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Purpose of Report
The purpose of this report is to analyze and conduct an auditing accounting of Marriot Australia’s corporate reputation and identity, mainly from stakeholder’s perspective in order to identify if there is an alignment between the Marriott's words (mission and vision statement) and its activities at large. Data on corporate identity and reputation will be gathered from various credible sources and those published by the Marriot itself, in order to arrive at a credible conclusion.
Scope of Report
This report aims to examine the alignment between what the company say they do and what they actually do from stakeholder’s perspective. This will help come to a conclusion as to whether the company is reputable or not.
Marriott Hotels and Resorts, a 73.7% rated worldwide international company, has presently more than 6, 500 properties in 30 leading brands across 127 countries and territories (Marriott Annual Report, 2017). Marriott was founded, as small A&W root beer stand by John Willard Marriott in 1927. Not until 1957, Marriott shifted its business and rapidly grew to 6, 000 hotels over 122 countries worldwide (The Statistics Portal, 2018). However, Australian Marriott has 6 hotels located in Melbourne, Gold Coast, Sydney, Brisbane, Surfers Paradise and North Ryde (Marriott Hotel Australia Webpage) with 2, 574 employees (Great Place to work, 2018).
Marriott international is seen a one of the largest hospitality brand, which operates in various parts of the world and controls the activities of its other brands such as Sheraton, AC hotels, Four points, Starwood hotels, Protea Hotels, Delta Hotels, Renaissance hotels, Bvlgari, and a lot more (Marriot, 2018a). Willard J. Marriot is the C.E.O of Marriot International and he plays a key role in the decision making of the company alongside other actors. Figure 1 shows the organizational structure of Marriot International.
Marriot International Organizational Structure
Factors influencing the Organization and its reputation
Australian Marriott Hotels has the following factors impacting its operations:
Reversed legislations and regulations: National Minimum Wage Order, e.g. National Minimum Wage ($719.20 per week) and National Employment Standards, like maximum weekly hours, impact Marriott hotels’ operations (Fair work commission, 2018).
Operational costs, e.g. Penalty Rates and Taxes levied on Australian Marriott Hotels and Resort property, etc. impact the business. Actually, about 42.7% sources of revenue for Australia are taxes from corporations (Australian Bureau of Statistics, 2016-2017). Again, Penalty Rates, credit and EFTPOS are rated highest in hospitality industry (IMPOS, 2017). Increased competitors, like IHG-Intercontinental Hotels Group, Four Seasons Hotels Limited, Accor Hotels, etc. adversely affect Marriott Hotels’ revenues and operations (Marketing91, 2018).
Frequent travels of diverse guests has affected Marriott’s culture, increased labour force and operational costs. Further, to gain Australian competitive advantage, Marriott has incurred huge resources in CSR, to ensure conducive environment for key guests as stakeholders is upheld (Sydney Morning Herald, 2016).
Marriott faces increased technological advancement challenges because of fast growing business competitors. However, Technology ensures effective service delivery to clients and company’s smooth operations but attracts huge technological costs (Skift, 2017)
Stakeholders are “those group without whose support the organisation will cease to exist”. It can be also defined as “any group or individual who can affect or is affected by the achievement of the organisations objectives” (Ackermann & Eden, 2011). An organisation has multiple stakeholders like investors, suppliers, community, government, media, consumers, employees (Internal). An organisation can identify key stakeholders by the assessing it on four criteria: legality, efficacy, ethicality, temporality ” (Ackermann & Eden, 2011).. An organisation maintains relations with the stakeholders according the role and importance of the group (stakeholder) regarding corporate reputation.
It is not only important to manage the key stakeholders but also identify multiple interdependent interactions that occur between stakeholders. An organisation is recommended to have stakeholder management strategies which overall focuses on mainly three areas: Identifying key stakeholders: Every organisation has different set of key stakeholders. It is important to identify them and understand their wants from the organisation and lastly planning out the ways to achieve it. Key stakeholder’s actions, objective and motivation can affect the organisation’s corporate identity because of their positive identification (positive stakeholder identification) or disidentification (negative stakeholder identification). “Positive identification is where stakeholders - informed by their attributed identities – accepts and internalise an organisation’s corporate identity traits” (Balmer, 2017). Whereas disidentification can identify as negative stakeholder to a corporate identity of the organisation (Balmer, 2017). For example: NGO’s can identify as a negative stakeholder for a tobacco manufacturing companies. It is crucial to identify positive internal/external identification and disidentification of internal/external stakeholders as behaviours from both groups can affect corporate identity of the organisation.
Stakeholders of Marriott
Marriott in Australia has a range of stakeholder groups which includes including shareholders, hotel owners and franchisees, suppliers, associates, customers, community organizations and industry associations, as well as governmental and nongovernmental entities. Stakeholders of Marriott are diverse group which operates at global, local and regional level therefore the stakeholders are not only on a local and regional level but also global level.
The key stakeholders for Marriot can be divided into two groups that is internal stakeholder and external stakeholders. Internal stakeholders include owners and franchises, associates, employees, shareholders, board of directors. Owners and franchise, shareholders and board of directors are important stakeholders as they are responsible for the important decision made in regard to the growth of the organisation. Employees and associates are responsible to implement policies in day to day activities.
External stakeholders include customers, non-government organisation, government. External stakeholders are important as they are the one affected by the performance of the organisation. They are the one to experience the service of Marriott and can prove to be a crucial aspect in building brand reputation for Marriott.
Corporate reputation can be defined as the sum of all the views and beliefs held about the company based on its history and its future prospects, in comparison to close competitors. Corporate reputation is a significant factor when considering the value of a company as scholars and managers believe that a good reputation is an organization’s most valuable intangible resource, for the following reasons: it reduces stakeholders’ uncertainty about the organization’s future performance; it strengthens competitive advantage; and it contributes to the target audience’s trust and to value creation, maximizing the ability to offer products and services with high added value (Lester, 2009).
Marriott Australia has a very positive reputation, it has been internationally acclaimed as one of the best hotels to work for and stay in, ranking number one for its industry segment in eight of FORTUNE’s nine key attributes of reputation: innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment value and global competitiveness (Marriott News Centre, 2017). In 2016 for the eighth consecutive time, Marriott was recognized by the Ethisphere Institute as a 2016 World’s Most Ethical Company (Marriott News Centre, 2017).
The four broad indicators of corporate reputation can be used to provide evidence to support the positive reputation of Marriott Australia. The first one is market share. Marriott Australia has a significant 27.92% of the hotel and tourism sector (CSI market, 2018). The second indicator is return on investments which is shown by the earnings per share for the shareholders. The 2017 annual report stated basic earnings per share at $3.22, an increase from 2.68 in 2016. The third indicator of corporate reputation is shareholder value which is indicated by the price of shares in the company. Stock in Marriott rose by 64% last year, and share prices are currently at $123.31 per share. In comparison with its competitors, Marriott's market strategy price is well within reason. The final indicator is media commentary. Marriott is frequently in the media as a result of its high rankings, or receiving awards and recognition for their quality service, and their work to give back to the community.
Company behaviour and activities
Marriott has one huge advantage that leads to a positive corporate reputation which includes both internal and external factors. Feldman et al (2013) points out the importance of the “organizational culture, history and values” because these factors result to how a company’s reputation is perceived. One of the core values of Marriott that results to the internal stakeholders to contribute towards a positive corporate reputation is “Acting with integrity and serving our World” (Marriot, 2018). The core value is one of the reasons that lead the company strategy when ensuring that they maintain a corporate reputation that is favourable to the company’s success. Being able to have employees aware of the importance of the hotels values is important because it will “actively shape other stakeholder’s perceptions of the firm” and in the context of Marriott which is a service industry that is one way to strengthen the company’s reputation (Helm, 2011).
Another behaviour that Marriott has to ensure continuous success is consistency in both external and internal stakeholders. The Marriott brands in Australia all have the similar standards and ensure that they use the same products and services to ensure that they maintain familiarity to their guests. Elving & Kartal (2012) outlines the importance of consistency in behaviour stating that “results and behaviour in the past” play a very crucial role in maintaining a reputation. One method that is used by Marriott to ensure that they are consistent with their external stakeholders such as the guests is to provide a product that they are familiar with and service, which is provided by internal stakeholders, which is acquired through training that is the same in all Marriott’s in Australia. Ensuring that the guests continue to enjoy the products that they are familiar with makes it possible for Marriott to have a continuous contract with their suppliers, which is another method to maintain a positive reputation.
Marriott hotels in Australia take part in a couple of activities to give back to the community and to reward their employees. The main activity that the company does for the employees is referred to as the Take Care program, which is done in all the Marriott’s hotels in the country. The program is focused on “associate wellbeing and happiness” and this is a global activity that focuses on employees “body, mind and spirit, while building a healthy and secure future” (Wilkinson, 2016).
Interpretation of Corporate reputation
The key drivers of reputation are company values, the products or services you offer, the people you employ and how well they work as a team, and the processes that help you run the business. Marriott has four core values that form the foundation of their organisational culture, which influences their reputation. Their values are to put people first, pursue excellence, embrace change, and act with integrity (Marriott Annual Report, 2017) .
The Chairman and CEO wrote a book, “the spirit to serve” which talks about running a hotel in the best way possible and the book is a required reading for every new employee hired.
Marriott internationally has documents and systems, policies and procedures, and even history and philosophy to guide their decisions frees them to focus on real resourcefulness and creativity. Within the hospitality industry, Marriott does indeed come in for its share of teasing about its almost religious adherence to the "Marriott way." (Overby, 2012) The service provided by Marriott is consistent in every country, and each hotel, and this is what sets the tone for the reputation of the hotel.
The Chairman of Marriot says in the 2017 Annual report "One of the things we always say is that we’ll never be satisfied with the way things are today. We’ll continue to improve them to make them better." As such, at Marriott, employees are expected to improve the way the company operates no matter what the balance sheet says. The continuous efforts to improve the quality of the services on offer are what makes Marriott constantly be one of the highest ranking hotels in the world.
Implications and Conclusion
Marriott has managed to build a brand name and reputation that is positive and highly ranked in the world. The world-class service delivered every-day, the acknowledgements, and the good financial performance are a testament to the core values, the company culture and the ethical business practices. Every stakeholder is satisfied and even in years of recessions, the company can maintain its reputation and performance. It is recommended that Marriott continues to find innovative ways of keeping stakeholders happy and delivering unparalleled world-class service.
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