Harmon Hotels

Harmon Hotels must make a choice between using home country managers (American) or local country managers (French) for their new acquisition in France. Half of the acquired company will be sold for asset value, the other half will have the properties converted to the Harmon brand. There are a number of things that Harmon must take into consideration when making this decision. The first thing is that there is a significant cultural gulf between the United States and France.

The French workers will have zero experience working for an American company, and therefore are likely to find the American business culture and the American way of doing things quite challenging. They will expect to retain their jobs if they hotel is going to be kept -- even during remodeling they will expect to be paid.

It is possible that all of the old staff will be let go, because the company was performing poorly to become an acquisition target, but new employees are going to be predominantly French as well. Language is actually a very important consideration here. There are two things to bear in mind. The first is that the American managers do not speak French, which will hinder their ability to communicate considerably.

With an American brand, however, the hotel staff will be expected to be halfway functional in English, because that is what the American customers will expect. So at least the staff with customer service positions will be able to speak English with an American manager, even if communication will be smoother in French. Language, therefore, calls for a local manager who is fluent in English, but can communicate with non-frontline staff in French out of necessity, and other staff for greater clarity.

The local manager will also be able to navigate French culture better than an American manager. Operationally, however, an American manager -- an internal candidate -- is best suited to set up an overseas subsidiary, knowing how Harmon operates its business and knowing the organizational culture of Harmon. The American manager will be seeking to instill the Harmon culture and operating systems on the French hotel and its employees. A local manager will not understand these things, even with a short apprenticeship in the U.S.

There is a strong need, operationally, to have an American manager to maintain brand consistency. Thus, there are two competing interests, each making a strong case for an American manager or a French one. Harmon does not have an internal candidate that is from France, which would be the best solution. In this case, the best solution is to have an American manager oversee the hotel restructuring and the rebranding effort, and then train a French manager to handle the day-to-day operations.

It might take a year or so for the American manager to feel comfortable with the French manager. Unfortunately, this implies an American manager for each hotel in France. It is possible that only one or two Americans can be sent, and they can oversee multiple properties, but it is better to have American managers working with and training the French managers for the first year at each site.

In the long-run, it will be European managers working in the European Harmon Hotels, but initially there is nobody qualified, so Harmon needs to build its training program and talent base, something that will require bringing over a.