case study organisation

The case study organisation that is known as a U.S.-based company has set the goal of becoming a key force in main European markets, including the United Kingdom, Germany, Spain, and Italy. This was to be achieved through organic growth—by opening new hotels. This case study describes how the case study organisation plans to achieve its goal in Europe. Country managers, who are usually local nationals or people who have lived in the area for a long time, are given the responsibility of establishing a network of contacts and identifying project opportunities in different country markets. These country managers are based in country markets in different countries. Since they know the sociocultural and business environments of the country in which they work, these country managers are kept responsible for the international expansion process. They have the role of evaluating international projects that have been developed in their regions. Interestingly, however, people get involved in the country manager’s area of responsibility and assess the potential merits of projects for the whole company. For example, senior members from the marketing discipline ensure that the project serves the longterm benefits of a specific brand in a particular market. Operations people assess the profitability of the project. Business support managers ensure that the risks associated with the project are reasonable and that the project will contribute to the shareholder value. The physical condition of the hotel properties and the safety issues are controlled by the technical services. The legal experts ensure that the legal framework of the partnership is properly set. In the case study organisation, the expansion process at first may seem logical and rational: Decision makers follow a specific route and make their decisions based on the organisation’s strategy, procedures, and standards. The decisionmaking process is guided by strict stages and guidelines. This structured approach to decision making, however, is only one facet of the activity. Decisions are not simply the outcome of an ordered and rational process but are more dynamic. Besides company strategy and standards, different decision makers with diverse views and interpretations contribute to decision making and influence the final decision. International expansion is a multidiscipline process. Therefore, the case study company takes advantage of the knowledge of different experts of organisational members. This suggests that there is a considerable amount of empowerment to the experts, who could bring their subject knowledge and experience to the decision-making process. This, however, does not mean that the case study organisation relies entirely on a decentralised structure for decision making. There is a certain element of “centralisation” of decision making. For instance, hotel project ideas that emerge from different countries have to be “filtered” through “rational” processes. This process consists of the assessment of projects against certain standards and decision-making criteria. Moreover, although the projects are continuously evaluated by the experts as they go through the process, they still must be approved by a committee. Additionally, the same details of the hotel projects are discussed and assessed many times by different disciplines. Decision making is so centralised that the country managers’ decisions can always be overridden by senior decision makers. This suggests that they have only limited power. In addition, country managers have to work within the financial parameters that have been set for them, as well as the framework of guidelines that outlines the case study organisation’s priorities for market expansion. Moreover, country managers are expected to use both formal and informal channels to update the senior decision makers with their ongoing activities. Based on these interactions and discussions, they are advised as to whether they should pursue a project idea. Such a control-oriented approach to decision making has a number of implications for international expansion. It both hinders the case study organisation’s ability to take advantage of international expansion opportunities and it demotivates the country managers. In particular, the increase in bureaucracy slows down the decisions made with regards to different opportunities and makes the country managers feel that their views and knowledge are not acknowledged and appreciated by the senior decision makers. Development and implementation of the strategy is highly dependent on placing country managers in different countries where expansion opportunities emerge. However, both senior decision makers and country managers need to better understand each other in order to be able to make healthy decisions about different country markets. Country managers should be fully aware of the key priorities of their organisation, and senior decision makers need to understand that the way business is conducted is different in each market. Top management might need to delegate more responsibility to country managers in order to facilitate organisational learning about different country markets and thus help to improve the company’s international expansion performance.