Introduction
Japan Airlines Development Company decided to establish a hotel company in the mid-1980s as a diversification and globalization strategy to strengthen the company’s position in the competitive U.S. market. Therefore, Japan Airlines Development Company formed Nikko Hotels International as an affiliate company.
Essex House was to be the foundation for the future growth of Nikko Hotels international. Nikko Hotels’ executives believed that if the company could do well with the Essex House in the competitive New York market, then they would do well in all other markets in the United States. The decision to acquire the Essex House was to test if the company would thrive in the U.S market.
Analysis
The management team at Essex House represented a highly diversified cultural group of managers. Essex House was originally by the Marriott Corporation. When Nikko Hotels International took over the management, they invited all the directors and staff that previously worked for the Marriott Corporation. The invited team consisted of professionals of different cultural diversities. Six managers of the Marriott employee agreed to stay on the invitation. Australian director of food and beverage, an Irish director of human resources, a Lebanese chief engineer, and a North American director of marketing remained. Later a Japanese controller joined the executive.
Owing to the employees’ diverse cultural nature, the corporate office of Hotel Nikko (USA) Inc. decided to organize an executive for team building. The retreat was to culminate in the development of the Nikko Hotels’ mission statement.
The president of the company, Yasuyuki Miura, joined executives after the group discussions when the executives reconvened to present their discussion results. During the presentation time, Miura annoyed non-Japanese executives by commenting in a manner in which the executives did not find acceptable.
Being the president of the company, Miura was shocked by the sharp criticisms from non-Japanese executives. Based on the Japanese culture, it was natural for the president of a Japanese company to miss an executive meeting and then later submit his views at the presentation stage. Miura was annoyed to hear the sentiments from the executives; however, he recollected himself and opted to have a break before reconvening the meeting the following day.
The next day, Miura humbly made his speech to the executives, sharing his strategies and experience. He also appealed for cooperation before joining the executives in the group discussions in formulating the company’s mission statement.
The company’s mission statement reads:
- dedicated employees,
- attentive service,
- quality facilities,
- together in harmony.
During the meeting, Miura assumed the Japanese cultural practices were applicable everywhere. However, upon realization, he recollected himself, accepted the existing cultural differences, and humbly submitted his views by participating in the group discussions.
The case provided highlights how cultural differences influence the daily office operations. Specifically, it points out the need for a foreign company to uphold the natives’ culture in the formulation and implementation of policies. Through assimilation of the natives’ culture, the company does not only get to win over the customers or target group but also the workers themselves. Therefore, a company must conduct a cultural analysis before setting up its operations in a foreign country. Additionally, from the case, it is clear that the foreign company needs to recruit its employees from the local area to get in touch with the culture of the locals.
The case also underscores the need for collective participation of all the executives in the formulation of major company policies. Additionally, collective participation sends a sense of belonging amongst the employees. Similarly, the case explains the problems that may occur in a company in a foreign country as a result of existing cultural differences between the mother country and the foreign country.