Strategic Shift for IHG Change in the Hospitality Sector Case Study Sample

Introduction OfStrategic Shift for IHG Change in the Hospitality Sector

In today's dynamic and constantly changing environment, organisational change is a crucial component of business success and sustainability. The COVID-19 epidemic and the worldwide economic collapse have significantly disrupted the InterContinental Hotels Group (IHG), like many other businesses (Lewis, 2019). The IHG must conduct organisational transformation that is in line with the new CEO's vision in order to maintain its competitiveness and satisfy the expectations of its consumers. The paper gives a broad overview of the factors that led to and supported change at the IHG, the part culture plays in organisational change, potential opposition to change, and the role leadership plays in putting change into action. Additionally, the report offers suggestions for how the IHG might successfully undertake organisational change that is consistent with the CEO's vision.

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The first part of the essay looks at the causes and motivators of change at IHG, including how the COVID-19 pandemic and the general economic crisis affected the hotel business. The second part of the article covers how culture affects organisational change and how IHG's culture must evolve to reflect the CEO's vision. The final piece looks at potential opposition to change and how the IHG might allay staff apprehensions and concerns. The article ends by offering suggestions for how the IHG might successfully execute organisational reform.

Type of Change

A strategic shift is the kind of change that is necessary at the IHG. The CEO of IHG has a vision to implement the required reforms so that IHG can compete with locally owned hotels that provide excellent service at competitive rates (Al-Haddad and Kotnour, 2015). Sabrina must create a strategic change plan to bring the hotel's goals, procedures, and organisational structures into line with the CEO's vision if she is to realise this ambition. Being attentive and providing better customer service are important components of the strategic transformation plan for the hotel.

A type of change called strategic change involves large and fundamental changes to an organization's strategy, goals, operations, and organisational structures. It usually entails a modification of the organization's vision, mission, or goals and is motivated by the need to adjust to evolving external factors like shifting market conditions, technical developments, or changes in consumer preferences. Strategic change is frequently a reaction to a crisis, like the COVID-19 pandemic-related economic slowdown that has impacted the IHG's profitability.

The requirement to align an organization's goals, procedures and organisational structures with its external environment is one of the primary forces behind strategic change (Buchanan and Badham, 2020). In order to do this, one must first discover new possibilities and risks by analysing market trends, consumer wants, and the competitive landscape. Then, one must build a plan that will allow the organisation to take advantage of those chances and lessen those threats. In the instance of IHG, the CEO's goal is to build a hotel chain that can compete with independently owned, locally priced accommodations. To accomplish this and remain competitive with its rivals, IHG will need to make changes to its operations, culture, and business model.

The requirement to enhance organisational performance serves as another major catalyst for strategic change. To do this, new systems, procedures, and structures must be created that are more effective, efficient, and responsive to stakeholders' and customers' needs (Hussainet.al 2020). The requirement to control opposition to change serves as a third important strategic change driver. Employees may be resistant to change if they believe that their employment, duties, or status are in jeopardy. Change can be disruptive and upsetting for employees. Organisations must express the need for change; include staff in the process, and offer assistance and training to help staff members adjust to the new ways of working in order to overcome resistance. Employees at the IHG are apparently concerned about the upcoming changes, and some have already started missing work due to illness (Burke, 2017). Sabrina will need to create a change management strategy that takes these issues into account and offers staff clear direction and assistance as they adjust to the changes.

Lewin's change management model is an applicable theory that can be used in the IHG situation. According to this paradigm, there are three stages to change: unfreezing, altering, and refreezing. The organisation gets ready for change during the unfreezing stage by instilling a feeling of urgency, explaining the necessity for change, and dealing with any resistance to change (Tidd and Bessant, 2020). The organisation implements the change, creates new systems, procedures, and structures, and offers training and support to staff during the shifting stage. In the refreezing stage, the organisation solidifies the change by incorporating new routines, procedures, and organisational structures into its operations and culture.

Causes and Motivators of Change

Organisational life must continually adapt to the ever-changing internal and external environments since change is an unavoidable part of it. Failure to adapt to change puts businesses at danger of going out of business or losing their market advantage. The IHG has acknowledged the need for change, and a strategic change strategy is now required as a result of various catalysts and drivers for change.

The worldwide economic crisis, which has had an impact on the hospitality sector, is one of the key drivers of transformation at IHG (Palmeret.al 2016). Executive business travel, a major source of income for the hotel, has decreased as a result of the economic slump. The hotel's profitability has suffered significantly as a result of the drop in revenue, which has decreased the share price of the hotel. Investors are constantly worried about the financial performance of their holdings, and this drop in share value has caused them to lose faith in the former CEO's ability to manage the hotel in a profitable manner.

The COVID-19 epidemic, which significantly affected the hospitality sector, is another force for change. Governments have imposed travel restrictions to stop the virus from spreading, which has significantly reduced travel. The pandemic has adversely impacted the IHG, as with other hotels, which has led to a decline in revenue and occupancy rates (Cameron and Green, 2019). The epidemic has also altered how people travel, with guests increasingly looking for lodging that provides a secure and sanitary setting. Consumer preferences have changed as a result, and the IHG must adjust with them in order to stay competitive.

The shareholders fired the former CEO and hired a new CEO with a different vision for the hotel as a result of the loss of profit and the effect it had on share value. The goal of the new CEO is to implement the required reforms so that IHG can compete with locally owned hotels that provide high-quality service at competitive prices. The new CEO has highlighted customer service and responsiveness as crucial elements for the success of the hotel (Alvesson and Sveningsson, 2015). This vision necessitates a change in the hotel's operations, processes, and organisational structures. The objectives, procedures, and structures of the hotel must be in line with the new CEO's vision for it to be implemented because it signals a change in the hotel's strategic direction. As a result, the IHG must create a strategic change plan.

Three stages of change—unfreezing, altering, and refreezing—are identified by Lewin's Change Management Model. In order to address the present issues the hotel is facing, the unfreezing step entails raising awareness of the need for change and building urgency. The new CEO's vision has sparked a sense of urgency to address the issues the hotel is facing, and IHG has acknowledged the need for change.

Implementing the modifications required to produce the intended results is part of the altering stage. The IHG must create a strategic change plan outlining the adjustments needed to bring the hotel's goals, procedures, and organisational structures into line with the incoming CEO's vision (Anderson, 2019). Given that these are essential components for the hotel's performance, the plan should concentrate on enhancing customer service and responsiveness. The IHG must also alter to accommodate the COVID-19 pandemic's effects, such as providing travellers with a secure and clean atmosphere.

Change in Organisational Culture

Change projects must take into account organisational culture in order to be successful. The behaviour, attitudes, and values of an organization's workforce are shaped by its culture, which in turn affects how those workers approach their work. In the instance of IHG, the current culture may be preventing the hotel from responding to customer needs and market expectations as well as adapting to changes in the macroeconomic climate. So, in order to match the hotel's culture with the CEO's goal, a cultural transformation is required.

In order to do this, Sabrina must evaluate the IHG culture as it is now and create a transformation strategy that encourages the desired cultural traits (Hayes, 2022). The change strategy should incorporate a comparison of the existing cultural norms and values to the intended cultural norms and values. Sabrina can analyse the current culture and pinpoint areas that want development using a variety of methodologies, including surveys, interviews, and focus groups.

To get their support and buy-in on the restructuring process, Sabrina also needs to involve the staff. It is crucial to address the worries and concerns of employees regarding the transition because it might be intimidating and uncomfortable for them. Through communication channels like team meetings, town hall meetings, and frequent reports on the development of the change programme, Sabrina can involve the workforce.

During the transition process, communication is essential. Sabrina needs to create a communication strategy that takes into account the employees' worries, makes the goal and advantages of the change initiative clear, and describes their part in the change process (TejeiroKoller, 2016). To make sure that all employees are on the same page and understand the goals of the change programme, communication should be clear, succinct, and consistent.

The success of change initiatives is ultimately influenced by corporate culture. IHG's current culture must be evaluated, a change plan must be created to bring the culture of the hotel in line with the CEO's vision, workers must be involved in the change process, and a communication strategy must be created to allay their worries and concerns about the change. IHG will be able to respond to customer wants and market expectations, adjust to changes in the macroeconomic environment, and eventually accomplish its strategic goals through a successful cultural transition.

Intolerance of Change

In organisational transformation, resistance to change is a regular occurrence. Some IHG employees have already started missing work due to illness because they are already concerned about the rumoured upcoming adjustments. Fear of the unknown, a loss of control, and job uncertainty are just a few reasons why people resist change. In order to create a change plan that allays the worries and concerns of the staff, Sabrina must first identify any potential resistance to change (Buchanan and Huczynski, 2019). In order to assist the staff adjust to the change, Sabrina must involve them in the process, properly communicate the change strategy, and offer support and training.

Along with the above described concerns, loss of faith in the leadership of an organisation or the conviction that the change would not be beneficial can also be causes of resistance to change. Sabrina must ascertain the causes of the staff members' opposition and take appropriate action (Steinertet.al 2016). Engaging employees in the change process and giving them a sense of ownership and control are two ways to overcome reluctance to change. This can be done by asking for their opinions and ideas, providing venues for interaction and teamwork, and praising and rewarding them for their contributions to the change endeavour.

Through effective communication, resistance to change can also be overcome. Sabrina must effectively communicate the change plan, outlining the motivations for the change, its advantages, and how employees will contribute to its implementation (Ben Arfiet.al 2019). The communication should also allay any worries and concerns that staff members might have, as well as dispel any rumours or false information.

Finally, Sabrina must offer guidance and assistance to staff members as they adjust to the shift. This can involve educating staff members about new procedures or technology, offering coaching or mentoring to assist them acquire new skills, and providing support as the organisation undergoes change. Sabrina can assist in overcoming change resistance and ensuring the success of the change endeavour by attending to the concerns of the workforce, involving them in the change process, and offering support and training.

Role of Leadership

When it comes to achieving organisational transformation, leadership is essential. To create a change plan that is consistent with the CEO's vision, Sabrina must collaborate closely with the new CEO and the senior management group (Burke, 2022). By giving the staff direction, support, and guidance throughout the transition process, Sabrina will also be able to take the initiative. Sabrina must encourage an innovative, adaptable, and customer-focused culture and instill a feeling of urgency in the transition process. To ensure the successful execution of the change plan, Sabrina must also create a change management team and assign clear roles and duties.

Sabrina needs to possess excellent leadership qualities in order to guide the transition process successfully. Effective communication, connection building, and the capacity to foster employee trust and confidence are a few of them. Sabrina must envision the hotel's future state and share it with the staff, outlining the necessity of the transformation and its advantages for both the staff and the establishment. Additionally, Sabrina needs to establish relationships with the staff members, pay attention to their feedback and concerns, and include them in the transformation process.

By being open and truthful about the transformation process, Sabrina may encourage the employees' trust and confidence (Nystrom and Starbuck, 2015). In order to mitigate these risks, Sabrina must outline potential hazards and difficulties associated with the transition process. Sabrina should also recognise accomplishments and the contributions of the staff that helped implement the transformation.

In summary, leadership is essential for bringing about organisational change. To create a change strategy, advance an innovative culture, and successfully manage the change process, Sabrina must collaborate closely with the incoming CEO and the senior management team.

Recommendations

The following suggestions are provided for the IHG based on the critical assessment of organisational change, triggers and drivers of change, how culture effects organisational change, expected opposition to change, and the leadership role in executing change:

• Create a strategic change plan that is in line with the CEO's vision: In order to compete with locally owned hotels that provide high-quality service at an affordable price, IHG must create a strategic change plan that is in line with the new CEO's vision. The change plan should define specific targets, timetables, and performance indicators and should address the major areas that need improvement, such as customer service and responsiveness. A strategy to deal with resistance to change should also be included in the change plan.
• Conduct a culture assessment to determine the strengths and shortcomings of the current culture, and then create a change plan to align the culture with the CEO's vision. The IHG must do both in order to align the culture with the CEO's vision. Employee participation in the change process and the promotion of creativity, responsiveness, and customer-centricity should be part of the change strategy. The change strategy should address any possible opposition to change and devise methods for getting around it.
• Engage staff members in the change process: Engaging staff members in the change process can help to lessen resistance to change and boost employee buy-in. By successfully communicating the change strategy, offering training and assistance to help them adjust to the change, and giving chances for employee feedback and input, Sabrina should involve the workforce in the change process.
• Create a change management team: Creating a change management team can help to guarantee that the change plan is implemented successfully. Key stakeholders from across the organisation should be a part of the change management team, and each member should have clear roles and responsibilities. The communication strategy should be created by the change management team in order to keep staff members informed and involved during the change process.
• Support and leadership: Throughout the transition process, Sabrina needs to support and lead the staff. She ought to encourage an innovative, adaptable, and customer-focused culture and instill a feeling of urgency in the change-process. She ought to be accessible to staff members so they may ask questions and receive advice and help.

Conclusion

The report is concluded that the IHG is dealing with serious issues that necessitate a strategic shift in order to secure its ongoing success in the hospitality sector. The hotel's operations, procedures, and structures have had to alter as a result of the shift's catalysts and drivers, which also include the COVID-19 epidemic and the world economic collapse. To compete with locally owned hotels that provide high-quality service at competitive prices, the new CEO's vision calls for a cultural revolution that encourages creativity, responsiveness, and customer-centricity. Employees that are resistant to such changes may include those who are afraid of the unknown, losing control, or job insecurity. To create a change plan that is in line with the CEO's vision and allays the worries and anxieties of the staff, Sabrina must collaborate closely with the senior management team and the new CEO. Sabrina can guarantee a smooth and successful implementation of the change plan that will allow the IHG to compete in a highly competitive business by integrating the workforce in the change process, effectively explaining the change plan, and offering training and support.

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