European Hotels Plc owns 10 hotel chains across Europe. They recently acquired a small hotel chain operating in Jamaica.
Posted: Thu Apr 28, 2022 2:53 pm
European Hotels Plc owns 10 hotel chains across Europe. They
recently acquired a small hotel chain operating in Jamaica. The
acquisition of a small hotel supports European Hotels’ strategic
objective of growing the organization but ensuring that new
ventures are well supported, opened on time and within
budget.
European Hotels Plc is considered a budget accommodation; they
are functional, clean and reasonably priced. Most guests stay for
one to three nights and are a combination of leisure and business
travellers. The hotels are typically situated in European locations
that are easily accessible by ground transportation. They follow
the bed and breakfast model of hospitality.
The organization has decided to use a modified ethnocentric
approach and send some of their existing European-based managers to
Jamaica to lead the changeover of the new hotels and then manage
them after they re-open. If this new overseas venture is
successful, European Hotels may decide to acquire other small hotel
groups in other Caribbean countries. The organization would like to
own four hotel chains in the next five years. Their 10-year plan is
to own eight chains across the Caribbean. This is an ambitious
target, so it is important that the organization finds an effective
formula to operate successfully in the Caribbean.
The organization has never hired managers to work outside Europe
and thus, the owners do not know how to start determining the
compensation and training needs. However, they do know
that:
The existing average salary for managers in Europe is 53,000
Euros plus bonuses.
Surveys show that the average salary for hotel managers in
Jamaica is 45,000 Euros with no opportunity to earn
bonuses.
European Hotels Plc current pays management staff an average of
55,000 Euros, with the opportunity for bonuses and commission.
The owners want to have a consistent approach as to how they
compensate expatriates because they expect their overseas business
to expand in the future. They also want existing employees to be
enticed into working abroad and know that they will need to have a
good range of incentives.
European Hotels Plc owns 10 hotel chains across Europe. They
recently acquired a small hotel chain operating in Jamaica. The
acquisition of a small hotel supports European Hotels’ strategic
objective of growing the organization but ensuring that new
ventures are well supported, opened on time and within
budget.
European Hotels Plc is considered a budget accommodation; they
are functional, clean and reasonably priced. Most guests stay for
one to three nights and are a combination of leisure and business
travellers. The hotels are typically situated in European locations
that are easily accessible by ground transportation. They follow
the bed and breakfast model of hospitality.
The organization has decided to use a modified ethnocentric
approach and send some of their existing European-based managers to
Jamaica to lead the changeover of the new hotels and then manage
them after they re-open. If this new overseas venture is
successful, European Hotels may decide to acquire other small hotel
groups in other Caribbean countries. The organization would like to
own four hotel chains in the next five years. Their 10-year plan is
to own eight chains across the Caribbean. This is an ambitious
target, so it is important that the organization finds an effective
formula to operate successfully in the Caribbean.
The organization has never hired managers to work outside Europe
and thus, the owners do not know how to start determining the
compensation and training needs. However, they do know
that:
The existing average salary for managers in Europe is 53,000
Euros plus bonuses.
Surveys show that the average salary for hotel managers in
Jamaica is 45,000 Euros with no opportunity to earn
bonuses.
European Hotels Plc current pays management staff an average of
55,000 Euros, with the opportunity for bonuses and commission.
The owners want to have a consistent approach as to how they
compensate expatriates because they expect their overseas business
to expand in the future. They also want existing employees to be
enticed into working abroad and know that they will need to have a
good range of incentives.
Which of the two compensation approaches would be most
applicable to European Hotels’ move to acquire the hotel chain in
Jamaica? Justify your argument using information from the
case.
recently acquired a small hotel chain operating in Jamaica. The
acquisition of a small hotel supports European Hotels’ strategic
objective of growing the organization but ensuring that new
ventures are well supported, opened on time and within
budget.
European Hotels Plc is considered a budget accommodation; they
are functional, clean and reasonably priced. Most guests stay for
one to three nights and are a combination of leisure and business
travellers. The hotels are typically situated in European locations
that are easily accessible by ground transportation. They follow
the bed and breakfast model of hospitality.
The organization has decided to use a modified ethnocentric
approach and send some of their existing European-based managers to
Jamaica to lead the changeover of the new hotels and then manage
them after they re-open. If this new overseas venture is
successful, European Hotels may decide to acquire other small hotel
groups in other Caribbean countries. The organization would like to
own four hotel chains in the next five years. Their 10-year plan is
to own eight chains across the Caribbean. This is an ambitious
target, so it is important that the organization finds an effective
formula to operate successfully in the Caribbean.
The organization has never hired managers to work outside Europe
and thus, the owners do not know how to start determining the
compensation and training needs. However, they do know
that:
The existing average salary for managers in Europe is 53,000
Euros plus bonuses.
Surveys show that the average salary for hotel managers in
Jamaica is 45,000 Euros with no opportunity to earn
bonuses.
European Hotels Plc current pays management staff an average of
55,000 Euros, with the opportunity for bonuses and commission.
The owners want to have a consistent approach as to how they
compensate expatriates because they expect their overseas business
to expand in the future. They also want existing employees to be
enticed into working abroad and know that they will need to have a
good range of incentives.
European Hotels Plc owns 10 hotel chains across Europe. They
recently acquired a small hotel chain operating in Jamaica. The
acquisition of a small hotel supports European Hotels’ strategic
objective of growing the organization but ensuring that new
ventures are well supported, opened on time and within
budget.
European Hotels Plc is considered a budget accommodation; they
are functional, clean and reasonably priced. Most guests stay for
one to three nights and are a combination of leisure and business
travellers. The hotels are typically situated in European locations
that are easily accessible by ground transportation. They follow
the bed and breakfast model of hospitality.
The organization has decided to use a modified ethnocentric
approach and send some of their existing European-based managers to
Jamaica to lead the changeover of the new hotels and then manage
them after they re-open. If this new overseas venture is
successful, European Hotels may decide to acquire other small hotel
groups in other Caribbean countries. The organization would like to
own four hotel chains in the next five years. Their 10-year plan is
to own eight chains across the Caribbean. This is an ambitious
target, so it is important that the organization finds an effective
formula to operate successfully in the Caribbean.
The organization has never hired managers to work outside Europe
and thus, the owners do not know how to start determining the
compensation and training needs. However, they do know
that:
The existing average salary for managers in Europe is 53,000
Euros plus bonuses.
Surveys show that the average salary for hotel managers in
Jamaica is 45,000 Euros with no opportunity to earn
bonuses.
European Hotels Plc current pays management staff an average of
55,000 Euros, with the opportunity for bonuses and commission.
The owners want to have a consistent approach as to how they
compensate expatriates because they expect their overseas business
to expand in the future. They also want existing employees to be
enticed into working abroad and know that they will need to have a
good range of incentives.
Which of the two compensation approaches would be most
applicable to European Hotels’ move to acquire the hotel chain in
Jamaica? Justify your argument using information from the
case.