The scheme in the gambling industry is the same everywhere. The main goal is to attract the client first and to make his/her stay as pleasant as possible to spend as much money on the tables as they possibly can.
RCC operates as a single firm to maximize the combined net profit from its three divisions. In this case, the three divisions operating as a single firm outperform the three divisions operating as individual companies in the market.
There is a synergy between the divisions where the combined result is better than the sum of the individual performances. In fact we could say that Entertainment and Hotel give support to the main income generator that is Gambling.
As the beginning of chapter 4 of the book says Team Production
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Big investments such as infrastructure for the hotel (notice the large invested capital in the Hotel division) are taken into account.
To avoid the export of inefficiencies between divisions we have the responsibility accounting and the performance measures
Each one of the three divisions would be a cost center, each responsible for their budgets. The performance measure would be to maximize output for a fixed budget but special attention should be given to maintain quality in the case of the Hotel and
Entertainment divisions.
Regarding benefit and investment centers the three divisions should be treated as one in order to make use of their synergies. Price for the Hotel and Entertainment divisions is sacrificed in order to attract more people and that explains their negative EVAs.
Performance should be measured by looking at joint profit. There is in effect a transfer price between the Hotel and Entertainment divisions and the Gambling division.
To reflect a good approximation of opportunity cost this transfer price could never be market based because of the large synergies between divisions.
Full cost transfer prices would be convenient because they take into count not only variable costs but fixed costs as well. Big investments such as infrastructure for the hotel (notice the large invested capital in the Hotel division) are taken into account.
We could say that RCC avoids the agency problem,
For instance, within the customer service center there is a separation from billing, to customer service. In addition, engineering and other behind the scenes departments like human resources function separately as well. The organization is seen as divisional based on the separation from geographic areas. One other important aspect is the Kansas Gas services is a part of the Union, and the other divisions do not have union represented employees. In order to make the organization a more cohesive unit it set out a strategic plan to Become One. Becoming One for the organization was to find a way for the divisions to share their best practices and become a solid unit, to Become One.
These three divisions integrate a centralized policy directed/ decentralized execution approach to govern daily operations.
Each division is operating independently with its own division manager. Also, each division’s performance had been judged on its profit and return on investment (ROI). The company policy of decentralizing responsibility and authority for all
Karen Daniels , president of Borders Hotel Corporation (BHC) , has to investigate three financing alternatives in order to evaluate their impacts on viability of the BHC
More fundamentally giving each division manager the responsibility of its divisions operations and not allowing it to interfere with other divisions.
For example, the colors and points system is complex because it is difficult to connect colors and points to the bonus points and the 40% multiply factor may cause managers' confusions. Since it is hard to understand, the scorecard would have problems on acceptance and the implementation process would be difficult. As a result, the scorecard would not reach the maximum effectiveness and efficiency. The second problem is that the scorecard contains uncontrollable factors for managers. For example, managers' performance will be measured by comparing the budgets and actual expenses. However, hotel level managers have no right to determine the budget and this measurement is unfair. As a result, many managers would be reluctant to accept the scorecard. The third problem is that the scorecard is only implemented at the hotel-general-management level. As stated in the case, the hotel-general-management is the last level of the company management and they have no right to discuss the components of the scorecard. In addition, the implementation process lacks communication between different levels of managements. As a result, the scorecard represents the top managements' thoughts and may not be suitable for the bottom level management. Also, the lack of communication may cause hindrance for accepting and implementing the scorecards.
With this system each customer’s order cost the same amount to complete causing orders with high profit limits to subsidized orders with low profit limits making it difficult for Super Bakery to know the true cost for an order. The company changed to the activity-based costing (ABC) system allowing the managers the ability to recognize the cost and profit margins for each sale. The ABC system associates the costs with the activities allowing managers the opportunity to access a system that allocates overhead costs that uses multiple bases. Costs can be traced back to each individual’s account regardless of the product provider letting managers know which products are profitable and which ones are not. The traditional costing system allocates cost to departments or jobs instead of overhead cost pools. The traditional costing system makes it difficult to know which activity or product is making a profit.
Answer 2. The first problem that is going to arise while implementing the strategy is the resistance form the divisions, so it is required to convince the departments
* Lack of Information and communication across divisions Each division maintains its own marketing, manufacturing, logistics and administrative departments (Silos)
In order to engage the employees the Portman must be dedicated to a performance management system. This cannot be the “system of the month” that simply creates hype for a time and then fades away, as they experienced with the 5-Star system. The hotel must set goals, monitor and evaluate these goals, provide feedback and create a reward and recognition program. (Krasner, 244). With the introduction of the 5-Star Program, the Portman relied on the PV’s to participate in the problem solving for the hotel. The Portman should again rely on the employees with the establishment of a performance management system by using a Management by Objectives system. This type of system would incorporate participation from the employees for decision making, goal setting and objective feedback (Kreitner, 246). This program should begin with the strategic plan of the hotel and then set goals for employees that will align with the hotels organizational objective. These goals should be set using the SMART method (Kreitner, 248). Once the goals are set, management must get commitment from the staff that they believe these goals are attainable and that they believe in why they are pursuing these goals. If the Portman uses staff to set these goals, commitment will be easier to
Service is the most important aspect when it comes to handling a hotel. A hotel’s main objective is to provide the best service and tend to all of the guests’ needs and requirements. If there is no service then there would be no business. When running a business, the costumer is always placed first. Poor services can results in a complaint from a guest. But that complaint can be used to better the business in the future.
Political and legal factors are those controlled by governments, local authorities, or other trade or activity orientated regulatory bodies' (Brassington and Pettitt, 2000). Gambling legislation is put in place in order to prevent consumers been taken advantage and also help control consumers with gambling problems. The internet is open to great abuse in all areas of the internet and gambling is no exception. Within five minutes it is possible to be gambling on the internet at as high stakes as one desires, this obviously has its dangers. Companies have recently been pushed to be more responsible for caring for their customers. Some of the companies now have a system which its customers can use. The system offers the customer control of how much they can deposit in a designated time period, this helps the customers control their spending. Though this may affect profits for a company, it gives the impression that they care for their customers, which promotes their company. The laws for online gambling are reasonably relaxed and with it been a worldwide market that anyone from any country can access it is hard to control such a market. There have been recent worries about illegal gambling carried out on Betfair with trainers and owners regarding the running of a horse to lose. Many bets would be taken on the specific horse resulting
9:00 to 10:00, the hotel standards will be explain such as values, visions and history moreover a review of the policies and procedures of the establishments will be explained such as in case of fire what is the procedure and also the expectation of the hotel from the employees.
The Marketing divisions is in charge of marketing the services that they offered. This division is also important when Dewaweb is giving important decisions on the price of their products. The public relation division oversees the networks and relation outside the company, whether they will get sponsors or clients is based on how good the public relation division works. Last but not least, the Quality control division is in charge of the web hosting services in case something might go wrong. It has been proved that this division is the most important division in this company. Since this company is a web hosting company, there have to a 24/7 service that guaranteed the satisfaction of each of their clients, and Dewaweb serves
3.1 What are the role of technology and the role of operations staff in delivering an appropriate level of service for each hotel?