Strategic Decisions for the Galleria Group

Innovation Theory

Introduction

The role of strategic management is one of the key roles in the sphere of the hospitality business. Thus, many of these people admit that it is a bit difficult to present a clear definition of this process as well as its functions because usually, it requires some contradictory qualities and skills (Joyce & Woods 2001; Hitt et al. 2008). Strategic management may be defined not as a process but as a kind of unity of mission, variety of goals and values, responsibilities that are inherent to the team, and functional decisions that help any organization achieve the objectives set. Strategic decisions and planning play an important role in management (Slack, Chambers, & Johnston 2007; Allison & Kaye 2005), and the Galleria Hotel Group is the organization that is chosen to explain how innovations influence its development and promote good quality services. This organization makes use of such management tools as an innovation that promotes the development of the industry life cycle. Improvements of current services focus on strong estate, changes in working staff, and the innovative possibility of online communication between customers, employees, and managers by means of organizers are the main keys of success that defines Galleria Hotels as a powerful and successful organization with clearly defined purposes and demands.

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Definition of innovation

Hill and Jones (2009) admit that “successful innovation can transform the nature of industry competition” (p. 61). Innovation is considered a significant strategic management element that provides an organization with a chance to overcome the competitive edge. Hitt et al (2008) define innovation as “the process of creating a commercial product from an invention” (p. 370), and Enz (2009) admits that innovation is “the invention of a new service, product, or idea” (p. 395). The invention is an integral part of innovation in management that helps to solve the problem or improve the solution. Considering the necessity to provide the innovation outline for the new gallery, it should be stated that innovation practices will be closely associated with the aspects of the hospitality business and the implementation of principles associated with the necessity to arrange the attractive hospitality service.

Details of innovation

Innovation is one of the most evolved stages in management. This tool promotes proper organization of work, improves the entire performance, and encourages people. To succeed in the process of innovation, much attention should be paid to each detail (Manseau & Shields 2005). The main details of innovation are the evaluation of the events at all possible levels, the working environment, and technological progress, analysis of customers’ demands and employees’ needs, examination of improvements done and the outcomes, and compliance with all three stages of innovation which are idea creation, development, and commercialization (Stark 2000). The idea of innovation under consideration that may be implemented as New Galleria offer requires such details as the proper level of information technology, analysis of current achievements and grounds, and development of the idea in accordance to set conditions and requirements. The recommendations on the matters of innovation will be based on the principles of hospitality in entertainment and the application of solid ethical principles. In accordance with Enz (2009, p. 256), the following statement should be emphasized:

Since Hospitality and tourism combine to create one of the largest service industries in the world, there are many opportunities for both good and bad behaviour, and right and wrong actions by hospitality and tourism practitioners. Ethics in these industries can be guided by codes of conduct, employee manuals, industry standards (whether implicit or explicit), and more.

Importance of innovation

There are many reasons why innovation is important for the organization, and Stark (2000) represents the most evident ones: to change the environment, evolve society, improve current strategies, and introduce powerful conditions to compete with other organizations at the same level. Trott (2005) explains that all corporations have to “adapt and evolve if they wish to survive” because nowadays “the idea of innovation is widely accepted” (p. 5) and the process of innovation help to succeed in the market.

Innovation as a significant competitive tool

The development and growth of market conditions promote the development of other two issues: innovation and change (Mason 2003). There are many reasons why innovation has to be regarded as a powerful competitive tool. It provides an evaluation of personal positions on the market, promotion of the development of new products and services which attract the attention of many customers, encouragement of managers and employers to think about possible improvements of working conditions and providing people with a chance to work better and achieve better results; and demonstration of what is in demand and why to present only the best up-to-date services and products. In accordance with the innovation theory, the key aspects of innovation entail time, social system, and communication channels. From the perspective of the hospitality business, it should be emphasized that the social system presupposes employee-manager relations, consequently, the innovation practices will depend on such factors as subordination, responsibility structure, and delegation management. Considering these values, it should be emphasized that the traditional approaches towards innovation strongly depend on the relations within the organization, consequently, the most important recommendation will relate to the aspects of HRM.

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The Role of Innovation in the Hospitality Industry

New Galleria

Nowadays Galleria Hotels take leading positions in the market and present the best services for their customers as well as for their employees. This organization has more than 20 holdings in the world, and each of them brings a certain income and a considerable amount of benefits. It operates in the middle market type and offers 2- or 3-stars markets. The two stars properties aim at operating with not many people in comparison to the demands of the three stars organizations. The peculiar feature of Galleria Hotels is a burning necessity of conditions’ innovations under which people work and use services; New Galleria is improved by new technologies and the possibility to communicate online with staff, customers, possible visitors, and even managers as frequent as it is required. Though it is not always possible to arrange the time according to consumers’ demands, this innovation is under development and has to promote better work and higher profits. Additionally, it should be emphasized that the implementation of the hospitality principles into the strategy of innovating the new gallery strongly depends on the aims of business in general. Thus, the hotel group activity is aimed at attracting new visitors by offering them high-class accommodation services. Consequently, the recommendations will be closely associated with the necessity to improve the comfort of accommodation, arrange sufficient communication practices for improving the quality of the services, and provide customers with an opportunity to communicate not only with personnel but also with the CEO.

Additionally, as has been already emphasized, the company should pay particular attention to the aspects of HRM and arrange the innovative practices aimed at improvement of employee–manager relations and definition of the key aspects in their communication. Moreover, everyone should be encouraged to provide their own innovations and discuss the corporate strategy for improving the entire performance of the business and hospitality spheres.

History of the company

From the very beginning, the founder of the Galleria made a decision to use the Scottish Gothic Style for the building. This is why it is not a surprise that many visitors are impressed by the gardens, wooden area, and the number of pounds of the territory. It is hard to define the official date when the organization was established, but still, it is known that the first stages were dated at the beginning of the 20th century, and the founder was James Farrell. The company creates a philosophy and meets its conditions all the time to give necessary opportunities for people to develop on different levels.

Current operations

The evaluation of current operations should help to define the weak and strong sides of the organization and to clear up what may be used to improve the situation. Management of operations has to pass on the appropriate level because these activities have an impact on each other and the results which are expected from the work (Dodgson 2000; Walters & Walters 2002). Sometimes it is hard to manage the necessary innovation in time as no one can say for sure what may happen in the future or how customers accept the innovation (Stark 2000). Current operations are the following: empowerment of the staff, division of equal opportunities in employment, promotion of qualitative services (including room services, food, etc), and evaluation of salary. These operations have to be constant because if the organization fails to take any of these steps in time, the outcomes of such a mistake may influence the future of the company.

PESTEL Analysis

Political

Political aspects show that local government supports the development of the hotel industry and promotes the process of modernization to expand the chosen network. From the political point of view, the development of hospitality business should be developed for the improvement of the tourism sphere in the State. Thus, the political forces are lobbying the necessary legislation for developing this sphere.

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Economic

The economic side influences domestic demands and relations with local suppliers to provide clients with quality services. Evaluation of social factors demonstrates that population growth, as well as tourists’ presence, promotes the development of hotels. It is impossible to stop people and frustrate their plans to visit the chosen place, this is why the demographic factor should influence hotels’ demands to create innovations. Promotion of organizers in hotels attract citizens’ attention: more tourists are eager to visit the sights where the hotels under analysis take place, this is why this change influences the development of hotel services and the development of the New Galleria Group innovation in particular.

Social

The social aspect of the hospitality business is not very favourable for business development, as few people are eager to work in it. Thus, the hotel group lacks technical workers and requires the further development and expansion of the managerial staff, responsible for improving the quality of the hospitality services.

Technological

Technological and ecological sides also support innovation development that is not only beneficial for the local ecological situation but also beneficial for all those developing technologies which are appreciated by consumers. Organizers are one of the achievements in the sphere of technology: it is enough to download necessary information into this device and provide a person with a possibility to find the material required within a short time.

Environmental

As for environmental factors, they can hardly prevent the development of this innovation in hotels, and this is what should attract hotel representatives: independence from weather conditions and changes.

Legal

Legalisation of organizers and political support to improve hotel conditions are the best and the most powerful indications which may be used. Moreover, it has been already emphasized that the necessary legislations are lobbied, moreover, the government is aiming to adapt the employment legislation in order to encourage people to work in the hospitality sphere for further development.

Competitor analysis

It is known that almost every innovation gives a kind of competitive advantage (Christiansen 2000), and competitor analysis helps to define the strengths and weaknesses of potential competitors. What competitors may do is to present more reliable and different services, changes of prices to attract the attention of more people, and heightened care of employees and customers. The weakness of the vast majority of competitors is that some of them do not have as many holdings as Galleria has. This is why it is possible to use such weaknesses of competitors and focus on the cooperation of holdings. The strength of some competitors lies in the idea that smaller organizations require less attention and costs; Galleria Hotels contains a huge number of employees who want to be noticed and get an opportunity to earn enough. Smaller organizations that are able to create good competition may use their sizes and attract more employees by means of stable and high salaries.

Innovations in services and products

The report by Brown, Watkins, and Smith Consultants (2010) shows that the Galleria Hotels Group tries to take as many steps as possible to uphold internal development and any kind of promotion between its other hotels. As a rule, the consumer of this company are businessmen who appreciate their own time and try to use more expensive services if necessary, in order to enjoy their quality. To satisfy such customers and meet their demands, it is necessary to take care of innovations and improve the quality of the offered services. Another type of consumer is tourists. To provide tourists with proper services, it is necessary to define what kind of interests they have. This is why innovations in products and services usually depend on current demands, fashion, tastes, interests, and desires. If the country where the hotel takes place is interesting for people, these hotels will be visited.

Innovation of Galleria Group

Recommendations

Innovations for New Galleria are associated with the technological progress that is spread over the world. In accordance with the innovation theory, it should be emphasized that the company needs the improved communication flow between all the components of the hospitality industry:

  • Management and top management
  • Technical personnel
  • Visitors
  • Target audience

Considering these aspects, it should be emphasized that the recommendations will relate to the aspects of HRM, as the company needs to implement the corporate culture and business strategy aimed at improving communication. Otherwise, all the innovations will fail because of a lack of communication.

The innovation offered help to develop communication between each member of the team, manager, and customer. Now, there is no necessity to ask for the book of complaints or make an appointment with the manager of the hotel. This innovation helps to contact the necessary personal any time and anywhere. Such a technological device is a good opportunity for the Hotels to attract the attention of many tourists and prove that this hotel is the best one to choose for rest. No other hotels use such type of connection, and New Galleria is the first who suggests and maintains the use of this innovation.

The process of innovation should pass in three stages as was mentioned above. First, it is the creation of the idea. To succeed at this stage, it is necessary to evaluate the financial side of the company and the possibility to develop this device for each client and employee. The second stage is the process of development itself. It should involve different people who are able to use the necessary material, introduce this innovation to a wider audience, and explain how to make use of this innovation. The point is that the process of operation should take much time, and if there are some difficulties or unpredictable situations, there are some people who may present necessary help.

Relations of innovation and performance

The performance of this innovation should be gradual. First, it is possible to present this innovation for VIP clients only and explain to them the main rules of exploitation. With time, if this innovation is clear for a certain group of people, it is possible to provide other clients with a chance to use this device and enjoy some new possibilities. This innovation should attract many clients: even those who find the prices too high would be eager to check this idea and develop communication on different levels with people. Let it be small organizers who perform the functions of maps of the hotel and closest places of entertainment, communicators who allow calling for room service or manager’s advice, and additional services.

Advantages and disadvantages

The main positive side of the innovation is that fast and in-time communication with staff is available for people. It is the possibility to win competitors and attract the attention of more visitors and a good chance to involve more people into the services offered and provide them with a chance to earn; and by the way, people are always eager to evaluate the use of new devices under new conditions, and this innovation is a good chance to offer a new idea and new device that may considerably improve hotel services. The main disadvantage of this device is the inability to teach every client how to use it. Not every visitor may know how to use this innovation; this is why it is necessary to develop special instructions and clear explanations concerning this innovation.

Conclusion

In general, the strategic management of Galleria Hotels proves that a number of details have to be taken into consideration. To achieve success in the chosen activity (innovation), it is obligatory to pass through all stages of PESTEL analysis and make sure that there are no obstacles to the encouragement of this product. The promotion of organizers within Galleria Hotels is a unique opportunity to attract more people and to create a more working place for people of different specializations.

Reference List

Allison, MJ & Kaye, J 2005 Strategic Planning for Nonprofit Organizations: A Practical Guide and Workbook. John Wiley and Sons, Hoboken.

Brown, Watkins, & Smith Consultants 2010 ‘The Galleria Hotel Group’, Industry Report.

Christiansen, JA 2000, Competitive Innovation Management: Techniques to Improve Innovation Performance. Palgrave Macmillan, London.

Dodgson, M 2000 The Management of Technological Innovation: An International and Strategic Approach. Oxford University Press, New York.

Enz, CA 2009 Hospitality Strategic Management: Concepts and Cases. John Wiley and Sons, Hoboken.

Hill, C & Jones, G 2009 Strategic Management Theory: An Integrated Approach. Cengage Learning, Mason.

Hitt, MA, Ireland, RD, & Hoskisson, RE 2008 Strategic Management: Competitiveness and Globalization: Concepts & Cases. Cengage Learning, Mason.

Joyce, P & Woods, A 2001 Strategic Management: A Fresh Approach to Developing Skills, Knowledge, and Creativity. Kogan Page Publishers, Sterling.

Manseau, A & Shields, R 2005 Building Tomorrow: Innovation in Construction and Engineering. Ashgate Publishing, Burlington.

Mason, JJ 2003 ‘Innovation and Change as Competitive Tools in Manufacturing Operations’, Control and Automation, pp. 78-82.

Slack, N, Chambers, S, & Johnston, R 2007 Operations Management. Pearson Education, Harlow.

Stark, J 2000 ‘Why Innovation Is so Difficult to Manage’, Innovation Management. Web.

Stark, J 2000 ‘Why You Have to Innovate’, Innovation Management. Web.

Stark, J 2000, ‘Invention and innovation words and terms’, Innovation Management. Web.

Trott, P 2005 Innovation Management and New Product Development. Pearson Education, Harlow.

Walters, D & Walters, DJ 2002 Operations Management: Producing Goods and Services. Pearson Education, Harlow.

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