Boardroom report

Dear student,

Kindly take note that your assignment requirement is

slightly different from these sample assignments. The

content is not necessary accurate for you to use.

Please adhere to the assignment requirement,

guidelines and brief that stated in the Module Study

Guide – Brand Reputation Management. By looking at

this sample assignment, you will be able to

understand the structure and format for a boardroom

report.

Your tutor,

Sherine Kwok

16 March 2020

EXCUTIVE SUMMARY

This boardroom report is intended to analyse the potential threats of the

consequences of the food poisoning that occurred last December 2018 at the

Mandarin orchard in Singapore for the hospitality organisation OUE Hospitality

Trust. Meritus Hotels & Resorts being the hospitality branch of the group might

be the first “victim” of the consequences.

Possible outcomes of the incident are a brand reputation damage and as a result,

not only the performance of the hotel might be affected but also all the

stakeholders of the hospitality group.

The report firstly identifies the key drivers that has been the actor in the event of

the food contamination, then analyses the measures that were taken by the hotel

and finally gives some recommendation for a better risk management as to avoid

any incidents in the future.

Nonetheless, this research encountered some limitation as such that is a recent

event. The results of the brand reputation consequences would have been

analysed in greater depth if the event was older.

CONTENTS

INTRODUCTION ................................................................................................................................. 4

Meritus Hotels & Resorts and its performance .................................................................................. 4

Report aim and focus ............................................................................................................................ 5

I – REPUTATION DRIVERS (REPTRAK MODEL) THAT MIGHT UNDERPERFORM AS A

RESULT OF THE FOOD POISONING ............................................................................................ 5

A. Product and services ..................................................................................................................... 5

B. Governance .................................................................................................................................... 7

II - IMPACT ON STAKEHOLDERS ................................................................................................. 8

A. Customers ...................................................................................................................................... 8

B. Workforce ...................................................................................................................................... 9

C. Investors ......................................................................................................................................... 9

D. Tenants ......................................................................................................................................... 10

E. Government ................................................................................................................................. 10

F. Community and Environment ................................................................................................... 11

III - CURRENT MANAGEMENT PRACTICE AND ALTERNATE PERSPECTIVES ........... 12

A. Analysis of current reputation management practices ............................................................ 12

B. Identifying the stage in the risk management style .................................................................. 13

IV - RECOMMENDATION FOR PROSPECTIVE MANAGEMENT STYLE .......................... 14

A. Food safety Management System .............................................................................................. 14

B. Proactive responses ..................................................................................................................... 15

C. Reactive responses ...................................................................................................................... 16

D. Food safety as part of Meritus’ culture ..................................................................................... 17

CONCLUSION ................................................................................................................................... 17

REFERENCES .................................................................................................................................... 18

APPENDICES ..................................................................................................................................... 24

INTRODUCTION

Meritus Hotels & Resorts and its performance

Mandarin Orchard Singapore is managed by Meritus Hotels & Resorts which

represents the hospitality branch of Singapore Exchange-listed Overseas Union

Enterprise Limited (OUE) one of Asia's leading property players with a portfolio

of top resources (PR Newswire Europe Limited, 2011). Established in 1973, the

brand prides itself to offer luxurious properties combining heritage and Asian

hospitality in important and extremely pleasant locations in Singapore, China,

Malaysia and soon, worldwide (Travel & Leisure Close – Up, 2013). Mandarin

Orchard Singapore is the flagship of the brand that also includes other hotels

(Appendix 1) (World Market Intelligence, 2014). With 1077 luxurious rooms and

suites and fine dining and events venues, Meritus Hotel and resorts rose as the

“Most Popular Heritage Brand” and the “Best City Hotel Singapore” respectively

in 2011 and 2017 at the Singapore Prestige Brand Award. The qualification

comes following an open vote to decide the most favoured decision among the

year's Heritage Brand Award beneficiaries (Travel & Leisure Close – Up, 2013;

Travel & Leisure Close – Up, 2017). In the Financial Year 2013, the hotel

division of OUE generated 52.6% of the company’s total revenues (World Market

Intelligence, 2014). All Meritus Hotels are designed to deliver a superior Asian

service with “grace warmth and care” (OUE Annual report, 2015). The hotel is

clearly designed for “bleisure” travellers with across 2700 sqm of MICE space

that can house up to 1200 people, and the dynamic location offering shopping and

eating venues in the heart of Singapore (Lichy and McLeay, 2017; George, 2018).

Report aim and focus

On December 2018, a food poisoning outbreak occurred in the main Ballroom of

the hotel affecting directly at least 175 people, amongst them 9 had been

hospitalized (Channel News Asia, 2018).

Academics pointed out that the source of a business reputation of the consumer

evaluation which are transmitted by the brand service delivery (Fouroudi et al.,

2014; Van Riel, 1995). Therefore, based on the literature, brand signature has an

important role on the customers’ behaviour by creating association and belief

towards its reputation.

The report is based on four areas of analyses all referring to the incident that

occurred on December 2018 at the Mandarin Orchard Singapore: reputation

drivers that underperform, the impact on the stakeholders, the current

management practices and recommendation for future risk management. As such

the report will be structured under these headings.

I – REPUTATION DRIVERS (REPTRAK MODEL) THAT

MIGHT UNDERPERFORM AS A RESULT OF THE FOOD

POISONING

A. Product and services

As per the Reptrak Model (Appendix 2), the main key driver that is responsible

for the food contamination incident is the Product/Services. This downfall in this

section resulted in a quality, value and performance depreciation (Fombrun et al.,

2015). The graph below shows the decrease of the quality review on booking

website such as TripAdvisor and Booking.com from December 2018 and

February 2019. The underperformance of the service and product offered by the

hotel impacted the reviews and this might lead to less purchase intentions

(Fombrun and van Riel, 2004)

Griffith (2000) explains in his study that the expression of food safety in an

organization is demonstrated by how things “should be done” and what

employees “actually do”. Therefore, it is the responsibility of the food handler

employees that are supposed to have the right knowledge and skills with the

culture standards of the hotel set by the managers of the venue (Figure 1).

The product and service that have been offered depended by numerous steps,

including the facilities available or not (e.g. anti-bacterial hand wash, proper

sanitary products just as the time accessible to execute sanitation rehearses. Inside

the sustenance administration setting, this can be a more noteworthy issue, where

staff may need to supply nourishment to arrange as opposed to from stock.

Researches including food contamination examinations have recommended that

poor food handling practices may be responsible for 97% of food contamination

0

2

4

6

8

10

12

14

Dec-18 Jan-19 Feb-19

TripAdvisor Reviews

Excellent Average Poor

0

10

20

30

40

50

60

70

Dec-18 Jan-19 Feb-19

Booking.com Reviews

Excellent Good Average Poor

at home and in the workplace (Howes et al., 1996). Observational studies using

techniques, such as notational analysis (Clayton and Griffith, 2004), confirm that

food handlers frequently do not use/implement appropriate known food safety

practices. The duties of preparing in improving sanitation handling is definitely

not a straightforward direct one and how, why and what preparing is conveyed to

ideally improve sanitation should be deliberately studied by the hotel (Worsfold

et al., 2004).

B. Governance

The Hotel governance should be the structure of the hotels’ operation and should

distribute responsibilities and resources to all the stakeholders that are related.

(Davies, 2005). It is identified as the key component of the reputation

management of a company (Casado et al., 2014). However, in this case the

governance duty to supervise the day to day operations. Which imply that the

management team on the concerned department were not properly chosen

(Reputation Institute, 2018). According to Guillet and Matilla (2010), a good

performance is directly related to a good corporate governance. The mechanism

of the hotel governance is supposed to reduce the “inefficiencies that arise from

Figure 1: Food safety is a multidisciplinary issue

moral hazard and adverse selection” (Jarboui, et al., 2014). However, in this case

the food contamination could have been avoid if the governance measures were

more efficient. The goal of the governance of the hotel is to manage the operations

and take corrective measures in order to achieve organizational goals. Another,

goal for the governance is to solve the conflicts of interest between all the

managers and shareholders as to improve the performance and underline the

importance of collective work (Guetat et al., 2015)

II - IMPACT ON STAKEHOLDERS

A. Customers

In today’s competitive hospitality industry, it is crucial to deliver superior value

to customers as to acquire significant competitive advantage (Hansen, Samuelsen

and Silseth, 2008). Professionalism is key in hotel management. The guests must

be given the best customer service conceivable by well-trained manager and

knowledgeable and skilled staffs due to all conducts that are taking place within

the hotel facilities (Hartmann, 2011). Outcomes of food contamination are

tremendous. According to MS News (2018), there were at least 7 mass food-

related incidents in Singapore including the Mandarin Orchard incident, affecting

around 1100 people in the country.

As consequences resulted to this crisis, the hotel has resulted with an economic

loss due to the medical cost and the closing of the main ballroom occurred a loss

of productivity and business (Buzby et al.; Todd). Brand perception is strongly

linked to brand equity, and guests that had been affected by the poisoning as well

as their surrounding have a negative perception towards to Mandarin Orchard

(Chen, 2010). Indeed, a solitary occurrence of food contamination can have such

a significant impact as to decimate a brand’s image and damage a company (Sago,

2014; Siomkos & Malliaris, 1992). Like epidemics, consumer criticisms tend to

spread really fast and crisis management is crucial in that case as more than 50%

of the hotel customers are from Asia (Appendix 3) (Liu-Latres, Pennington-Gray,

Klemmer, 2015). According to Benady (2015): “Capability hits are much more

significant because they are long term and suggest you can't do your core

business”

B. Workforce

Employees represent the hotel and can be considered as ambassadors of the

Meritus brand (Hemsley, 1998). The connection between the hotel’s notoriety

and its workforce has a strong impact on employees’ influence on stakeholders’

judgment the organisation (Harris and de Chernatoy, 2001; Balmer and

Wilkinson, 1991. In addition to this, the workforce is also concerned by the image

and public criticism of their employer (Riordan, 1997). Therefore, the crisis that

occurred in December 2018 affected the internal organisation of the hotel with 51

waiting staff that had been contaminated by the food poisoning. The impact of

sickness absence has a significant repercussion as it includes productivity decline,

obligation to pay compensation or salary for the absent workers, find-train-pay

temporary staff, customer satisfaction’s devaluation or even a lack of motivation

and morale from the other employees (Caine, 2015)

C. Investors

The food poisoning crisis compromises investors’ opinion through decreasing the

reliability of the hotel company and whether to invest in the firm (Petersen and

Vredenburg 2009). The reputation of Meitus Hotels and Resorts reputation plays

an important role in investor’s decision (Arikan et al., 2016). Indeed, the negative

criticism of the public invokes a poor reputation and generate psychological

discrepancy (Festinger, 1957). Investors will also take into account past

experience of the hotel, the ROI percentage and risk evaluation (Virlics, 2013).

Therefore, we can admit that the hotel reputation is associated with investors’

loyalty and satisfaction (Arikan et al., 2016). The poor reputation that the crisis

could lead the company to, could deliver the idea that the hotel is a too risky

investment (Srivastava et al. 1997). Investor would rather invest in companies

with a strong reputation and that are long-established (Betul and Lambkin, 2017).

D. Tenants

The food poisoning issue can lead to a spill-over effect among the competitors

(Eo et al., 2014). Indeed, the food harm crisis is a favourable circumstance for

Meritus competitors to drain the fragile company (Siomkos et al. 2010). Druing

this period, other hotels or restaurants will not hesitate to capture more market

shares and use aggressive advertising toward Meritus in order to change

customers’ perception (van Heerde et al., 2007; Dawar, 1998). The crisis may

lead the brand to a reputational threat (Coombes, 2004), but also will incurred

fines and penalties by the government, a loss of employees and managers that

will increase hiring and training costs (Gatzert, Schmit and Kolb, 2016)

E. Government

Ministry of Health (MOH), National Environment Agency (NEA) and Agri-Food

& Veterinary Authority of Singapore (AVA) were all concerned by the December

2018 crisis (Channel News Asia, 2018). Their role of promoting Health and safety

in the country has been spoiled by the crisis that occurred within the Mandarin

Orchard Hotel causing at least 400 people ill. Sanitation is significant for the

general population's general wellbeing and day by day life, monetary

improvement, and social steadiness, and the government’s and nation's picture

(Rohr et al., 2005).

This occurrence features a solid requirement for government administrative

organizations to handle the difficulties in sanitation. It is reasonable that the

private part's ideal objective is to expand benefits with respect to costs; sanitation

security for shoppers is reliant on solid government guidelines (Belaya et al.,

2013). Hence, it is sensible to expect a more responsive than deterrent

methodology from controllers on real sanitation outrages as opposed to tending

to the basic issues (Hussain and Dawson, 2013).

F. Community and Environment

The 400 people that had been infected by the Norovirus that has caused the

infections. (Channel News Asia, 2018). The infection is spread transcendently

through ingestion of infected aliment just as individual to-individual by the

faecal-oral course, airborne transmission, and contact with infected surfaces (Yu

et al., 2010). Food handlers are often related as the source of food infection and

this may play a role in the spread of the virus (Iversen et al., 1987). The National

Environment Agency (NEA) in Singapore is responsible to conduct an

investigation as to penalize and discipline the offenders (Huiwen and Fumiko-

Tay, 2018) The CSR environment related activities influence the consumers;

positive attitude toward the hotel’s image and can result in higher profitability

(Kellert et al., 2000; Khojastehpour and Johns, 2014).

III - CURRENT MANAGEMENT PRACTICE AND

ALTERNATE PERSPECTIVES

A. Analysis of current reputation management practices

Right after the incident became public, the hotel manager had published an

acknowledged apology (Channel News Asia, 2018). This is crucial as the hotel

had recognized its responsibility for the food contamination and declare their

regret and mistake (Hargis and Watt, 2010). By admitting their responsibility, the

hotel also underlines the fact that the contaminated food was from an external

source of the hotel as the dinner was prepared by a separate caterer. By doing so

the hotel did well to explain the reason behind the incident (Smith, 2017). A

cooperation with local authorities was established as to investigate and analyse

the crisis (Smith, 2017) and corrective actions were undertaken by the hotel by

closing down the ballroom and food premises to carry out a cleaning and

sanitation procedure. The corrective action could save the image of the hotel by

repairing the damage and prevent it to happen again (Smith, 2017).

All upcoming events were adjusted in order to ensure the security and cleanliness

of the premises and satisfy the customer. This amendment completed by the

organization intend to restore the situation into its original state by compensating

the victims (Smith, 2017). By announcing the enhancement program of the food

safety and sanitation operations, the hotel demonstrates its will to change the heart

and the policies of the business (Smith, 2017).

The hotel made sure their food and hygiene office realized the Singapore

Workforce Skills Qualifications (WSQ) conduct for Food and Beverage hygiene

Audit prior starting their operations (Channel News Asia, 2018). Anticipating the

perception management as above is a proof of safety advancement and bring the

company toward a positive image to the stakeholders (Elsbach, 2013).

A system to ensure staff are properly trained with good food hygiene standards

was set up and employees are no longer able to work when ill. These measures

are promoting the high-commitment of the Human Resources practices of the

company as to underline the positive treatment of the employees as to recover the

public’s esteem (Chen et al., 2016).

B. Identifying the stage in the risk management style

Recognising the risks for an organisation is necessary when talking about good

risk management. The Ministry of Manpower (Singapore) set up a guide for the

Workplace Safety and Health regulations. It is structured with steps that has to be

undertaken one by one in order to be able to analyse the points to allow constant

enhancement in decision making (Worksafe, 2018). The risk management

includes risks’ assessment combined with the work duties and involves control,

monitoring and communication with all stakeholders (Ministry of Manpower,

2018).

The main reason for the ineffective risk management in this situation is that risk

documentation is taken as an end rather than an actual tool to manage risks. As

stated previously, a lack of strong Board and management control to take

corrective actions has cause the incident. Also, a confusion in the roles and

responsibilities when controlling the risks might have happened. The graph below

illustrates all the drivers that have to be taken into account for an effective Risk

Management and follow five steps as below (RSM, 2018)

The risk management conduct should be reviewed at least once every 3 years and the record of each

assessment must be maintained and includes assessment forms of the findings, risk control measures

and safe work procedures (Ministry of Manpower, 2018).

IV - RECOMMENDATION FOR PROSPECTIVE

MANAGEMENT STYLE

A. Food safety Management System

In 1992, Bryan (1992) proposed the HACCP approach which is now the standard

endorsed by The World Health Organisation (WHO) that complies with the

regulations of ISO 22000. The framework is managed, at the beginning of the

process, by distinguishing those perilous activities in the planning and serving of

aliment items whilst which infection can happen or sustain and, besides, by opting

for viable Critical Control Point (CCP) where the recognized risk can be

managed. As soon as the CCP is recognized, characteristics which would

demonstrate whether an activity is levelled out at a given CCP are characterized

and checked. The outcome preferred standpoint is that the Public Health agent,

just as the operator, can control at a couple of pertinent focuses and successfully

avert foodborne infections as opposed to experiencing a wieldy and regularly

unfeasibly not insignificant rundown of assessment subtleties of cook houses and

aliments’ handlers at incessant interims. The best techniques for recognizing

dangerous activities and building up CCP for the equivalent is by exploring crisis

of food contamination, in this manner distinguishing the purposes behind

contamination of a given aliment (Food Standards Agency, 2019).

B. Proactive responses

The hidden desire of each organization or individual applying proactive conduct

is to adjust the current conditions. Individuals who are making a special effort to

change something, challenge business as usual rather than inactively adjusting to

present conditions (Crant, 2000). An organization that in its emergency reaction

technique conveys that they will be seeking after an adjustment later on

subsequently acts proactively rather than an organization who is stating that they

are not going to experience any endeavours to maintain the circumstance from

happening once more. (Appendix 4) (Kolking, 2014).

In situation of doubt a proactive hotel would seed for feedback information

(Ashford and Cummings, 1985). While experiencing an emergency, the hotel

surely wind up in a circumstance of vulnerability which is the reason a proactive

methodology of emergency reaction ought to incorporate chasing criticism from

individuals who were concerned by the food contamination, which includes the

victims as well as different hotel’s partners for example, clients, providers,

financial specialists and people speaking to the people in question. Organizations

can pursue two different ways of social event criticism data: through inquisitive

and through observing. Asking criticism is finished by requesting it

straightforwardly while checking suggests watching and assessing how the

condition reacts to the emergency and to the reaction system of the organization.

One of the main elements of the organizational initiatives is the “long-term”

vision attitude (frees, et al., 1996), which fundamental for proactive reactions to

issues. Organization that are able to solve issue on a long-term basis are bound to

indicate proactive conduct (Parker et al., 2006)

C. Reactive responses

Opposite to proactivity, reactive responses the retraction of speculation plans, and

the decrease of the executive’s levels. On the off chance that these procedures

lead to productivity enhancements or the advancement of progressively capable

staff to basic leadership positions, the organization will profit; that is, the

organization will increment its upper hand and produce new upper hands or

reinforce existing favourable circumstances (Laitinen, 2000). Also, these

methodologies can generate dynamic outcomes. In this sense, leaving normal

schedule can likewise prompt unique abilities since they lower the waste of assets

that are unbeneficial for the hotel organization (Eisenhardt and Martin, 2000).

Reactive strategies could be diversionary (Smith, 2017). On a first hand, the hotel

could offer complimentary services that would bring value to the concerned

guests as to rebuild their relationship with the community (Ogbeide et al., 2015).

On another hand, Meritus Hotel & Resorts could connect with other partner with

a less negative image as this is part of the publicity branding and can influence

the opinion of the public (Smith, 2017). Finally, the hotel could deny the incident

in the future as to highlight the hotel’s good practices (Elsbach, 2013)

D. Food safety as part of Meritus’ culture

The general result of applying a Food Safety Management System for Meritus

Hotels & Resorts for example, ISO 22000, is that it gives a simple method to

make great cleanliness and sanitation part of your organization culture,

guaranteeing it is considered in all phases of the business. This decreases the

danger of food contamination crisis, constraining the odds that sanitation could

imperil the image's notoriety of the hotel. Besides, it provides extra proof that

sanitation is paid attention to, improving the notoriety. This ensures the image

against any dishonest complaints with regards to food contamination, since there

is evidence that sanitation is considered at all stages, regardless of whether in the

kitchen or front of house.

CONCLUSION

This report has analysed the key drivers that are underperforming as in the result

of the incident of food poisoning that occurred in December 2018. The crisis is

not without repercussion on the different stakeholders of the OUE hospitality

group. The analysis of the event recognized that the food contamination that

stated at Mandarin Orchard main Ballroom could critically damage the brand

equity as a result and with decrease the perception of quality from all the

stakeholders and decelerate the hotel performance. This could result in a lack of

trust in the CSR activities from the stakeholder (Coombs, 2015) and a reduction

in sales as analysed above. The crisis management of the hotel at the time was

valuable as the online reputation of the hotel has not dramatically change. A

number of recommendations has been provided as well as what could result from

applying them in the future. Greater risk management should be taking into

account as to improve health and safety and decision making. However, the

limitation of the study approves that due to the recent issue (6 months), we were

unable to analyse the result of that event on a long-term basis. Also, the

doubtfulness of the online review website is not helping to give a proper

reputation analysis (Rubio-Aparicio et al., 2018) and Carrol’s study (2019)

identified that a single event cannot be defined as a crisis. Meritus Hotels and

Resorts, should not rest on its laurels and have to be more careful while taking

decision that could injured its brand’s image.

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APPENDICES

Appendix 1: Meritus Hotels & Resorts

Mandarin Orchard Singapore Marina Mandarin Singapore

Meritus Pelangi Beach Resort & Spa Langkawi Shanghai JC Mandarin

Meritus Mandarin Haikou Meritus Shantou China

Appendix 2: The RepTrak Model explained

Appendix 3: Main customers are from Asia

Appendix 4: Difference between Proactive and reactive component of a crisis response

methodology

Southeast Asia 47%

North Asia 26%

Europe 7%

South Asia 7%

North America 5%

Oceania 5%

Others 3%