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Introduction
External Environment Analysis of Marriott International will be conducted in this report. Marriott International is a diversified multinational hospitality company that manages and franchises hotels and lodging facilities. The headquarters of the company is situated in Bethesda, Maryland, U.S (Marriott, 2020). Marriott covers 6,906 areas globally (Marriott, 2018). The company have 176,000 employees across the world (Marriott, 2020). The company generated 22.9 billion in revenue in 2019 (Statista, 2019). In this report, a pestle analysis of Marriott has been conducted to evaluate the effects of its external factors. The importance of effective recruitment and selection has been demonstrated. The principles that affect the culture, equality and diversity of the organizations have been also demonstrated.
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PESTLE Analysis
PESTLE stands for Political, Economic, Social, Technological, Legal and Ecological environment, which are the external factors that effect Marriott International.
Political Environment: Political factors such as tax policy, the danger of terrorism, political stability, the origin country’s relation with the host country, etcetera are the factors that effect Marriott International (Gajjar, and Okumus, 2018). For example, Marriott International has to follow different tax strategies in different countries because every country has a different tax policy. Marriot International meets the terms of UK tax laws and practices while executing business there, therefore, conducted a new tax strategy in 2019 for the UK (Marriott Bonvoy, 2019).
Economic Environment: Interest rate, inflation rate, the economic stability of the host country, etcetera are the factors that affect the business of Marriott International (Matthews, 2016). The biggest economic effect on Marriott in recent days is increased c. People from all over the world have stopped visiting China in recent days because of the fear of the virus. As a result, the first quarter revenue of Marriott is supposed to drop by about 3% to 7% (CNBC, 2020).
Social Environment: Social factors such as shared beliefs of people, country’s lifestyle, buying habits etcetera have a great influence on Marriott International (Lesser, Jaeger, and Gilston, 2016). The global tourist number in 2018 was 1.4bn which increased by 6% from 2017 (The Guardian, 2019). People spend money on travelling more than before. As a result, Marriott International has become profitable because of the travelling trend because it has increased its customers and ensured repeatable sales. As a result, the profit level of the company has increased than past times.
Technological Environment: Advancement of technology & transportation sector; telecommunication sector has played an outstanding role in making Marriott more successful (Nyangwe, and Buhalis, 2018). For example, Marriott introduced its Airbnb with a fancy pants version of home share rentals in 2019 by which they offer 2,000 luxury properties across the world (The New York Times, 2020). It is expected to bring great success for the company because no one has offered this opportunity before. It will help them to increase their sales enormously.
Legal Environment: Marriott has to maintain the rules and regulations of host countries and origin countries in its executions, and the legal environment impacts on the company enormously (Zhang et al., 2015). For example, the minimum wage in the US is going to increase by about $15 an hour by 2024 (Economic Policy Institute, 2019). As a result, Marriott has to pay the average wage, and it will increase its operational costs highly.
Ecological Environment: About 20% of the US economy gets directly affected by weather (Forbes, 2019). For example, Rising ocean levels, storms and flooding can stop people from beach-going, which will reduce the customers’ number of beach resorts. Global warming cause too many high temperatures therefore, travellers will not feel comfortable in the beach resorts. As a result, the sales of Marriott will decrease.
Importance of effective recruitment and selection in sustaining competitive advantage:
Effective recruitment and selection refer to making sure the adoption of good people who can do their stuff well and do not cost much (Ansoff et al., 2018). The effectiveness of the effective recruitment and selection process for Marriott has been demonstrated below:
Increases profitability and performance: Effective recruitment and selection ensure that employees of high quality are appointed to the company therefore, profitability increases (Rothaermel, 2016). For example, when Marriott appoints high-quality employees, they deliver the best service by utilizing their talent. By delivering the best services, they become capable of increasing customers’ satisfaction. As a result, customers maintain repeatable purchases from Marriott and suggest others purchase Marriott’s services. As a result, the demand of the company increases and the profitability of the company increases more than their competitors.
Increases retention: Effective recruitment helps to be careful while conducting interviews and hiring employees therefore the company can select the appropriate employee for the available post (Hitt, Ireland and Hoskisson, 2012). For example, the effective recruitment and selection process of Marriott makes them capable of selecting employees who are compatible with the organization’s culture. As a result, they have a high employee retention rate of 80% (SCRIBD, 2012). When employees work for a long time, they become more experienced day by day and become able to do stuff successfully. As a result, the productivity of the company increases which fosters its competitive advantage of the company.
Reduces Costs: Effective recruitment and selection process helps an organization minimize its costs by finding out the most compatible employees for the company (Eden and Ackermann, 2013). For example, when Marriott appoints employees who are compatible with organizational culture and eligible enough furthermore they stay for a long time in the company which saves the replacement costs for employees. Even companies have to spend on training to enhance employees’ skills which are minimized by appointing skilled employees with the help of effective recruiting. Though companies can minimize costs through effective recruitment and selection, they can become the cost-efficient service providers in the sector which has the most powerful competitive advantage.
External Environment Analysis of Marriott International: The principles that influence Marriot’s culture, equality and diversity:
The principles that influence Marriott’s culture, equality and diversity are stated below:
It is committed to providing fair treatment to all: Marriott commits to providing fair treatment to all the employees they have (Globair Group, 2020). The company arrange training for all the employees in order to enhance their skills and capabilities. This principle of Marriott influences the behaviour of employees positively. When the employees see that their company is taking steps to enhance their capability, they feel valued as an important asset of the company. As a result, employees stay highly motivated, and they focus more on the company’s culture.
It emphasizes well-being: Marriott emphasizes on the health and wellness of their employees much more by focusing on well-being (Inc, 2020). It ensures that the employees are the happiest employees in order to ensure its success. Marriott takes focuses on the well-being of every employee which refers to the equality of the organization. As a result, a culture of satisfied and sustainable employees is created.
It welcomes creativity and multi-talented employees: Marriott welcomes creativity and multi-talent in their company. It supports recruitment, retention and advancement of all employees through unity in order to develop a diverse workplace (Marriott International, 2020). Therefore, employees of any nationality can join Marriott, and the company gets multi-talented people. As a result, the company can meet customers’ demands in a new way and they become highly satisfied.
Works with local communities: Marriott works with local communities in order to create opportunities, value differences and a positive sense of well-being which refers to the global diversity of the organization. It also has partnered with about 30 diverse organizations with whom it has long-standing partnerships (Marriott International, 2020). And the company values these partnerships that help the company to deliver the best services to its customers.
External Environment Analysis of Marriott International: Key methods of performance management
Performance management refers to the ongoing process by which supervisors and employees communicate throughout the year in order to ensure the achievement of strategic objectives of a company (Buckingham, and Goodall, 2015). Supervisors measure, report and manage the progress of employees’ work through performance management in order to make sure better performance (Mone, and London, 2018). There are many performance management tools that make the process efficient and easy. These are evaluated below:
Key performance indicators and metrics: Key performance indicators and metrics refer to the tool that helps to measure how well business units, companies, projects or related parties are performing to attain the strategic goals and objectives of the company (Ahmed et al., 2016). Through KPI, Marriott will be able to see actual metrics, and they can check who is not performing. Though metrics are visible, the company can make better decisions by using factual data. It will help them to foster their competitive advantage because companies can deliver better results when they take an effective decisions on the basis of factual data.
Performance appraisal: It is the process through which companies can review the regular performance of an employee and his or her contribution to the company (Gerrish, 2016). Performance appraisal focus on developing employees’ performance. Marriott International will be capable of understanding the strengths and weaknesses of an employee. Therefore, they can easily identify who needs training, and it will make the employee development process easier. The company will also be capable of identifying the most eligible employee who deserves a promotion. It seems that Marriott can identify employees’ weaknesses to prevent them and strengths from utilizing them with performance appraisal therefore, it will be capable of making its position stronger than competitors by utilizing employees’ talent.
360-degree feedback: 360 degrees is the way by which companies find out how employees are performing on the basis of the views of the supervisors or managers, customers, suppliers and others (Arnaboldi, Lapsley, and Steccolini, 2015). It is a confidential process of knowing about the progress of employees’ performance. Marriott can use this tool to create self-awareness among employees because employees know that others are monitoring their performance. As a result, employees will work proactively, and the company will be capable of achieving its target successfully.
Management by objectives: It refers to the process that is conducted to develop the performance of employees by clearly defining their objectives (Bititci, Cocca, and Ates, 2016). By MBO, Marriott will be able to maximize the utilization of human resource management of the company. It will help them to improve communication and organizational structure. Employees get clear objectives. Therefore, they can make plans in order to attain them successfully. As a result, Marriott will be able to compete with its competitors efficiently.
Recommendations for Marriott:
Recommendations on the issues which are raised in the presentation are demonstrated below:
Firstly, Marriott should ensure effective recruitment and selection in order to get eligible employees always. Eligible and talented employees will deliver the best services to the customers, and demand of customers will be fulfilled through creativity. As a result, the company will be capable of providing unique service, and it will be one of the most effective competitive advantages for Marriott.
Secondly, Marriott International should arrange a training and development programme in order to develop and enhance the capabilities of their employees. It will ensure that the company can deliver the best services to the customers and that customers get back to the company after being satisfied. As a result, the competitive advantage of Marriott will be boosted by delivering the best services and creating high customer satisfaction.
Thirdly, the company have to hold on to their well-being programme for employees in order to keep employees happiest always. It will make employees feel secure in the company, and they will work with all enthusiasm. As a result, the productivity of the company will increase, which is another competitive advantage of an organization.
Fourthly, the Company should ensure effective communication with the employees in order to keep them on track. It motivates employees highly when they see the company is communicating with them and they have the scope to give their opinion. As a result, employees will work more proactively in order to make their company best than the competitors by creating an outstanding image in customers’ minds.
Fifthly, Marriott should use the effective performance management tools of their choice which will be compatible with the organizational structure. It will help them to monitor employees’ performance. Therefore, they will be capable of developing employees’ performance and maintaining their leading position by utilizing the capabilities of their employees.
Conclusion
Marriott International is one of the leading multinational hospitality companies in the world (Qadri, Ahsan, and Hashmi, 2016). It has to maintain employees effectively in order to maintain the quality of its service, which will increase customers’ gratification. Better quality and high customer gratification will help them to hold their leading position in the hotel industry.
References
CNBC, 2020. Marriott, Booking Holdings see drop in demand from coronavirus. Retrieved from: https://www.cnbc.com/2020/02/27/marriott-booking-holdings-see-drop-in-demand-from-coronavirus.html. [Assessed on: 27 February 2020]
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage.
Economic Policy Institute, 2019. Raising the federal minimum wage to $15 by 2024 would lift pay for nearly 40 million workers. Retrieved from: https://www.epi.org/publication/raising-the-federal-minimum-wage-to-15-by-2024-would-lift-pay-for-nearly-40-million-workers/. [Assessed on: 25 February 2020]
Forbes, 2019. Weather And Business: Insights And Ideas For Weathering The Storms. Retrieved from: https://www.forbes.com/sites/jimfoerster/2019/01/18/weather-and-business-insights-and-ideas-for-weathering-the-storms/#28ef0f8a251c. [Assessed on: 26 February 2020]
Marriott International, 2020. Diversity & Inclusion. Retrieved from: https://www.marriott.com/diversity/diversity-and-inclusion.mi. [Assessed on: 28 February 2020]
Marriott, 2020. Corporate Overview. Retrieved from: https://marriott.gcs-web.com/corporate-overview. [Assessed on: 21 February 2020]
Marriott, 2018. FISCAL YEAR ENDED DECEMBER 31, 2018. Retrieved from: https://marriott.gcs-web.com/static-files/a9e39469-3202-4593-bbaa-cc3b71a67a9d. [Assessed on: 21 February 2020]
MacroTrends, 2020. Marriott: Number of Employees 2006-2019. Retrieved from: https://www.macrotrends.net/stocks/charts/MAR/marriott/number-of-employees. [Assessed on: 21 February 2020]
Marriott Bonvoy, 2019. Marriott UK Group Tax Strategy 2019. Retrieved from: https://www.marriott.co.uk/marriott/group-tax-strategy.mi. [Assessed on: 22 February 2020]
Statista, 2019. Revenue of Marriott International worldwide 1999-2018. Retrieved from: https://www.statista.com/statistics/266279/revenue-of-the-marriott-international-inc-hotel-chain/. [Assessed on: 21 February 2020]
The Guardian, 2019. Global tourism hits record highs – but who goes where on holiday? Retrieved from: https://www.theguardian.com/news/2019/jul/01/global-tourism-hits-record-highs-but-who-goes-where-on-holiday. [Assessed on: 23 February 2020]
The New York Times, 2020. A New Marriott Division Goes Head-to-Head With Airbnb. Retrieved from: https://www.nytimes.com/2019/04/29/travel/marriott-airbnb-homeshare-luxury.html. [Assessed on: 24 February 2020]