaining about theplace where to work for both low level of service,sides. provided by almost all the staff operating at the resort, had Customer satisfaction increased drastically (from 10 per week to 30 per week
  10. 10. •  Power distance is the level of acceptance by a society of the unequal distribution of power in institutions àLOW/LOW•  Uncertainty Avoidance is the extent to which people in a society feel threatened by ambiguous situationà HIGH/LOW•  Masculinity refers to the degree of traditionally masculine value (assertiveness, materialism and lack of concern for the others) that prevail in a society. The fundamental issue here is what motivates people, wanting to be the best (masculine) or liking what you do (feminine). MASC/MASC•  Individualism is linked to the tendency of people to look after themselves and their immediate families only and to neglect the needs of society. COLLEC/INDIV
  11. 11. Cultural Differences NOTEPower distance (LOW) Power distance (LOW)• Informal relationship • Similar to the Carribean but in the case• accessible superiors• “coaching leaders” Uncertainty Avoidance (LOW)Uncertainty Avoidance (HIGH) • They want to take risks • Strong decision taking style• they don’t want to take risks • Achievements first• non-decision making” style• role of regulation MasculinityMasculinity • Money • Promotions• Different elements than money drive their • Career motivation IndividualismCollectivism • Family• Extended relationships • Individual first• Group first • Achievement
  12. 12. BVI Labor lawLimited number of work No lay-off during slow Restricting firingpermits + Promote local seasons conditionsif possible • Higher Labor cost (not in • Compensation system• Linked to the high level of term of wages but retention) problems: illiteracy it leads to the • Rewards possibility of not-well Firings educated staff Uncertainty avoidance people are not truly rewarded accordingLess time for expatriates to their performance and they can’t be VACTIONS fired if they don’t work.Paid by offshore companies Local employees, who are uncertainty avoidance, feel save and they are not motivated by money or promotion by themselves. They know that they will get more money within time, putting MORE INEFFECTIVE HR the same effort or eventually not working at all
  13. 13. Culture and problems Conflicts between local Expatriate turnover Customer satisfaction and expatriate staff Management style Employees management Cultural collision doesn’t fit with local. and compensation system Power distance + Individualism vs Motivation Indivividualism Collettivism. They came from the US and The current compensation system also play an the two differentmanaged locals in the same way cultures’ collisionthey would have treated Americans. important role because it’sThe way they give orders, the not good to motivate localfeedback they expect to receive and staffthe way they motivate localemployees was a result of theirpersonal background, especiallylinked with the Americanindividualistic culture. Thismanagement style doesn’t suit thelocal.
  14. 14. Motivation theory" Humanistic Theories of Motivations: People have strong cognitive reasons to perform various actions Self-actualization This is illustrated in Abraham Maslows hierarchy of needs, which presents different motivations at different levels. Esteem Maslows hierarchy of needs is the representation of westerner society so in the case it could beBelongingnes s seen as the way the Americans are motivated: they will reach their climax when they will be able to fulfil their self-actualization needs, thanks to promotions, more salary SafetyPhysiological
  15. 15. Caribbean Pyramid of Needs Caribbean people have the same needs, but theBelongingness hierarchy seems to be completely different. At the top of their pyramid, belongingness needs Self- are the most important.actualization This has a very strong impact on the motivation, making the resort compensation system as Esteem ineffective. It has been created for people who want to satisfy self-actualization needs, so it is not the right way to motivate people who want Safety to fulfil other kind of need (friends, family, group identity). Physiological The regulations, with the “difficult to fire” mode, also help the system to be even more ineffective.
  16. 16. Questions Part II Managerial BehaviourSeveral example of managerial behaviour are provided in the case. Which behaviour seems to beinappropriate regardless of cultural context? Which seem to be ineffective due to the resort culturalcontext? Why is Lucas having such a difficult time with his staff? BVI employees, especially those in Water Sport Department, don’t seem to be motivated by tips. Why do you think this is so? What alternative arrangements might be made? Does the fact that Kimball, Johnson and Fitch work from the United States have any potential impact on local employees?Things are not all bad at WIYCR. Who are the expatriate managers who seem to be effective andwhy are they effective?
  17. 17. WIYCR Managerial Structure Marketing and Chicago office President Special promotions Director General manager Operations Level, Accounting & Property manager Finance Rooms Division Food & Beverage Waterfront Engineering Manager Director director Marina director Department 2 Restaurants and WatersportsFront desk Housekeeping Commissary Director
  18. 18. Johnson’s main intervention area Chicago office Joe Kimball Tom Fitch US US US Jim Johnson USàUS/BVI Operations Level, Kent Mawhinney Accounting & Finance USAàBVI Kristin Singiser Steve Lucas Nick Smith Engineering VACANT Department USAàBVI USAàBVI USAàBVI 2 Restaurants and Enrik HarriganFront desk Housekeeping Commissary DominicanàBVI
  19. 19. “Real” main intervention area After reading Chicago office Joe Kimball Tom Fitch US US US the case Jim Johnson USàUS/BVINO Communication Operations Level, Kent Mawhinney Accounting & Finance USAàBVI Kristin Singiser Steve Lucas Nick Smith Engineering VACANT Department USAàBVI USAàBVI USAàBVI 2 Restaurants and Enrik Harrigan Front desk Housekeeping Commissary DominicanàBVI
  20. 20. Inappropriate and Ineffective managers (I) Johnson Lucas • Lives in the US • Individualistic American • Speaks only with top managers • Not a coaching leader • Stays in his office • Doesn’t build relationships • Should be the bridge with Chicago • Complains too much Harrigan Fitch • Non-decision maker • Rarely on place • His subordinates want day by day goal • Cannot understand resorts’ truly capabilities • He has no supervision and potential. Kimball Chicago Office • Old • More communication and integration with the • President key people in the resort • Can perform his activity from Chicago
  21. 21. Inappropriate and Ineffective managers (II)Johnson, Lucas, Fitch Common attributes: ParochialMost inapproriate behaviourFor local they are outsiders American people Attitude Worked in hospitality resorts in Narrowly restricted in the US scope or outlook Specialists (academic training)
  22. 22. Effective Managers• “Get-his-hands-dirty” Man • Relationship builder• every day on the field • Never take things for• Truly interested in all the credit resort problems • “Bash them over the head• always accessible with it” philosophy • Her really problems are with the HQ Kristin Singiser,Kent Mawhinney, Rooms DivisionProperty Manager Manager Cultural Approach
  23. 23. •  Water Sport employees don’t seem to be motivated by tips, they want something else. By they way it seems that they would like to have some more money somehow (like when Down show them the tips he gained).•  But individuals do not need just money and rewards, they also need respect and interaction.•  They want to be friends, not only subordinates. For example they treat with interest the guests who had offered them drinks.•  The Watersport’s director can start saying thank you everyday if a good job is done and go drink a beer with his employees after work.•  Teamwork is also important. Employees should work in teams formed of local and expatriate staff. Instead of tips, team who perform well every day, at the end of the month will have paid days off, or will gain special holidays during their forced lay-off period.
  24. 24. Unmotivated water-sport’s staffNot challenging people and they don’t reward Don’t believe in their “individual” initiatives capabilities No TIPS motivated They want respect and They want to build a interaction friendship relationship first
  25. 25. Questions Part III RecommandationsIf you were Down, what short term and long-term recommendation would you make toJohnson? What measures would you recommend that Johnson take in order to reduce the level of expatriate turnover? What measures would you recommend that Johnson take in order to decrease the occurrence of guest complaints related to unmotivated local employees?What measures would you take to reduce the growing gap between expatriates and localemployees?
  26. 26. Customer satisfactionShort term Long TermApologiesDiscounts, special prices, special Present to everyday activityoffers or prize GM ‘s everyday meetings, with Room Division manager Executives everyday meetings with staff “Tutor” for each task group with the assignment of “call them on their duty
  27. 27. STAFF: Short-term decisions Staff Executives BOTH •  Share tips Everyday explaining •  Johnsonà Talk more with the plan (evenSmall teams (2/3 •  Paid days off at the staff physically) executive people) of both end of the month for •  Executiveà locals and expatriates the team Continuously Staff Check if everything •  “Special” vacations control plans implementation is ok during their forcedOrganize parties lay-off period •  Other daily prizes, Ask instantaneous feedbacks. Thank the staff if the job is well done Especially Lucas and such as free drinks the watersport •  INTERACTION “Tutor” with the Merge the Marina director assignment of “call direction and the the staff on their duty. Waterfront direction for a total of 22 • Control Harrigan employees). Smith has to control and rules Harringan operation
  28. 28. Move to the resort and live there Johnson • Bridge with US CLO (Chief • Cross-cultural management Mawhinney Learning Officer) course Chief Learning Office of the Resort: DO LIKE THE PROPERTY responsible for formulating MANAGER JOB learning strategy and education initiatives for the local employees. His tasks can include integrating and managing training programs throughout the organization. Staff Training Inner “Hospitality School” Local: Train for intermediate management positions Cross-culturalmanagement course High experience in the Caribbean or poor experience Expatriate: in the US hospitality market Greater incentives to stay
  29. 29. Limitations BVI’s culture Worked mainly with Little Motivati Dave expatriates TIPS:informati on Pickering Down vson about system example Dave Any relationshi p built Values with locals •  When Down did it they thought he was joking and then they were willing to know how was it possible. •  When Dave did it they didn’t care and maybe considered it as “showing off”. •  Down was considered part of the group, a friend not only a colleague. •  Dave had any relationship with them. •  The lack of information about how to gain respect in a culture as a leader could lead to different result from a similar behaviour provided by someone who is accepted and someone who is not.
  30. 30. THANK YOU