There will be one case study assigned during this semester. Read the case (can be found under Content
and answer all of the questions. Write
about the case.
CASE STUDY I:
CULTURAL DIVERSITY AT NIKKO HOTELS INTERNATIONAL
Nikko Hotels international is a subsidiary of the Japan Airlines (JAL)
Development Company, Ltd. It was created as JAL’s diversification and globalization
strategy to strengthen the company’s marketing and financial position. Known for its
aggressive global marketing and application of new technology in hotel operations,
the company is determined to establish a worldwide network of hotels comparable in
number to Hilton, Sheraton, and inter-Continental. It has forty-four properties in its
worldwide portfolio by 1997. Relating to the theme of this chapter, this case study
focuses on the cultural diversity of Nikko’s management team and the cultural
adjustment made by Nikko’s executives when they first entered the U.S lodging
market.
The decision to enter the U.S hotel market was intended to establish Nikko’s
identity and reputation in the large and competitive U.S travel market. But, Nikko’s
entry into the market presented some cultural challenges to the company, particularly
the transfer of a corporate culture based on Japanese cultural values to a multicultural
workplace in the United States.
The first hotel Nikko hotels International acquired in the United States was the
Essex House in New York City. The famous Essex House was to be a springboard for
Nikko’s future growth. Nikko’s executives believed that if they could do well with the
Essex house in the competitive New York market, they would do well in other
markets in the United States. Nikko’s strategy and management operation would be
tested in this major world commercial city and adjusted to the competitive and
changing requirements of the U.S. lodging market.
The Essex House was originally managed by Marriott Corporation. When Nikko
took over the ownership and management, all on-site Marriott managers and staff
were invited to stay with the new company. In response to Nikko’s invitation, six
managers decided to stay. These six director of rooms, an Austrian director of food
and beverage, an Irish director of human resources, a Lebanese chief engineer, and a
north American director of marketing. A Japanese controller was later added to this
executive management team, which represented a highly diversified cultural group of
managers.
Because of the diverse group, the corporate office of hotel Nikko (USA) Inc.
decided to develop an executive team building program. With the assistance of several
professors at Cornell University, Nikko Executive Team Development Program was
formulated for executive leadership exercises and stimulations. This program included
an overview of the hotel development trends in the United States and a perspective on
Japanese management. The end result of this four-day retreat was to create a Nikko
Mission Statement.
The executive retreat was held in May 1985 in Ithaca, a city in upstate New
York. The participants were divided into small working groups to discuss group
leadership issues and the hotel’s mission statement. The president of the company,
Yasuyuki Miura, did not participate in the group work, which was natural for a
Japanese company president. After the group sessions, the teams reconvened to
present their discussion results. At the time, Miura came to the presentations and
commented on them in a manner that the non-Japanese executives found annoying.
The managers began to complain: “If you have already formed your own mission
statement, don’t waste our time and energy, just give it to us! We don’t like being
tested like Students.” “On the other hand, if you don’t have on yet and would like to
contribute, why did you join us from the start?”
Miura was shocked to hear these sharp criticisms from his subordinates. It took a
few minutes before he could control himself. He then told the mangers: “Okay, you
guys go to the student pub and keep complaining and accusing me over as much as
you can drink. It’s on me. My poor Japanese executives will accompany you and
listen to you patiently. Who knows, they may even agree with you. In the meantime, I
will go to my room and do my homework like a good student. First thing tomorrow, I
will tell you about my career, experiences, management philosophy, and aspirations.
If that is acceptable to you, let’s begin again.”
The managers drank happily that night, while Miura worked very hard. The next
day, Miura began his speech to the executive team in a frank and all humble manner.
He described the global strategic development by JAL, and explained why Nikko had
come to the United States. Then he shared with the executive team his twenty-seven-
year experience with JAL, and concluded with an appeal for cooperation. After this
speech, he joined the executive team as a working participant to develop the Nikko
Mission Statement.
This executive retreat was a great experience for all the executive and managers
since they all worked hard to find common ground. After heated discussions and
sincere attempts to reach a consensus, the team formulated the Nikko Hotels Mission
Statement in the most participatory manner. The statement reads:
At Nikko Hotels, our guests always find:
dedicated employees,
attentive service,
quality facilities,
together in harmony.
Case Study Source
Yasuyuki Miura, “Success Strategy: Nikko Hotels International Smiles a hearty
Smile,” In
World-Class Service
, eds. Germaine W. Shames and W. Gerald Glover )
Yarmouth, ME: Intercultural Press,1989), pp. 35-43.
Case Study Questions
1.
Why did Japan Airlines Development Company decide to develop a hotel
company in the mid-1980s?
2.
Why did Nikko Hotels International choose the Essex House in New York
City as its first property in the United States?
3.
Can you describe the cultural diversity of the management team at the Essex
House?
4.
What was the purpose of the executive retreat?
5.
When did Miura join the managers at the executive retreat?
6.
How did he annoy the non-Japanese managers during their presentations?
7.
Why was Miura shocked to hear complaints from his managers? What did he
do after he regained control of himself?
8.
What happened the next day?
9.
What is the mission statement for Nikko Hotels?
10.
Can you explain what cultural blunder Miura committed during the executive
retreat and how he ridged the cultural gap and brought the team togeth