Adaptation of a Business Model Overseas

Harmon Hotels

The main problem that Harmon Hotels is facing is that of cultural differences. As a corollary of this problem, the organization has no experience as a global company: all its hotels are in the United States and the expansion to France is the first part of a larger expansion project to Europe. As a consequence, the company will face communication and integration problems as it moves to the European market.

There are several additional issues to this core problem, which need to be listed before recommendations are made. First, the European market in general, and the French one in particular, is a pretentious, difficult market. Customers have particular expectations and it will not be enough to replicate the Harmon Hotels business model that works in the United States to the European market. A certain level of customization will be required.

Second, the managers that are moving to France to lead the process seem inadequate for the job. It is true that they would like to work abroad, which shows the positive will to be part of a global organization. However, they do not speak French fluently, which is imperious for the French market, particularly given the job specifications, including the fact that they will need to lead the recruitment and selection process for staff in the new French hotels. Not speaking French will seriously limit their capacity to lead and manage effectively, so the first recommendation would be an intensive French course for the managers.

Another important issue to be discussed is the compensation package. The compensation package for managers has been customized for the U.S. market. It is worth an analysis whether this package is fit for the European market. The case study shows that the French managers receive a large pay, but have no possibility to gain bonuses. Is this because the French market is thus created that it does not offer opportunities for bonuses or simply French managers refuse this form of compensation? Upon correctly answering this questions, it is thus essential to either raise the compensation for future Hotel Harmons managers working in France or to create the appropriate bonus package.

The recruiting and selection process seems also to be exclusively focused on recruiting American managers. The recommendation is, however, that French managers be considered as well. This paper started with emphasizing the core problem at Harmon Hotels' expansion to France: the lack of expertise on the French market and on the European market. Recruiting or considering French managers as well will partially solve this problem, and would allow the company more time to train U.S. managers. French managers would need to be bilingual and some of the existing managers at the hotels being purchased in France can actually be retained as part of the expansion process. This will make the company more flexible in its expansion on the European market, with a workforce that is more diverse and more adapted to working in a multicultural environment.