Moscow Aerostar Hotel Case Essay Example

the employees and had an ethnocentric attitude that escalated into improper HR practices and a somewhat condescending imposition of Western culture unto the Russian employees who, subsequently, felt like outsiders forced to act a role, distrusting of the corporation.

Criteria used for alternative evaluation: employee satisfaction/commitment, increased productivity/decreased expatriates, lower staff costs, cohesive application of unified values.

1. Continue enforcing the “Western-way” in efforts to maintain a solely Western atmosphere: This alternative is not feasible in the long run given the high costs and lower benefits of the current strategy. Imposing the Western way with no cognizance and recognition of Russian cultural values will not lead to job satisfaction/commitment (as it does not presently). Increased productivity may be feasible if an aggressive tone is taken to warn of the possibility of job loss unless productivity increases but this may be a short-term solution and will only fuel the bitterness of the employees. With this alternative the company cannot strategically afford to reduce expatriates nor will staff costs be considerably lower. There will definitely be a split between values held by the two parties.
2. Revise current approach to adapt, when necessary, to Russian cultural values and create a family environment where both sides are reaching for a unified goal: Developing a new corporate culture that integrates the Russian and Western values can provide many synergies for the company. Two major differences compared to the West include that Russians are collective individuals with high power distance and, thus, a preference of a structure hierarchical system. By taking these values into account, adjustments can be made that without compromising the general “Western” atmosphere for the customers.
3. The business idea is
   

strong; this alternative takes into account the importance of working with the domicile employees to help the idea blossom into a sustainable organization. This alternative takes into account the Russian needs, helps break down trust issues; this will consequently result in greater job satisfaction and feeling of ownership in the corporation. Greater pride in a strong, cohesive company will drive productivity and increase learning, ultimately lowering staff costs. Most importantly, this alternative helps place emphasis on organizational hierarchy not any cultural hierarchy, helping create unity/goal congruence.

There will be a reduction in costs given the reduced need for any expatriate involvement and higher necessity for Russian management and personnel. However, this alternative results in a loss of reputation and core purpose for the hotel; instead, Moscow Aerostar will blend in with its competition. The long-run competitive advantage is eroded and there exists little possibility that there will be any large productivity increases from simply switching over to the Russian model.

Implementation

Timely action cannot be stressed enough. The restructured approach should be completed within 10 months. A potential risk of such a drastic change is employee resistance and employee loss. Patient yet firm management approach, delivery of a consistent message and values, and a high effort in building personal connections with Russian employees can moderate this risk. Laurie Sagle and other expatriates must immediately (Month 1) take on

additional cultural training as well as hire professional Russian managers and HR personnel; also establish a new system of core values that will be taught and exemplified by expatriates

• Devise and implement a new and effective training methodology within the next 1-2 months; re-train current employees after having carried out a number of social events to bond with the employees and “re-getting” to know them (intensively involved the professional Russian managers in planning events common to the Russian culture)
• Following the re-training in approximately Months 4-5, re-evaluate existing employees based on the new core value system/standards expected after re-training
• Devise new scheme for compensation and bonuses (group-based) and implement immediately after re-evaluation in approximately Month 6
• For the next 3-4 months, continue reinforcing new core values and assessing and letting go of underperforming existing employees, while recruiting (based on an altered recruiting approach with Russian interviewers and a common Russian interview process) for any necessary personnel and developing Russian management talent

Conclusion

Performance is deemed successful once expatriate managers have been reduced to 10 and payroll expenses have been reduced proportionately without reducing capacity, thus, showing increased overall productivity. It should be expected that profits increase by 10% due to the cost reduction. A control system is vital; it should comprise (should be more intensive during transition period of the first couple of years): semi-annual performance/productivity evaluations/employee surveys and annual analysis of budget variances. Overall, showing greater interest and respect towards the Russian culture will help reframe the negative perception of Westerners that Russians tend to have and build a well-oiled hotel machine.