CASE TEMPLATE TO WRITE YOUR CASE ANALYSISCase 3.6 – Club Med and the InternaTonal Consumer Name: Maryam Ahmadi 1. Company Facts – Club Mediterranee SA (Club Med)Club Mediterranee SA, commonly known as Club Med, is a French public limited company specializing in the sale of all in holidays at a number of vacation villages which it owns and operated in anumber of locations around the world. The Club was started in 1950 by a former Belgian water polo champion Gerard Blitz. The first official Club Med was built in 1960 in Palinuro, SalernoItaly. In 1961, the company was purchased by a 35-year-old Baron Edmond de Rothschild, after he had a visited a resort and enjoyed his stay there. The Club became a destination for families, with thefirst Mini Club opening in 1967.The Club has also ceased to be a club in the legal sense, changing from a not – for – profit public limited company in 1995. In the 1990s, the Club’s fortunes declined because competitors copied its concepts and holidaymakers demanded more sophisticated offerings. The Club fell into a deep loss following the 9/11 attacks in the USA. The Club regained its profitability in 2005. In 2006 and 2007, Club Med and its partners dedicated a total of $530 million to renovate several resorts. 1
HBS Case Study: Club Med
Turnover is a normal part of any business, and is to be expected. For some, it is common matter, and for others, it can be become a real burden. The idea is not to necessarily eliminate, but minimize the effects of turnover. Turnover can be either voluntary or involuntary. It is the job of managers to come up with solutions to motivate their employees to not only want to stay, but also to help develop them to their full potential.
The current organization at hand is Club Med. Started in 1950 by a group of friends, Club Med has since then gone from a nonprofit sports organization to the ninth-largest hotel company in the world. As the size of the association grew, managing it also became more and more complex. It was in 1954, newly appointed managing director, Gilbert Trigano, saw a commercial opportunity in the concept of turning the association into a business. By 1985, the Club, also known as, Club Mediterranee had become a publicly owned company on the Paris Stock Exchange and encompassed 100 resort villages that could host up to 800,000 vacationers.
In the organization, each resort village is made up of one Ð²Ð‚ÑšChief of the VillageÐ²Ð‚Ñœ (general manager) and seven assistants called Ð²Ð‚ÑšChiefs of ServiceÐ²Ð‚Ñœ whom each oversee the activities of 80 congenial hosts Ð²Ð‚" also known as GOs Ð²Ð‚" who handle all jobs outside of house and grounds keeping. One of the biggest problems the organization faces is with the increasingly high turnover rate of newly recruited GOs. Turnover is now at 50% with North America at twice that of Europe. In the American zone, differences in culture and language have set barriers of communication between the North Americans and Europeans, frequently with French-speaking GOs and American GMs Ð²Ð‚" congenial members. Thus the importance of American GOs is crucial for quality customer service. We will be assessing the dilemma of turnover through thorough analysis of the recruiting, selection, training, and appraisal system processes.
The first issue was that some village chiefs fired two or three times as many GOs as other chiefs. To resolve the problem, it has been proposed that the village chiefs take part in the recruitment process, so that they see how hard it really is to find quality GOs. There are a few problems here. For example, it is harder to assess rÐ"©sumÐ"©s in America than in Europe because of discrimination laws barring both requests for photo and age. This makes screening applicants that much more difficult when certain demographics are ideal, especially for EuropeanÐ²Ð‚™s who are not familiar with American practices. Also, Americans tend to be more Ð²Ð‚ÑšcreativeÐ²Ð‚Ñœ with their rÐ"©sumÐ"©s, so as to attract attention, and though not always, most of the time, these rÐ"©sumÐ"©s tend to be very misleading. All in all, the entire recruitment process is very tedious and time consuming especially when cultural differences work as a restricting factor for something as simple as screening candidates for interviews. And though I strongly believe that village chiefs should have a say in the recruiting process, I also believe that American village chiefs may be better qualified when assessing the needs of its American subordinates because of their similar outlook on life than that of someone from another country.
Motivation is a major component in effectively reducing turnover. Many American GOs feel that they are not getting proper feedback from their respective chiefs, and subsequently the European chiefs do not consider the need to provide that feedback either. This plays a huge factor in motivation because how will you know what you are doing wrong when your supervisor does not tell you. The current system solely uses a rating system that rates technical ability and attitude and comportment with GMs. Though the appraisal system allows for feedback in the comment box, most chiefs were not inclined to elaborate. Again with the differences in culture, European chiefs feel that the American GOs should just do what they are told without explanation, and American GOs are feel that European chiefs are being condescending. One employee complained that upon arrival, he was given no clarification of what was required of him; he was escorted to his room and told to Ð²Ð‚Ñšgo on stageÐ²Ð‚Ñœ. Not knowing what that meant, he went about his business, and two weeks later, he was disposed of. It is the responsibility of management to properly define tasks and expectations. I think that implementing a 360 degree assessment feedback plan will not only be beneficial to the GOs as a medium to voice their opinions and concerns, but it will also motivate their chiefs to respond to those needs as apart of their performance appraisal rating.
This brings me into my next topic of training. It almost seems as if, as soon as American GOs are being promoted to chief of service, they are being shipped off to manage European GOs without any ease of transition.